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Citation: 2004TCC654
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Date: 20041112
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Docket: 2004-2415(EI)
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BETWEEN:
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MARLÈNE BOURGET,
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Appellant,
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and
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THE MINISTER OF NATIONAL REVENUE,
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Respondent.
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[OFFICIAL ENGLISH TRANSLATION]
REASONS FOR JUDGMENT
Bédard J.
[1] On December 2, 2003, the Appellant
asked the Respondent to rule on whether or not she had worked in
insurable employment for the company, Les fumoirs Gaspé
cured inc. (the "Payer") from September 23 to
November 12, 2002.
[2] In a letter dated April 23, 2004,
the Respondent informed the Appellant of his decision that she
did not hold insurable employment. He also informed her that the
amount of $2,412.14 received from the Payer was severance pay
given after a settlement was reached to compensate for the loss
of her employment, and that this amount does not constitute
insurable earnings because it falls under the definition of a
retiring allowance.
[3] The Appellant is appealing this
decision.
[4] To render his decision, the
Respondent established that the Appellant's employment did not
fall within the meaning of a contract of service, which he based
on the following uncontested assumptions of fact:
(a)
The Payer runs a smoked herring factory;
(b)
The business is open 8-10 months a year;
(c)
In 2002, the Payer had nearly 100 employees;
(d)
All of the factory workers worked 40 hours a week;
(e)
The Payer did not provide a pension fund or group insurance for
the workers;
(f)
On November 10, 2001, the Payer hired the Appellant;
(g)
She worked at the Payer's factory;
(h)
She removed the herring fillets;
(i)
She was paid $7.68 an hour plus 4% vacation pay;
(j)
On November 25, 2001, the Appellant got injured at work and took
an injury-on-duty leave;
(k)
On February 4, 2002, the Appellant resumed work for the Payer in
a temporary night guard position;
(l)
On June 4, 2002, the Payer temporarily ceased its activities and
the Appellant was laid off;
(m)
On June 13, 2002, the Appellant was again able to perform her
usual day labourer tasks;
(n)
On September 23, 2002, the Payer resumed its activities and
called back some of its workers;
(o)
The Appellant was not called back to work;
(p)
The Appellant then filed a complaint with the CSST against the
Payer's decision to not call her back to work;
(q)
The employee's complaint was dismissed and she appealed the
decision to the Commission des lésions
professionnelles;
(r)
On November 1, 2003, the Appellant and the Payer reached an
agreement that settled their differences;
(s)
The Payer acknowledged that if the Appellant had been called back
to work, she would have completed 302 working hours from
September 23 to November 12, 2002, before being laid off
again;
(t)
The Payer agreed to pay the Appellant $2,412.14, which
constituted the loss of wages from not being called back, that
is, 302 hours at $7.68/hour plus 4% vacation pay;
(u)
It granted the Appellant additional seniority of 302 hours for
all issues relating to her employment;
(v)
In return, the Appellant withdrew her challenge against the CSST
decision.
(w)
Both parties agreed that $2,412.14 was fair compensation for the
Appellant for not being called back in 2002;
(x)
Both parties said they were satisfied with the settlement and
mutually released each other from all claims, rights or appeals
that could result from not having called the Appellant back to
her employment with the Payer.
Analysis
[5] The facts are relatively
simple-the Appellant was not called back to work when she should
have been. One year later, following a settlement (agreement)
reached between the Appellant and the Payer, the Payer gave the
Appellant monetary compensation equivalent to the total wages she
would have earned during the period when she normally would have
worked, from September 23 to November 12, 2002. In this
agreement, the Payer granted the Appellant additional seniority
of 302 hours for all issues relating to her employment. It should
be pointed out that in the agreement, the Appellant did not waive
her right of recall.
[6] The issues are as follows:
(i) Did the Appellant work in
insurable employment for the Payer from September 23 to November
12, 2002?
(ii) Did the amount of $2,412.14
fall under the definition of a retiring allowance?
[7] The relevant provision of the
Employment Insurance Act (the "Act") reads as follows:
5.(1) Subject to subsection (2), insurable employment is:
(a) employment in Canada by one or more employers,
under any express or implied contract of service or
apprenticeship, written or oral, whether the earnings of the
employed person are received from the employer or some other
person and whether the earnings are calculated by time or by the
piece, or partly by time and partly by the piece, or
otherwise;
...
[8] The relevant regulatory provisions
are as follows:
Employment Insurance Regulations
9.1 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.
Insurable Earnings and Collection of Premiums
Regulations
1.(1) The definitions in this
subsection apply in these Regulations.
"retiring allowance" means an amount received by a
person:
(a) on or after retirement of the person from an office
or employment in recognition of the person's long service,
or
(b) in respect of a loss of an office or employment of
the person, whether or not received as, on account or in lieu of
payment of, damages or pursuant to an order or judgment of a
competent tribunal. (allocation de retraite)
...
PART I
INSURABLE EARNINGS
Earnings from Insurable Employment
2.(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
(b) the amount of any gratuities that the insured person
is required to declare to the person's employer under
provincial legislation.
(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.
(3) For the purposes of subsections (1) and (2),
"earnings" does not include:
...
(b) a retiring allowance;
...
[9] Therefore, according to section
9.1 of the Employment Insurance Regulations, a person who
is paid on an hourly basis 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.
[10] According to the definition of
insurable earnings, they include the total insurable earnings
from insurable employment, that is, the earnings that the insured
person receives from the employer for this employment, but not
including a retiring allowance. A retiring allowance is defined
as an amount received in respect of a loss of employment, whether
or not this amount is received as payment of damages.
[11] Counsel for the Appellant pointed out
that the employment relationship was not broken during the period
in question and that, consequently, the pay given to the
Appellant during this period was not a retiring allowance.
Moreover, relying on the Federal Court of Appeal's findings in
Canada (Attorney General) v. Sirois, [1999] F.C.J.
No. 523 (Q.L.), she claimed that even if an employee is no
longer working it does not necessarily follow that there is no
longer a contract of service during this period.
[12] I agree with counsel for the Appellant
that the pay given to the Appellant cannot be considered a
retiring allowance unless the employment relationship was broken.
However, I believe that it is unnecessary in this case to
determine whether or not the employment relationship was broken
when it took place, if it did, because in any case, the Appellant
did not, in my opinion, work in insurable employment during the
period in question. In fact, section 9.1 of the Employment
Insurance Regulations stipulates that a person paid on an
hourly basis 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. The Appellant acknowledged that
she was paid on an hourly basis and that she did not work the 302
hours for which she was paid.
[13] With regard to Sirois,
supra, referred to by counsel for the Appellant, I would
like to point out that this decision only recognizes that a
contract of service exists as long as the employment relationship
is not broken, and as long as this is the case, a contract of
service can exist even if the employee no longer provides a
service. In Sirois, the Federal Court of Appeal clearly
indicates that no regulatory provisions were involved. However,
the Court recognizes that when such provisions are involved, they
must be reviewed to determine an employment's insurability.
Consequently, whether or not the employment relationship was
broken, what must be asked in this case is whether the employment
was insurable in light of section 9.1 of the Employment
Insurance Regulations. In this regard, I agree with the
reasoning of my colleague, Lamarre J., in Lefebvre c. Canada
(ministre du Revenu national - M.R.N.), [2004] A.C.I. no 69
(Q.L.), 2004 CCI 131, at paras. 7-13.
[14] On these grounds, I dismiss the
appeal.
Signed at Ottawa, Canada, this 12th day of November 2004.
Bédard J.
Translation certified true
on this 10th day of February 2005.
Julie Oliveira, Translator
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