PAY EQUITY HEARINGS TRIBUNAL

0592-96 The Corporation of the County of Wellington, Applicant v.

Carol Butler, Mary Margaret Spencer, Beth Leith, Respondents

Before: Phyllis Gordon, Chair, Margaret Kvetan, Member and Geri Sheedy, Member

Appearances: Angela Rae for the Applicant; Senka Dukovich for the Respondents Butler and Leith, and Beth Leith as agent for the

Respondent Spencer

Cite as: Wellington (No.3) (October 25, 1999) 0592-96 (P.E.H.T)

DECISION OF PHYLLIS GORDON, CHAIR AND GERI SHEEDY, MEMBER, OCTOBER 25, 1999

Introduction

1. This decision determines whether the women who provided day care in their homes as part of the private home day care program operated by the Corporation of the County of Wellington (“the County”) were employees of the County for the purposes of the Pay Equity Act, R.S.O.1990, c.P.7, as amended (the “Act”). The County is a municipal government in Ontario, which, at the time of the Application, contained 21 municipalities. It was one of many local governments that had opted to provide subsidized home based child care by operating a Home Child Care Program as part of its overall child care program. The Respondents are three individuals who each provided daycare in their home for children of parents subsidized by the County. They and their colleagues are known as providers.

2. The Review Officer, in her Order of February 1, 1996 determined that the providers were employees and ordered the County to include the job class of ‘provider’ in its pay equity plan. The County objects to the Order, stating that it had no obligation to include these individuals within its pay equity plan because they were independent contractors and not employees. We conclude that the Review Officer was correct and dismiss the Application.

Legal Framework

The Pay Equity Act

3. Our task, the characterization of the legal nature of the parties’ working relationship for the purposes of pay equity, is undertaken in the absence of a comprehensive definition in the Act. Section 1(1) defines employee not by who is an employee, but by who is not, as follows:

“employee” does not include a student employed for his or her vacation period.

4. Pay equity jurisprudence from this Tribunal has consistently held that the Act is, in part, anti-discrimination legislation. We are guided by the approach set out in a leading decision of the Tribunal, Haldimand-Norfolk (No. 3) (1989) 1 P.E.R. 17 at paragraph 43.

…What are the principles underlying the approach the Tribunal should take in defining employer? In order to look at the interpretive principles which apply to our consideration of this issue, we rely in part on recent judgments of the Supreme Court of Canada. The Supreme Court wrote in Canadian National Railway Company v. Canadian Human Rights Commission [87 C.L.L.C. 17,022]

at p. 16,263:

Human rights legislation is intended to give rise, amongst other things, to individual rights of vital importance, rights capable of enforcement, in the final analysis, in a court of law. I recognize that in the construction of such legislation the words of the Act must be given their plain meaning, but it is equally important that the rights enunciated be given their full recognition and effect. We should not search for ways and means to minimize those rights and to enfeeble their proper impact.

The Court went on to cite the federal Interpretation Act and the Tribunal finds that the same section in the Ontario Interpretation Act, R.S.O. 1980, c. 219, gives us guidance. Section 10 says:

10. Every Act shall be deemed to be remedial, whether its immediate purport is to direct the doing of any thing that the Legislature deems to be for the public good or to prevent or punish the doing of any thing that it deems to be contrary to the public good, and shall accordingly receive such fair, large and liberal construction and interpretation as will best ensure the attainment of the object of the Act according to its true intent, meaning and spirit.

11. The language used in the Act is often intentionally general, thereby covering the huge variation which exists in the structure of employment in Ontario. In light of the purpose of the Act, and the judicial direction to construe human rights and remedial statutes liberally, we find that, at a minimum, we are to approach the task of determining whether the providers are employees in a way that would best further the purpose of the Act. The Act does not qualify the definition of employee in any way relevant to this inquiry. We should not be constrained by traditional notions of what employee status entails: that is, it is possible for the Act to apply in novel situations so long as the evidence demonstrates that the position under scrutiny meets the legal tests.

12. We agree with counsel for the County that the Act does not provide wage discrimination redress for all women working in traditionally female sectors, but only to those working women who are employees in job classes covered by the Act. Merely because child-care has traditionally been, and continues to be, female work, does not on its own justify a finding that the providers are employees. We must be otherwise satisfied that the providers are employees.

13. Counsel for the County submitted that various provisions of the Act limit the meaning of employee and lead to the conclusion that the providers are not employees. Her first argument is that the posting provisions require documents to be posted “in prominent places for each workplace” (s. 1(2) and s. 32(2)). There is therefore an assumption that employees are required to report to a particular location. The providers, she submits, were never required to go to County property. In response, counsel for the providers submits that the posting provisions cannot be read so as to limit such a significant aspect of the Act as the definition of employee. If necessary, the Tribunal can and has resorted to making posting rulings which are employer-specific and appropriately address notice issues. It is our view that the posting provisions are intended to ensure that the contents of certain documents are brought to the attention of employees. They should not be read as a limit on such a fundamental concept as employee. Indeed, there may well be persons, whose status as employees is not in doubt, who do not report to the work place. Had the Legislature intended to exclude any employee who is a home worker, merely on the basis that he or she worked at home, it could have done so directly and not through the posting provisions.

14. The County’s second argument is that, as section 5 of the Act includes working conditions as a part of the composite to be used for the comparison of job value, it cannot apply to providers. Counsel assumes that each provider would necessarily experience different working conditions in her respective home to such an extent that it would not be possible to arrive at a value. This argument, taken to its logical conclusion, would result in an exclusion from the ambit of the Act of any employee who works independently and in a separate location. We reject the view that coverage under the Act is to be so denied on the basis of working in isolation. Once the determination of employee status is made, then an examination of working conditions can take place.

15. In a similar vein, counsel submits that, if required, it would not be possible to make an adjustment to achieve pay equity. She says that, as section 9(3) requires that “all positions in the job class shall receive the same adjustment in dollar terms”, it can only apply to those situations where a job class is identifiable in terms of identifiable hours worked. This would not be workable for the providers, as the rates paid to them differ, depending on the age and ability of the children for whom they provide care. It is not our task to interpret section 9(3). However, we note that there may well be other cases where there are differential earnings between individuals based on factors other than time: for example, under a merit compensation plan meeting the requirements of the Act (section 8(1)(c)); or, where remuneration is based on piece-work. This is an issue to be resolved in the implementation of pay equity and is not determinative of whether the Act applies at the outset.

16. Counsel’s final submission on the basis of the Act, is that the requirements for minimum adjustments are referable to the employer’s payroll, and the providers were not on payroll. We reject this argument on the basis that it directly puts the cart before the horse. Who the employer has placed on its payroll is not determinative of whether a function is performed by an employee or an independent contractor. For the purposes of the Act, whether a position is to be included in the determination of payroll is to be done after the legal nature of the position has been clarified.

Tests to determine whether the providers are employees or independent contractors

11. At the outset, we note that counsel each referred us to numerous cases, some of which have considered the employment status of persons engaged as providers, which vary both with respect to the amount of evidence reviewed, and, the statutory context. In the unemployment insurance context, two brief decisions held that an individual engaged as a provider was an independent contractor. Clark v. Canada (Minister of National Revenue – M. N. R.) [1993] T.C.J. No. 925; Kuenzler v. Canada (Minister of National revenue – M.N.R.) [1988] T.C.J. No. 131. On the other hand, in the certification context, the Ontario Labour Relations Board has found providers to be dependent contractors under the Labour Relations Act, 1995 S.0. 1995, c.1 as amended, and thus employees. Ontario Public Service Employees Union v. Cradleship Creche of Metropolitan Toronto v. The Canadian Union of Public Employees, O.L.R.B. Rep. [1986] 3351-84-R; and, Ontario Public Service Employees Union v. Ottawa Day Nursery inc. c.o.b. as Andrew Fleck Child Centre, O.L.R.B. Rep. [1987] 0855-85-R. Providers have been held to be employees under the Employment Standards Act. Re MacAulay Child Development Centre, 1993 CanRepOnt 1202, E.S.C. 3157 (Wacyk).

12. The early common law cases dealt with vicarious liability and worker compensation matters. Subsequently, tax courts, as well as pension and unemployment insurance boards, determined the appropriate test in their respective contexts. The issue has been looked at by labour relations boards, workers’ compensation tribunals, and, employment standards and human rights adjudicators.

The Courts and the Legislature have considered the notions of “employment”, “employer” and “employee” in such different contexts as the definition of the circumstances in which liability will exist vicariously for the act of another, prescribing the liability of one person for the payment of income tax owed by another, prescribing when one person will be required to pay premiums for workers’ compensation or unemployment insurance, and stating when a person performing work for another will be subject to the collective bargaining apparatus created by labour relations statutes. The main problem has lain in distinguishing the relationships of “employer and employee” and “master and servant”, said to result from a “contract of service”, from the relationship between a person and another who is his “independent contractor” under what is said to be a “contract for services”. Cormier v. Alberta Human Rights Commission, (1984), 1984 CanLII 1204 (AB KB), 6 C.C.E.L. 60 (Alta Q.B.) at page 67.

13. For many years the leading common law case was Montreal v. Montreal Locomotive Works Ltd. et al. 1946 CanLII 353 (UK JCPC), [1947] 1 D.L.R. 161 (P.C.). In it, Lord Wright of the Privy Council enunciated what is called the ‘fourfold test’, a complex that involves control, ownership of tools, chance of profit, and risk of loss. A major shift in approach took place with the development of the ‘organization’ or ‘integration’ test, which we consider at the end of this decision. Somewhat in reaction to the organization test, the ‘total relationship’ test evolved. In Canada, the Federal Court of Appeal followed the ‘total relationship’ test that transformed the “fourfold” test of Montreal Locomotive into a ‘four-in-one test’ with emphasis on the “combined force of the whole scheme of operations”, Wiebe Door Services Ltd. v. M.N.R., 1986 CanLII 6775 (FCA), [1986] 5 W.W.R. 450 at 458. It doing so, it quoted the formulation of the total relationship test set out in Market Investments Ltd. v. Min. of Social Security, [1969] 2 Q.B. 1973 as follows:

…“Is the person who has engaged himself to perform these services performing them as a person in business on his own account?” If the answer to that question is “yes”, then the contract is a contract of service, no exhaustive list has been compiled and perhaps no exhaustive list can be compiled of considerations which are relevant in determining that question, nor can strict rules be laid down as to the relative weight which the various considerations should carry in particular cases. The most that can be said is that control will no doubt always have to be considered although it can no longer be regarded as the sole determining factor; and that factors, which may be of importance, are such matters as whether the man performing the services provides his own equipment, whether he hires his own helpers, what degree of financial risk he takes, what degree of responsibility for investment and management he has, and whether and how far he has an opportunity of profiting from sound management in the performance of his task, The application of the general test may be easier in a case where the person who engages himself to perform the services does so in the course of an already established business of his own; but this factor is not decisive…(at p.460).

14. In light of the very general language in the Act with respect to the definition of employee, we find it appropriate to make use of the common law tests. We accept counsel for the County’s recommendation that we review the evidence in light of the total relationship test. It is comprehensive and consists of a framework, based on principles developed over time, that can accommodate new circumstances. It specifically recognizes that “no exhaustive list…can be compiled of considerations which are relevant… nor can strict rules be laid down as to the relative weight which the various considerations should carry in particular cases”. We also briefly subject the evidence to the organization/integration test because we find it responsive to the pay equity context. Under each of the two major common law tests, we find that the providers are employees.

15. The jurisprudence highlights the importance of the factual situation in each case and the parties therefore presented full and detailed evidence. The evidence is reviewed in light of the factors in the total relationship test. To that test, we have added one factor we consider important, ‘the structure of the relationship’ factor, in which we examine the selection process, the duration of the relationship, the contract and matters flowing from it.

16. Our analysis is organized as follows:

• The Structure of the Relationship

• Control

• Equipment

• Capacity to Hire Helpers

• Financial Risk

• Responsibility for Investment and Management

• Profiting from Sound Management

• The County’s Relationship to Others

• Summary of Total Relationship Test

• Organization – Integration Test

Preliminary Matters

The relevant time period

17. In a preliminary ruling in this case, the Tribunal determined that January 1, 1988 was the relevant date for determining whether the providers should be considered a job class. Wellington (No. 1) (January 9, 1997) 0592-96 (P.E.H.T). In light of the difficulties inherent in marshalling evidence as of one particular date within an on-going and continuing relationship, the panel expanded the evidentiary period as follows:

Our understanding of the relationship between the Providers and the County will be informed by information compiled over a period of time and the continuum of events, understandings and arrangements. The appropriate time period for this review starts January 1, 1988 and may include information up to the date of the complaint in December, 1994. Thus, our understanding of the relationship will be informed by what counsel see as the most relevant evidence over this time period, but our inquiry will focus on whether any pertinent aspect of the evidence can be considered to describe what was in fact the situation on January 1, 1988. In this way, the evidentiary problems arising from the legal requirement to assess job classes as of January 1, 1988 will be alleviated. (at paragraph 13).

The Witnesses

18. Three County witnesses testified: Ms. Sharron Walpole, Director of Day Care Services for Wellington County Social Services; Mr. Robert Granger, Director of Personnel and Purchasing for the County; and, Mr. Jim Shaefer, Treasurer for the County. Each of the Respondents testified. Carole Butler was a provider with the County from August 1991 to June 1995; Peggy Spencer was a provider from January 1989 to late 1996; and, Beth Leith was a provider from December 1990 to June 1996. We have not attributed the evidence to a specific witness unless the context made it essential to do so.

Background - The County’s Program and its Relation to the Province

19. A 1989 Ministry of Community and Social Services (“MCSS”) document entitled A Survey of Private home day care Services in Ontario, 1988, sets out a brief history of regulated day care. Originally, the Day Nurseries Act, R.S.O. 1990, c. D.2 (“DNA”) only regulated “day nurseries” (commonly called “day-care centres”) and services provided in the home of the child (commonly called “in-home care”) and provided for the development and funding of these programs. In response to a growing demand, day care centres had initially provided home day care services by undertaking the selection of homes and providers, the placement of children, and the on-going supervision and support to both providers and parents. Subsequently, in 1971, the DNA was amended to enable the Ministry to share the costs of subsidized private home day care operated directly by municipalities or through purchase-of service arrangements with private agencies. In 1978, it was further amended to allow the Ministry to license private home day care agencies, although the implementation of licensing requirements did not occur until 1984.

20. The MCSS study indicates that, as of March 31, 1988, approximately 10,000 children were enrolled in 78 Ontario licensed private home day care agencies. Of the children who were in these licensed agencies, 96% in municipal private home day care agencies were subsidized, as contrasted to 63% in non-profit private home day care agencies and 60% in commercial private home day care agencies. Despite these figures, most children who were in private home day care were not in the licensed day care sector. In the County, a 1990 Guelph United Way Social Planning Council consultation indicated that 83.3% of the parent respondents did not utilize licensed care.

21. The DNA, along with its regulations, set out how an agency was to provide service and how it was accountable to the Ministry. DNA definitions include:

“private home day care” means the temporary care for reward or compensation of five children or less who are under ten years of age where such care is provided in a private residence, other than the home of a parent or guardian of any such child, for a continuous period not exceeding twenty-four hours. (s.1 (m)).

“private home day care agency” means a person who provides private home day care at more than one location. (s. 1 (n)).

“operator” means a person who has control or management of a day nursery or a private home day care agency…” (s. 1(l))

22. The regulation (s. 56(1)) specifies the maximum number of children permitted in a licensed private home day care setting. It is the operator’s responsibility to ensure that there are no more than five children present under six years of age at any time, including the provider’s own children. As well, the number of children in the following specified classifications are not to exceed these maximums:

• Two handicapped children.

• Two children, who are under two years of age.

• Three children, who are under three years of age.

• One handicapped child and one child who is under two years of age.

• One handicapped child and two children who are over two years of age but under three years of age.

23. The regulations are numerous. Pursuant to section 18 of the DNA, they govern “the management, operation and use of … private-home day care agencies and … premises where private-home day care is provided by a private-home day care agency …” Throughout, the regulations refer to the premises where the care is provided as “at each location where private-home day care is provided by the operator” and to providers as “each person in charge of each location where private-home day care is provided by the operator”(emphasis added). Thus, it is the agency, and not the provider, that is regulated and licensed. In order to maintain its licence, the agency must ensure that the providers and their homes comply with the DNA and its regulations. This is true whether the agency is a municipal government, a not-for-profit centre, or a private commercial corporation.

24. In her dissent, our colleague suggests that to the extent the standards and policies implemented by the County were pursuant to the DNA, they are not indicators of employment status and should somehow be shielded from our review. With respect, we disagree. Whether the County was obligated by operation of law to adopt certain policies relating to the providers’ work, or to supervise them in the manner it did, is not germane. The relevant issue is whether, as a result of the way the County conducted itself, the providers were its employees. A similar argument was advanced in Re MacAulay, supra, where the operator of the licensed agency argued that not much weight should be given to the degree of control exercised over the providers because most of the requirements flowed from the DNA and the funding agreement with the municipality. We agree with the referee who wrote at paragraph 47, “…the issue is not whether there is a rational reason for the control, but rather the degree and nature of control which exists”. We note as well that many public entities conduct their activities in accordance with a specific statutory regime. Schools, colleges and universities, community health centres, nursing homes and hospitals are examples of such broader public sector entities, and several more are listed in the Appendix of the Act. Nevertheless, the determination of whether someone engaged by one of these entities is an employee or an independent contractor is made by reference to the applicable test and not the organization’s statutory mandate.

25. The County joined forces with the City of Guelph, a separate municipality, for the provision of its social services programs which included general welfare, homemaker and nursing services, youth counselling services, parental support services and day care services. Its Department of Social Services reported to the Joint Social Services Committee (“JSSC”) composed of an equal number of councillors from the two municipalities whose decisions went to both municipal councils for ratification.

26. The County voluntarily offered day care programs in three forms, each of which were ultimately regulated under the DNA. It held two licences: one for the Willowdale Day Care Centre, a day care centre it operated; and, one for the Wellington County Social Services Private Home Day Care. It also utilized a third option and purchased day care centre spaces for subsidized children from other licensed agencies. It employed staff for the Willowdale Centre, and had a complement of staff in the private home day care program as well. In particular, the County employed home visitors, at a ratio of one home visitor for 25 providers. (Although the title of this position has now changed to Family Day Care Worker, in 1988 the position was titled ‘home visitor’, the term used in this decision.)

27. Prior to its annual licence renewal, a program advisor from the MCSS audited the program. This entailed reviewing the County’s files and visiting 10% of provider homes randomly selected. As head of the agency, Ms. Walpole was expected to follow up on any identified problem areas and take corrective action.

28. From a budget point of view, the cost to the County was very similar for centre spaces and private home day care spaces with the key monetary issue being the number of subsidized spaces. Depending on the demand, the County moved money back and forth between the three types of care, demonstrating the degree of integration of the programs. The parents of the children enrolled in the program qualified for subsidized care based on income and the County’s goal for the program was to keep parents working, thereby reducing its welfare obligation.

29. In 1988, the County set the rates for the providers and the province then paid 80% of this amount, the County paying the remaining 20%. In addition to the funding formula, the Province instituted two grants relevant to provider income. The Direct Operating Grants, called “DOGs”, were introduced by the Province in 1988 and were the first to address low compensation levels for providers. Subsequently, Provider Enhancement Grants, or “PEGS” were introduced and were first received by non profit licensed agencies in January of 1992 for providers who worked in 1991. It is evident from Ministry documents describing the grants that the Ministry did not consider providers to be employees of the agency.

30. The County, under Ms. Walpole’s guidance, put considerable thought and energy into the program and developed a set of objectives for it. In 1988 these objectives were very similar to those set out in the Wellington County “Private Home Day Care Policy Manual for Parents and Providers” of March 1991. In this brochure and similar documents, the County represented to the community and prospective parents that the care by the providers would be in accordance with these care objectives and standards, and that the providers were an integral part of its program.

The Structure of the Relationship

The selection process

31. The County undertook a variety of methods to recruit providers. These included the posting and distribution of flyers in the community and the county fair; the placement of advertisements in the child care section of the newspaper, separate from the Help Wanted, tenders and other contract sections; and, the listing in the telephone directory. Potential providers were also referred to the County by resource centre staff, other providers, clients and home visitors. Sometimes, providers called the County on their own initiative to inquire if work was available.

32. Once a provider applicant expressed an interest, the home visitor used a one-page intake form for each applicant to record the age of children she wished to care for, and the hours she would be available (including daytime only or overnight). This became part of an inventory of who was available in what locations, should a demand arise. If parent clients were available in the applicant’s area, the home visitor then met the applicant in her home for a lengthy interview in order to advise her about the program and to complete an “Application to Provide Supervised Private-Home Day Care” form. This form, used in 1988, covered many matters required under the DNA. During this visit, the home visitor also filled out a “Premises Evaluation” form, a County form likewise covering DNA requirements. The applicant was given a County document setting out the program requirements in detail. As part of the application process, the County also required a private home day care provider medical form to be completed by a physician. This was used because, as Ms. Walpole said, they wanted to be certain that the applicant was “in good health and able to do the work”.

33. In 1993, the County utilized a revised application form, 8 pages in length, which formalized the interview but did not indicate a significant shift from the less formal process of 1988. Counsel for the County suggested that this process was less complex than the County adopted when hiring its regular staff. However, when Mr. Granger, the Director of Personnel and Purchasing, was shown the form used for applicant providers, he volunteered that the interview process for regular full-time employees was “very much less formal” than the form used in the provider selection process.

34. We find that this very extensive recruitment process has more in common with an employee recruitment and hiring process than it does with a process of engagement of an independent contractor. The County advertised widely for “applicants”. This differed from the process involved when prospective contractors’ proposals would have been assessed in terms of specifications, costs and fees. The assessment the County made of the applicant was whether her home was safe and in a good state of repair, whether the home visitor thought her attitude and approach were appropriate, and, if her health was adequate. It was not an assessment of her service or a product she was providing. This indicates a contract of service rather than a contract for services.

Duration of the relationship

35. The attention and time the County devoted to the selection process is consistent with the fact that the applicants were not sought for one engagement only, but in anticipation of an on-going relationship with the County. There was an expectation that the applicant would provide care for many children over time. As will be noted below, the method of payment of the providers was on-going and regular, also reflecting the on-going nature of the relationship. Similarly, the system used by the County to discipline and terminate, described below, connotes an employment relationship. When new clients of the County needed care, it utilized an approach somewhat parallel to a recall system. These are indictors of a long-term contract of service, rather than a contract for services.

The Contract

36. Upon being selected as a provider, the provider was required to sign a non-negotiable contract prepared by the County called an “Acknowledgement of Agreement”. It stated that, in consideration for being appointed to do private home day care, the provider acknowledged that:

• the DNA had been explained to her,

• she was an independent contractor,

• there would be no deductions from any fees paid to her,

• she absolved the County from all liability for accident or injury to herself,

• she would keep regular and accurate records,

• she would not charge any greater fee for her services, and,

• her appointment could be cancelled on ten days’ notice.

While the contract specified their formal relation, this was not a negotiated understanding as becoming a provider was conditional upon signing the contract, written in its entirety by the County.

37. Counsel for the County submits that the intention and understanding of the parties are significant factors. They understood that they had entered into a contract for services, rather than a contract of service, and this has not been challenged until this pay equity complaint. We do not agree that a characterization of their relationship imposed unilaterally by one party amounts to a joint expression of intention. Nor do we infer that, because providers at the County have not previously challenged this characterization, they necessarily accepted it to be an accurate description of their status. Even in light of the contract language, the testimony of the Respondent providers indicated that they perceived themselves differently. Ms. Spencer said that she did whatever she had to do, whether she agreed with it or not, and that she had a job. Ms. Leith felt that they had to do as they were told. In light of these circumstances, we do not attach much weight to the formal description set out in the contract.

Income Tax

38. It was common ground that the providers filed their income tax as self-employed persons operating their own business and thus were able to claim all expenses related to providing home day care. The document distributed to new providers stated:

For the purpose of the Income Tax Department, a … provider is considered self-employed, operating a small business. One is not an employee of Wellington County Social Services; the County of Wellington buys your service in the form of child care. ... It is expected that a registered provider will give income tax receipts to parents.

39. The providers did not undertake to file as self-employed on their own initiative. Rather, they were directed by the County to do so, which was consistent with the characterization of their relationship set out in the contract. The County provided them assistance and training to do so by hosting a speaker from Revenue Canada at a training session each year. In these circumstances, we give little weight to the fact that the income tax returns indicated that the providers were self-employed. Nor is the view of Revenue Canada significant to our determination of their status under the Act. Similarly, the providers were required to maintain records under the contract.

Insurance

40. Providers were required to hold general liability insurance as they were not covered by the County’s insurance. While ordinarily the assumption of liability insurance would tend to indicate independent contractor status, it does not influence our decision because it was a condition of being engaged as a provider set by the County and flowed from the unilaterally designed contract.

Summary

41. In light of the selection process utilized by the County and the continuous and indeterminate duration of the relationship, the structure of the relationship factor indicates that the providers are employees. We do not attach much weight to the contract, the providers’ income tax status, insurance or records, for the reasons given.

Control

Placement of children with providers

42. One indicator of control is who controls the flow of work to be performed. In this case, we find that the County, through its placement procedures, determined the work assigned to the providers. Rather than act as a referral agency providing parents with a list of qualified providers, it actually placed children in particular provider homes. The home visitor considered three key factors: the proximity of the parent's home or workplace to a provider's home; the hours of care required; and, the ages of the children to be placed. These were matched with the provider's location, her preference for part-time or full-time care, the age of children she preferred and the age of the children already in her home. Any licensing requirements with respect to disabled children were considered. The home visitor would consider if the child had relevant health requirements such as allergies and might consider whether there was a similarity of values between the provider and parent. A provider’s flexibility was relevant. Ms. Walpole indicated that although a provider could refuse to take a child at certain hours, this might result in the home visitor approaching another provider with more flexibility.

43. The evidence about how parents were advised of possible providers is inconsistent. Ms. Walpole testified that the home visitor gave the parent three provider names and the parent then decided whom to interview and made the choice of provider. On the other hand, she stated that upon receiving a request for child care, the home visitor would locate a suitable provider for a two-week trial. If unsuccessful, the placement could change. She said that the home visitor did not merely see who was available but usually had a provider in mind and would call to see if she was willing to take the child.

44. The different possibilities were reflected in the experience of the provider Respondents, although none were aware that the parent was to have been given three provider names. Ms. Spencer usually met the client before the meeting with the home visitor and regularly had the two-week trial period. To her knowledge the parent had not had a choice of placement. Ms. Butler and Ms. Leith did not meet the clients until the matching meeting with the client and the home visitor. While there may have been some residual right of the parent or the provider to decline a particular placement, this was rarely exercised. We conclude that, for the most part, the home visitor was very involved with the placement process and actually placed the child with a provider, taking into consideration the factors identified above.

45. The County then assumed a strong role in the next step referred to as “matching” process which was the meeting at which a parent and provider determined the child’s care arrangements, in the presence of the home visitor. For a period of several years, a three-way written contractual agreement was utilized. Although in 1988 the matching process was less formal, Ms. Walpole testified that the material discussed at the placement meeting, and the understandings reached were similar to those set out in the three-way agreement. This document reveals the extent of County supervision, as, in the presence of the home visitor, all three parties would discuss and agree to: plans for the pick-up and delivery of the children; the communication method between the parent and the provider; arrangements when a child was not picked up as scheduled; outdoor supervision; liability when children were transported to school; authorization for excursions; developmental screening; vacation arrangements; medication, accidents or sickness; behaviour management; sleeping arrangements; mealtimes; and, the parent’s instructions for feeding children under one year of age. The document even covered the authorization by the parent and provider for the use of photographs of the children and the providers to publicize the County’s program.

46. While Ms. Walpole claimed that the role of the home visitor was to record the discussion and to make the clients and the providers aware of the DNA, we find this description inconsistent with the written document itself, and the evidence of the providers. Ms. Spencer testified that the home visitor supervised the match interview, asked the questions and filled out the forms. Ms. Butler testified that on occasion, if the home visitor did not agree with an item, (such as a child’s mother wanting the child to take swimming lessons which the County found unacceptable) it was not included in the agreement.

47. Unlike most arrangements where an agency pays an independent contractor for a service to be rendered to its clients, the County did not contract for general service to be offered to its clients on an as-needed basis, but rather investigated and ‘matched’ each placement individually. The County also guided, approved and controlled the actual arrangements between provider and parent in a manner consistent with its on-going management and monitoring of the placement, highlighting its supervisory role.

Orientation and Training

48. A central part of the County’s program was the orientation and training of providers. The orientation program was a day-long session conducted by home visitors. In 1988 the topics covered were an overview of the agency and its role, record-keeping, child development, nutrition, discipline, business practice, County structure, creative activities, films, role play, storytelling, science activities, the program’s policies and procedures, the forms used, client needs and the selection of providers. The home visitors reviewed the supervision process, the role of the home visitor, her visits, how to contact her, her links to other agencies, how to report accidents, and how to obtain approval for outings. The training program involved between 8 to 10 evening workshops per year. In 1988, the topics covered were nutrition, co-operative games, infant development, Children's Aid, income tax (with a speaker from Revenue Canada), fire safety, music for children, storytelling, and a speaker from the Ministry on licensing. While specifically developed for the providers, these training sessions were also open to parents, or staff of the County or other child-care resource centres, but we had no evidence that they were actually attended by persons other than providers. Providers were paid for orientation as an inducement for their attendance and any children in their care were placed with another provider while they attended the orientation. In 1988, if they attended the orientation and two evening workshops, they qualified for the trained rate, an additional $2.00 per day.

49. It was Ms. Walpole’s position that in 1988 attendance at orientation and training was not mandatory but strongly encouraged. The providers state that attendance was required. Ms. Butler testified that she had not wanted to do the training as she already had her Early Childhood Education diploma and that she had worked for two other municipal agencies which had recognized her qualifications. She was ready to forego the trained rate but was told in her initial interview that she would not be accepted as a provider if she did not do the training. As training was not optional at the County, she accepted the requirement.

50. The documentary evidence confirms the providers’ view. One document indicates that “active providers must attend a minimum of two meetings per year”. The 1991 document, ‘Wellington County Private home day care Policy Manual for Parents and Providers’, indicates that “all of our providers are required to be trained by regularly attending an orientation and monthly meetings.” A June 1992 newsletter indicated that “two weeks notice will be given to those who do not complete the training”. In addition, the emphasis on training was consistent with Ministry policy. We find that training was mandatory.

51. The development and provision of paid orientation and on-going training for the providers indicates that, in the County’s eyes, the providers were expected to provide day care in accordance with the training they received. The County was considered to have the child-care expertise (notably arising from the qualification requirements of the home visitors) and to have been under an obligation to ensure that it communicated this expertise to the providers.

52. We find that the County’s provision of paid-for orientation and on-going training is parallel to an employer’s provision of orientation and training for what it perceived to be essentially an unskilled workforce. It differs significantly from an independent contractor situation, where the contractor sells his or her expertise to the purchasing client, generally without any expectation or requirement of further training from the client.

Policies and Procedures

53. The County issued many policies with a direct impact on the work of the providers. Over the years, several remained constant and some changed slightly. While the directive to formulate some of the policies came from the DNA and the regulations (as was also the case for day care centres), the County’s policies were developed by the home visitors, the resource teacher and Ms. Walpole. Providers did not have input directly, although their suggestions might be incorporated. Some of the policies were written and some were communicated orally to the providers by the home visitors.

54. The DNA requirements dealt with safety and health concerns. In order to maintain its licence, the County was required to develop policies and to monitor provider compliance with them. Thus: children were not to be left without adult supervision; a telephone in the home was mandatory; emergency phone numbers were to be posted; first aid kits were mandatory; medicines and cleaning materials were to be locked; sanitary practices were required; rules regarding the care of sick children and medications were specified; and, spanking and harsh punishment were forbidden. The providers’ homes were to comply with municipal laws, rules or orders of the local board of health, fire bylaws and any restricted-area housing standard or building by-laws. There was also a requirement that daily activity plans be maintained.

55. While not all the policies that were in evidence were actually in place in 1988, all of the issues were of concern to the County at that time and it had the authority to stipulate the rules in 1988. County policies were often formally developed after an incident arose. The overnight care supervision policy illustrates this. A home visitor was concerned when she realized that a brother and sister, both young children, were sharing a bed at Ms. Spencer’s house. Ms. Spencer was advised that this could not continue and the County developed a written overnight care policy, with seven requirements.

56. Some matters appear to have been treated as matters of policy although not formally adopted as such. For example, the Respondents each understood that the County had a return of documents policy and referred to a February 1992 newsletter item requesting that documents be returned for shredding. Ms. Walpole testified that there was no such policy and that each provider could make her own decision about what to return, the issue was not discussed at meetings and she was unaware of the newsletter item. She further explained that home visitors may have had their own requirements.

57. We conclude that there were many formal written policies developed by the County that affected the providers and that were monitored by the County. There were also rules that were not written, but were understood by the County to be policies. In addition, home visitors could set their own procedures and requirements, which, even if not thought of by the County to be policies in a formal sense, could well have been perceived as such by the providers.

58. From the perspective of the provider, whether or not a requirement was a policy derived from the DNA or the County, or whether it was a program requirement or a requirement of her individual home visitor, it would have had the same impact on her own independence of operation. This evidence demonstrates that the home visitors exercised a great deal of supervision and control over the way providers approached the care they gave to County children. In all respects the home visitors were employees and agents of the County.

Supervision - daily routine

59. The County submits that the providers were in charge of the daily routine, received a minimum of supervision, worked independently of the County and never needed to go to the County premises during the workday. Even within the parameters of the DNA, there was still much room for provider discretion, originality and initiative. We agree that the evidence indicates that the providers exercised much independent planning and initiative and were basically in charge of the details of the daily routine.

60. Ms. Spencer testified that she had oral understandings with parents about the needs of the children and how she operated. She kept track of what occurred with the children in her own private record book, along with her business records. Although these were not shared with the County, she was required to pass on to the County any notes she received from parents. She decided the daily schedule of activities and planned meals and snacks but did not post menus, as it was not mandatory to do so.

61. Ms. Leith would receive information about the child’s food likes, feeding instructions, nap habits, etc. from the parents. If the child was an infant, the parent sent a diaper bag. If medication was to be administered, the parent was to sign a form from the County. For one family she was asked by the County to set up a daily communication book, but this was not a general expectation and she rarely received notes from parents. She also had some of her own rules which she described as common sense and often similar to those of the County. For example, the children were to use the bathroom before meals and could not go outside without her. She tried to arrange the children’s naps so as to comply with the DNA. She planned themes and programming which included outdoor activities and excursions. Ms. Leith created forms which she said she was required to give to the home visitor who wanted to see what she was doing. Her own daily routine and schedule form was distributed by her home visitor to her other providers. Ms. Leith used the County’s menu for planning, as requested by her home visitor.

62. Ms. Butler had what she called common sense rules, which she said were not extraordinary. These included respecting others and not using bad language. The children were expected to wash before eating, to come directly to her house from school without playing in the park, and to wear helmets when biking. She also developed her own forms, including an excursion form which she gave to all parents advising them of an up-coming field trip. She developed program calendars using resources from a variety of places including the County’s craft packages and newsletters, her own textbooks and ideas of her own or others. She prepared lesson plans and developed the activities herself. Although not required, she gave these monthly calendars to her home visitor, partially out of pride of workmanship. She was not required to inform the home visitor of field trips but did so as a courtesy and sometimes invited her to come along. Ms. Butler outlined a few of her activities, including a trip to the store to learn about shopping, and then to prepare lunch. She had the children write thank you cards to their parents. She also had newsletters from time to time, which outlined the different programs she developed for pre-school and school-aged children.

63. We find that while carrying out the daily care under their own initiative, the Respondents still operated within the context of County requirements, used County forms and provided requested or required information to the home visitors. Even in this aspect of their work, the on-going relation with the County is very evident. Where the County was involved to a greater degree with children with special needs, the demands for carrying out County instructions increased.

Supervision - home visits

64. In the early years, the home visitors visited providers on a regular basis monthly or every six weeks, with or without notice. They also carried out quarterly mandatory inspections of the premises. The visits could be from 5 to 10 minutes, or, as long as 70 minutes. Ms. Walpole suggested that a provider could refuse entry to the home visitor but was unable to say if this ever occurred or if it was considered an acceptable practice by the home visitors. The home visitor kept an extensive record of each of the visits.

65. The level of monitoring and supervision at the home visits was significant. At the visits, the home visitor observed the children, ensured provider compliance with the rules and policies, and mentored and taught the provider. We consider that these visits were supervisory in nature and were reasonably frequent, given that the supervision was also on-going through regular phone contact.

Supervision - provider files

66. The County kept a file for each provider which included a chronological narrative sheet starting from the date the provider began with the County and outlining all contacts with the provider, including visits and phone calls. The file included the provider’s initial application to provide home care, premises evaluation forms, medical information about the provider and members of her household, proof of rabies shots of any animals in her home, her acknowledgement of agreement forms, any reference letters she offered, phone contacts, correspondence and insurance information.

67. The files consisted mostly of the ongoing record of visits and telephone contacts, notes of the home visitor’s observations and her own interactions with the children. The sheer amount of detail in the files of each of the three Respondents is impressive, revealing the home visitors’ involvement with the care of the children and their responsibility for their well being. They also recorded any concerns they had about the children, what advice was given, and comments on the care and the directions they gave to the provider.

68. We find that the files kept on the providers demonstrate that, even though the home visitor was not on site on a daily basis, she carried out a degree of supervision and coaching of the provider not normally associated with the monitoring of an independent contractor. The degree of overlap that existed between the work of the home visitor and that of the provider, constitutes a continuum of activity more likely to be found in an employment relationship than with an independent contractor.

Material support by the home visitors

69. The home visitors created newsletters for providers and parents two to four times a year which included information about childcare, equipment, supplies, recipes, crafts and nutrition. The County regularly provided much relevant information about childcare, along with practical suggestions on such things as planning activities, preparing meals and safety concerns. This information, like the training sessions, was geared to enhance the quality of the day care provided by the providers. In addition, Ms. Walpole sent out news bulletins to providers once or twice a month. The home visitors regularly brought craft kits to the providers, which included ideas and any materials they were able to obtain. We find that these contributions were an on-going part of the home visitors’ mentoring role.

Supervision - the activities of County staff

70. Although the County made some attempt to downplay the extent of the home visitors’ supervision of providers, its own documentation indicates otherwise. In the absence of any direct testimony from a home visitor, we find the position job description helpful. It sets out the following duties of the position:

• Recruiting, assessing and monitoring of providers.

• Reviewing the homes and establishing capacity and ongoing monitoring as per Ministry requirements.

• Maintaining clear, concise records.

• Resource person for the providers and clients.

• Liaison person between client, providers and community agencies.

• Participate in provider training sessions, meetings, and preparation of newsletter.

• Other day care related duties.

71. In the pay equity position questionnaire, which Ms. Walpole agreed was generally accurate, the home visitors elaborated on the job description. They assessed providers by ensuring that they maintained agency standards, visiting them a minimum of once every six weeks, and updating all the documents. They monitored providers by recording monthly visits and all other related information in the files, maintaining accurate computer profiles, updating the providers on policy changes, advising on program ideas, taking disciplinary action when warranted, and, terminating the agreement if necessary.

72. The questionnaire also indicates that the home visitors made referrals to other agencies, and received and acted on serious occurrences. It states that home visitors modeled appropriate behavior for the providers and children in care, authorized attendance forms for payment, organized and facilitated provider training and special activities for providers and children, and, did fundraising. They were expected to present a positive image of the program in the community and within the County. They communicated to clients and providers through correspondence and monthly newsletters. They distributed craft materials, songs and activity ideas to the providers and made decisions regarding the program, including policies and content.

73. Under the heading ‘list of contacts’ they began with providers, prospective providers and sub-providers, indicating they had daily contact with them, as well as for the children in care. Under ‘problem-solving responsibilities’ they indicated that they dealt “daily” with providers on issues of discipline, communication, policy enforcement or adjustment, and regulation enforcement. “Occasionally” they dealt with providers regarding suspected child abuse, serious occurrences, demands for more money and termination, if necessary. They indicated that they dealt with clients “frequently” about dissatisfaction with care, financial difficulties, medical problems, loss of job and lay-off, job search, personal problems, accessibility to care and termination.

74. We find that the job description and the pay equity position questionnaire confirm that the providers were regularly supervised in their work. While on a day-to-day basis the providers planned and carried out their daily routine, they did so in the context of a full home day care program and were subject to the on-going monitoring, supervision, and potential discipline of the home visitor. We find that this degree of supervision amounts to a controlled work environment akin to an employment situation.

Supervision – comparison with services contracted by the County

75. We find it instructive to briefly consider the degree of supervision the County exercised with service providers with whom it contracted. The Social Services Department made several expenditures to third parties such as opticians, health providers, doctors, and dentists, on behalf of it clients. No one was specifically assigned to supervise the contracting process or the work of these professionals. Mr. Schaefer commented that the County did not have the skills to second-guess them, nor did it need to monitor their competence. The Social Services Department also contracted with agencies such as Red Cross Home-making Services, Com Care and the Victorian Order of Nurses for homemaker and nursing services on behalf of its clients, and with other agencies to provide counselling services for its clients. There was no evidence that the County trained, monitored or supervised these services or unilaterally set the contract price, in contrast to its approach to the providers.

76. Currently, the County has a contract with a company for the processing of blue box materials and two County employees are required to spend a lot of time supervising this work. Mr. Schaefer made a relevant observation when he noted that this degree of County staff involvement was more than should be the case. This, along with his observation that it was unusual that another County employee was involved in overseeing rest home rates to the extent she was, indicates that his view about the appropriate degree of supervision when services are contracted is similar to ours.

Discipline and Termination

77. A provider could lose work in two ways: the County could withdraw a particular child from the provider’s care and continue the relationship with the provider; or, it could sever its connection to the provider altogether. The County withdrew children from the care of a provider in a number of circumstances. It could occur automatically if the parent lost her job and therefore her day care subsidy. Or, the home visitor could decide that the care was not of continuing value for a particular child, in general, or, with the particular provider. Ms. Walpole indicated that if something about the provider’s care was of concern to the home visitor, she would discuss it with the provider to see how it could be prevented in the future. If the provider did not respond appropriately, the County would ask the parent whether she wanted to continue with the same provider or find alternate care.

78. The County could terminate a provider if there was no longer need for care in her area—a lack of work. If this happened, the provider’s file was made temporarily inactive but was not taken out of the system. After a period of time the provider’s name was removed from a home visitor’s files, but kept in the system for annual payroll information. If work became available in the provider’s area once again, and there were no active providers, her file might become reactivated. In such cases, the home visitor would first consider those provider files most recently closed, as conditions such as insurance would likely still have been up-to-date. In an informal way, this process was parallel to a recall after a lay-off for lack of work.

79. The County could also revoke its approval for a provider, resulting in a termination of the agreement for cause. Ms. Walpole noted that the number of terminations has been very low (not more than two a year) because the initial screening ensures that providers are comfortable with the program beforehand. The most common reason for termination was if a provider had more than five children in care, a violation of the DNA. She speculated that a conflict of interest might give rise to discipline or termination. The evidence also indicates that the 1988 newsletter stated that non-completion of training could lead to termination. Similarly, failure to comply with the policy regarding alternate care-givers could result in termination.

80. We agree with counsel for the County that the fact that the agreement between the providers and the County contemplated termination of the contract for cause does not necessarily imply an employment relationship. However, in addition to this provision, the County also had a progressive discipline scheme found in its Policy Regarding Behaviour Management which is as follows:

Failure to comply could result in any or all the following disciplinary actions being taken against the provider; verbal warning, written warning and termination of agreement. The criteria to be considered when determining disciplinary action include:

• seriousness of the offence

• actual or potential risk, or harm to the child

• past performance in general of the provider

• recent performance

• frequency of occurrence

• previous disciplinary action

Of note is the reference to verbal and written warnings, and to previous disciplinary action. We find that this language contemplates an on-going work relationship subject to discipline. This policy indicates a supervisory control similar to that exercised by employers over their employees.

Determination of rates

81. If one party determines the amount of compensation and how it is to be paid, it is an indication of control over the other. In this case, the County council approved the rates that had been set by the JSSC. While there have been some efforts by providers to influence the rates set by Council, these have not succeeded. On occasion, home visitors have encouraged providers to write letters, particularly if they were aware of higher rates being paid elsewhere. Ms. Walpole suggested that providers were entitled to make representations to either the JSSC or Council, pointing out that Ms. Butler had made representation about having an advisory board created for the program. We find that the providers’ capacity to influence the rates was more theoretical than real. Council meetings were in the mornings when the children were in care, and, without some practical support from the County, the providers would not have been able to attend them. Ms. Butler’s unsuccessful attempt to organize an advisory board illustrates the difficulties inherent in bringing providers together for group advocacy. The County determined the rates unilaterally and did not negotiate in any respect with the providers.

Remuneration process

82. The evidence demonstrates that the system of remunerating the providers, while on a ‘per child’ basis and with a billing form superficially akin to that of independent contractors, had many similarities with payment of hourly paid employees. Since 1987, the County’s payment system has been based on scheduled attendance and provider availability. Any variance from scheduled care required prior approval no matter what the reason, regardless of whether the change was initiated by the parent or the provider. Without this approval the provider was not paid, except for rare instances when Ms. Walpole granted exceptions after the fact. Parents and home visitors were asked to report any changes to the pre-arranged schedule. Examples of the rules based on provider are: if a provider was available to provide care on a statutory holiday, she was paid the full rate for the day, even if care was not required; likewise, if she was available, she was paid if a child was absent because of illness; or, if available, she was paid for up to two weeks of care when the client was on vacation.

83. The County calculated and paid for a provider’s time on a daily, hourly or part of an hour basis. For example, the daily rate paid for the child included a half-hour travel time each way, for the parent to get to and from work. If the parent was late, the provider could charge late-fees, although providers infrequently did so. If the home visitor thought it justified, she might authorize payment for the additional travel time. Another example was the swimming policy. If the provider agreed to a parent’s request for her child to attend swimming classes during the time of the provider’s care, the County would calculate this specific time and deduct it from the provider’s income, on the theory that she was not caring for the child during that time.

84. The invoices submitted by the providers were County forms entitled ‘Private home day care Attendance Register’. This record of the attendance of the children in a provider's care was filled out by the provider, signed by her and the parents (confirming that the care had been provided) and then sent or delivered to the Day Care Services office every two weeks. The form utilized codes linked to the number of hours or the type of care provided and each code corresponded to a particular amount of remuneration. The form also recorded such information as a child being away due to illness and whether the provider was entitled to the ‘trained rate’.

85. The home visitor processed the completed forms and checked for any changes between scheduled and actual attendance that required an explanatory note from the provider. She then initialled the form, approving it for processing. In 1988, cheques were produced from data from the attendance register and were sent to the Day Care Services Department on Thursdays, ready for the providers on Fridays. The providers’ cheques were generated from the County’s general account and were integrated with the other private home day care accounts, and not with the County’s payroll. Statutory deductions were not taken from the providers’ cheques.

86. We find that this complex system was highly integrated into the County’s daycare operations. The method of calculating the hours worked, verifying the accuracy of provider accounts and the approval process had much in common with a time-clock and payroll system. It was an on-going, routinized bi-weekly process that, in reality, determined pay on an hourly basis. It had a built-in verification control, as parents were to advise of any schedule changes and were required to sign the forms. This process differs significantly from the invoices of independent contractors which generally set out the services performed, are prepared when the contractor chooses and are forwarded upon completion of the contracted service, or on an interim basis. The County’s system indicated a high degree of control and was organized on the basis that the providers’ service was continual and indeterminate in nature.

Hours of work

87. Another aspect of control is who determines the individual’s hours of work. The County submits that, unlike employees, a provider had the choice of when to work. We agree that a provider could initially indicate her preference for part-time or full-time, or, day or night work. However, employees are also able to make similar choices or decline the job. As with employees, the more flexible a provider was with respect to hours, the more likely it was that a home visitor would place children with her.

88. Once the provider had committed to full-time or part-time care, we find that she had less control of her time than most employees, and certainly less than independent contractors. This is because she was required to provide the care until all of the parents had picked up their children. Parents could be delayed for many reasons, including the demands of their job or school schedule, travel or other unexpected delays.

89. Providers had very little input regarding any release time. From 1988 to 1992 the County policy was that, unless there was an emergency, they were required to always be available. If they knew they would not be available, they were to notify the County in advance and the County would either ask the client to make her own arrangements or ask another provider to look after the children. Providers were not to sub-contract the care to someone else. In 1993 this rule was amended to permit a provider to use a previously approved alternate caregiver to cover her absence for up to two hours for medical appointments (and other purposes pre-approved by the County). This was contingent on having given notice to the home visitor and having obtained the parent’s prior consent. Failure to report the change could result in recovery of overpayment of funds, or in termination of the agreement. In either case, the policies regarding alternative care did not permit providers any flexibility in their hours of work. The rules parallel an employee’s obligation to report to work at a particular time. Indeed, the requirement for prior approval was more strenuous than in many traditional employment situations, where fewer steps would be required to obtain permission for time off. We conclude that providers did not have control of their hours.

Summary

90. In light of our observations regarding the placement of children with providers, the orientation and training of providers, the policies of the County, the supervision of the providers including their daily routine, the home visits, and the files maintained on them, the job duties of the home visitors, the County’s approach to discipline and termination, the determination of provider rates, the remuneration process and their hours of work, we conclude that the County exercised a great deal of control and that the control factor indicates that the providers are employees of the County.

Equipment

91. The County’s position is that the providers supplied the vast bulk of their own equipment and supplies, the ‘tools’ of their enterprise. The providers’ view is that although the County’s contributions were not rich, they were, nevertheless, valuable additions to the providers’ supplies. We find that although the County did not purchase equipment for the specific use of providers, it did supply some furniture and equipment over the years. The home visitors also provided materials to assist providers with activities for the children, depending upon what was available to them. These comprised found and free materials such as scraps of coloured paper ends, egg cartons, newsletters with recipes, directions for crafts, references, donations of materials, etc. Occasionally, if the program received a grant, it would be spent on such things as bulk paint. When funding became available in 1988, a toy library was opened for staff and providers. First aid kits were distributed to a few of the providers in the earlier years, and then, when the County received the direct operating grant from the province, they were provided to everyone.

92. Each of the providers was asked about the equipment and supplies she owned and used. Ms. Spencer, who frequently cared for infants and toddlers, provided cribs, high chairs, change tables, strollers, booster seats, blankets, pillows, sheets, playpens, car seats, baby gates, games, puzzles, books, and toys. She had wipes for baby care, while the parents provided cream, diapers, and formula. Ms. Butler provided toys, games, outdoor toys, beach toys, stencils, and craft materials. Her equipment included highchairs, and strollers. She used a lot of books, including her early childhood education textbooks. Parents provided items such as egg shells and chicken bones and she would collect supplies such as old wallpaper books and rolls of paper from local merchants. Ms. Leith’s equipment and materials were similar. Although the County assisted providers when able to do so, for the most part, the providers owned and supplied their own equipment.

Summary

93. We conclude that the providers supplied most of the equipment they used in the provision of care and the equipment factor indicates that they are independent contractors.

Capacity to hire helpers

94. The capacity to hire helpers is another factor that may indicate independent contractor status. The evidence indicates that occasionally Ms. Butler hired a high school student on a casual basis to assist her for a few hours at a time. The student did not replace Ms. Butler but worked alongside her. Unlike the County’s prohibition on sub-contracting alternate caregivers up to 1993, and its constraints on doing so after that, it did not oppose this incidental hiring of a casual assistant. Thus, we infer that the County permitted the hiring of extra assistance, at the provider’s expense, but did not permit the hiring of persons to replace her from time to time (other than set out in the restrictive policy on alternate care-givers). In any event, Ms. Butler was the sole example of a provider taking this initiative.

95. It is our view that the hiring of helpers is considered a relevant factor because, ordinarily, it is indicative of whether or not a person is in business on his or her own account. That is, if able to hire helpers, an entrepreneur could increase the amount of work he or she could do, thereby providing the goods or service to more clients, leading to greater profit. In this case, the ability to hire an assistant, as Ms. Butler, did, could not lead to greater income, because it could not result in an increase in the number of children in her care. The DNA sets the maximum number of children that can be cared for at each location where private home day care is provided and does not refer to exceptions should adult assistance be in the home. Indeed, if there were more than five children in the home, then the location would have to be licensed as a day care centre (“day nursery”) and no longer would be a location where private home day care could be provided. Thus, while this isolated instance is an example of the capacity to hire a helper, we give it little weight, because, it did not have the entrepreneurial impact that is imported into and intended by the factor.

Summary

96. The capacity to hire helpers factor in this context does not indicate independent contractor status.

Financial Risk

Regular payment

97. The greater the financial risk an individual assumes, the more likely it is that he or she will be determined to be an independent contractor. Although the County did not guarantee that it would place children with them, when it did, the providers had no risk of non-payment and there was considerable continuity with the placements. As noted above, the majority of children did not receive care within the licensed system and were cared for in private homes. The providers’ assumption of risk was less than that assumed by persons who offered home day care in the unregulated day care sector, who did not receive regular work from an institutional source and who did not have the security of an institutional payor remitting pay cheques every two weeks. It is our assessment that, overall, the providers assumed little risk when providing care for the County.

Parent fees

98. There was some smaller degree of risk involved with respect to sums that were the responsibility of parents, particularly in those cases where the parents were too poor to pay. The ‘participation fee’, a $1.50 daily charge parents set by the County, was one such charge. Until 1988, the County collected this fee from the parents and passed it on to the providers. After that, the County determined that the providers were required to collect and keep accurate records of the participation fees. However, since 1988, parents on social assistance were exempted from the requirement to pay the fee. As the vast majority of parents were on social assistance, non-payment by some portion of the remainder would have had only a minimal impact on provider income because the potential for non-payment was limited to a very small group of parents.

99. Providers were permitted to charge all parents for late fees and extra meals or snacks, and were expected to collect these amounts themselves. On occasion, the County agreed to subsidize additional meals, but only with prior approval and in limited circumstances. Again, there was some risk, if the parents were too poor to pay, given that the County was uneven with its assistance in the event of non-payment.

Summary

100. The financial risk factor indicates that the providers are employees.

Responsibility for Investment and Management

101. In the public side of the private home day care system, financial investment does not pertain as an entrepreneurial factor. (This would differ for the commercial holders of licences.) Responsibility for investment, loosely defined, was found at the County level where wise fiscal decisions would have the potential for significant impact. At the provider level, any investment in such things as equipment was her responsibility. We do not find that responsibility for investment has much resonance in this context.

102. Responsibility for management within the private home day care program rested with the license holder, and has been explored above under control and supervision. As the providers really were ‘one-person’ operations, the management of others was not relevant, highlighting the limits of their actual and potential activity and that they were not independent contractors.

Summary

103. The responsibility for investment is not a relevant factor. The responsibility for the management of others factor indicates that the providers were not independent contractors.

Profiting from Sound Management in the Performance of her Task

Extra charges

104. The County suggests that as the providers had the capacity to charge clients for additional items not covered by the County (which we canvassd in paragraph 97) they could profit by efficient organization of their business. Were the providers offering care to affluent families who could afford special meals and snacks and higher late fees, this might have been a significant factor. In the subsidized context this example of entrepreneurial capacity is largely illusory. The amounts were too small to amount to any thing of note. It is true that if a parent was late, or hired the provider to work additional hours not covered by the agreement with the County, then the provider could charge extra and set her own rate. However, spending additional time providing care is not, in our view, demonstrative of organizing a business more efficiently. Rather, it is akin to working overtime on the basis of an hourly rate.

Care of private children

105. The County submits that, as the providers could also care for private children, they could profit from sound management in the performance of their task. To that end, some providers had their own separate day care identity. For example, Ms. Butler called her activity “Carole’s Day Care”. As well, providers that sought private, non-County clients advertised their availability using various methods. However, even this opportunity was circumscribed by the statutory maximums, as private children were included in the count. The need to seek private children was often the result of a County decision to not place the maximum number of children with a provider. Ms. Walpole was clear that the home visitor decided how many children to place and, therefore, these decisions were part of the equation.

106. We agree that the potential to care for private children in addition to County children indicates an opportunity for limited economic independence from the County. That is, if the County did not place the maximum number of children with them, then they could seek private children up to that limit. As well, they could set the rates for the care of the private children and perhaps earn slightly more. To the extent that they were effective in advertising and attracting private children, up to the maximum, they exercised the opportunity for some economic independence. We find it stretches the ordinary notion of commercial profit to suggest that this amounts to ‘profiting’ from sound management and therefore do not attach much weight to this factor.

107. We disagree with our colleague when she writes that the number of private children was underreported. Ms. Walpole testified that her office had reviewed provider billings for the period 1990-1994. These indicated that in 1990, 68% of the providers did not report private children in their care; in 1991, 66% did not; in 1992, 58% did not; in 1993, 57% did not; and, in 1994, 50% did not. There was no reason to suspect that this sparse information, based on the County’s records, indicates underreporting. What it does show is that for all the reported periods, at least 50% of the providers did not care for private children, which is consistent with Ms. Walpole’s ‘guesstimate’. In any event, it was the County’s responsibility to ensure compliance with the DNA and if there was reason to suspect unreported private children in excess of the maximums, it was obligated to investigate the situation. We know the County did so because Ms. Walpole referred to such conduct as the most frequent reason for termination.

Summary

108. The providers have very limited ability to profit from sound management and therefore we do not attach much weight to this factor.

Conclusion on the basis of the total relationship test

109. We find that the structure of the relationship factor, the control factor, and the financial risk factor indicate that the providers are employees of the County. In particular, there are many incidents of County control in this relationship and we attach the greatest weight to this factor. The equipment factor indicates that the providers are independent contractors. The capacity to hire helpers factor and the management of others factor do not indicate independent contractor status. The responsibility for investment factor is nor pertinent. We attach little weight to the opportunity for profit factor. On balance, we find that the weight of the evidence indicates that the providers are employees of the County and not independent contractors.

Organization or Integration test:

110. The second common law test relevant in this case, is the well-known ‘organization’ or ‘integration’ test, that considers the degree of interdependence of the operations of the two parties. In Re MacAulay Child Development Centre, supra, the referee quotes Lord Denning in Stevenson Jordan & Harrison, Ltd., v, MacDonald et al, [1952] 1 T.L.R. 101 as follows:

One feature which seems to run through the instances is that, under a contract of service, a man is employed as part of the business, and his work is done as an integral part of the business; whereas, under a contract for services, his work, although done for the business, is not integrated into it but is only accessory to it.

111. This test has been discarded in some contexts because it is said to lead to confusing and absurd results. In Wiebe Door, where the issue was whether installers of hanging doors were self-employed in the context of unemployment insurance and pension deductions, the Federal Court of Appeal repeated this view with approval. However, the test has been adopted regularly since Wiebe Door, notably in employment standard cases: Headlines Hairgrooming Inc. February 25, 1986 (Brown) referred to in Willick and McClellan and MOL [1995] ESC 95-152 (Briggs); Re MacAulay Child Development Centre, supra; and, Re Entertainment Associates [1991] Decision No.2916 (Cumming).

112. It is our view that this test has significant value in the context of pay equity. In pay equity, the basic mechanism used to achieve the object of the Act is to subject all positions within a work force to a review and comparison of value, so that those employed in the positions can benefit from its application. Accordingly, a meaningful test for employee, in the context of the Act, is one that is inclusive of all the positions which are, in fact, integral to the work of the employer. Adopting such a purposive approach to the interpretation of employee leads us to conclude that the organization/integration test is particularly pertinent in the pay equity context.

113. When applying this test, we find that it is the providers who perform the actual work for which the County is licensed. The County employs home visitors whose sole focus is the private home day care program and who devote much of their time to the monitoring and supervision of the providers. The County represents to the public that it is responsible for the training and supervision of the providers. The goal of the program is important to the County—the reduction of its welfare obligation by the parents’ return to work. One of the three aspects of the County’s day care initiative is the private home day care program, and the funds for the three programs are used interchangeably and moved to where they are most needed. The providers’ work is parallel to the work of the other day care workers on staff at the County’s own day care centre and is subject to the same regime, which licenses both programs. There is no doubt that the providers are essential to a key program of the County and not merely accessory to it, and are, therefore, employees of the County.

DECISION

114. For the foregoing reasons, we uphold the Order of the Review Officer and dismiss the Application.

115. Counsel for the Respondents requested, in the event the Application was dismissed, that the panel remain seized to deal with any problems that may arise with respect to implementation of the Order. We have decided that, if there are problems with the implementation of the Order, then they are to be dealt with first at Review Services. Failing resolution at Review Services, an application can always be made to the Pay Equity Hearings Tribunal.

Dependent Contractor

116. In their presentation of the evidence and the law, both counsel dealt with the issue in terms of whether the providers were independent contractors or employees, and indicated that this was the appropriate line to be drawn for the purposes of this case. They did so primarily with reference to the common law. Our application of the common law has led us to the conclusion that the providers are employees and should be included in the County’s pay equity plan.

117. The issue arose as to whether jurisprudence, based on statutory regimes which include dependent contractors within the definition of employee, was applicable, given that the Act is silent in this regard. The County submits that we have no jurisdiction to incorporate the notion of dependent contractor into the Act. The providers submit that the Tribunal is not so restricted and does have the jurisdiction to do so.

118. We explicitly do not decide the issue of the Tribunal’s jurisdiction to define employee by reference to a definition included in another statute which is not in the Act. Furthermore, we heard the briefest of arguments with respect to whether the providers are dependent contractors and are reluctant to proceed in the absence of a full discussion of the issue. On the basis of the two most frequently used common law tests, we have held that the providers are employees and, therefore, it is unnecessary to explore the issue of dependent contractor in this instance.

DECISION OF MARGARET KVETAN, MEMBER, OCTOBER 25, 1999

1. I disagree with the majority’s finding that providers are employees of the County

of Wellington.

Legal Tests

2. After a review of the various tests that have been used to determine whether

someone is an employee or independent contractor, I believe that the appropriate test in this case is the multi-faceted organizational test as first set out in the employment standards case Re Sparta Mercantile Ltd. (June 21, 1984) Brown and as applied in the employment standards case Re Headlines Hairgrooming Inc. (February 25, 1986) Brown. The eight factors in this test are:

a) Who determines and controls the source of the work or services to be performed?

b) To what extent do the parties hold themselves out to each other and the public as an integrated enterprise?

c) To what extent is supervision and control exercised unilaterally by one party over the place where the work is performed, the manner of its performance, and when, how and by whom the work or services are to be performed, and other matters relating to the terms and conditions of work?

d) Are limitations placed by one party over the other with respect to the performance of these and other services for third persons?

e) To what extent does one party determine the amount of remuneration and other matters affecting the profit and loss of the other party to the relationship?

f) To what extent does one party provide the necessary business skills and judgment affecting decisions made by the other party to the relationship?

g) Whether and to what extent one party may apply disciplinary sanctions to the other for failure to follow or comply with business decisions and judgments affecting the relationship?

h) To what extent do the parties have a financial investment in or ownership

over the means of production including the work that is performed or the

services that are provided?

I will deal with each factor as it applies to the evidence in this case.

Who determines and controls the source of the work or services to be performed?

3. In 1990, the Guelph United Way Social Planning Council conducted a child care

assessment study for the County. The study reported that 83.3% of children in the County at that time were being looked after in non-licensed day care.

4. The County holds the licence for private-home day care and is the referral source

of subsidized children to the those who provide child care in the County. Providers themselves are not licensed.

5. Providers could choose to provide child care under a licensed private-home day

care program such as that of the County, or privately or both. The County did not prohibit the providers from looking after “private” children and we heard evidence that all three Respondents looked after private children in addition to and while looking after subsidized children referred from the County. We also heard evidence that providers could look after subsidized children in more than one county at a time, and one of the Respondents did so. The County guaranteed neither a minimum amount of work nor a minimum income to providers.

6. I find that the County did not control the source of all the child care work of the

providers, as the providers had a choice of looking after subsidized children exclusively for the County, looking after County, private and other children together, or not looking after County children at all.

To what extent do the parties hold themselves out to each other and the public as an integrated enterprise?

7. The County document called Private Home Day Care is a description of the County’s program and is given to provider applicants. The providers are described as self-employed and operating a small business. In the Acknowledgment of Agreement - the contract which the providers signed annually - they are called independent contractors. The County never considered them to be employees. We heard evidence from Mr. Granger, Director of Personnel and Purchasing for the County, that no municipality in Ontario had ever done so. The evidence also showed that others outside the County structure did not consider them to be employees either. While this, in and of itself, would not be determinative of the providers' status, the paragraphs that follow assist my determination in this regard.

8. In relevant sections of the Day Nurseries Act and its Regulation, i.e., those

applying to private-home day care, there is a distinction made between staff of the program and “the person in charge of a location where private-home day care is provided”. The Ministry of Community and Social Services which oversees and closely monitors the implementation of the Day Nurseries Act did not consider the providers to be employees. For example, in its November 1992 document Provider Enhancement Grant: Guidelines and Procedures for Non-Profit Home Child Care Agencies, the “purpose” section states in part: “Home Child Care providers are not agency employees and are therefore not eligible for many of the benefits normally available to employees”.

9. Revenue Canada did not consider the Respondents to be employees. While they

were providers for the County, all three Respondents completed their income tax forms as self-employed and claimed numerous business expenses. These included expenses and allowances in the following income tax form categories: accounting, legal and collection; advertising and promotion; automobile; bad debts; business tax, professional fees, licences and dues; cable; capital cost allowance; courses, conferences, meetings and workshops; groceries; heating and utilities; insurance; interest and bank charges; maintenance and repairs; meals and entertainment; mortgage interest; postage and stationery; property taxes and/or rent; salaries; supplies, materials, books and toys; travelling expenses. With one small exception, while the Respondents provided home child care for the County, none paid any income tax and they were frequently able to claim a refund.

10. Ms Walpole testified that the providers were able to make their own agreements

with clients on services that the County was not providing. They also used their own personal contracts for their private clients. One Respondent testified that she had oral agreements, while the other two had written contracts, some of which were submitted as exhibits.

11. The County is required to have liability insurance which covers all their

employees. It did not cover the providers. As the providers were required by the Day Nurseries Act to have their own liability insurance, they were required to and did purchase it at their own expense.

12. Ms Spencer testified that when she started providing child care for the County, she

had understood that the County was contracting out services to her and that she had agreed with this view of the arrangement at the time. She acknowledged that she had signed yearly contracts in which she was described as an independent contractor. Ms Spencer kept her own business records as well income tax and receipt book.

13. Ms Leith also kept her own business records which she did not share with the

County. She testified that she started her own daycare at home in December 1990. A home visitor’s report dated May 28, 1992 notes that “Beth talked about her role in Special Needs childrens [sic] care and why she chooses to stay home in her own business”.

14. Ms Leith represented herself as an independent contractor in a letter dated May 11, 1992 to Richard Bradley, Director of the Child Care Branch of the Ministry of Community and Social Services, where she wrote in part: “My livelyhood [sic] depends upon the various decisions made by your government … I feel that it is somewhat unfair the restrictions that are put on those who are qualified and have chosen to run our own daycare at home. … I am a SINGLE PERSON on my own with no secondary income, only my daycare. I have spent 13 years working in the larger institutionalized centers and chose to start my own business at home …”

15. In a letter of reference dated November 19, 1992 To Whom It May Concern, Ms Leith’s home visitor said in part: “Beth Leith has been actively involved with this Agency since April 1991. She is considered self employed and we purchase home day care service from her”. Ms Leith testified that she had objected to the letter being sent without her knowledge. However, she had not objected to being referred to as “self-employed”.

16. Ms Butler also represented herself as an independent contractor. In an undated letter to Tony Silipo, the Minister of Community and Social Services from February 1993 to June 1995, she wrote that she had been told by the County that there would be no increase to the County’s rates for providers due to the province not giving an increase to the County for providers. Telling the Minister that providers should be able to get at least a 2% pay increase, she urged him to: “Please be fair and ensure that providers who are already in my opinion under paid [sic], get something to help us recover costs”. She added in a postscript: “Could I please have 35% of my income ‘tax free’ as you do because I am trying to run a business”.

17. On March 31, 1993, Ms Butler wrote to Premier Bob Rae for the third time,

complaining about the lack of a pay increase, while her expenses continued to rise.

18. In 1993, Ms Butler initially refused to sign her contract because she was unhappy that the method of her payment had been changed from cheque to direct deposit without her consent. Although this seemed to be a major point of dissatisfaction for her, she never challenged her non-employee status either at the County or in previous provider work in Peel Region and Metropolitan Toronto. In fact, her first complaint regarding her status was her pay equity complaint to the Pay Equity Commission on December 6, 1994. The evidence showed that, although the Respondents could have tried to challenge their non-employee status under numerous statutes, including the Employment Standards Act, the Workers' Compensation Act and the Income Tax Act, none of them had done so.

19. In the so-called matching process, a three-way agreement was signed by the home visitor on behalf of the County, by the provider and by the client. Any of the three could initiate changes to the agreement and all three parties would have to agree to the changes. If the providers were employees, why were there three parties to this agreement? If the providers were employees, there would only need to be two parties to the agreement - the County and the client - and the County would assign the work to a provider.

20. I find that the evidence shows that the County never treated the providers as employees and that the providers did not represent themselves as County employees. Therefore, the County and the providers could not be considered to be part of an integrated enterprise.

To what extent is supervision and control exercised unilaterally by one party over the place where the work is to be performed, the manner of its performance, and when, how and by whom the work or services are to be performed, and other matters relating to the terms and conditions of work?

21. Four very small recruitment advertisements for providers were submitted as

exhibits. The County placed these in the "childcare" section of local newspaper advertisements, rather than in the "help wanted" section. Each referred to specific geographical locations for which providers were needed and used the following terms: “home day care provider needed”; “looking for interested people to provide child care in their home”; “needs caregivers to provide quality child care in their homes”. The only requirement listed in all of them was the need to meet [the County’s] licensing requirements. No qualifications were listed. In addition to these advertisements, recruitment of providers was done by word of mouth, referrals from other providers, referrals from parents and postings on telephone poles. There followed a lengthy interview of the provider applicant by the home visitor, using a standard list of questions and a scoring system. There was evidence that this process was different from the ones the County used to recruit and hire employees.

22. In order to maintain its licence as an operator of a private-home day care program, the County was required to ensure that the providers complied with the Day Nurseries Act and its Regulation. Among other things, it had to ensure that there was a program of activities that was varied and flexible and included the following activities appropriate for the developmental levels of the children enrolled: group and individual activities; activities designed to promote gross and fine motor skills; language and cognitive, social and emotional development; and, active and quiet play.

23. Beyond these bald requirements of the Day Nurseries Act, there was no direction across the board by the County to the providers as to which specific activities they must carry out or how they were to provide care. The County made no attempt to standardize these activities among all the providers or to ensure that all the providers adhered to the same prescribed program of activities. Nor did it prescribe that all the providers must have the same basic list of equipment, toys and supplies. Each provider was free to choose what activities she would provide. These were observed and recorded by her home visitor but did not require her approval. The evidence of the three Respondents would suggest that there was a wide range of activities provided, varying from provider to provider. It did not appear to be dependent on the training provided by the County, but was dependent, rather, on the experience, skills and interests of each individual provider.

24. The County produced a number of documents such as the Childproofing Checklist which were seen as useful to providers. They were also available to clients and the general public and were not considered to be requirements of expected performance.

25. By its very nature, the work in this case was performed in the provider’s home and, therefore, the location of the work is not an issue. The only reason for a provider to attend at the County’s premises was for orientation and training, which are discussed later in this decision.

26. Providers could choose their own hours of work, shifts and days of the week. They were free to determine their own schedules, mealtimes and rest periods. The Respondents testified that they were free to structure the day as they saw fit and were not required to share this with the County. This included being able to do errands outside the home while looking after children.

27. Providers were free to hire assistants to help them look after both private and

County children. Ms Butler did so.

28. The County had no formal or informal performance appraisal process to evaluate

how well providers provided child care. Except for assessing compliance with the legislated requirements of the Day Nurseries Act and the requirements of the Medical Officer of Health and the By-Law Officer, the County did not formally assess what the providers did or how they did it.

29. I find that the control and supervision exercised by the County was restricted almost entirely to matters covered by the Day Nurseries Act. In areas where the County itself had discretion, its control and supervision were minimal.

Are limitations placed by one party over the other with respect to the performance of these and other services for third persons?

30. Providers are very heavily regulated by the Day Nurseries Act. Most of these requirements are in the Regulation and cover areas such as building and accommodation, equipment and furnishings, playground, inspection, insurance, fire safety and emergency information, health and medical supervision, nutrition and behaviour management. These are the areas that the County, as the licensed operator, is required to monitor in order to maintain its licence as an operator of a private-home day care program. Nevertheless, within these requirements, providers had a significant amount of choice in many areas.

31. Providers could choose whether or not to accept a placement. They could choose

to look after only one age group or not to look after specific age groups or special needs children. Provided that they met the requirements of the Day Nurseries Act regarding nutrition, they were free to choose what to feed the children at meals and for snacks. They were not required to post menus as was required in daycare centres. They could choose not to do excursions. Providers could not refuse the licensing screening required under the Day Nurseries Act, but they could refuse developmental screening. Providers could choose to terminate their care of a particular child.

32. Providers were asked to report the number of private children in their care so that

the County could be assured that they were not exceeding the total number limitations set by the Day Nurseries Act. Ms Walpole testified that the providers did not always report the numbers of private children in their care. She produced in evidence the results of a survey which the County had done of provider billings for the years 1990 to 1994. These indicated that during those years, 50 to 68% of the providers did not provide this information. It was her evidence that some chose not to report because they felt that it was none of the County’s business.

33. Some providers established their own set of practices, separate from the County’s.

Ms Walpole testified that the County did not always know what the providers’ practices were. All the Respondents had their own “house rules”.

34. Variations in evidence among the Respondents indicates that there were not set

policies and procedures to be followed in every instance and that their application sometimes depended on the quirks of a particular home visitor.

35. With respect to the legal requirement to report suspected child abuse, the Private-

Home Day Care Manual issued by the Ministry of Community and Social Services suggests that agencies, such as the County, "should offer clear guidelines and training which assist providers and home visitors in determining whether or not there are reasonable grounds for suspecting child abuse". It also suggests that it will usually be the home visitor who decides whether or not a report of suspected child abuse should be made to the Children's Aid Society. However, if the home visitor decided not to report and the provider disagreed with this decision, the provider still had the legal obligation to make the report herself.

36. “Sub-providers” could be used to substitute for the provider, but the individual

had to be approved by the County in order to ensure that they too met the licensing requirements to which the County was subject. However, Ms Walpole testified that the County wouldn’t know if a provider subcontracted to people the client didn’t know about unless the home visitor observed it or someone reported it.

37. The provider and the client could make private arrangements for part of the day not

covered in the agreement for a child's care under the County. For example, the County would not pay the provider for those hours of the day covering the private arrangement, such as taking a child to swimming lessons.

38. The County had no say with respect to any private children the provider might be

looking after and could not enforce the Day Nurseries Act or its Regulation with respect to those children.

39. I find that almost all the areas in which the providers were restricted fall within

the requirements of the Day Nurseries Act. Therefore, these are restrictions established by the statutory regime and not by the County, except indirectly.

To what extent does one party determine the amount of remuneration and other matters affecting the profit and loss of the other party to the relationship?

40. The County received funding for the providers from the provincial government. The Council set the provider fees. The total amount a provider would receive from the County would not only vary from one provider to another, but would vary for any provider from year to year, depending on the number of County and/or private children in care, the type of care provided, the number of hours of care, etc.

41. The Day Nurseries Act limits how many children a provider can look after under a licensed private-home day care program. This was a requirement with which the County and the providers had to comply, but which would limit the amount of profit a provider would have.

42. Providers could not charge fees for subsidized children greater than what had been approved by the County, but they could charge clients for a variety of other fees, including charges for late payment, penalties for NSF cheques, fees for extra meals and snacks and looking after children beyond the parent’s normal working time.

43. Providers could directly lobby Council for a rate increase as other contractors had done. They were not able to successfully lobby as a group. The evidence showed that individual providers, including two of the Respondents, did lobby Council, staff of the Ministry of Community and Social Services and members of the provincial government, but they were not successful. This does not diminish the fact that they could lobby either individually or collectively - an opportunity not available to employees.

44. Employee salaries and benefits were in a different part of the County’s budget from contracted services. Salaries and benefits for employees of the Social Services Department were in several expenditure accounts of that department's budget, while providers' payments were in non-salary accounts in the "City Assistance"and "County Assistance" part of the budget. While the employee payroll was contracted out to the Royal Bank, provider payments were handled in-house through cheques issued from the general account for which the County banks with the Canadian Imperial Bank of Commerce. The issue is whether the providers were paid a salary through the County payroll system. They were not.

45. Providers were not paid by the hour, but for unit of service, i.e., child care for a period of time. There were no statutory deductions from the cheques to the providers. They did not receive T4 slips and the County had no connection with Revenue Canada regarding the providers.

46. There may be many reasons why the providers experienced limits on their profits. I find, however, that this was due in part to the restrictions of the Day Nurseries Act, and, in part, to their inability to lobby successfully for rate increases. However, as has been shown earlier, the providers were able to reduce their losses by claiming all their business expenses on their income tax returns.

To what extent does one party provide the necessary business skills and judgment affecting decisions made by the other party to the relationship?

47. In sections 58-60 of its Regulation, the Day Nurseries Act lists the qualifications required by supervisors, staff of day nurseries and home visitors. There is no mention of providers. Two of the Respondents have an Early Childhood Education diploma. Providers could take extra education courses and attend conferences at their own expense to upgrade their knowledge. The County counted attendance at meetings sponsored by other organizations as part of the providers’ training.

48. The Ministry of Community and Social Services has prepared an administration manual, called the Private-Home Day Care Manual, for the use of licensed operators. This manual, referred to as the "grey binder" by Ms Walpole, requires that: “Each agency must develop written policies and procedures regarding training and development for their staff and providers”. [emphasis added]

49. There was a fair amount of discrepancy between the evidence of Ms Walpole and the Respondents, and among the Respondents themselves, about how much training the providers were required to attend over the years and whether it was mandatory. It was clear that all providers had to attend an orientation session which typically lasted for most of one day and covered such topics as an overview of the agency and its role, policies, record-keeping, nutrition and the disciplining of children.

50. The County’s position is that attendance was not mandatory. However, they offered the providers a premium of $2 a day - the “trained rate” - if they attended a minimum number of training sessions every year. The lack of consensus was on the number of that minimum, which we heard was two, three or, at one time, four. The trained rate was offered as an incentive to providers to attend. The providers had the choice of not attending, and, thereby, foregoing the trained rate.

51. The County did provide training for the providers, but not in the form of a structured employee training program that would ensure that all providers received the same training or that core competencies were covered. The training was provided in the form of 8-10 evening meetings throughout the year, lasting 1-1 ½ hours each. These were open not only to providers, but to parents, the staff of three child care resource centres, Social Services Department staff, friends, spouses, etc., depending on the topic.

52. Training topics delivered by Day Care Services staff included: nutrition, cooperative games, infant development, children’s aid, music for children, storytelling, the effects of divorce and separation on children, art activities, program planning, child development and child abuse, fire and other safety, day care as a business, communication and first aid. In addition, there were non-staff presentations, including: a representative from Revenue Canada on income tax; a speaker from the Milk Marketing Board; a representative from the Ministry of Community and Social Services on licensing; a chiropractor; a public health nurse.

53. There was no evidence that the same list of topics was repeated on any regular basis to ensure that all new providers had access to them. There was no attempt to ensure that all providers had taken the same training; in fact, quite the contrary. If a provider chose to attend only the bare minimum number per year in order to qualify for the trained rate, she could also choose which topics to attend. Therefore, regardless of their qualifications and skills, training would vary from provider to provider, depending on her initiative and personal interests. The training offered may have met the requirements of the Day Nurseries Act, but I would not characterize it as an employee training program.

54. I find that the County offered a wide variety of information training sessions to the providers, the usefulness of which would vary from provider to provider depending on the individual's own formal education and experience. The County also offered support to the providers through the home visitor who acted as a liaison with the County and who assisted in problem-solving when the provider requested it.

Whether and to what extent one party may apply disciplinary sanctions to the other for failure to follow or comply with business decisions and judgments affecting the relationship?

55. The County might terminate its contract with a provider who did not comply with the Day Nurseries Act and its Regulation. If it did not do so, its licence would be at risk.

56. A June 1992 newsletter to providers suggests that a provider would be terminated if she did not complete training. Ms Walpole testified that this had never been done. Moreover, it is not entirely clear how the County would determine whether or not a provider had completed training, given the ad-hoc nature of the training sessions, other than through strict monitoring of attendance at a minimum number of sessions.

57. I have also considered the County’s written Policy Regarding Behaviour Management regarding the disciplining of children. This policy outlines the disciplinary steps the County may take with respect to failure of a provider to comply with the program’s stated policies and procedures and the provisions of the Day Nurseries Act with respect to behaviour management of children. Ms Walpole testified that this had never been done.

58. I find that the little evidence we had in this area indicates that the County might discipline providers but rarely, if ever, did so. Furthermore, this exercise of discipline appears to be tied to failure to comply with the Day Nurseries Act and, therefore, is not indicative of an employment relationship.

To what extent do the parties have a financial investment in or ownership over the means of production including the work that is performed or the services that are provided?

59. The Ministry guidelines recommended, but did not require, that a toy library be provided. The County’s policy in 1988 was to provide a toy library for staff and providers. This was later discontinued. We also heard that the County loaned strollers to providers, as well as cots until they could obtain suitable beds for themselves. These cots were part of the County’s surplus.

60. We also heard evidence that home visitors would supply providers with a variety of “found” materials such as scrap paper, paint and craft materials on an irregular basis. Such materials were also available to providers at the County offices.

61. Apart from these, virtually all the furniture, equipment, toys, games, books, craft materials and supplies were purchased at the provider’s expense and were, as was discussed above, treated as business expenses by the providers. Each Respondent provided us with a long, detailed list of items she had purchased. These ranged from supplies such as diapers and cleaning products to larger, costlier items such as tables and chairs, cribs, playpens, a swing set, a TV, a VCR and a computer.

62. I find that the providers had a significant financial investment in and ownership of their child care business.

Jurisprudence

63. The majority decision points to a number of cases which have considered the status of providers. One of those decisions, Re MacAuley Child Development Centre (February 12, 1993) Wacyk, found providers to be employees under the Employment Standards Act. Although there are some similarities, there are significant differences between the relationship of providers to the MacAuley Child Development Centre of Metropolitan Toronto and the relationship of providers to the County of Wellington.

64. In Wellington, providers were not unionzied. The MacAuley providers were members of the Ontario Public Service Employees Union. In Wellington, providers were able to choose to care for private children in addition to and while caring for subsidized children referred by the County, without the approval of the County. MacAuley providers could care for private children only with the approval of the field worker. In Wellington, providers could make private arrangements and agreements with clients regarding services not provided by the County. MacAuley providers were prohibited from making private arrangements with families referred to them by MacAuley. Wellington did not have a performance appraisal process for the providers. MacAuley field workers prepared a written evaluation of providers annually. In Wellington, disciplinary measures appeared to be tied to failure to comply with the Day Nurseries Act. MacAuley was able to discipline providers, up to and including termination. The Collective Agreement outlined the list of behaviours for which MacAuley was entitled to discipline. These include: provision of inadequate care, caring for children not previously approved in writing by MacAuley and insubordination. I find that the MacAuley case is distinguishable from the case before me and, therefore, I do not find it to be applicable.

Conclusion

65. Based on my analysis of the evidence under the multi-faceted organizational test, I find that the preponderance of evidence indicates that the providers were independent contractors, and not employees of the County of Wellington. Therefore, I would revoke the Review Officer's Order.

Dated at Toronto this th day of October, 1999

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Phyllis Gordon

Chair

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Geri Sheedy

Member

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Margaret Kvetan

Member