[OFFICIAL ENGLISH TRANSLATION]
Date: 20020826
Docket: 2001-3728(EI)
BETWEEN:
JEAN RENÉ ST-JEAN,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
REASONS FOR JUDGMENT
Savoie, D.J.T.C.C.
[1] This appeal was heard on July 11,
2002, at Matane, Quebec.
[2] This is an appeal concerning the
insurability of the appellant's employment with the Quebec
government, hereinafter the payer, during the period in issue,
that is, from May 15 to November 13, 2000, within the meaning of
the Employment Insurance Act (the "Act").
[3] On July 16, 2001, the Minister of
National Revenue (the "Minister") informed the appellant of his
decision that the employment was insurable from May 15 to October
30, 2000. It was also determined that the appellant had
847 hours of insurable employment and a total of $14,213.68
in insurable earnings during that period. The appellant's appeal
does not concern the insurability of his employment but concerns
the Minister's decision with respect to the appellant's
period of employment and the total number of insurable hours
accumulated during the period.
[4] In rendering his decision, the
Minister relied on the following assumptions of fact:
[TRANSLATION]
(a) The payer hired
the appellant as a term employee for the period from May 15,
2000, to May 15, 2001.
(b) The appellant
held a position as a tax audit technician.
(c) On October 30,
2000, the appellant received a letter from the payer informing
him that the department was terminating his probation period and
his employment on November 13, 2000, at 4:30 p.m.
(d) On October 30,
2000, the appellant handed in his magnetic card that gave him
access to the department's offices.
(e) The appellant
did not render any services to the payer between October 31 and
November 13, 2000.
(f) On
November 2, 2000, the appellant received a record of employment
from the payer indicating 917 insurable hours and a total of
$14,213.68 in insurable earnings; the record of employment
indicated October 30, 2000, as the "last day worked" by the
appellant with the payer.
(g) On March 8,
2001, the appellant received an amended record of employment from
the payer indicating 917 hours and a total of $14,213.68 in
insurable earnings; the record of employment no longer indicated
the last day "worked" by the appellant.
[5] The appellant admitted the
assumptions of fact set out in subparagraphs 8(a) to (c) and (f)
of the Reply to the Notice of Appeal and denied those set out in
subparagraphs 8(d), (e) and (g) as written. At the hearing, the
parties agreed to change the year indicated in subparagraph 8(e),
from 2001 to 2000.
[6] The appellant stated that he had
never received from the employer a magnetic card giving him
access to the department's offices.
[7] In response to the assumption set
out in subparagraph 8(e) of the Reply, the appellant stated that
his immediate supervisor had assigned him duties to be performed
from his home during the two weeks ending on November 13,
2000, at 4:30 p.m., and that this work consisted of staying at
his home and being available to provide information on his
previous files.
[8] On October 30, 2000, the appellant
cleaned out his files and as of that date he did not perform any
work on his existing files and did not receive any others from
the employer.
[9] The second record of employment,
dated March 8, 2001, did not indicate the appellant's last day of
work as did the record dated November 2, 2000. It was established
that this change had been made at the appellant's request.
[10] At issue is the interpretation of the
appellant's two weeks of notice, that is, from October 31 to
November 13, 2000: whether the hours paid for that period are
insurable even though the appellant did not render any service
after October 30, 2000. The notice period was set out in the
collective agreement.
[11] "Insurable earnings" are defined in
subsections 2(1) and 2(2) of the Insurable Earnings and
Collection of Premiums Regulations, which read in part as
follows:
(1) For the purposes
of the definition "insurable earnings" in subsection
2(1) of the Act and for the purposes of these Regulations, the
total amount of earnings that an insured person has from
insurable employment is
(a) the total of all amounts, whether wholly or partly
pecuniary, received or enjoyed by the insured person that are
paid to the person by the person's employer in respect of
that employment, and
...
(2) For the purposes
of this Part, the total amount of earnings that an insured person
has from insurable employment includes the portion of any amount
of such earnings that remains unpaid because of the
employer's bankruptcy, receivership, impending receivership
or non-payment of remuneration for which the person has filed a
complaint with the federal or provincial labour authorities,
except for any unpaid amount that is in respect of overtime or
that would have been paid by reason of termination of the
employment.
[12] In her report on an appeal (Exhibit
I-4), Johanne Nicol, an Appeals Officer with the Canada Customs
and Revenue Agency, stated, inter alia, the following:
[TRANSLATION]
According to Jean-René St-Jean's record of employment,
he received $14,213.68 including his base salary, $1,054.73 in
vacation pay and $1,004.50 representing two weeks'
notice.
The payer therefore deducted employment insurance premiums in
the manner prescribed in section 67 of the Act, which
indicates that a person employed in insurable employment shall
pay, by deduction, a premium equal to their insurable
earnings multiplied by the rate set by the Commission.
This is mandatory. The premium is based on the total amount of
the compensation and not on the remuneration paid for the hours
worked.
Accordingly, there is no doubt that the $1,004.50 amount is
insurable; however, we must verify whether this amount confers
entitlement to insurable hours, since there were no hours worked
during the two weeks of notice.
[13] Section 9.1 of the Employment
Insurance Regulations provides:
Where a person's earnings are paid on an hourly basis, the
person is considered to have worked in insurable employment for
the number of hours that the person actually worked and for which
the person was remunerated.
[14] According to the aforementioned report
on an appeal (Exhibit I-4), that section was interpreted by the
Minister as follows:
[TRANSLATION]
... no insurable hours can be granted ... for the
period from October 31, 2000, to November 13, 2000, because the
worker did not work any hours. The amount paid was an indemnity
and was not for the performance of work.
[15] Moreover, section 10.1 of the
Employment Insurance Regulations provides:
Where an insured person is remunerated by the employer for a
period of paid leave, the person is deemed to have worked in
insurable employment for the number of hours that the person
would normally have worked and for which the person would
normally have been remunerated during that period.
[16] According to the Minister's
interpretation of that section, the amount thus paid by the
employer could not include remuneration for a period of paid
vacation since the worker had already received vacation pay
equivalent to 10-1/2 days acquired since May 15, 2000.
[17] On page 7 of that same report, the
Minister's interpretation continues as follows:
[TRANSLATION]
"This is not a continuation of salary as we encounter when the
employer or employee enters into an agreement whereby the
employer agrees to continue paying a salary even though it does
not expect the employee to report for work or to render services.
The employer was required to pay this amount under the collective
agreement. It could also have notified the worker that his
contract was ending on November 13, 2000, and could have kept him
employed until the last day, which would have given the worker
insurable hours.
[18] In the Minister's view, this was an
indemnity provided for under the collective agreement and was not
an amount relating to the performance of services. This amount is
insurable but does not result in any insurable hours. Clause
11-49.02 (Exhibit A-1) of the collective agreement provides as
follows:
[TRANSLATION]
The Deputy Minister shall give notice to casual and seasonal
employees who have accumulated three (3) months of service before
they are dismissed or laid off for more than six (6) months when
the dismissal or layoff occurs before the expiration of their
anticipated period of employment.
The length of such notice is one (1) week if the anticipated
period of employment is less than one (1) year and two (2) weeks
if it is one (1) year or more.
[19] It must be noted that the appellant
expended a great deal of time and effort on his case; this is
shown by the evidence filed as Exhibit A-1, which sets out his
case in detail. This exhibit includes correspondence with his
employer and with the Minister's officers, the amended record of
employment, the decision by the board of referees and a letter
from his section head; in short, the position taken by the
parties in support of the appellant's contention that the period
of notice was in fact worked and that the hours of work it
contains are therefore insurable. Armed with all these documents
contained in Exhibit A-1, the appellant is asking this court to
intervene and to rule on the issue in his favour. However, the
Minister argues that the decision-making authority lies with him
and not with the board of referees or with the other parties
called by the appellant in support of his position.
[20] The courts have previously heard cases
similar to this one. Some of the judgments cited by the Minister
shed some light on the interpretation of the applicable
legislation in this case. In Gagné v. Canada (Minister
of National Revenue - M.N.R.), [1997] T.C.J. No. 1357, Judge
Tardif of this court ruled in favour of the appellant (a decision
overturned on appeal) in circumstances similar to those of the
case under review and wrote as follows at paragraph 11 et
seq.:
The Minister relied on a decision by Pierre Denault J., the
umpire in Rachel Lamontagne, dated May 31, 1988, in which he
concluded as follows:
[TRANSLATION]
It remains to be seen whether the board of referees was right
to consider "that the week's notice of termination may
be regarded as a week of insurable employment."
Section 36(6) of the Regulations states:
Sec. 36(6) Notwithstanding Subsection 35(4), for the purposes
of Part II of the Act, a claimant shall not be deemed to have had
a greater number of weeks of insurable employment in any one
employment period than the number of weeks or part weeks that
fall between the first and last dates of that employment.
The application of this section in practice leads me to
conclude that money paid to an employee in lieu of notice but
without the employee actually working operates to increase
insurable earnings in that pay period but cannot count as an
additional week of insurable employment.
Based on this decision, the respondent maintained that this
week was not insurable; counsel stated that the insurability of
employment depended on the performance of work. As the appellant
had not physically performed his usual work during the week in
question, she concluded that the appeal should be dismissed.
...
What is generally meant by work or the doing of work is the
performance of physical and/or mental activities, performance of
which is useful to and assists in achieving a desired result
which the payer giving out the work wishes to achieve. Ensuring
the consistency of or coordinating and planning the work are the
responsibility of the person who has the right of control, who
may have all kinds of requirements which he or she regards as
useful or necessary to the desired end.
What happens if the holder of this power of control decides to
require his or her subordinate not to be involved in performing
any physical or mental task for what he or she considers to be
the good of the business? It may be that the boss will decide
that the success of the business requires that the subordinate
individual be excluded from "productive" activities.
This is essentially a real, concrete manifestation of the
payer's authority. The worker cannot be penalized for
complying with the authority to which he is subject. The
appellant does not have to suffer any penalty resulting from a
choice in which he was not involved. For my part, I believe that
the appellant essentially complied with the orders and directions
of his employer.
For these reasons, the appeal is allowed in that the week of
April 18 to 25 is an insurable week.
[21] This case was appealed before the
Federal Court of Appeal, [2000] F.C.J. No. 927, and that court
stated as follows in a judgment dated June 15, 2000:
In our opinion, the trial judge had no cause to conclude, from
the admissions filed in the record of the Tax Court of Canada,
that the employment relationship between the respondent and his
employer had not been ended as of April 18, 1996.
The application for judicial review will be allowed, the
decision rendered by the Tax Court of Canada set aside and the
matter referred back to the Court for redetermination on the
assumption that the respondent did not hold an insurable
employment during the week of April 19 to 25, 1996, with
costs.
[22] In a judment dated October 4, 1999,
Judge Cuddihy of this court examined a similar case in Hutton
v. Canada (Minister of National Revenue - M.N.R.), [1999]
T.C.J. No. 655, and stated as follows at paragraph 2 et
seq.:
This is an appeal from a decision by the Minister of National
Revenue (the "Minister") of February 23, 1998, where it
was determined that the employment of Eric Hutton (the
"Appellant") with the Newfoundland Legal Aid Commission
(the "Payor") from June 30 to July 23, 1997, was
insurable employment within the meaning of paragraph 5(1)(a) of
the Employment Insurance Act (the "Act").
The Minister also determined that the lump sum payment made to
the Appellant at the termination of his employment with the Payor
on July 23, 1997, was considered as "insurable
earnings", however, there were no insurable hours pursuant
to paragraph 9.1 of the Employment Insurance Regulations (the
"E.I. Regulations").
...
Therefore, the Appellant was paid for 135 hours of work, ...
which formed part of his earnings during his pay period. For that
same pay period he received three months of salary in lieu of
notice which formed the second part of his earnings. These two
sources of total earnings were his insurable earnings with which
was calculated the mandatory premium which was deducted by his
employer. Because the premium was calculated on the
Appellant's insurable earnings as defined in the Act does not
have the effect of qualifying the Appellant for an additional
number of hours of work derived from the payment of the three
months of salary in lieu of notice. This lump sum payment is
considered an earning but not equal to a number of hours worked.
The only hours actually worked were those described in the record
of employment.
In other words benefits are payable for hours actually worked.
Premiums for these benefits are calculated on the insurable
earnings which include, as in this case, the remuneration paid
for the hours actually worked and the three months of salary paid
in lieu of notice. Since the Appellant did not actually work any
hours for the Payor after July 23, 1997, he could not be deemed
to have worked in insurable employment after that day.
The legislation indicates that insurable employment is a
period of time where work was actually accomplished and paid for.
It also defines "insurable earnings" as the basis upon
which the premium for insurable employment is calculated.
[23] The appellant made a valiant effort in
presenting his case. However, this court has no choice but to
apply the rule of law, the legislation and the case law. Ruling
in favour of the appellant would have required that Parliament be
inspired with greater compassion. Such was not the case, and this
court is bound by the case law cited above.
[24] This court must therefore conclude, in
light of the foregoing, that the appellant held insurable
employment within the meaning of the Act during the period
from May 15 to October 30, 2000, since during that period the
appellant and the payer were bound by a contract of service
within the meaning of paragraph 5(1)(a) of the
Act.
[25] This court also finds that, in
accordance with the provisions of section 9.1 of the
Employment Insurance Regulations, the appellant
accumulated 847 hours of insurable employment with the payer
during the period at issue because he did not render any service
to the payer after October 30, 2000.
[26] As a result, the appeal is dismissed
and the Minister's decision is confirmed.
Signed at Grand-Barachois, New Brunswick, this 26th day of
August 2002.
D.J.T.C.C.
Translation certified true
on this 16th day of December 2003.
Sophie Debbané, Revisor
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