Tax Court of Canada


Taxation

INCOME TAX
Relationship was not consistent with intention expressed in contract

Appeal by payer from decision by Minister determining that employee was engaged in insurable and pensionable employment for purposes of Employment Insurance Act (Can.), and Canada Pension Plan. Payor was in business of providing direct sales services for large organizations. Worker was engaged by company for door-to-door sales for business and was paid on commission basis. Worker signed standard form contract which stated that he was engaged as independent distributor and did not qualify for benefits such as minimum wage, worker’s compensation or employment insurance. Contract described that worker was independent businessperson, with opportunity for profit and risk of loss, and with control over place, time and method by which products were offered for sale. Contract stated that worker was not assigned routes, could select his own days and hours of work and was not required to ask for time off. Appeal dismissed. Based on contract, parties intended that worker carry on business on his own account. Worker willingly signed contract and by that action he intended to accept contract’s terms. Worker’s experience was different than that suggested by written contract. Terms of written contract were not being respected by payor. Payor considered that it could exercise significant control over most aspects of how worker’s work was performed. Control factor strongly pointed to employment relationship. Lack of reimbursement for expenses supported company’s position but was not significant factor. Other factors tended to be neutral. After considering factors as whole, relationship was not consistent with intention expressed in contract. Worker was engaged as employee.


Intergranuity Marketing Ltd. v. M.N.R.

(Jan. 4, 2012, T.C.C., Woods J., File No. 2011-2056(EI); 2011-2057(CPP)) 212 A.C.W.S. (3d) 284 (7 pp.).

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