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Citation: 2004TCC559
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Date: 20040816
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Docket: 2003-3651(EI)
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BETWEEN:
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JACOB PETE,
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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
McArthur J.
[1] This appeal under the
Employment Insurance Act is from a determination by the
Minister of National Revenue that the Appellant had 588 hours of
insurable employment with Pehdzeh Ki First Nation (the Payor)
from May 6, 2002 to July 25, 2002 (the Period). During the
hearing of this appeal, the Respondent conceded another 172
hours, bringing the total hours not in dispute to 760. As a
"new entrant" to the employment insurance regime, the
Appellant required 910 insurable hours in the "qualifying
period" from January 6, 2002 to January 4, 2003. The
Appellant argued that he had over 910 insurable hours.
[2] The Appellant was retained as the
senior administrative officer for the Payor, a native band of
approximately 200 members in the Northwest Territories. He was
hired effective May 1, 2002 by Chief Percy Hardisty of the Payor.
Three and one-half months later, Chief Hardisty was replaced by
Chief Lennie by what was described as a coup d'état.
As of August 15, 2002, the Appellant was no longer employed by
the Payor, his contract having been terminated by Chief Lennie
who hired Mike Canadien in place of the Appellant.
[3] The Appellant and a former
co-worker, James Allan Smith, were the only witnesses. Mr.
Smith's evidence was of very little assistance. The Appellant
argued that in addition to the 760 hours of insurable employment,
the evidence established the following additional hours:
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Education Director Position (2001)
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430 hours
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Unpaid "regular" hours in May
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33.5 hours
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Overtime worked but not paid (May 6 to July 25)
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224 hours
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Time worked but unpaid (September to December)
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160 hours
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The issue is whether these hours can be included as insurable
hours for the relevant period. The parties agreed that he was
paid hourly and, therefore, Regulation 9 of the Act
applies.
[4] In addition to the 760 hours, the
Appellant submits that the following be included:
(i) Time he worked as education
director in 2001 (430 hours) for Kwanlin Dun First Nation
(unrelated to the Payor);
(ii) Unpaid regular hours in May
2002 while he waited several days for a flight out of
Edmonton;
(iii) Overtime worked but not paid
between May 6 and July 25, 2002; and
(iv) Time worked but not paid from
September to December, 2002.
I will deal with these four submissions in the order
presented.
[5] 430 hours for Kwanlin Dun First
Nation in 2001: These are not insurable hours because they do
not fall within the statutory "qualifying period". The
qualifying period is set out in subsections 8(1) and 10(1) of the
Act which is not in issue. In effect, it is the calendar
year 2002.
[6] Unpaid "regular"
hours in May: The parties agreed at trial that the contract
date began May 1. The Appellant's time journal includes 33.5
hours of time worked for the dates of May 1 to 5,[1] although his representative
argued that the time should be counted as eight hours per day for
2.5 days, or 20 hours.[2] These hours were not paid, as the first day of pay
began on May 6, when he arrived in the Northwest Territories.[3] According to the
Insurable Earnings and Collection of Premiums Regulations,
unpaid hours will only be included in insurable hours if they
have been the subject matter of a complaint to the relevant
federal or provincial authorities.[4] The complaint filed by the Appellant
was only for unpaid hours from July 26 onwards and overtime for
the entire contract period. Since the complaint that was filed
did not include these May 2002 hours, they are not to be included
in the total insurable hours. As stated, the Appellant was
credited with the 172 hours claimed in his complaint.
[7] Overtime worked but not paid
(May 6 to July 25): The hours of overtime worked but not paid
are not clearly outlined in the evidence. To determine these, the
Appellant's work journal[5] must be compared to the time sheets submitted by
the Respondent.[6]
From these documents, the difference is approximately 223.5
hours, which represents the total amount of unpaid overtime from
May 6 to July 25. The question arises whether unpaid
overtime hours count as "insurable hours". Under the
Employment Insurance Regulations, where earnings are
unpaid for one of the reasons described in Regulation
2(2), the amount is to be included in calculating the insurable
earnings.[7]
Regulation 2(2) of the Regulations includes in
total insurable earnings the amounts that remain unpaid because
of non-payment of remuneration where the person has filed a
complaint with the relevant authorities. Both parties agree that
this has been done. However, Regulation 2(2) specifically
excludes "any unpaid amount that is in respect of overtime
or that would have been paid by reason of termination of the
employment".
[8] The number of unpaid overtime
hours worked by the Appellant is unclear. The difference between
the parties is 223 hours between May 6 and July 25, 2002. The
Appellant based his calculation on his journal entries filed in
evidence as Exhibit A-14. The Respondent referred to time sheets
submitted by the Appellant's employer. In any event, it must
be determined if the overtime hours are "insurable
hours". The Regulations are of some guidance.
[9] Pursuant to section 9.1 of the
Regulations, the Appellant must establish the hours he
actually worked "and for which he was remunerated".
Section 9.2 provides:
9.2 Subject to section 10,
where a person's earnings or a portion of a person's
earnings for a period of insurable employment remains unpaid for
the reasons described in subsection 2(2) of the Insurable
Earnings and Collection of Premiums Regulations, the person
deemed to have worked in insurable employment for the number of
hours that the person actually worked in the period, whether or
not the person was remunerated.
Subsection 2(2) of the same Regulations provides as
follows:
2(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.
(Emphasis added)
Subsection 2(2) specifically excludes "any unpaid amount
that is in respect of overtime or that would have been paid by
reason of termination of the employment". The Appellant
concedes that he was not paid for the overtime he now claims in
excess of 760 hours allowed.
[10] As stated, the Appellant did establish
that he did file a complaint for 172 hours and pursuant to
section 9.2 of the Regulations, these hours are added to
the original 588 hours to bring the total hours accepted by the
Respondent to 760.
[11] The Appellant's counsel urges the
Court to use a humane and compassionate method to interpret the
words of subsection 2(2) because it is social legislation,
particularly when dealing with a fixed statute.
[12] Where the statutory language is clear
and unambiguous, the plain meaning rule requires this Court to
apply the language of the statute. To do otherwise would have me
assume the function of the legislature. If the words of
subsection 2(2) were unambiguous and capable of various
meanings, I could consider selecting the interpretation
recommended by the Appellant's counsel.
[13] The words in subsection 2(2) are clear
and I must follow them. They do not lead to an absurdity. The
plain meaning of subsection 2(2) clearly prevents unpaid overtime
from being included in insurable hours unless it was included in
a complaint. The following statement by the respected author,
Vern Krishna, in The Fundamentals of Canadian Income Tax,
Seventh Edition, is a clear answer to the Appellant's
counsel's submission that the purpose of the legislation must
be considered when interpreting it:
To summarize: the purpose rule is not a substitute for the plain
meaning rule. It is used where statutory language is obscure or
ambiguous and a court needs assistance in determining legislative
intention. Otherwise, unambiguous legislative language is
interpreted according to its plain meaning, but not so literally
as to produce absurd results. The presumption in favour of the
taxpayer is residual in nature and should play only an
exceptional part in the interpretation of tax legislation. Thus,
every effort should first be made to determine the meaning of the
Act. Only when this proves to be impossible, or produced
bona fide alternative interpretations, is it legitimate to
apply the presumption in favour of the taxpayer.
[14] Time worked but unpaid from
September to December. 2002: The Appellant submits that he
continued a liaison with Chief Hardisty from September to
December in an effort to have Chief Hardisty reinstated. Both
Chief Hardisty and the Appellant remained in Edmonton. The
Appellant never did return to his work with the Band in the
Northwest Territories. Chief Hardisty was not reinstated nor was
the Appellant. The efforts the Appellant made with the former
Chief cannot be considered employment under any express or
implied contract of service. His contract had been terminated. He
had no status with the new Chief and he had been replaced as
senior administrative officer. There is no evidence that the
Appellant's activity after August 15, 2002 was insurable
employment.
[15] For these reasons, the appeal is
dismissed.
Signed at Ottawa, Canada, this 16th day of August, 2004.
McArthur J.
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