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Citation: 2004TCC362
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Date: 20040520
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Docket: 2003-2997(EI)
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BETWEEN:
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GILLES GAGNÉ,
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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
Savoie D.J.
[1] This
appeal was heard at Montréal, Quebec, on February 23, 2004.
[2] This
appeal deals with the determination of the Appellant's insurable hours, within
the meaning of the Employment Insurance Act (the "Act")
for the period from October 29, 2002, to January 14, 2003,
when employed by Écotherm Inc., hereinafter referred to as the Payor.
[3] On
May 20, 2003, the Minister of National Revenue (the
"Minister") informed the Appellant of his decision that the
Appellant's insurable hours totalled 560.
[4] In
making his decision, the Minister relied on the following presumptions of fact:
[TRANSLATION]
(a) The Payor was
incorporated on May 11, 2001; (no knowledge)
(b) The Payor was
starting an electric heater distribution business; (admitted)
(c) The Appellant
was hired as a general manager; (admitted)
(d) The
Appellant's duties included promoting sales and coordinating the Payor's
activities; (admitted)
(e) The Appellant
and the Payor had signed an employment agreement on
November 28, 2002; (admitted)
(f) The Payor's
business hours were from 9:00 a.m. to 5:00 p.m., Monday to Friday;
(admitted)
(g) An agreement
was reached between the Payor and the Appellant so that the Appellant began
work at the office at 10:00 a.m. in order to avoid rush hour; (admitted
subject to amplification)
(h) The
Appellant's predecessor worked eight hours per day; (denied)
(i) The
Appellant worked a bit more, i.e.: 10 hours a day; (denied)
(j) The first
week, the Appellant worked four days for a total of 40 hours; (denied)
(k) The Appellant
then worked 10 weeks at 50 hours per week for a total of
500 hours; (denied)
(l) The last
week of the period, the Appellant only worked two days, for a total of
20 hours; (denied)
(m) The Appellant
worked a total of 560 hours for the Payor; (denied)
(n) On January 27, 2003,
the Payor gave the Appellant a Record of Employment indicating the first day of
work as October 29, 2002, and the last day of work as
January 14, 2003, indicating 560 insurable hours. (admitted)
[5] The
Appellant claims he worked a total of 1,386 insurable hours, in other
words that, during the period at issue, he worked 15 hours per day, seven
days per week, for a total of 105 hours per week and furthermore that he
had the right to two weeks' notice.
[6] The
Minister determined the amount of insurable hours at 560, according to his
calculation of 10 hours per day, five days per week, for
10 weeks. He added four days of work, for 40 hours, for the
first week of work and two days of work, for 20 hours, for the last week,
which totals 560 hours. The amount of insurable hours as determined
by the Minister corresponds to the same total recorded on the Record of
Employment issued by the Payor to the Appellant on January 27, 2003,
that is 560 insurable hours.
[7] The
evidence established that an agreement had been reached between the parties but
that it did not indicate the number of hours of work. However the agreement was
not produced. In addition, the evidence revealed that from
November 28, 2002, Mr. Prats, the Payor's vice‑president
and the owner's son‑in‑law, did not accept the number of hours
claimed by the Appellant and that he informed him of this the very same day.
The Appellant admits that Mr. Prats informed him that he did not accept
this figure that, in his opinion, was unreasonable. He called the
105 hours per week "slavery". According to Mr. Prats, the
employer did not require the Appellant to work that many hours. Also, he
allegedly asked the Appellant to drop his claim for so many hours.
[8] The
evidence revealed that the Appellant's predecessor worked eight hours per day
but that he had not met the expectations of the Payor, who terminated his
employment after five months. Mr. Prats stated that the Appellant's
replacement works 40 hours per week; however, he admits that the replacement
is profiting from the work completed by the Appellant. He established that the
Payor did not expect the Appellant to work more than 50 hours per week, as
is the case in France where the Payor's head office is located.
[9] A
document entitled "MEMO" (Exhibit A‑1) addressed by the
Appellant to Mr. Prats and dated January 26, 2003, establishes
that the Appellant worked long hours, often late into the night, in order to be
able to communicate with the head office in France. The many activity reports
support the Appellant's long hours of work, which were necessary to meet the
Payor's requirements. These reports, filed together as Exhibit A‑1,
provide detailed documentation of the tasks accomplished by the Appellant as
part of his duties acknowledged by the Payor, who considered the Appellant his
principal contractor. He was the general manager and had been hired as such.
[10] The documentary evidence produced by the Appellant establishes that he
accomplished a colossal amount of work during the period at issue. This was not
contradicted by the Minister.
[11] The Payor's representative, Mr. Prats, emphasized that the
Appellant's claim is unreasonable. He added that it was impossible for him to
verify so many hours. However, he recognizes the existence of an agreement that
the Appellant could start work at the office at 10:00 a.m. in order to
avoid rush hour traffic. Moreover, the Payor knew that the Appellant worked
from home.
[12] It is appropriate to reproduce the Appellant's "memo"
addressed to Pierick Prats, dated January 26, 2003. This
"memo" is part of Exhibit A‑1 and provides a detailed
summary of the Appellant's position and supports his allegations. There are
many reports that describe his activities throughout the period at issue. I
reproduce the "memo" below:
[TRANSLATION]
MEMO
To: Pierick Prats FAX
#: 1‑514‑636‑8733
From: Gilles Gagné
RE: Errors on the Record of Employment Date:
Sunday, January 26, 2003
Block 15A, Insurable hours: Following our telephone conversation of 22‑01‑03
and your refusal to include the period of two weeks' notice provided for in the
employment agreement in case of termination, I checked with the Human Resources
Development Canada support centre in order to fill out the Record of
Employment, and with the tax services office of the Canada Customs and Revenue
Agency. The reason the two weeks' notice must be taken into account when
establishing the number of weeks in calculating the number of insurable hours
is indicated in the "Summary chart for insurable earnings and hours"
in the document you have in your possession entitled "How to complete the
Record of Employment" at line #31 which we read together:
"Salary paid for the period of notice worked or not" must be included
in the calculation of the number of insurable hours indicated in
block # 15A, or a total of 132 weeks.
Block 11, Last day
for which paid: For the reason indicated in 15A, the last day paid is the last day of the
last week of insurable earnings, or the last day of the last week of advance
notice, therefore 28‑01‑03.
Block 12, Final pay
period ending date: For the same reason as in block 15A, the last day of
the last insurable pay period, or the last week of the advance notice is
therefore 31‑01‑03.
Block 15B, Total
insurable earnings and Block 17A, Vacation pay: In checking with the
Commission des Normes du Travail, 6% also applies to the week of vacation for
New Year's Day.
With respect to the number of days
per week used to calculate the number of insurable hours in block 15A, you
confirm that you could use six days of work rather than the five days used
in the original Record of Employment in order to somewhat better reflect the
amount of work I did, but you refuse to use seven days, which would reflect the
real number of days worked. Regarding the number of hours worked per day, you
confirm using 10 hours per day rather than eight hours, but you refuse to
use 15 hours per day, which is the actual number of hours worked.
You justify this by saying it is unreasonable and that
you were not able to verify the number of hours per day and the number of days
per week. Reasonable or not, that is the actual number of hours and days I
actually worked. We all know that your expectations and the deadlines to be met
in order to recover what could be salvaged from the heating season were not
reasonable. As soon as I started work you indicated to me how urgent it was to
generate cash flow, given the many errors you had made to date, since
August 2001, or more than one full year; given pure losses of more than
$300,000; and the possibility that Mr. Peyronny would put an abrupt end to
the North American adventure.
Since you indicated to me, from the start, that I
could work at office or at home, you are in fact unable to verify all the hours
worked. You can verify neither those worked at home, because you were not
there, nor those worked at the office. You cannot check the work performed at
the office evenings and weekends because you were not there. I can confirm them
for you because I was there. You may even have difficulty verifying the hours
worked at the office during the day since you were frequently absent.
However you cannot claim ignorance. My Activities
report #1 (created at 5:58 a.m. Monday 25‑11‑02
and printed at 7:56 a.m. Tuesday 26‑11‑02) which
was placed in your hands, indicates on page 2 that on Saturday 02‑11‑02,
you and I together completed the installation of the radiators in the office
showroom and that on Sunday 03‑11‑02 I reviewed the
European brochures in preparation for writing a Quebec brochure. My Activities
Report #2 (created at 8:26 a.m. Friday 22‑11‑02
and printed at 5:55 a.m. Monday 25‑11‑02)
indicates on page 3 that Saturday and Sunday 8
& 9‑11‑03 were spent writing a pamphlet as you had agreed the
previous Friday, since the deadlines for advertising in decorating magazines
were close. On 28‑11‑02 I showed you a confirmation of employment
form for Emploi Québec on which I confirmed I worked 105 hours per
week.
Saturday 30‑11‑02
and Sunday 01‑12‑02 were spent writing the brochure,
as indicated in the report of 24‑12‑02 to Mr. Peyronny in
which I explained that to meet the unrealistic deadline of 20‑12‑02
for the brochure, the graphics artist required the text by 28‑11‑02
and the photos by Monday 2‑12‑02, which only left me the weekend
to do it all.
In my report #4 dated Saturday 14‑12‑02,
(created at 8:06 a.m. Thursday 12‑12‑02, printed
at 11:32 a.m. and sent by fax at 11:33 a.m. on Saturday
14‑12‑02) I indicate to Mr. Peyronny that the delivery of the
three first clients and replacement of the radiators for one of the clients
occurred on Saturday 07‑12‑02. Furthermore, on Saturday
07‑12‑02 I brought handling and storage equipment, in order to
reduce Écotherm’s costs, as had been previously agreed with you and which you
then refused to reimburse. It was also on Saturday 07‑12‑02
that I received a ticket while making these deliveries. In the same report I
indicated "that I work 15 hours per day, 7 days per week
in order to move forward on things that should have been accomplished a year
ago, and that 105 hours/week is equal to three, 35‑hour
weeks in one, at $11/hour."
In the report #5 dated 24‑12‑02,
created at 8:42 a.m. on Sunday 22‑12‑02,
printed at 2:55 p.m. and sent at 2:59 p.m. by fax on Tuesday 24‑12‑02
(a sick day), I indicated that the fourth sale had occurred on Saturday
21‑12‑02 and would be delivered the following Saturday,
the 28‑12‑02. On 27‑12‑02, during a telephone
conversation with Mr. Peyronny, I again explained that I had to work 15 hours
per day, 7 days per week, or 105 hours per week to recover
what was salvageable of the heating season and to meet all the deadlines: on 30‑12‑02
in order to promote the draw at the Montréal National Home Show, on 03‑01‑03,
to be used in the Montréal National Home Show kiosk; hiring two advisors for 06‑01‑03;
replacement of the secretary as I had been asked, etc. . . .
As indicated in report #6 dated Sunday January 5,
if I had not been able to take a single day of the week of vacation that was
imposed on me at New Years' Day; such a holiday would have been more than
deserved given the amount of work achieved by that point. I could not allow
myself to take it because there was still too much for me to do.
In my report #6 of Sunday 05‑01‑03,
I also indicated to Mr. Peyronny that the delivery planned for Saturday
28‑12‑02 was delegated to you to allow me to spend Saturday
and Sunday 28 & 29‑12‑02 interviewing
candidates for the two advisor positions. The Écotherm development
plan and the budget use report which accompany this report are both dated Sunday
05‑01‑03. Mr. Peyronny sent his response to me at the
office by fax, on Sunday evening 05‑01‑03 at
1:30 a.m., when I was still at the office, I even returned the required
information with respect to my personal telephone numbers several minutes later
that same Sunday‑to‑Monday night, the 05‑01‑03.
In my report dated Saturday 11‑01‑03,
I again indicate to Mr. Peyronny that the candidate interviews for the two
advisor positions were held Saturday and Sunday 28
& 29‑12‑02, that "I have to work 15 hours
per day, 7 days per week. . . and that over the past two
and a half months my daughters have lost their father." The Écotherm
development plan and budget use report that accompany this report are both
dated Sunday 12‑01‑03.
The many exchanges of correspondence in each of the
files on which I worked with the graphic artist for advertising in decorating
magazines and for the directory of exhibitors for the Montréal National Home
Show and for writing the brochure, the correspondence with the decorating
magazine staff and all the Montréal National Home Show and Place Bonaventure
staff, correspondence sent and received, sometimes at unearthly hours, and to
which you were a witness on occasion, demonstrate without a shadow of a doubt
the truth of the colossal amount of uninterrupted work, 75 long 15‑hour
days, 7 days a week.
The correspondence that was
addressed to you personally and the correspondence with Mr. Peyronny also
confirm this. See the table . . . which shows the size of the
schedule for the general manager of Écotherm Canada for the last ten days of
work. The hours are taken from statistical data in the documents and files
saved on my computer, from the fax transmission report from my fax machine and
my telephone bill for overseas calls to France.
Although it is perfectly true that you are in no way
able to verify each of the hours worked (which no employer can do in any case!)
and for this reason you can only confirm that this colossal work performed was
done so at the cost of an unusual investment of time, you are no more able to
reduce the time I invested by arguing that it is an arbitrary 560 hours
based on eight or 10 hours of work per day for five or six days per
week, nor can you refuse to include in the calculation of the number of insurable
hours the two weeks' notice provided for in the employment agreement.
Your refusal to include the recognized two weeks'
notice, in compliance with the guidelines of Human Resources Development
Canada, and your attitude of wanting to reduce, at any price, the colossal
investment of my time during my employment with Écotherm is beginning to look
like bad faith and a false declaration by an employer's representative, an
offence punishable by prosecution and a penalty of up to $25,000, under
section 39 of the Employment Insurance Act and/or the Criminal
Code.
[13] The expert quality of the Appellant's work was never questioned by the
Payor. On the contrary, the Payor acknowledged having benefited from the
Appellant's work even after he had left and even to this very day. At the
hearing, the evidence was presented that, unlike his predecessor (a
Mr. Lamoureux who had to be laid off), the Appellant performed priceless
services for the Payor from which it is still deriving benefit.
[14] The Payor's vice-president, Mr. Prats, at the hearing admitted
that the Appellant, in his opinion, doubtlessly had to work 10 hours per
day, 5 days per week and even sometimes on weekends. However, he was not
able to establish how often he worked weekends, nor could he verify the number
of hours worked. He admitted that he was unaware of the time at which the
Appellant arrived at the office and that the Appellant was still on the job
when he left at 4:00 p.m. Mr. Prats added that the Payor did not
require the Appellant to work a specific number of hours but he recognized that
the Appellant [TRANSLATION] "accomplished an enormous amount of
work. . . too early to bear fruit. . . it takes
time. . . in relation to the structure he began to implement. . ."
[15] Mr. Prats is the Appellant's replacement. He works 40 hours per
week. But he clarified:
[TRANSLATION]
It's true that we are profiting
from the work he did, what he put in place. The company is making progress.
[16] Faced with this impasse, the Minister relied on subsection 10(3)
of the Employment Insurance Regulations in making a decision in this
file. The subsection in question reads as follows:
Where the number of
hours agreed to by the employer and the worker or group of workers under
subsection (2) is not reasonable or no agreement can be reached, each
worker is deemed to have worked the number of hours in insurable employment
established by the Minister of National Revenue, based on an examination of the
terms and conditions of the employment and a comparison with the number of hours
normally worked by workers performing similar tasks or functions in similar
occupations and industries.
[17] At the hearing, the Appellant was questioned by Counsel for the
Minister with respect to the management of his packed schedule, given that he
was divorced with shared custody of two adolescents, that he had to maintain a
home, do housekeeping, prepare meals and shop for groceries. The Appellant had
to admit that this was difficult but that he had managed.
[18] However sympathetic the Appellant, here is another file that must be
resolved in accordance with the provisions of the legislator. It provided the
regulation in subsection 10(3) of the Regulations mentioned above.
The Minister made his decision as required by the subsection in question, in
light of the information collected from the Payor.
[19] Under the circumstances, the intervention of this Court is not
justified. The appeal is dismissed and the Minister's decision is upheld.
Signed at
Grand Barachois, New Brunswick, this 20th day of May 2004.
Savoie D.J.
on this 22nd day
of October 2004.
Shulamit Day, Translator
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