Surveillance cameras ruled an unreasonable intrusion

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|Canadian HR Reporter|Last Updated: 09/04/2003

A $2.5-million fire and a series of burglaries necessitating increased police surveillance are not enough to permit an employer to install surveillance cameras in the workplace.

The cameras violate workers’ privacy rights, an arbitrator ruled in a decision upheld recently by Ontario’s Divisional Court. The court accepted the arbitrator’s decision regarding an interior camera operating in an area where a fire occurred at Lenworth Metal Products in Toronto.

Lenworth Metal sits at the end of the road in an industrial complex in suburban Toronto. Because the environs are isolated and sometimes deserted, Lenworth has experienced a high level of security problems.

These include burglaries, as well as a fire that destroyed its paint room. The police stepped up their patrols in the area and, on the advice of its insurer, Lenworth installed alarms and security cameras.

Lenworth put nine cameras on the building’s exterior. It installed others inside (none in the lunchroom or washrooms), but activated only the interior camera in the paint room. The union then grieved, complaining of “the installation of surveillance equipment.”

The arbitrator found that the use of the cameras violated the collective agreement where it said that management rules had to be “reasonable.”

Q Can installing surveillance cameras amount to a workplace “rule?”

A The court has said that the arbitrator could reasonably find that the use of the cameras amounted to a “rule” within the terms of the collective agreement. “The result of using the cameras,” Justice James Southey wrote for the two-judge majority of the Divisional Court (the court which reviews labour arbitrations), “is a requirement that employees must work under camera surveillance. The employees do not have an option. Such a requirement is clearly articulable, even though unwritten. It is a regulation governing the individual conduct of each employee...

“As such, the collective agreement requires that it be reasonable. It was for the arbitrator to decide whether the use of cameras was reasonable in this case.”

For more information: Lenworth Metal Products Ltd. v. United Steelworkers of America, Loc. 3950, Ont. Div. Ct. file 215/00, Nov. 16/00.

Employment Insurance contributions — time to pay up

Whether you need to make Employment Insurance contributions on behalf of those who work for you depends upon whether they are in “insurable employment.” Permanent employees, part time and full time, come within this category, but freelancers — “independent contractors” — do not.

The problem, of course, is figuring out what the Ministry of National Revenue (now the Canada Customs and Revenue Agency) considers to be “employment.”

The courts say that there is a specific, four-pronged test:

•how much control the employer exerts over the worker;

•who owns the work tools;

•whether the worker carries any chance of profit or loss in the enterprise (unlike the situation in a normal employment relationship); and

•whether the worker is truly “integrated” into the enterprise.

Yet the application of that test can seem quite arbitrary, as these two recent cases from the Tax Court of Canada demonstrate.

The case out of Sherbrooke, Que., concerns Théatre Piggery Theatre. It operated during the summer only, and hired Shane Corrigan to work as general manager. This was a part-time job, but, because Corrigan was responsible for all administration — including fund-raising and play production — it required year-round work.

During the summer months, Corrigan rented a house in North Hatley, Que., where Piggery was located. The rest of the year, he worked in his home office, using his own equipment, in Montreal. He submitted his annual budget to the board of directors for their approval but did not work for any other employer, nor did he have other clients.

Piggery paid Corrigan $25,000 to $27,000 per year. It did not make employment insurance contributions on his behalf, insisting that Corrigan was a freelancer. However, the minister and the court have said that he was an employee, making Piggery liable for the contributions. The fact that Piggery exercised significant control over Corrigan’s work, albeit not on a day-to-day basis, suggested that Corrigan worked under a “contract of service” (instead of an employment contract — a contract for services).

As well, his use of his own equipment, the court says, was not conclusive. And although he assumed some of his own expenses, Piggery paid $12,000 to $14,000 on account of many expenses.

As to involvement and integration in the enterprise, Corrigan made no investment in Piggery’s endeavours, and Piggery approved his budget, funding all revenues or losses.

A related case which the Tax Court decided the same week concerns the Yarmouth Airport in Nova Scotia. The airport claimed that it did not owe Employment Insurance or Canada Pension Plan contributions on behalf of workers providing its weather and radio services.

The airport trained Glenn Thorbahn and Ralph Amiro to perform such work. It contended that from the beginning of the hiring process it characterized the positions as freelance. It set the annual pay level, but required that Thorbahn (an ex-pilot) and Amiro work full time and invoice the airport every two weeks, at 1/26 the annual set fee.

The airport provided all of the equipment used by the workers. However, it allowed Thorbahn and Amiro to determine their own work schedules in consultation among themselves and their colleagues. The two other people hired to perform the same work (the services ran 24-hours-per-day, seven-days-a-week) agreed to sign contracts stipulating that they were independent contractors. But Thorbahn and Amiro quit without signing the agreements.

In the circumstances, it claimed that Thorbahn and Amiro were independent contractors.

Q Were the men freelancers?

A Again the minister and Tax Court has answered “No.” No matter what the work agreement said, the court has held, the four-part test established that Thorbahn and Amiro were employees. The airport required them to work at its place of business (obviously) and controlled most of their activities on-site. It also owned all of the tools. Thorbahn and Amiro had no opportunity for profit or loss in a business sense, and they were fully integrated into the airport’s operations.

For more information: Théatre Piggery Theatre Inc. v. Canada (Minister of National Revenue), Tax Court of Canada file 98-1178(UI), Nov. 28/00; 23012507 Nova Scotia Ltd. v. Canada (Minister of National Revenue), Tax Court of Canada files 1999-2852 (EI), 1999-3852 (CP), 2000-18 (EI), 2000-19 (CPP), Nov. 24/00.

Jeffrey Miller is editor of Canadian Employment Law Today. For subscription information, call (416) 609-3800 or (800) 387-5164.

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