Tax - Income tax - Employment income
Taxpayer corporation was in business of providing workers to two catering companies, and taxpayer hired supervisors, servers, bartenders and chefs for catering companies. Taxpayer established roster of people by receiving resumes and hired wait staff that worked multiple jobs and most of chefs that worked for taxpayer were career chefs. Taxpayer’s booking coordinator sent email to wait staff to ask to accept or decline shifts and there was no minimum number of shifts guaranteed. At large events, usually one supervisor was required, and head chef would relay instructions to kitchen staff on how end user would like meals served and at what time. Most wait staff had signed independent contract agreement with taxpayer but only few chefs did same. Minister found that taxpayer was placement agency with respect of two workers, and Minister also found that workers of catering company were employees with exception of two workers. Taxpayer appealed. Appeal allowed in part. It was confirmed that workers were employees of taxpayer, but taxpayer’s appeal was allowed in finding that taxpayer was not placement agency with respect to two workers. It was found that control factor in this case was akin to employee relationship rather than independent contractor relationship. Evidence showed that taxpayer and catering companies put mechanisms in place that had effect of exerting control over workers for both small and large events. Taxpayer selected who was offered shift for event and decided which function wait staff would occupy, and head chefs selected chefs who would work at each event and roles they had and this all pointed to employment relationship. As it was found that there was contract of service between taxpayer and workers, there was no need to analyze whether taxpayer was placement agency, and it was found that neither of two employees had been under control of catering companies, although one was found to be only for specific period.
AE Hospitality Ltd. v. M.N.R. (2019), 2019 CarswellNat 2079, 2019 CarswellNat 2557, 2019 TCC 116, 2019 CCI 116, Johanne D'Auray J. (T.C.C. [Employment Insurance]).
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