Worker was engaged in insurable and pensionable employment on basis of common law test

Public Law - Social programs - Employment insurance

Worker began driving taxi leased from company, after selling vehicle that he had previously used as owner-operator for company. Company remitted Employment Insurance (EI) premiums for worker for two years and, when it stopped, he sought determination of employment status. Minister determined that worker was not engaged as employee for Canada Pension Plan and EI purposes under common law test, but that he held insurable employment under s. 5(1)(d) of Employment Insurance Act and 6(e) of Employment Insurance Regulations. Company appealed. Appeal dismissed. In light of worker’s testimony and company’s initial remittance of EI premiums, parties’ common intention was that he would be employee. It was likely that company unilaterally began treating worker as independent contractor upon learning that other taxi corporations were doing so. Worker’s control over manner in which he performed taxi-driving services was subordinate to company’s ultimate control as gatekeeper to dispatch system, as demonstrated by its successful cutting off of worker from taxi operations after he sought determination of status. Company provided all essential equipment and, as lease-drivers incurred little loss and could not sublease taxicabs, factors of chance of profit and risk of loss also indicated that they were more akin to employees than to independent contractors. Worker was engaged in insurable and pensionable employer on basis of common law test. In two lines of jurisprudence following precedent on s. 6(e) of Regulations, which excluded owners of taxi cab business from insurable employment, one distinguished cases based on details of lease-driver arrangements and other excluded all independent contractors under common law test. Latter strict interpretation would defeat purpose of s.6(e) of Regulations of providing some security to cab drivers, particularly in light of how taxi industry was operating to maintain large level of control over drivers outside of traditional employment structures. Worker’s arrangement with company was sufficiently distinguishable from precedent so he was not excluded from insurable employment.

Royal City Taxi Ltd. v. M.N.R. (2019), 2019 CarswellNat 1672, 2019 CarswellNat 1996, 2019 TCC 105, 2019 CCI 105, Robert J. Hogan J. (T.C.C. [Employment Insurance]).

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