Date: 20000114
Dockets: 96-2042-UI; 96-116-CPP
BETWEEN:
ALLIANCE FRANÇAISE D'HALIFAX DARTMOUTH,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
and
GHISLAINE LAGUENS, BÉNÉDIKTE VERCAEMER,
Interveners.
Reasons for Judgment
McArthur, J.T.C.C.
[1] The appellant is a non-profit association whose mandate is to contribute to the promotion of the French language and culture in Nova Scotia. The appellant offers courses in French as a second language to various groups and individuals.
[2] The issue is whether the instructors engaged by the appellant held insurable employment within the meaning of paragraph 3(1)(a) of the Unemployment Insurance Act. In a letter dated November 30, the respondent indicated that he wished to consent to judgment in the case of Claude Aucoin, a cook.
[3] The statement of facts and of the appellant’s position, reproduced hereinafter, is primarily taken from the written argument submitted by the appellant:
[TRANSLATION]
The Alliance française is an independent organization whose headquarters are in Paris . . . . It has branched out and has approximately 1,300 Alliances worldwide, of which 12 are in Canada. An executive officer in Ottawa co-ordinates cultural activities. . . . Each Alliance is a non-profit association, operating and financed independently of the Alliance in Paris.
The purpose of the Alliance is to promote French language and culture in the context of la Francophonie generally, and cultural and linguistic duality in Canada. . . . Each Alliance has an identical constitution. It is a non-profit association made up of members who pay annual dues of $20 to $50. . . . The Halifax-Dartmouth Alliance . . . has experienced both good times and hard times, depending on the degree of activity of its volunteers . . . . [I]n 1988, it was taken in hand; conversation classes were offered in various locations . . . .
Our instructors/consultants come from all sorts of backgrounds: university professors, high school and elementary school teachers, master’s and doctoral students, translators and second-language instructors.
All of them . . . consider the Alliance as a supplementary income source, if not as a service (free conversation courses given by board members).
. . . Working at the Alliance is thus, for most of the instructors/consultants, just a temporary activity and, for example, 86 percent of the people who worked there in 1995 are no longer there.
. . .
Instructors/consultants are hired after an interview with the director and submission of their credentials. They have an oral contract and choose whatever course or courses suit them best, whether in terms of course level, location or proposed schedule (the schedule is not a fixed one and may change on consultation with the instructor and the student or students). . . . The Alliance does not guarantee a fixed monthly income. . . . The instructors submit a written report to the Alliance at the end of their contract and are responsible for following the students' progress and having them change levels if necessary. Evaluation of the instructor’s work is performed informally by the students. If they are happy, they come back; if they are unhappy, they let it be known by telling the director or the instructor and, above all, by not coming back. In the last ten years, incidentally, the Alliance has never had to refrain from giving a contract to anyone because of a lack of professionalism.
How they are paid
Generally, the instructors/consultants submit at the end of the month (but sometimes at the end of the contract) an invoice that is paid by the Alliance. They indicate the number of hours of instruction and the number of hours not charged for. The Alliance has a fixed hourly rate covering instruction time only. Each instructor/consultant is thus responsible for his own course. It is up to him to have himself replaced (and to find a replacement if necessary) or to reschedule the class at a later time.
Where they work
The courses may be taught wherever the instructor/consultant wishes (with the agreement of the student or students). Some classes are offered at the Alliance's premises, in the offices of companies proposing courses to their employees, at a student's or instructor’s home, in schools, on the telephone or in some other place. Thus, the location is agreed upon by the instructor and the student or students.
Tools used
The courses offered by the Alliance are almost exclusively conversation classes . . . The choice of teaching materials is therefore left up to the instructor (with the agreement of the student or students). The Alliance therefore does not dictate a particular subject of conversation for a class.
. . .
The students and their membership
Students come to the Alliance as much for the classes as for the cultural activities (they automatically become members of the Alliance and may take advantage of everything the Alliance offers).
Assessment of the criteria
Conclusion
-- control over the hours, which is, in the first place, left up to the instructor . . . Each instructor had his own diplomas and his own experience of the language. The fact that we have instructors with Quebec, Acadian, French, anglophone and Lebanese backgrounds is clear evidence that the *equipment* involved here is the exclusive property of each instructor.
-- the choice of teaching materials is in part suggested by the student’s objectives, and thus it is up to the instructor to adapt his own teaching techniques. . . .
-- the locations used by the instructors vary greatly, as has already been mentioned. . . . [W]e would like to emphasize first of all that in the past some of us here have taught for the Alliance elsewhere and we have always been treated as self-employed workers without its ever being a problem.
Lastly, we would like to explain our association’s financial situation. We have neither the means nor the desire to operate as a business. In fact, the Alliance française de Halifax-Dartmouth receives only a minimal subsidy from the French government ($2,500 per year) and largely depends on volunteers. Thus, we are almost totally self-financing. Nonetheless, we take an active part in the life of the community by presenting cultural events and by participating in the bilingualism policy in Canada. The amount of $6,784.86 that we are being asked to pay to cover pension contributions and unemployment insurance premiums for 1995 threatens to deal our association a fatal blow (indeed, it would be very hard for us to recover the contributions from the instructors, a number of whom no longer work for us and/or have moved away). We think we are not alone in believing that the possible closing of our cultural centre would be a loss for the cultural life of our region.
[4] In reaching his decision, the respondent relied on a number of assumptions of fact that are incorrect. Among these assumptions, taken from paragraph 5 of the Reply to the Notice of Appeal, are the following:
[TRANSLATION]
(e) the appellant assumes all expenses associated with the business;
This is incorrect: the instructors paid most of their own expenses related to the courses they gave.
[TRANSLATION]
(f) the employees were hired to give French courses to the appellant’s clients;
This is not entirely correct, because the instructors attracted clients themselves.
[TRANSLATION]
(i) the appellant was responsible for the quality of the courses given by its employees;
According to the evidence, the instructors were responsible for course content.
[TRANSLATION]
(k) the appellant was responsible for setting its criteria for the courses that it wanted to offer to its clientele;
The evidence shows that the instructors set their own criteria.
[TRANSLATION]
(o) the Hamilton and Ottawa branches consider their instructors as employees hired under contracts of service, in agreement with the Department of National Revenue;
The appellant said that, in Ottawa and Hamilton, 90% of the instructors were considered as employees and 10% as self-employed workers.
[TRANSLATION]
(p) the clientele belonged to the appellant and not to the employees;
As indicated above, the clientele was partly the appellant’s and partly the instructors’.
[TRANSLATION]
(s) most of the instructional materials were provided by the appellant;
Here again, the material was in fact provided by the appellant and by the instructors.
[5] The key issue is whether the instructors were employed under a contract of service or under a contract for services. The leading case in this area of the law is Wiebe Door Services, [1986] 2 C.T.C. 200. This decision set out four tests: control, ownership of tools, chance of profit or risk of loss and integration (or organization). This is actually a four-in-one test and in applying the test the total relationship of the parties must be considered.
[6] It should be noted that most of the instructors signed a document stating: [TRANSLATION] “I the undersigned ----------- am in agreement with the attached letter of the Board of Directors of the Alliance française”. Certainly, one might feel inclined to allow the appeal out of sympathy in order to support such a praiseworthy association, but the relevant legal rules must be faithfully applied. Naturally, I am aware that the outcome of this appeal could be crucial for the survival of the Alliance.
[7] A number of impressive instructors testified for the appellant. They said that they knew the difference between a self-employed worker and an employee and that they were not employees. Unlike the situation in Hennick v. Canada, [1995] F.C.J. No. 294, there was no written contract in this case. I will now apply the tests to the facts of this case:
Control. Applying some of the tests often used by the Minister of National Revenue, I find as follows:
(a) the instructors’ hours of work were not fixed, but flexible;
(b) they did not have to provide any reports to the appellant concerning the instruction they gave;
(c) they were free to teach courses to other people whenever they wanted;
(d) they received little or no direction: they were professional teachers who taught as they saw fit;
(e) when they could not teach because of illness or for some other reason and the class had already been included in the schedule, they found their own replacement, and the appellant played no role in this;
(f) their clients consisted of their own students and the appellant’s students; and
(g) there was no list of materials to keep.
[8] The control test tends to indicate that the instructors were not employees. The instructors had skills that they had acquired over the years independently of any relationship with the appellant. They were invited to exercise these skills, without being subject to any control and as they saw fit, in courses given to persons interested in learning the French language. They chose their own replacements.
[9] Ownership of tools. The instructors were highly competent and used their teaching talent, with no structure being imposed on them by the appellant. The appellant provided minor teaching aids such as blackboards or slide projectors, but it is not clear whether that material was used by the instructors. Some instructors supplied their own teaching materials such as felt pens and manuals. This test tends to indicate that the instructors were not employees.
[10] Chance of profit or risk of loss. Once or twice a month, each instructor submitted a statement of the hours that he had taught and was then paid in accordance with the fixed rate. The instructors were not reimbursed for any expenses such as travel expenses or expenses related to the use of their residence or their own telephone. This test tends to indicate that they were employees.
[11] Integration. The appellant performs activities in the field of promoting French culture. In so doing, it has turned to experienced teachers to provide language instruction. The teaching skills of each of these instructors were unique and personal. Each instructor undeniably had the ability and freedom to teach as he saw fit. From this point of view, it was the instructors' business as much as the appellant's. The criteria of integration is therefore not decisive.
[12] Taking into account all the elements involved in the appellant’s operations, I find that each instructor was a self-employed worker.
[13] The total relationship of the instructors and the appellant was one in which the instructors were paid to teach from time to time, as they themselves decided, exercising their skills at their own discretion, with no control being exercised over them. I concur in the analysis of Deputy Judge Potvin in Ferme Gendroline Enr. v. Canada (Minister of National Revenue), [1987] T.C.J. No. 910, and, for the purposes of this appeal, I adopt his reasoning. More specifically, at page 5, Deputy Judge Potvin said:
With respect to control of the employee's work by the employer, it must be recalled that the degree of control exercised by the employer over the employee's work remains the essential test in determining whether there is the subordinate relationship that characterizes a contract of employment, although the degree of control may vary according to the circumstances and often depends on the nature of the work to be performed. Control means having the . . . power to require another person to perform a specific activity, act in a particular manner and maintain a certain line of conduct. However, this power may be general or, on the contrary, it may be specific.
Thus we see that the evidence was silent as to control by the employer of the employee's work, and Ms. Parent Raymond appeared to be free to do her work as she chose, because both Ms. Pitre and Mr. Gendron worked outside the home.
[14] In Hennick, the Federal Court of Appeal had found that a part-time music instructor was an employee of the Royal Conservatory of Music. The facts in this case clearly distinguish the Alliance's situation from that of the Conservatory. The instructors at the Conservatory entered into a written contract giving control to the Conservatory over when, where and how the instructors would work. Desjardins J.A. said, at page 4:
While it is true that the element of control is somewhat more difficult to assess in cases of professionals, the trial judge completely ignored that, on January 15, 1993, the intervener notified the respondent that she had not fulfilled the minimum teaching requirement as stipulated in the collective agreement and that she was requested to increase her teaching load. While her contract with the intervener did not specify how she was to teach, there were parameters she had to meet with regard to time which clearly constituted control. The trial judge erred in failing to consider this piece of evidence.
[15] In the case of the Alliance, there was no written contract. The parties were not acting in concert. The instructors did not consider themselves as being under the Alliance’s control. They had expertise and they gave lessons when they wished, where they wished and how they wished. There was thus no control. The instructors were not employees. I accept the depositions of the witnesses for the appellant, who expressed themselves well and with precision. The respondent submitted no evidence. The depositions of the witnesses for the appellant were not contradicted. Having regard to the evidence as a whole and applying the tests in the manner prescribed in Wiebe Door, I find that the instructors were not employees of the Alliance. Each case must be examined on its own facts, and weight must be given to what actually happened, that is, the reality of the relationship that existed during the years in question, rather than speculating on what might have happened. It is quite possible that in other cities there are Alliance offices where the relationship between the Alliance and its instructors is an employer-employee relationship, but this is not the case in Halifax.
[16] The appeal is allowed.
Signed at Ottawa, Canada, this 14th day of January 2000.
"C.H. McArthur"
J.T.C.C.
[OFFICIAL ENGLISH TRANSLATION]
Translation certified true on this 31st day of January 2001.
Erich Klein, Revisor