Citation: 2008TCC50
Date: 20080205
Docket: 2007-2360(EI)
BETWEEN:
LES IMMEUBLES ANCHORAGE INC.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
and
DIANE ÉMOND
Intervener.
REASONS FOR JUDGMENT
Favreau, J.
[1] This is an appeal
under the Employment Insurance Act, S.C. 1996, c. 23, as
amended (the "Act"), from a decision of the Minister of
National Revenue (the "Minister") that during the period from
January 1, 2003 to January 10, 2004 (the "period"), Ms. Diane
Émond had acquired 1 855 insurable hours.
[2] The only issue in
this appeal is the determination of the number of insurable hours Ms. Émond
worked during her period of employment with the appellant. By letter dated
February 21, 2007, the Minister informed the appellant that it had been
determined that Ms. Diane Émond had accumulated 1855 insurable hours and
that, in calculating this number, the Minister had relied on
subsections 10(4) and 10(5) of the Employment Insurance Regulations,
SOR/96-332 (the “Regulations”).
[3] The appellant
disagreed with this determination, as it considered that Ms. Émond’s insurable
hours ought to be determined according to the number of hours that she actually
worked, which totalled approximately 720.
[4] Counsel for the
respondent submitted that, during the period in question, Ms. Émond worked
1855 insurable hours during 53 weeks of 35 hours, as per
subsections 10(4) and 10(5) of the Regulations, which read as
follows:
10(4) Except where subsection (1) and
section 9.1 apply, where a person's actual hours of insurable employment in the
period of employment are not known or ascertainable by the employer, the
person, subject to subsection (5), is deemed to have worked, during the period
of employment, the number of hours in insurable employment obtained by dividing
the total earnings for the period of employment by the minimum wage applicable,
on January 1 of the year in which the earnings were payable, in the province
where the work was performed.
10(5) In the absence of evidence
indicating that overtime or excess hours were worked, the maximum number of
hours of insurable employment which a person is deemed to have worked where the
number of hours is calculated in accordance with subsection (4) is seven hours
per day up to an overall maximum of 35 hours per week.
[5] The assumptions
upon which the Minister based his decision are the following:
(a)
Ms. Émond
had worked for the appellant for five years;
(b)
Ms. Émond
mentioned that it was not necessary to complete time sheets while she was working
for the appellant;
(c)
Ms. Émond
had to respect the opening hours, which were Monday to Wednesday from
1:00 p.m. to 8:00 p.m., Saturday and Sunday from 1:00 p.m. to
5:00 p.m.; Thursdays and Fridays were days off;
(d)
the Minister
asked the appellant for documents showing the details of the number of hours
worked by Ms. Émond;
(e)
the
appellant did not record Ms. Émond’s working hours;
(f)
as
no documents were submitted by the appellant and as the parties were not in
agreement, the Minister established Ms. Émond’s working hours as follows:
53 weeks
at 35 hours per week = 1855 hours.
[6] Ms. Émond
began to work for the appellant on February 7, 1999 as a sales representative.
The appellant is a general contractor and developer involved in the
construction of single-unit residential homes at Saint-Basile-le-Grand. The
appellant’s head office was in the Town of Mount-Royal.
[7] The appellant’s
sales office was located in the model home, which was also for sale. Ms. Émond’s
responsibilities included the following:
-
answering
phone enquiries;
-
scheduling
appointments with potential clients and organizing visits of the model home;
-
providing
information to potential clients concerning the choice of materials, available
options, prices, time of delivery, etc;
-
checking
the competition;
-
organizing
the advertising campaigns and purchasing promotional materials.
Ms. Émond was not present at
the model home every day, but she was always available on her cellular phone.
[8] Ms. Émond was
paid on a commission ‑ only basis (2% of the sale price to begin
with, increasing later to 3%) with advances of $200 per week to be
deducted from the commission payable on the next sale. The appellant also reimbursed
her cellular phone fees, the cost of her business cards, and the cost of magazines,
displays and promotional materials that she acquired.
[9] During 2003, Ms. Émond
sold only five (5) houses and earned commissions of approximately $ 20,000.
[10] As the appellant requested
a report of her activities, Ms. Émond used a calendar on which she wrote
the number of visits she had every day, the names and phone numbers of
potential purchasers and any other relevant information. That calendar was left
on her desk so that it could be consulted at any time by Mr. John
Mendelson, the president of the appellant.
[11] Mr. Michael
Mendelson, vice-president of the appellant in charge of administration and
financial matters, produced as Exhibit A-1 the said calendar and testified
that it was a very reliable source of information concerning the activities of
Ms. Émond and the number of hours that she actually worked during the 2003
calendar year. He said that Ms. Émond was a well-organized and very
meticulous person. After making many remarks concerning the days on which,
according to him, Ms. Émond did not work because there were no annotations
concerning the number of visits on those days or because the annotations were
of a personal nature, Mr. Mendelson concluded that, based on the calendar,
Ms. Émond worked no more than 800 hours in 2003.
[12] In her testimony, Ms. Émond
stated that she never filled out time sheets to record the actual hours she
worked each day during the period in question and that the calendar was not
really a report of her activities but a personal working document to help her recall
the names and phone numbers of serious potential clients. Not all visits were recorded
on the calendar. Ms. Émond said that she followed the business hours of
the competition. She further said that she was given the flexibility to
substitute days of work. She also pointed out that, during the summer of 2003,
she moved across the street from where the appellant’s model home was located.
From her new residence, she could see if a client was looking at the model home
or was parked in its driveway. Ms. Émond further stated that there was a
sign at the sales office which indicated that she was available for an
appointment at any time.
[13] Ms. Émond said
that she worked many more hours than the 15 hours per week argued by the
appellant. She mentioned that she had to call Mr. John Mendelson often
after 8 p.m. to determine the price of houses based upon requested modifications.
She also mentioned that occasionally she had to meet with designers and architectural
technicians to finalize or simply pick up plans. Ms. Émond also mentioned
that she received calls and visits from various suppliers when Mr. John
Mendelson was not present on the construction site.
[14] From the information
provided and the documents filed during the hearing of the appeal, I am unable
to conclude that there is any clear evidence of the hours that Ms. Émond
actually worked during the period in question.
[15] Given the above
findings, there is also no evidence indicating that "overtime or excess
hours were worked", as contemplated by subsection 10(5) of the Regulations.
[16] Accordingly, the Minister
was correct to calculate the number of insurable hours in accordance with the
formula in subsection 10(4) of the Regulations. The appeal is
dismissed.
Signed at Montreal, Canada,
this 5th day of February 2008.
“Réal Favreau”
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