[OFFICIAL ENGLISH TRANSLATION]
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Reference: 2004TCC53
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Date: 20040130
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Docket: 2003-1952(EI)
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BETWEEN:
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LUCIENNE BERNATCHEZ,
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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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REASONS FOR JUDGMENT
Bédard J.
[1] This is an appeal from the
Respondent's decision of February 20, 2003, according to which
the Appellant's employment met the requirements of a contract of
services because there was an employer-employee relationship.
Moreover, it established that the amount of insurable earnings
from this employment during the period at issue from July 1 to
December 31, 2001 (the "period at issue") totalled $8,914.40.
[2] The Respondent primarily relied on
paragraph 5(1)(a) and subsection 93(3) of the
Employment Insurance Act, S.C. (1996), c. 23 (the "Act")
and on section 3 of the Insurable Earnings and Collection
of Premiums Regulations (the "Regulations")
[3] In rendering his decision, the
Minister of National Revenue (the "Minister") primarily relied on
the following assumptions of fact set out in paragraph 6 of the
Reply to the Notice of Appeal:
[Translation]
(a) The main
activity of the Payer, Les Immeubles G. Gagné Inc., is
managing residential buildings and construction.
(b) The payer owns
about 30 buildings with about 300 rental units.
(c) The payer hired
the Appellant as a rental agent.
(d) The Appellant
has worked for the payer since March 1997.
(e) Her duties
consist primarily of renting out the units, which involves
showing the units to potential renters, conducting credit checks,
preparing leases, managing building maintenance and repairs and
preparing bids to that effect.
(f) From
January to July, the Appellant worked full-time for the payer at
40-80 hours a week.
(g) During slower
periods from August to December, the Appellant's work hours were
reduced to 10 hours a week.
(h) The payer
submitted a record of employment to the Appellant indicating that
the last payday was July 28, 2001, even though she continued to
work for the payer and continued to be paid after this
period.
(i) The
records of wages and of hours worked submitted by the payer
indicate that during the period at issue, the Appellant worked 10
hours a week and that she was paid an hourly wage of $9.50.
(j) The
records also indicate that the Appellant did not do any work for
the payer and did not receive any pay for the pay periods ending
August 9 and 16, 2001.
(k) During the
period at issue, the Appellant received a $2,000 rental
bonus.
(l) From
January 1 to June 30, 2001, the employee paid her own monthly
expenses for her lodging at 1-235 des Bouleaux in
Québec.
(m) From July 1 to
December 31, 2001, the payer provided her with free lodging at
4-690 Des Groseilles in Québec.
(n) The payer
determined the value of the lodging benefit provided to the
Appellant to be $300 a month.
(o) During the
period at issue, the insurable earnings totalled $8,914.40 and
were broken down as follows:
Wages from July-December
2001:
$5,114.40
Lodging taxable benefit (6 X
$300):
$1,800.00
Rental
bonus:
$2,000.00
Total:
$8,914.40.
[4] However, the insurable earnings of
$8,914.40 were adjusted to $8,794.40 in order to take into
account a lodging taxable benefit which had a value of $1,680
instead of $1,800 because no cash remuneration was paid to the
Appellant for the pay periods ending on August 9 and 16,
2001.
[5] In fact, the only issue raised by
the Appellant is the following. She argued that the lodging
benefit which she enjoyed during the period at issue should have
been added to her insurable earnings for the period of
January-July 2001 (first period) and not to the insurable
earnings for the period at issue.
[6] The Appellant testified that her
verbal employment contract with Les Immeubles G.
Gagné Inc. stipulated that it had to provide her with free
lodging during the first period and that it was unable to honour
its commitment because all of its units were rented. The
Appellant added that she should have rented a third party's unit
and should have paid the costs during the first period. The
Appellant argued that her employer instead provided her with free
lodging for the period at issue as compensation for not
fulfilling its contractual obligation to provide her with free
lodging during the first period, and not because of her
employment during the period at issue.
[7] Mr. Gagné, a shareholder
and administrator for the employer, confirmed the Appellant's
version in all respects in his testimony.
Analysis
[8] I will therefore have to determine
whether the value of the lodging benefit received by the
Appellant during the period at issue must be added to her
insurable earnings for that period. The provisions of the
Regulations that address this issue are set out in section
2 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
partially 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:
(a) any
non-cash benefit, other than the value of either or both of any
board or lodging enjoyed by a person in a pay period in respect
of their employment if cash remuneration is paid to the person by
their employer in respect of the pay period;
(a.1) any amount excluded as income under paragraph
6(1)(a) or (b) or subsection 6(6) or (16) of the
Income Tax Act;
(b) a retiring allowance;
(c) a supplement paid to a person by the person's
employer to increase worker's compensation paid to the person
by a provincial authority;
(d) a supplement paid to a person by the person's
employer to increase a wage loss indemnity payment made to the
person by a party other than the employer under a wage loss
indemnity plan;
(e) a supplemental unemployment benefit payment made
under a supplemental unemployment benefit plan as described in
subsection 37(2) of the Employment Insurance Regulations;
and
(f) a payment made to a person by the person's
employer to cover the waiting period referred to in section 13 of
the Act, or to increase the pregnancy, parental or compassionate
care benefits payable to the person under section 22, 23 or 23.1
of the Act if the payment meets the criteria set out in section
38 of the Employment Insurance Regulations.
[9] Even though the Appellant received
this benefit as compensation for the payer not executing a
previous obligation, I believe that under paragraph
3(2)(a) of the Regulations, the value of the lodging
enjoyed by the Appellant during this period when she was paid as
an employee must be added to her insurable earnings.
[10] I believe that for the purposes of the
Regulations, the benefit received as compensation must be
treated in the same way as would be treated the benefit that she
would have received under the previous obligation. Moreover, even
if this benefit was received as compensation for the payer not
fulfilling a previous obligation, it must be added to the
Appellant's insurable earnings upon receipt.
[11] It is certain that the employer, by not
fulfilling its obligation, may have personally caused the
Appellant harm. However, that does not mean that I have to
compensate the Appellant for harm caused by the employer by
rendering a favourable decision for the Appellant which would be
contrary to the Act as it must be interpreted.
[12] For these reasons, the appeal is
dismissed.
Signed at Ottawa, Canada, this 30th day of January 2004.
Bédard J.
Certified true translation
Manon Boucher
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