The Appeal CommissionThe Workers Compensation Act of Manitoba

Preamble

The appellant firm is appealing the decision made by the Workers Compensation Board ("WCB") that the firm was considered to be the deemed employer. A hearing was held on February 24, 2020 to consider the appellant firm's appeal.

Issue

Whether or not the appellant firm should be considered the deemed employer.

Decision

The appellant firm should be considered the deemed employer.

Background

On November 30, 2017, the appellant firm requested reconsideration of a March 15, 2017 decision by the WCB Assessment Services Department that individuals providing services through the appellant firm were workers of the appellant firm. At a meeting held on January 23, 2018, the Assessment Committee upheld the WCB's decision that the appellant firm was considered the deemed employer.

On May 16, 2018, the employer appealed the decision of the Assessment Committee to the Appeal Commission. On November 8, 2018, a hearing was held to consider the appellant firm's appeal and Decision No. 13/19 was published on January 28, 2019 denying the appellant firm's appeal.

The appellant firm applied to the WCB's Board of Directors on March 1, 2019, pursuant to s 60.9(1) of The Workers Compensation Act (the Act) for a review of Decision No. 13/19 noting disagreement with the “significant weight” placed by the Appeal Commission upon the third party agency agreements it requested and received after the hearing, and further, that the Appeal Commission failed to provide the appellant firm with opportunity to make any submission on the contents of those agreements. In the result, the appellant firm argued, the decision of the Appeal Commission was incorrect, unreasonable and unfair.

The WCB's Board of Directors considered the appellant firm's request on June 20, 2019 and on June 25, 2019, the WCB's General Counsel advised the appellant firm's representative that the appeal would be re-listed and re-heard by a new panel. An oral hearing was arranged.

As a preliminary matter, the appellant’s counsel requested that the panel permit him to rely upon the examination and the submissions made in the course of the November 8, 2018 hearing, noting that the information and positions taken by the appellant have not changed in the intervening time and that this would allow the present hearing to proceed more efficiently. Panel members adjourned to consider the request, and when the hearing resumed, advised of their agreement with the appellant’s request, allowing the appellant to rely upon the evidence given and submissions made on November 8, 2018 as recorded in the transcript from that hearing.

Reasons

Applicable Legislation and Policy

The Act defines employer and worker in s 1 as follows: 

"employer" includes 

(a) a person 

(i) who has in service under a contract for hiring or apprenticeship, written or oral, expressed or implied, a person engaged in work in or about an industry, or 

… 

(c) a person that the board has determined under subsection 60(2.1) to be an employer for the purposes of Part I,

"worker" includes 

(a) a person, whether or not under the age of 18 years, who enters into or works under a contract of service or apprenticeship, written or oral, expressed or implied, whether by way of manual labour or otherwise, 

… 

(d) a person deemed to be a worker under subsection 60(2.1)…

Section 60 of the Act provides the WCB with exclusive jurisdiction to determine questions including whether or not an employer's undertaking or any part of it is in an industry within the scope of Part I of the Act as well as whether or not any worker in any industry is within the scope of Part I of the Act.

The Act further provides in s 60(2.1) that the WCB may deem a person who is not a worker under the provisions of Part I of the Act to be a worker and the person for whose benefit the work is performed may be deemed to be the employer.

Regulation 196/2005 under the Act, the Excluded Industries, Employers and Workers Regulation (the Excluded Workers Regulation) outlines which industries, employers and workers are not within the scope of Part I of the Act. Excluded industries, employers and workers are listed in Schedule A to the regulation, which provides, in part, as follows:

SCHEDULE A 

Health care services 

16(1) Provision of health care services by a physician, nurse, dentist, chiropractor, occupational therapist, optometrist, physiotherapist, podiatrist or psychologist. (This category does not include 

(a) those health care services provided in conjunction with a manufacturing or retail component; or 

(b) those health care services provided 

(i) by a regional health authority or a subsidiary health corporation under The Regional Health Authorities Act; 

(ii) by a firm that provides medical services at a hospital or home care services to the elderly or infirm, or 

(iii) in a facility offering medical care and overnight accommodation.)

The WCB has established Policy 35.10.50, Status of Workers, Independent Contractors and Employers (the “Policy”) to determine whether someone is a worker under the Act and to outline the circumstances where the WCB will deem a service provider to be a worker under the Act. Since the date of the original adjudication in this matter (March 15, 2017), the Policy was revised on June 20, 2019, effective for decisions made after July 1, 2019, to provide greater clarity about its application and to improve flexibility in addressing alternative work arrangements. The panel noted that the WCB submission suggests that the panel should apply the predecessor version of the Policy, effective since June 1, 2011, but could take guidance from the newer version. However, given that the decision of the panel has been made after July 1, 2019, the panel has relied upon and applied the Policy that was effective after that date.

The relevant portions of the Policy are as follows:

1. Key Principles 

a) The WCB has exclusive authority to make all necessary determinations under the Act, including: 

• whether a service provider is a worker, an independent contractor, or an employer; 

• whether a service provider is a deemed worker of a principal, who is then considered to be the service provider's employer; and 

• the amount of a worker's assessable earnings in a situation where the worker does not receive a T4 slip, as is often the case in contract-based industries.

b) A service provider may be involved in several different types of working relationships simultaneously and play different roles in each of them. For example, he or she may be in a traditional working arrangement with an employer in one relationship, act as an independent contractor providing services to a consumer in another, and function as an employer in another.

The WCB decides whether a person is a worker, employer or independent contractor at the time that coverage is requested, as described in section 2 of this policy. For the purposes of determining a person's entitlement to compensation, however, the WCB decides whether a person is a worker, employer or independent contractor, as well as whether someone is a deemed worker, based on the nature of the working relationship at the time that the person suffers a workplace accident. In other words, the relevant working relationship is the one the person was specifically engaged in at the time of his or her injury.

c) In making its determination regarding a service provider's status as a worker, employer or independent contractor, the WCB will look at all of the facts. The manner in which the parties characterize the working relationship between them, through written contract or otherwise, will be considered but will not determine the matter.

d) Other agencies, such as Canada Revenue Agency and the Employment Standards Branch of the Manitoba government, also make determinations regarding worker, employer and independent contractor status. While the WCB may consider those determinations and the basis on which they are made, determinations by other agencies do not determine a person’s status under the Act. 

… 

3. Determining Whether a Service Provider Is a Worker 

If a service provider sustains a workplace injury and makes a claim for compensation, the WCB must determine whether the person is a worker within the meaning of the Act. This determination is based on what he or she was doing, for whose benefit, at the time of the injury. The relevant working relationship is the one in which the person was engaged at the time that he or she was injured. 

… 

In summary, if the WCB determines a service provider to be a worker within the meaning of the Act, he or she will be entitled to coverage. The source of that coverage will depend on what the service provider was doing, and for whose benefit, at the time of the accident.

4. Use of the Deemed Worker Provision 

If the WCB determines that, at the time of the injury, the service provider who sustained the injury was not a worker within the meaning of the Act, the WCB may, nevertheless, deem that service provider to be a worker.

In accordance with section 60(2.1) of the Act, the WCB may only exercise its deeming authority where the service provider: 

• is not a worker under the Act (i.e. does not otherwise fall within the definition of worker found at section 1(1) of the Act): and 

• is working for the commercial benefit of another.

One of the main principles that underpins the workers compensation system is that workers in mandatory industries are entitled to coverage. The deeming provision exists to prevent employers from reorganizing their work force in order to avoid responsibility for paying worker's compensation premiums.

One circumstance in which the deeming provision is used is where a service provider is injured while working for the commercial benefit of someone else, but the WCB has determined that the service provider in question is not a worker. This occurs when an independent contractor or employer operates an independent business and is eligible to purchase optional coverage on that basis, but for some reason chose not to do so.

By not purchasing optional coverage, he or she is not a worker within the meaning of the Act. Because he or she is working for the commercial benefit of someone else and is working in a mandatory industry, however, the WCB is of the view that he or she should still be entitled to coverage. In such circumstances, the WCB will deem the service provider to be a worker, and will deem his or her principal to be his or her employer. As the employer, the principal will be required to pay WCB premiums in relation to this deemed worker.

With respect to the application of the Policy, the WCB has also established Administrative Guidelines. The Administrative Guidelines in effect on the date of hearing provide, in part, that:

When contract relationships exist between individuals or firms, the WCB needs to determine if the service provider is a worker, an employer, or an independent contractor….

In a contract relationship, the principal is the person or firm that hires and pays a service provider to perform work for them….

A principal in a “non contract-based industry” can be deemed the employer of a service provider if the service provider is not an independent contractor….

In a contract relationship, the service provider is the person or firm that is hired to provide the labour, and at times the materials, to complete or perform certain tasks….

Unless a service provider is defined as employer, they need to demonstrate they operate as an independent business in order to register with the WCB. If a service provider cannot pass the Independent Business Test (“IBT”) – see Appendix A – they may be deemed workers of principal(s) that engage them….

For a service provider to be considered an “independent contractor”, the service provider must pass the Independent Business Test (see Appendix A).

The IBT consists of 11 questions that, when answered, aid in establishing whether a small service provider is an employer, an independent contractor or a worker.

Appellant’s Position

The Appellant firm was represented in the hearing by legal counsel, as well as by a representative of the firm and the firm’s accountant. Counsel submitted additional documents for consideration by the appeal panel in advance of the hearing, some of which were already available on the WCB file.

Counsel for the appellant indicated that the appellant’s position is as was outlined in the November 8, 2018 hearing before the Appeal Commission and requested that the panel consider the submission made at that time, as outlined in the transcript of that hearing.

The appellant’s position, simply stated and as outlined by its counsel, is that the appellant should not be deemed to be the employer of the service providers as the service providers are independent contractors, not employees.

To establish the nature of the relationship between the appellant firm and the service providers, the counsel for the appellant relied on the testimony of the firm’s representative at both hearings as well as the provisions of the contractor agreements, samples of which were submitted to the WCB and are on file.

The representative of the appellant firm testified that the firm provides the service providers to deliver services in third party healthcare facilities. The firm has entered into contracts with various regional health authorities (“RHA”) in Manitoba to fill needs for those services, as identified from time to time. The appellant’s representative stated that specific requests for service providers on specific dates and times are made to the appellant firm. The firm then reaches out to the service providers under contract with it to inquire as to interest in taking the offered shifts. A list of the service providers who indicate availability to any specific offer is provided to the RHA, which then selects which service provider it will accept.

The appellant representative told the panel that the service providers have each entered into a standard form of contract with the appellant firm. The service provider contracts set out the terms of the relationship between the appellant firm and the service providers. Counsel for the appellant firm highlighted a number of provisions of the standard contract for the panel, including provisions that outline that: 

• Service providers are not obligated to provide any services to the firm or its clients, and are not subject to supervision by the firm; 

• Service providers are not obliged to provide services personally; 

• The firm is not obliged to engage the service providers for any minimum number of hours or placements; 

• Service providers may provide services to or accept employment with third parties, including competitor firms; 

• The firm will pay compensation to the service providers based on an established fee schedule, and service providers must invoice the firm biweekly for their hours plus all applicable taxes; 

• Service providers are not entitled to reimbursement for expenses other than mileage expenses as set out in the schedule (which the appellant representative stated is based upon the mileage rates set by the RHA); 

• Service providers are responsible for their own expenses related to their licensing and insurance, continuing education and professional dues, tools and equipment, uniforms and supplies; 

• The service providers are not eligible for any benefit plans offered by the firm; 

• Service providers must maintain good standing in their professions and meet all licensure requirements; 

• The service provider is an independent contractor, not an employee; 

• Service providers are responsible for all taxes arising from compensation and other amounts paid under the terms of the contract. No source deductions are taken from the compensation paid to the service providers.

The appellant’s representative also advised the panel that service providers working in an RHA facility are working under the charge of RHA staff and are expected to take on any assignment given. The appellant firm does not provide oversight to the service providers, but only sends them to the facilities. Service providers must sign in to those facilities and must have their time sheets signed by the RHA staff member in charge. When service providers are involved in incidents while on assignment, they report these to the RHA staff in charge and the incidents are dealt with by the RHA. The appellant firm is only informed after the fact by the contracting RHA. The firm is not involved in any kind of discipline of the service providers, and where there are concerns about an individual service provider’s work, the RHA may advise the appellant firm that service provider is no longer to be assigned.

With respect to payment of compensation to the service providers, the firm’s representative indicated that upon receipt of invoices from the service providers, the service providers are paid out by the firm on a biweekly basis and the firm then invoices the RHA according to the provisions of their contract. At year-end, the appellant firm issues a T4A statement to each service provider reporting all amounts paid for mileage and travel time and compensation for hours worked as self-employment earnings. Compensation rates for the service providers are established by the appellant firm based upon the rate paid (and set) by the RHA less an amount that results in a margin of profit to the appellant firm.

Counsel for the appellant firm pointed out select provisions of the Multi-Service Agency Agreement between the appellant firm and various RHAs. This agreement was requested by the panel following the initial hearing and is on the WCB file. Counsel noted that this is a standard form agreement provided by the RHA to the appellant firm that governs their relationship. The contract includes provision for monthly invoicing by the appellant firm to the RHA. It uses employment language throughout for the relationship between the appellant firm and the service providers, which indicates, counsel stated, that the RHA does not want to be seen as the employer of the service providers. Rates of payment for services provided by the service providers through the appellant firm are outlined in a schedule to the agreement and are set by the RHA.

The appellant submitted that the service providers do not therefore fall within the definition of workers under the Act, and further, should not be deemed to be workers under the provisions of the Act.

The deeming provision in s 60(2.1) is discretionary and the issue for the panel to consider, counsel argued, is whether or not that discretion was exercised properly. In this regard, the Policy in effect at the time of the initial decision, outlines that where the factors are balanced, service providers may be deemed to be employees. The appellant argued that the intention of the Act is not to mandate the exercise of the deeming discretion, but to permit it in suitable circumstances. Counsel noted that the recent revisions to the Policy would appear to mandate the exercise of the deeming discretion and argued that if there is any inconsistency between the Act and the Policy, the provisions of the Act must prevail.

With respect to the application of the Excluded Workers Regulation, the appellant submitted that the firm is not a firm that provides medical services; rather, the appellant firm is a healthcare placement agency as is evidenced by the provisions of the independent contractor agreements that the service providers enter into with the appellant firm. Therefore, the firm is not included under the exception to the exclusion set out in s 16(1) of Schedule A to the Excluded Workers Regulation, and the service providers are not therefore captured by this Regulation.

Counsel for the appellant also noted that the determination by Canada Revenue Agency that the service providers are independent contractors was disregarded by the WCB Assessment Committee and urged the panel to give this determination greater weight in coming to its own determination of the issues before it. The criteria considered by Canada Revenue Agency should be persuasive to the panel in making its determination.

The appellant acknowledged that the Act prohibits contracting out of the provisions of the Act and states that it was not attempting to do so here.

Counsel for the appellant also noted that application of common law factors to determine whether an individual is an employee or an independent contractor weigh in favour of a determination that the service providers here are independent contractors.

In sum, the appellant’s position is that, firstly, it is not mandated to provide Workers Compensation coverage to the service providers as it is an excluded industry under the provisions of the Excluded Workers Regulation. Secondly, application of the considerations set out in the Policy, as well as the criteria considered by the Canada Revenue Agency, and the common law factors for determining whether an individual is an employee, should lead the panel to determine, on a balance of probabilities, that the service providers contracted to the appellant firm are independent contractors. The deeming discretion therefore should not be exercised to find the service providers to be employees, and as a consequence, the appellant firm is not the deemed employer.

WCB’s Position

The WCB did not participate in the hearing but provided a written submission dated February 12, 2020 to the panel in advance of the hearing. That submission was provided to the appellant in advance of the hearing.

The WCB’s position is that the service providers fall squarely within one of the exceptions to the exclusion set out in s 16(1) of Schedule A of the Excluded Workers Regulation and are therefore providing services in a covered industry.

Further, the WCB takes the position that the service providers are workers, as defined under the provisions of s 1 and s 60(2.1) of the Act, and as applied in accordance with the provisions of the Policy established by the WCB. The WCB submission suggests the panel apply the 2011 Policy to the facts, but that the 2019 Policy may also provide guidance to the panel on the question for determination, suggesting that the 2019 Policy be used as an interpretive aid.

The WCB takes the position that nothing in the Policy (either version) precludes the panel from taking into account the contracts between the appellant firm and the service providers, or the contracts between the appellant firm and the RHAs, but cautions the panel against placing undue weight upon the contractual provisions. Rather, the panel should examine the relationship between the appellant firm, the service providers and the RHAs as a whole in an effort to determine whom, if anyone, the service providers are working for. Over-reliance upon the contractual provisions, the WCB states, would be contrary to the remedial purpose of the Act and may be contrary to the provisions of the Act if it results in the conclusion that the parties have contracted out of their legislated obligations, which is prohibited by sections 14 and 15 of the Act.

Finally, the WCB urged the panel to give a liberal interpretation to the Act and Regulation, in accordance with s 6 of The Interpretation Act which requires remedial interpretation that is “fair, large and liberal” so as to best ensure the statutory objects are achieved.

Analysis

The sole issue on appeal is whether or not the appellant firm should be considered the deemed employer of the service providers engaged by the appellant firm. In order to find in favour of the appellant, the panel would have to determine that if the service providers engaged by the appellant are workers as defined under the provisions of the Act, they are excluded workers under the provisions of the Excluded Workers Regulation, or the panel would have to find that the service providers are not workers as defined by the Act. The panel was not able to make either of those findings for the reasons that follow.

Are the service providers Excluded Workers? 

The panel first considered whether or not the service providers here are providing services in a covered industry, such that coverage under the Act is mandatory.

Even if a person is found to be a worker under the provisions of the Act, they may be excluded from coverage under the Act by virtue of providing services in an excluded industry. The Excluded Workers Regulation sets out, in s 16(1) of Schedule A to the Regulation, that provision of health care services by a physician, nurse, dentist, chiropractor, occupational therapist, optometrist, physiotherapist, podiatrist or psychologist is excluded. But the exclusion does not include those health care services provided by, among others, a regional health authority, by a firm that provides medical services at a hospital or home care services to the elderly or infirm, or in a facility offering medical care and overnight accommodation.

With respect to this question, the appellant firm submitted that it does not provide medical services but is a healthcare placement agency as is evidenced by the provisions of the independent contractor agreements that the service providers enter into with the appellant firm. Therefore, the appellant firm is not included under the exception to the exclusion set out in s 16(1) of Schedule A to the Excluded Workers Regulation, and the service providers are not therefore captured by this Regulation.

The appellant’s position is that the appellant firm is in the business of providing temporary workers to the third party organizations it contracts with. As such, the appellant firm describes itself as a kind of employment agency, matching those who require service providers with those who can provide the services required.

The WCB submission sets outs its position that the service providers provide their services in a covered industry, as they are health care providers not excluded by the Excluded Workers Regulation. Regardless who, if anyone, employs these service providers, they are performing work that is captured by the exceptions to the exclusion of certain health care providers found in s 16 of that Regulation.

The panel considered the appellant’s evidence of the nature of the services provided by the service providers here. The service providers are working as registered nurses, licensed practical nurses and healthcare aides. The service providers work in their respective professions within hospital facilities operated by a number of RHAs in Manitoba.

The panel finds that the service providers are providing health care services and are doing so in a facility that offers medical care and overnight accommodation. They are therefore captured by the exceptions to the s 16 exclusion in the Excluded Workers Regulation. As such, the panel finds on a balance of probabilities that the service providers are providing services in a covered industry and are not excluded workers. 

Are the service providers workers or independent contractors? 

To be eligible for compensation under the Act, a person must fall within the statutory definition of a worker. Determining whether someone is a worker under the Act is key to determining not only coverage under the Act but also who is responsible for paying for a person's WCB coverage.

In traditional employment relationships where a service provider works for a principal and the principal pays the service provider wages for that work, it is clear that the service provider is a worker within the meaning of the Act and that the principal is an employer responsible to pay for the service provider’s workers compensation coverage. But in other cases, the nature of the relationship may be less clear. That is the case here, and therefore the panel must determine if the service provider is a worker or an independent contractor.

The Act defines a worker to include a person who enters into or who works under a contract of service or apprenticeship, as well as anyone deemed to be a worker under s 60(2.1). The appellant takes the position that the service providers are not working under a contract of service, but are working under a contract for service. This distinction, the appellant argues, is of importance in that employees work under a contract of service, consistent with the definition of worker under the Act, but independent contractors work under contracts for service. The panel considered whether the evidence before it supports a finding that the service providers are workers as defined in s 1(1) of the Act. This determination is guided by the Policy established by the WCB.

The Policy sets out that in making a determination as to the status of a service provider, all the facts must be examined, including how the parties themselves have characterized the working relationship between, whether through contract or otherwise, but that the parties’ own characterization of the relationship is not determinative. Further, the determinations of other agencies, such as the Canada Revenue Agency (“CRA”) may be considered, including the basis for those determinations, but also are not determinative of the status under the Act.

The evidence before the panel includes samples of the standard form contracts between the appellant firm and the service providers, as well as between the appellant firm and the RHAs. As relevant, the details of these are referenced below.

The evidence before the panel also includes a letter from CRA dated July 28, 2017 regarding its determination that the status of one of the service providers under contract with the appellant firm is that of a self-employed worker. As outlined in that letter, in making its determination, the CRA considered the following criteria:

• The intent of the appellant firm and the intent of the service provider with respect to the relationship; 

• The level of control the appellant firm had over the service provider’s activities; 

• Whether the service provider provided the tools and equipment; 

• Whether the service provider could subcontract the work or hire assistants; 

• The degree of financial risk the service provider took; 

• The degree of responsibility for investment and management the service provider held; 

• The service provider’s opportunity for profit; and • Other relevant factors, such as written contracts.

As noted, the CRA determined, based upon its review, that the particular service provider referenced was not an employee of the appellant firm, but was a self-employed worker.

The evidence also includes the testimony of the firm’s representative and its accountant, both at this hearing and the previous hearing before the Appeal Commission.

The appellant firm argued that the service providers are not its employees and therefore are not caught within the s 1(1) definition (a) of worker as a “person…who enters into or works under a contract of service….” The WCB, in its submission, outlined that if the panel finds the service providers to be analogous to workers, they are captured by this aspect of the definition. Alternatively, the WCB submits that the service providers are captured by clause (d) of the definition of worker, as those deemed to be workers by s 60(2.1) of the Act. The appellant firm argues that the service providers are not captured by the “deemed worker” provision as the evidence supports that they are independent contractors.

In considering whether the service providers are workers or independent contractors, the panel considered the totality of the evidence before it, including the sample contracts, the CRA determination and the oral evidence presented in both hearings, including the following: 

- The contracts between the service providers and the appellant firm explicitly describe the relationship as one of independent contractors, outlining the totality of expectations and obligations of the parties in relation to one another. 

- There is no obligation upon the service providers to take up any offers of work, nor is there any obligation on the appellant firm to offer any work to the service providers. There are also no guarantees of minimum hours available to the individual service providers. 

- There is no exclusivity in that the service providers are permitted to have other employment and to engage in other contractual relationships with competing firms. 

- The appellant firm does not provide any direct supervision of the work of the service providers, nor any control or disciplinary action where issues arise in the course of their work. Rather, the service providers work under the authority of employees of the host RHA. 

- The service providers are not themselves engaged in the services that the appellant firm engages in, namely, as a placement agency for healthcare professionals; however, the appellant firm has no profit, and effectively, no business model without the service providers. 

- The appellant firm does not provide any tools or equipment, and the service providers are expected to provide their own basic uniforms and some equipment, such as stethoscopes; however, most of the equipment that the service providers would use and rely upon is provided at the worksite by the third party RHA. The investment of the service providers in tools and equipment is minimal. 

- The appellant firm pays the service providers based upon invoices submitted by the service providers, which include a “sign off” from the RHA on the hours, without taking any employment related deductions. 

- Service providers are paid a rate based upon the hourly rate set by the RHA and outlined in the contract between the RHA and the appellant firm, less the profit maintained by the appellant firm. 

- The hourly rate paid to service providers in any designated professional category is established by the appellant firm and is consistent for all service providers in that category, although in exceptional cases a service provider may negotiate a different rate that is not reflected in the contract but is noted in that service provider’s invoices to the appellant firm. 

- There is little or no financial risk to the service providers, who are paid by the appellant firm directly on the basis of the invoices submitted and hours worked. 

- The risk to the individual service providers is that they will not be selected for any given work opportunity by the host RHA despite offering their services through the appellant firm. The service providers may indicate to the appellant firm their availability to work but their offer may never be accepted by the appellant firm if the host RHA does not select them. 

- There is no exclusivity in the relationship between the appellant firm and the service providers in that the service providers may contract with other placement firms and may also have more regular employment in their professions. 

- The contract allows the service providers to subcontract their shifts, but this is not in practice permitted. A service provider may “give away” a shift that has been accepted, but only to another service provider contracted to the appellant firm and only with the consent of the host RHA. That substitute service provider then must invoice the appellant firm in order to be paid. The payment does not flow through the original service provider as would be expected in a subcontract relationship. 

- The contract requires that the service providers pay their own licensing and insurance fees, and engage in any ongoing professional education as required by their licensing body. 

- The appellant firm does not provide or offer any benefits to the service providers. - The service providers do not receive T4 income, but are provided annually with T4A statements of the self-employment income. 

- The agreements between the appellant firm and the individual RHA are in a standard provincial form that requires the appellant firm to bill monthly for services provided. The contract terms specify that the service providers are employed by the appellant firm, not by the RHA. Further, rates of payment are set by the RHA, including mileage and travel expense rates that the appellant firm will pay to the service providers upon receipt of invoices.

The Policy requires the panel to consider, in determining the service providers’ status, the facts of the working relationships, including what the service provider is doing and for whose benefit. The panel has done so and on the basis of the evidence reviewed and considered, the panel determined that the work undertaken by the service providers is for the benefit of the appellant firm. The service providers are paid by the appellant firm on the basis of the work undertaken at a rate set by contract between the appellant firm and service providers. The appellant firm is paid by the third party RHAs at a higher rate based upon the work undertaken by the service providers, with the margin between these rates as the profit, or benefit to the appellant firm.

Despite the capable argument of counsel for the appellant firm, the panel cannot find that the evidence supports a determination, on a balance of probabilities, that the service providers are independent contractors. The contracts here describe the service providers as independent contractors, but the totality of the relationship does not support that conclusion. There is little to no financial risk borne by the service providers who are guaranteed biweekly payment upon submission of invoices that verify the services provided. The service providers can indicate their availability but have no control over whether or not they are selected to work in response to any particular offer. While they have the ability to refuse work offered, their ability to subcontract, though outlined in the agreement, is something of a fiction. Hours of work and how tasks are performed are not within the the control of the service providers, other than if the service providers choose not to accept any offers of work. Although the service providers are to provide their own uniforms and equipment, this does not represent any significant financial investment on their part, and for the most part, the service providers use and rely upon the tools and equipment at the work site. The service providers are performing work that is integral to the appellant firm’s line of business, in that the business model is entirely predicated upon the service providers delivering services in the host RHA.

The panel acknowledges the finding of the CRA that the specific service provider identified in the letter of July 28, 2017 was self-employed and notes the criteria that the CRA considered, but, as outlined in the Policy, that finding is not determinative. Furthermore, the panel is not aware of the details of any documentation and evidence relied upon by the CRA in making that ruling. Finally, the panel notes that determination of the CRA was made under a different legislative scheme with a different legislative purpose than The Workers Compensation Act.

The panel is satisfied, on the basis of the totality of evidence before it and on the standard of a balance of probabilities, that the service providers are workers, for the purposes of and under the provisions of the Act.

The Policy outlines that in a contract relationship, the principal is the person or firm that hires and pays a service provider to perform work for them and that a principal in a “non contract-based industry” (such as provision of healthcare) can be deemed the employer of a service provider if the service provider is not an independent contractor. The Act sets out in s 60(2.1) that the person who receives the benefit of the work of another person, who is deemed to be a worker, may be deemed to be the employer, within the meaning of the Act.

Having determined that that service providers here are workers for the purposes of coverage under the Act, the panel is satisfied that the appellant firm is the employer.

The appeal is therefore dismissed.

Panel Members

K. Dyck, Presiding Officer
D. Loewen, Commissioner
R. Ripley, Commissioner

Recording Secretary, J. Lee

K. Dyck - Presiding Officer
(on behalf of the panel)

Signed at Winnipeg this 22nd day of April, 2020