Placement agencies that supplied temporary workers to the federal government appealed assessments requiring them to pay employer health tax under the Employer Health Tax Act.
The agencies argued they were not employers of the workers because the Government of Canada managed and directed the workers.
The appeal judge found the parties were involved in a tripartite relationship and determined the agencies were the employers because they paid remuneration to the workers, held contractual obligations to the workers, and the government's contractual documentation indicated its intention that the workers be employees of the placement agencies.
The Court of Appeal upheld the decision, finding the appeal judge undertook a comprehensive review of all circumstances and did not err in concluding the agencies were employers for tax purposes.
