Tax Court of Canada


Public law

Social programs

Employment insurance

Objective reality of control by employer indicating employee not contractor

Employer operated music school that provided lessons for Music for Young Children Program (MYC) as well as private piano lessons. Worker and employer entered into verbal agreement whereby worker was hired as music teacher. Employer determined worker’s schedule and paid worker $36 per hour. Minister of National Revenue determined worker was engaged in insurable and pensionable employment with employer under contract of service, within meaning of para. 5(1)(a) of Employment Insurance Act and para. 6(1)(as) of Canada Pensions Plan for period from September 6, 2014 to May 3, 2015. Employer appealed. Appeal dismissed. There was no common intention between worker and employer; employer considered worker to be self-employed while worker considered herself to be employee. Employer specifically referred to relationship with worker as being one of employer/employee. Worker was trained Level One MYC teacher, and did not require instructions from employer on how to perform her duties. Employer controlled how worker was to interact with clients, how worker’s schedule was to be set, how classroom should be decorated, and how worker should reply and communicate with employer. Termination letter to worker showed that MYC students and private students were employer’s students and not worker’s; it also indicated worker had deadlines to meet, had to respond to enquiries in timely manner and had to keep accurate records. Objective reality of control that employer exercised over worker did not support employer’s intention for worker to be independent contractor. Worker never used services of subcontractor to replace her during period; in case of her absence, worker had obligation to find replacement supplied by employer or reschedule classes or cancel them and not get paid. Worker’s pay was not negotiable and was set at rate that was same for all music teachers working for employer; worker was paid whether student attended lesson or not. Both locations and equipment were leased by employer; worker did not have any real risk of financial loss, and not have any capital expenditures.

Coathup v. Minister of National Revenue (2017), 2017 CarswellNat 1351, 2017 TCC 54, Réal Favreau J. (T.C.C. [Employment Insurance]).

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