Tax court rules that agency does not have to pay UI for volunteer worker.

MONTREAL -- The Comite des Personnes Assistees Sociales de Pointe St-Charles won its appeal against a decision by Revenue Canada, requiring it to pay Employment Insurance for a volunteer who received a modest amount for expenses, for bus tickets, lunches and clothing.

The Comite, an anti-poverty advocacy group, engaged a volunteer, an unemployed person, bookeeping and other clerical services in 2001. The volunteer agreed to provide clerical services on a 20 hour per week basis for 40 weeks. The group uses the services of client volunteer as a way of helping unemployed persons, including persons receiving social assistance, and maintain employment skills. The volunteer received $50 per week for expenses during his service and $2,000 in one year.

Revenue Canada found that the volunteer was engaged to replace a paid clerical worker and there was a formal agreement for services. At the end of the 40 weeks the man was taken on as a full time paid employee at $13 per hour. This employment lasted three months. The worker then made a claim for Employment Insurance for the 40 week voluntary work period.

Revenue Canada deemed this to be a payment for work and demanded that the Comite pay Employment Insurance premiums, especially as there was a a formal agreement.

The agency argued in the Tax Court that the purpose of the agreements were to integrate the social assistance in the world of work. Judge Lamarre Proulx agreed with the appellant that there was no employment contract and the voluntary work was part of the service of the Comite.