Knights of Columbus (Re), 2010 MBCA 110

Citation: Knights of Columbus (Re), 2010 MBCA 110 Date: 20101126 Docket: AI 10-30-07400 IN THE COURT OF APPEAL OF MANITOBA B E T W E E N : KNIGHTS OF COLUMBUS ) J. I. Jardine ) for the Applicant (Employer) Respondent ) ) D. P. Negus and ) M. N. Burkett ) for the Respondent - and - ) ) D. G. Gu é nette ) for the Manitoba Labour Board ) CLAUDE BOISJOLI ) M. A.

Webb ) for the Director of Employment (Employee) Applicant ) Standards ) ) Chambers motion heard: ) November 4, 2010 ) ) Decision pronounced: ) November 26, 2010 SCOTT C.J.M. 1 The applicant applies for leave to appeal from a decision of the Manitoba Labour Board (the Board) pursuant to s. 130 of The Employment Standards Code , C.C.S.M., c. E110 (the Code ), which provides for an appeal on a question of jurisdiction or law to the Court of Appeal by leave of a judge of the court.

This provision is in keeping with similar statutory provisions with respect to many other senior provincial administrative tribunals. 2 Jurisprudence from this court over the years makes it abundantly clear that facts are for the administrative tribunal alone. Questions of law on the other hand can be reviewed by the Court of Appeal if, but only if, they can be isolated from the factual matrix so that the court is not involved “in an assessment or analysis of conflicting factual issues” (see, for example, Pelchat v. Manitoba Public Insurance Corp. , 2006 MBCA 90 , 40 C.C.L.I. (4 th ) 46 at para. 2 ).

Three factors are relevant. The first, just addressed, is whether the issue is truly one of jurisdiction or law alone. The second is whether, even if a question of law can be isolated from the evidentiary findings, there is an arguable case of substance.

The last question is whether the issue is of sufficient importance to warrant the attention of the court. 3 In this instance, the critical question for determination by the Board was whether the applicant was an “employee” and thus entitled to wages, general holiday wages and vacation pay under the Code or whether he was an “independent contractor” and hence entitled to no compensation. The Board conducted a lengthy hearing extending over a period of six days and issued extensive reasons for decision, 55 pages in all.

The Board ultimately concluded (at para. 83): …. … [T]hat Boisjoli was not an employee of the Knights. Rather, he was operating a business on his own account in a regulated industry selling the products of a fraternal insurer. 4 In arriving at its conclusion, the Board took note of the context-driven question before it (at para. 30): …. Despite the serious efforts of courts, academics and administrative tribunals to formulate and analyze legal tests and

definitions, the concept of employment remains elusive and the line between employees and independent contractors is often difficult to draw. Although no universal test has been established to determine whether a person is an employee or an independent contractor, courts have set out a

series of factors to be considered in making these determinations. However, these decisions remain challenging. In many cases, somefacts point to an individual being an employee while others tend to support an independent contractor characterization. That situation isclearly evident in the present case. Here, a number of facts support the conclusion that Boisjoli was an employee of the Knights; otherfacts are indicative of the opposite view. 5 After an extensive review of authorities, the Board took its guidance from the recent decision of the Supreme Court ofCanada in 671122 Ontario Ltd. v.

Sagaz Industries Canada Inc., 2001 SCC 59, [2001] 2 S.C.R. 983. In Sagaz, Major J., writing for aunanimous court, explained (at paras. 46-48): … [T]here is no one conclusive test which can be universally applied to determine whether a person is an employee or an independentcontractor.

Lord Denning stated in Stevenson Jordan, [[1952] 1 The Times L.R. 101 (C.A.)], that it may be impossible to give a precise definition of the distinction (p. 111) and, similarly, Fleming [The Law of Torts, 9th ed. (Sydney: LBC Information Services, 1998)]observed that “no single test seems to yield an invariably clear and acceptable answer to the many variables of ever changingemployment relations ...” (p. 416).

Further, I agree with MacGuigan J.A. in Wiebe Door [ (FCA), [1986] 3 F.C. 553],at p. 563, citing Atiyah, [Vicarious Liability in the Law of Torts (London: Butterworths, 1967)], at p. 38, that what must always occur isa search for the total relationship of the parties: [I]t is exceedingly doubtful whether the search for a formula in the nature of a single test for identifying a contract of service any longerserves a useful purpose ....

The most that can profitably be done is to examine all the possible factors which have been referred to inthese cases as bearing on the nature of the relationship between the parties concerned. Clearly not all of these factors will be relevant inall cases, or have the same weight in all cases. Equally clearly no magic formula can be propounded for determining which factorsshould, in any given case, be treated as the determining ones.

Although there is no universal test to determine whether a person is an employee or an independent contractor, I agree with MacGuiganJ.A. that a persuasive approach to the issue is that taken by Cooke J. in Market Investigations [[1968] 3 All E.R. 732 (Q.B.D.)]. Thecentral question is whether the person who has been engaged to perform the services is performing them as a person in business on hisown account. In making this determination, the level of control the employer has over the worker’s activities will always be a factor.

However, other factors to consider include whether the worker provides his or her own equipment, whether the worker hires his or herown helpers, the degree of financial risk taken by the worker, the degree of responsibility for investment and management held by theworker, and the worker’s opportunity for profit in the performance of his or her tasks. It bears repeating that the above factors constitute a non-exhaustive list, and there is no set formula as to their application.

The relativeweight of each will depend on the particular facts and circumstances of the case. [emphasis added] 6 To sum up, it cannot be doubted that the decision whether someone is an employee or an independent contractor is, in theend, context-driven. While guidelines or lists of helpful criteria can be of assistance, ultimately the decision in each case will depend onits own particular facts. 7 The standard of review to be applied on an appeal is a factor to be considered on the leave application if a question of lawhas been identified.

This is because it has obvious relevance when considering whether the applicant’s argument has a realistic prospectof success. Applicant’s counsel argued that the standard is correctness since questions of law were at issue, referring to this court’sdecision in Nygard International Partnership Associates v. Michalowski, 2005 MBCA 96, 195 Man.R. (2d) 301 at para. 14, where it washeld that in the circumstances of a similar, but not identical, application for leave under the Code, there was likely a lower degree ofdeference due to the Board’s decision.

However, this court, upon appeal (2006 MBCA 115, 208 Man.R. (2d) 159), determined that thestandard of review on two of the principal issues before the court was reasonableness. More importantly, the subsequent landmarkdecision of the Supreme Court in Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190, makes it abundantly clear, in myopinion, that the decision of the Board is entitled to considerable deference and that the standard of review in this instance isreasonableness.

In reaching my conclusion that the reasonableness standard applies, I note in particular that the Board is an experiencedexpert tribunal operating in this instance within the four corners of its own statute.

The narrow (but undoubtedly important to theapplicant) decision for the Board was one that it is required to decide in the course of its ordinary responsibility; in other words, thequestion fell squarely within the area of its expertise. 8 This standard requires courts to respect the decisions of expert administrative tribunals, of which the Board is undoubtedlyone. 9 As explained in Dunsmuir (at para. 49): Deference in the context of the reasonableness standard therefore implies that courts will give due consideration to the determinations ofdecision makers. … In short, deference requires respect for the legislative choices to leave some matters in the hands of administrativedecision makers, for the processes and determinations that draw on particular expertise and experiences, and for the different roles of thecourts and administrative bodies within the Canadian constitutional system.

And (at para. 48):

Deference imports respect for the decision-making process of adjudicative bodies with regard to both the facts and the law. And (at para. 47): … A court conducting a review for reasonableness inquires into the qualities that make a decision reasonable, referring both to theprocess of articulating the reasons and to outcomes. In judicial review, reasonableness is concerned mostly with the existence ofjustification, transparency and intelligibility within the decision-making process.

But it is also concerned with whether the decision fallswithin a range of possible, acceptable outcomes which are defensible in respect of the facts and law. 10 Thus, the Supreme Court of Canada has made it plain that the reasonableness standard, when applicable, applies to bothfacts and the application of the law. 11 In his motion brief, and before this court, the applicant argued that three errors of law had been committed by the Board.

Firstly, counsel asserted that the Board failed to properly analyze its own statute; in particular, the meaning of the words “employee” and“employer.” In the result, the Board had abrogated its duty. The simple answer to this submission is that the Board, as its reasons makeclear, was fully aware of the difficult task before it. Given the lack of a definition of “independent contractor” in the Code, the Boardwas required to look at common law tests, which it did.

It is evident from the reasons for decision that the Board committed no error inmoving expeditiously to the question before it (one with which it was well familiar), rather than specifically addressing every detail ofthe applicant’s argument. 12 Secondly, the applicant invoked the audi alteram partem doctrine, arguing that the Board erred in law by relying upon legalauthorities that were not referred to it by either party or contained in the various materials. In his brief, the applicant lists five instanceswhere it is alleged that the Board did so.

In fact, in three of those instances, the authorities were referred to in other cases properly reliedon by counsel. The other two impugned references consist of an

article dealing with the distinction between employees and independentcontractors and an additional authority dealing with a proposition properly arising from a decision placed before it. In any event, it isclear that no tribunal or court is bound to rely strictly on the law as presented by the parties unless the court has “introduced a principleof law that was not raised by either party expressly or by necessary implication, or had taken the case on a substantially new and differentanalytical path” (Heron Bay Investments Ltd. v. Canada, 2010 FCA 203 at para. 24). This is not what happened here.

The applicant hasfailed to identify an arguable ground of appeal with respect to this issue. 13 This leaves the third ground, which requires more substantial analysis. The question is, did the Board err in law in relyingon the general approach discussed in Sagaz, at paras. 46-48, rather than basing its analysis on the tests adopted in a line of cases in thespecific context of the insurance industry? 14 Counsel for the applicant stressed in argument that there was no challenge to the findings of fact.

Rather, the assertion isthat had the proper test been applied to the facts, no other conclusion could have been reached other than that the applicant was not anindependent contractor. The “line of cases” counsel referred to is a trio of authorities, starting with Doyle v. London Life Insurance Co., (BC CA), [1984] B.C.J. No. 1119 (S.C.) (QL), and followed in Belton v. Liberty Insurance Co. of Canada (2004), (ON CA), 72 O.R. (3d) 81 (C.A.), and Braiden v. La-Z-Boy Canada Limited, 2008 ONCA 464, 294 D.L.R. (4th) 172.

In Doyle, aff’d (1985), 23 D.L.R. (4th) 443 (B.C.C.A.), the trial judge identified five tests which, in his opinion, could appropriately be“applied in attempting to determine the true status of a commissioned sales agent” (at para. 17): 1. Whether or not the agent was limited exclusively to the service of the principal; 2. Whether or not the agent is subject to the control of the principal, not only as to the product sold, but also as to when, whereand how it is sold; 3. Whether or not the agent has an investment or interest in what are characterized as the “tools” relating to his service; 4.

Whether or not the agent has undertaken any risk in the business sense or, alternatively, has any expectation of profitassociated with the delivery of his service as distinct from a fixed commission; 5. Whether or not the activity of the agent is part of the business organization of the principal for which he works. In otherwords, whose business is it? 15 The trial judge, Wood J. (as he then was), noted that the various authorities dealing with the employee/independentcontractor question “must be viewed with two cautions in mind.

First of all, the decisions depend in large measure on a detailedexamination of the facts peculiar to each of them. Secondly, the weight to be ascribed to any principles enunciated in them must becritically examined in the light of the real issues in the case” (at para. 12). 16 In Belton, the Ontario Court of Appeal, in circumstances where the trial judge had relied on the five criteria from Doyle,was not prepared to disturb the trial judge’s finding that the appellants in that instance were employees.

In so deciding, the courtemphasized that whether an individual was a servant or independent contractor was evidence-driven. 17 In Braiden, the Ontario Court of Appeal, relying on Belton, was not prepared to interfere with the conclusion of a trial judgewho had relied on the criteria from Doyle. Noteworthy is that the court in Braiden considered that the adoption of the five criteria from

Doyle by the court in Belton “had been modelled on the considerations set forth in the above quotation from Sagaz ” (referring to para. 47, referenced in para. 5 herein). 18 Counsel for the applicant strenuously argued that the Board committed an error in law in failing to recognize that the trilogy of Doyle – Belton – Braiden created a refined and specialized test for commissioned sales agents which should have been followed in this instance and that the Board erred in law in not doing so.

In his written argument, the applicant reviewed the evidence in light of the five factors found in Doyle , asserting that “had the Board applied the correct legal standard to its own findings of fact, it would have had little choice but to find that the Applicant was an employee and not an independent contractor.” 19 I cannot agree with the applicant’s assertion that the Board committed an error in law in choosing to follow the principled approach articulated by the Supreme Court in Sagaz .

The Board, after referring to Doyle , rightly concluded (at para. 38): … [I]t is clear that, as the Supreme Court of Canada noted in Sagaz , supra [at para. 47], the central question to be answered in resolving disputes concerning whether an individual is an employee or an independent contractor is ‘whether the person who has been engaged to perform the services is performing them as a person in business on his own account.’” In doing so, the Board considered other features of the relationship besides those suggested in Sagaz , recognizing that “there may be additional factors worthy of consideration” (at para. 38) beyond those set out in Sagaz . 20 Furthermore, I do not agree that the result would inevitably have been different if the Board had chosen to apply the test urged by the applicant’s counsel.

As the Board concluded, “there is not a huge distinction between the tests set out in Doyle , supra , as compared with the factors identified by Major J. in Sagaz , supra ” (at para. 37). 21 The applicant seems to be arguing that there is a mandated occupation-specific test for insurance agents such as himself and that it is an error in law not to slavishly apply it. I do not agree.

The Board was quite right, relying on Sagaz , to closely examine the particular facts and circumstances of the case, recognizing there is “no set formula” (at para. 36) or structured approach that must be applied. 22 I am hard pressed to find that the Board erred in law in meticulously examining and taking into account the relevant facts before it to determine whether the applicant was performing the services in question “as a person in business on his own account” ( Sagaz at para. 47).

The Board made no error in accepting that no one test could be universally applied to determine whether a worker fell into the category of “employee” or “independent contractor.” In any event, it can hardly be said that the Board’s approach and the resulting decision is unreasonable. 23 In the circumstances, there is no arguable issue of law that the Board followed the wrong legal path in arriving at its conclusion.

Despite the applicant’s insistence that there was no challenge to the Board’s factual findings, in the end that is precisely what this application is all about. 24 Thus, none of the three issues identified by the applicant raise arguable points of law. Alternatively, with respect to the third ground of appeal, even if a question of law had been identified, there is no reasonable prospect that the applicant could succeed.

This makes it unnecessary to consider whether the issues raised were of sufficient importance to engage the attention of this court. 25 The application for leave to appeal is accordingly dismissed, with costs. ______________________________ C.J.M.