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Citation: 2003TCC746
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Date: 20031023
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Docket: 2003-1183(EI)
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BETWEEN:
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AMARJIT KAUR MAHIL,
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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
Rowe, D.J.
[1] The appellant - Amarjit Kaur Mahil
- appeals from a decision dated March 10, 2003, issued by the
Minister of National Revenue (the "Minister"), wherein
the Minister decided her employment with Shamsher Mahil and Meena
Mahil - doing business as Mahil Farms - (Farms) during the
periods from July 8 to August 24, 2002, June 5 to August 25,
2000, and May 3 to June 26, 1999, was not insurable employment
because the parties were related and the Minister was not
satisfied the contracts of employment would have been
substantially similar if the employer and employee had been
dealing with each other at arm's length. The Minister's decision
was issued under subsection 93 (3) of the Employment Insurance
Act (the "Act") and is based on paragraph
5(2)(i) of said Act.
[2] Amarjit Kaur Mahil (Amarjit Mahil)
testified by utilizing the services of Sarb Sandhu, a
Punjabi-English, English-Punjabi interpreter. Amarjit Mahil was
represented by an agent, Ms. Gurcharan Dhillon, who advised the
Court she was not related to an anticipated witness with the same
family name. Amarjit Mahil stated she resided in Clearbrook,
British Columbia and was a nursery worker. She had been adopted
by Shamsher Mahil and Meena Mahil and, even though she worked at
their farm during the relevant periods, had resided in town and
not on the Mahil farm property which is located near the City of
Abbotsford. While working at the farm, she applied sawdust and
fertilizer, planted new blueberry plants, checked the rows
and performed all other necessary tasks under the direction of
her parents and in accordance with their instructions. She began
working on the farm in the summer of 1999 and also worked there
in 2000 and 2002. However, she did not work there during 2001
because she was able to obtain more work than usual at a nursery.
At Farms, there were no fixed hours and the workday began at 6:00
a.m. and ended at 9:00 p.m. - usually 6 days per week - but
sometimes it was necessary to work 7 days. In 1999, Amarjit Mahil
worked at Farms and also at a cannery in addition to attending
English Language Services for Adults (ELSA) classes (commonly
referred to as English as a Second Language or ESL instruction).
In the event she worked for two employers on the same day, she
did not attend her evening ESL class. Between February 15 and
March 22, 1999, the ESL classes were held between 9:00 a.m. and
noon. On March 23, 1999, she began attending ESL night
classes and started working at Farms on May 3. Amarjit Mahil
identified a letter - Exhibit A-1 - issued by the ELSA
Coordinator on March 3, 2003, to the Appeals Division of the
Vancouver office of Canada Customs and Revenue Agency (CCRA)
concerning the appellant's attendance at the classes during
various periods between February 15, 1999 and January 31, 2001.
The ELSA program was closed from June 11 to September 19, 1999.
The appellant stated she did not attend ESL classes in 2002. She
stated there were other non-related workers at Farms who
were also paid by cheque and a bundle of photocopies of cancelled
cheques - issued by Shamsher Mahil and Meena K. Mahil - were
filed as Exhibit A-2. Shamsher Mahil maintained business records
- including pay sheets - Exhibit A-3 - which were used
to record hours of work performed by various workers. The
appellant did not keep any separate record of her working hours
but is satisfied the records of Farms were accurate. The
appellant stated that even though some of the cheques were issued
to Mahil Amarjit Kaur - rather than to Amarjit Kaur Mahil -
she is the person to whom those cheques were issued, in payment
of services rendered. The appellant stated she arrived in Canada
- in 1998 - and was not able to deal with financial institutions
due to her inadequate knowledge of English. As a result, she
opened a joint account with her mother, Meena K. Mahil - and her
brother opened an account with Shamsher Mahil. In addition, her
schedule was such that - often - the bank would be closed by the
time she finished work and since she did not own a motor vehicle,
was dependent on obtaining transportation from others. She
deposited all her cheques into the joint account whether they
related to work done at the cannery, the nursery or at Farms. The
appellant stated she was paid the minimum hourly wage
(established by provincial law) and received her wages only at
the end of the season. In 2002, her last day of work was on
August 24 and she was paid two or three weeks later with two or
three separate cheques. In 2002, she also worked at the
nursery.
[3] Prior to commencing
cross-examination of Amarjit Mahil, counsel for the respondent -
with the consent of the appellant's agent - filed a Book of
Documents - Exhibit R-1 - tabbed 1-26, inclusive. Counsel advised
the Book may contain some documents which were filed as Exhibits
during the appellant's evidence-in-chief (Reference
to a tab number - without more - will indicate the document(s)
is/are located within Exhibit R-1).
[4] Amarjit Mahil described Farms as a
property which produced strawberries, raspberries and
blueberries. During times when her mother and father were absent
due to their own respective employment, the appellant was in
charge of the farm. Her father's sister had three children who
worked on the farm and her brother performed certain tasks from
time to time but may not have been included on the regular
payroll. The appellant identified the Questionnaire - Tab 1 - she
had completed and confirmed her answers therein were correct. At
Tab 3, the appellant identified the Record of Employment (ROE) as
having been issued to her by Yarrow Nursery Ltd. (Nursery) in
respect of her employment - in 2002 - during which she worked 444
insurable hours and earned a total of $4,541.40. She was paid by
cheque, issued bi-weekly. Farms issued the appellant an ROE - Tab
4 - in relation to her employment between July 8 and August 24,
2002, certifying she had worked 370 insurable hours and had been
paid the sum of $3,078.40. Her Application For Unemployment
Benefits - tab 5 - (generally referred to as employment insurance
or EI benefits) was dated September 11, 2002. The appellant
agreed Farms had issued four cheques - tab 6 - to her during
2002, as follows: #0292 - July 13/02 in the sum of $339.40; #0293
- July 27/02 in the sum of $889.36; #0294 - August 10/02 in the
sum of $850.63 and #0295 - August 24/02 - in the sum of $811.90.
Amarjit Mahil agreed that - despite the dates thereon the
- cheques had not been issued to her - by Farms -
until after her employment had ended on August 24, 2002. A copy
of her bank statement - tab 9 - disclosed a deposit - on
September 19, 2002 - in the sum of $2,891.29, an amount equal to
the total of those 4 cheques within tab 6. The appellant agreed
she had not deposited her pay cheques for 25 days following the
end of her employment and had applied for EI benefits on
September 11, 2002. She stated this method of receiving payment
was not unusual in that she had worked - in 2000 - for
non-related employers at a cannery but had not received her wages
until 2001. With respect to her delayed payment from Farms - in
2002 - the appellant agreed she had informed the
Rulings Officer that her father - Shamsher Mahil - had been
too busy to write the cheques and that she had not been concerned
since she was accustomed to waiting for final payment of wages.
In the interim, whether working at Farms or at the cannery, she
had adequate funds to pay for her costs of living. In 2002, she
had a term deposit - tab 10 - in the sum of $10,000 - held
jointly with her mother - Meena Mahil - which had been purchased
with money transferred from their joint bank account. The
appellant stated she did not work for her parents - at Farms - in
2001, because her work at the cannery continued and her parents
hired other workers. In 2002, she worked enough insurable hours
at the cannery to qualify for EI benefits but stated she prefers
to be employed as much as possible in each year. Two ROEs - tabs
13 and 14 - were issued to the appellant by Universal Packers
Inc. (Packers) with respect to her employment during two separate
periods in 2000. She worked from June 15 to September 1 and from
September 5 to September 28. Another ROE - tab 15 - was issued to
the appellant - by Farms - for the period June 5 to August 25,
2000. The appellant completed an application - tab 16 - for
EI benefits on September 14, 2000. At tab 17, the appellant
identified photocopies of 6 cheques - issued to her by Farms
- bearing several dates during 2000 and acknowledged that the
first 4 cheques in sequence had been deposited by her on August
28, 2000 and the last two cheques - dated August 12, 2000 and
August 26, 2000, respectively - had not been deposited until
September 15, 2000. In 1999, the appellant had worked at Packers
from June 17 to September 16, and received an ROE - tab 19 - with
respect to that employment indicating she had worked
679 insurable hours and had earned the sum of $5,248.41. She
was issued another ROE - tab 20 - by Farms, covering her
employment between May 3 and June 26, 1999, during which period
she worked 377 insurable hours and was paid the sum of $2,803.40.
The appellant's application for EI benefits - tab 21 - was dated
September 29, 1999. The cheques - tab 22 - issued to her - by
Farms - in the summer of 1999 were dated May 18, May 29, and June
12. The May cheques were deposited by the appellant on June 21,
1999 and the June 12 cheque was not deposited until July 24. In
response to the question why she had not deposited all of the
cheques if she had received them at the same time, the appellant
replied she might have misplaced one cheque or merely forgot
about it. She stated she had informed an official at CCRA that
Packers had not paid her until 2001 - for services provided in
2000 - and that she had not been worried or concerned about this
delay in payment. With respect to her attendance at ESL classes -
as outlined at tab 25 - (a duplicate of Exhibit A-1) the
appellant stated that if classes ended at noon she would work at
the farm on the same day. A summary of ROEs and ESL classes was
located at tab 26 and indicated - by use of an asterisk (*) -
certain overlapping periods.
[5] In re-examination, Amarjit Mahil
stated that, although her father was ultimately in charge at the
farm, she had to supervise other workers and instruct them on the
proper method of picking berries. She had the responsibility to
ensure the casual workers - usually students - were following
proper picking procedures and, in the event someone attended at
the farm to purchase a small amount of berries, handled the
transaction but was not involved in shipping product to canneries
or other commercial enterprises.
[6] Meena Mahil testified by utilizing
the services of Sarb Sandhu, interpreter. She lives in
Abbotsford, works in a nursery and is the adoptive mother of the
appellant who came from India - in 1998 - to live on the 10-acre
farm operated in partnership by Meena Mahil and her husband,
Shamsher Mahil. In 1999, 2000 and 2002, Amarjit Mahil worked for
Farms and was paid the applicable minimum hourly wage. Shamsher
Mahil maintained the time records and the appellant was paid her
wages at the end of the growing season. The cheques issued to
Amarjit Mahil were prepared by the Farms' accountant or
their son because neither she nor her husband could write in
English. However, all cheques were signed by Shamsher Mahil.
Meena Mahil stated the pay cheques issued to the appellant were
dated every two weeks even though they had been written on the
same day. The dates inserted on the cheques were based on the
payroll sheets and time sheets for the preceding period. The
practice of paying the appellant her entire wages at the end of
the season was followed because her husband was too busy to
attend to that matter earlier. Meena Mahil stated all their
workers are paid minimum wage and receive payment only at the end
of the season with the exception of casual workers - usually
pickers - who work for a short period - perhaps one or two days -
and are paid in cash upon quitting. The workers who are placed on
the payroll are steadily employed and remain until the end of the
season. During 1999, 2000 and 2002, Meena Mahil stated Farms
employed some non-related workers as well as the daughters of
Shamsher Mahil's sister. A non-related worker - Darsham Sandhu
(Sandhu) - worked for Farms in 1999 and did not receive his wages
until after the season had finished even though cheques were
prepared with dates inserted as though they had been issued on a
bi-weekly basis in order to conform with the ordinary business
practice of paying workers regularly for a particular preceding
period (Photocopies of said cheques are included within Exhibit
A-2). The cheques issued to Sandhu were deposited in his account
on September 17, 1999. Meena Mahil acknowledged no
non-related workers were on the Farms' payroll during 2000
and/or 2002, even though some worked for short periods of time
and received payment in cash. Other non-related workers performed
services for Farms at various times during the season in those
years but were paid by cheque and were not listed on the
Farms' payroll.
[7] Bagga Singh Dhillon testified he
lives in Abbotsford and owns a farm on which he employs several
workers whom he supervises on a regular basis. During 2000 and
2002, Dhillon stated he visited Farms two or three times a week
and sometimes purchased small quantities of blueberries from
Amarjit Mahil. Over the course of the 2002 season, Dhillon
estimated he purchased 200 pounds of blueberries from Farms and
often saw the appellant working in the fields. In his long
experience as a farmer in the Abbotsford area, Dhillon stated
that, while the season for growing most blueberries is finished
at the end of August, there are different varieties grown on some
other farms in the area that have a late September maturity date.
In 2002, the ordinary blueberry picking season was finished near
the end of August and the type of blueberries he had purchased
from the appellant at Farms belonged to that normal variety.
Dhillon stated he employs 12 workers on his farm and makes
advance payments to workers - if requested - but the usual
business practice is to prepare documents and issue cheques in
final settlement of outstanding wages only after the end of the
farming season. Dhillon stated he has farmed for 25 years and is
accustomed to working long hours, commencing at 6:00 a.m.
and finishing as late as 10:00 p.m., and has also experienced
difficulty in attending at his bank in a timely fashion which -
on occasion - resulted in some cheques issued to him by certain
cannery companies being dishonoured -when presented at a later
date - because those businesses had failed in the interim.
[8] In cross-examination, Bagga Singh
Bhillon stated it is usual practice within the farming community
to prepare all necessary documentation and to reconcile wages
earned - and advance payments paid to workers - only at the end
of the season and, thereafter, to issue final cheques in full
settlement of outstanding wages.
[9] Ms. Dhillon - agent for Amarjit
Mahil - submitted the evidence disclosed the appellant had been
paid all her wages - based on the applicable minimum hourly rate
- at the end of the season. Subsequently, Ms. Dhillon submitted
it was the appellant's right to do as she wished with her money,
including depositing all cheques - including those issued by
other employers - into a joint account she operated with her
mother, Meena Mahil. Ms. Dhillon submitted there was no basis
upon which to conclude the appellant was able to accumulate
sufficient insurable hours in a particular year only by including
her employment at Farms.
[10] Counsel for the respondent agreed the
assumption of the Minister - contained at subparagraph 8(g) of
the Reply to the Notice of Appeal (Reply) - with respect to the
harvest season for certain berries had been rebutted by the
evidence adduced by the appellant. Counsel questioned why the
appellant was paid only the minimum wage - like other workers -
when the evidence disclosed she had exercised a supervisory
function at Farms. Counsel referred to the evidence pertaining to
the appellant's employment at Farms in 1999 - commencing on May 3
and continuing until June 26 - even though she had started
working at Universal Packers on June 17, 1999. In 2000, the
appellant worked at Universal Packers between June 15 and
September 1, 2000, while also working at Farms from June 5 to
August 25, 2000, indicating there was a significant period during
which she worked at two jobs in addition to attending ESL classes
during one of those periods.
[11] Pursuant to paragraph 251(6)(c)
of the Income Tax Act (the "ITA") the
definition of "related persons" within subsection
251(2) of the ITA includes a person who "has been
adopted, either legally or in fact, as the child of the other or
as the child of a person who is so connected by blood
relationship ... to the other". As a result, the adoption of
the appellant by Shamsher Mahil and Meena Mahil - whether
legally, as recognized by Canadian law, or in fact - according to
Indian custom - still places her in the category of a related
person according to the provisions of the ITA which are
adopted by the Employment Insurance Act for
purposes of determining whether persons are not dealing with each
other at arm's length.
[12] The issue in the within appeal is
whether the appellant was employed in excluded, non-insurable
employment with Farms during the relevant periods.
[13] The relevant provision of the
Act is paragraph 5(3)(b) which reads as
follows:
(3) For the purpose of paragraph
(2)(i),
...
(b) if the
employer is, within the meaning of that Act, related to the
employee, they are deemed to deal with each other at arm's
length if the Minister of National Revenue is satisfied that,
having regard to all the circumstances of the employment,
including the remuneration paid, the terms and conditions, the
duration and the nature and importance of the work performed, it
is reasonable to conclude that they would have entered into a
substantially similar contract of employment if they had been
dealing with each other at arm's length.
[14] In Légaré v. Canada
(Minister of National Revenue), [1999] F.C.J. No. 878 - a
decision of the Federal Court of Appeal - Marceau, J.A. speaking
for the Court stated at page 2 of the judgment:
In this matter, the Court has before it two applications for
judicial review against two judgments by a judge of the Tax Court
of Canada in related cases heard on the basis of common evidence
which raise yet again the problems of interpretation and
application of the saving provision, subparagraph
3(2)(c)(ii). I say yet again because since its passage in
1990, several decisions of the Tax Court of Canada and several
judgments of this Court have already considered what workable
meaning could be given to subparagraph 3(2)(c)(ii).
In reading the text, the problems it poses beyond its deficient
wording are immediately obvious, problems which essentially
involve the nature of the role conferred on the Minister, the
scope of the Minister's determination and, by extension, the
extent of the Tax Court of Canada's general power of review
in the context of an appeal under section 70 et seq. of the
Act.
While the applicable principles for resolving these problems have
frequently been discussed, judging by the number of disputes
raised and opinions expressed, the statement of these principles
has apparently not always been completely understood. For the
purposes of the applications before us, we wish to restate the
guidelines which can be drawn from this long line of authority,
in terms which may perhaps make our findings more meaningful.
The Act requires the Minister to make a determination based on
his own conviction drawn from a review of the file. The wording
used introduces a form of subjective element, and while this has
been called a discretionary power of the Minister, this
characterization should not obscure the fact that the exercise of
this power must clearly be completely and exclusively based on an
objective appreciation of known or inferred facts. And the
Minister's determination is subject to review. In fact, the
Act confers the power of review on the Tax Court of Canada on the
basis of what is discovered in an inquiry carried out in the
presence of all interested parties. The Court is not mandated to
make the same kind of determination as the Minister and thus
cannot purely and simply substitute its assessment for that of
the Minister: that falls under the Minister's so-called
discretionary power. However, the Court must verify whether the
facts inferred or relied on by the Minister are real and were
correctly assessed having regard to the context in which they
occurred, and after doing so, it must decide whether the
conclusion with which the Minister was "satisfied"
still seems reasonable.
[15] The Minister relied on certain
assumptions intended to apply to the entire relevant periods as
well as other assumptions relating - specifically - to a growing
season in 1999, 2000 or 2002. The assumptions set out in
subparagraphs 8(a) to 8(f) of the Reply are as follows:
a) Mahil Farms
is a partnership operated by Shamsher and Meena Mahil;
b) the
Appellant is related to Shamsher and Meena Mahil as she is their
adopted daughter;
c) the
Appellant lived on the farm property during the Periods;
d) the
Appellant's duties during the Periods included picking
berries, fertilizing, supervising other workers and, in 2002 when
the Appellant obtained her driver's license, occasionally
driving other workers home;
e) Mahil Farms
produced strawberries, raspberries and blueberries;
f) Mahil
Farm's biggest crop was blueberries;
[16] At subparagraph 8(g) of the Reply, the
Minister assumed certain beginning and end harvest dates for
various berry crops were in accordance with the information set
forth in the form of a table.
[17] The assumptions contained in
subparagraphs 8(h) to 8(m), inclusive, are as follows:
h) Mahil Farms
has both related and unrelated employees;
i) Mahil
Farms employed the services of Shamsher and Meena Mahil, their
son, the Appellant, three children of Shamsher's sister and 3
or 4 other workers;
j) the
Appellant was the only worker on the payroll of Mahil Farms
during the Periods;
k) the
Appellant was put on payroll during the Periods based on her
non-arm's length relationship with Mahil Farms;
l) the
Appellant was issued her paycheques after her employment ended in
each of the Periods and the cheques were backdated to match the
payroll records;
m) in June 2002 the
Appellant withdrew $10,000.00 from her personal bank account and
deposited that amount into a term deposit set up in the Appellant
and her mother's name;
[18] Those assumptions - specific to the
2002 year - are set forth in subparagraphs 8(n) to 8(q) as
follows:
n) in 2002 the
Appellant required 630 hours of insurable employment to qualify
for employment insurance benefits;
o) in 2002 the
Appellant was issued a record of employment from Yarrow Nursery
Ltd. covering a period of employment from March 25th
to June 14th with 444 insurable hours;
p) in 2002 the
Appellant received a record of employment from Mahil Farms
alleging a period of employment from July 8, to August 24, 2002
with 370 insurable hours;
q) in 2002 the
Appellant was laid off on August 24, 2002;
[19] The assumptions relevant to the 2000
year are contained in subparagraphs 8(r) to 8(u) of the
Reply:
r) in
2000 the Appellant was issued a record of employment from
Universal Packers Inc. covering a period of employment from
June 15 to September 1, with 324 insurable hours and
September 5, 2000 to September 28 with 84.75 insurable hours;
s) in 2000 the
Appellant received a record of employment from Mahil Farms
alleging a period of employment from June 5 to August 25, 2000
with 466.50 insurable hours;
t) the
Appellant was laid off from Mahil Farms on August 25, 2000;
u) the
Appellant attended ESL classes from Monday to Friday from 9:00 to
12:00 from September 20, 1999 to June 16, 2000;
[20] The assumptions pertaining to the 1999
year - at subparagraphs 8(v) to 8(z) - are:
v) in 1999 the
Appellant was issued a record of employment from Universal
Packers Inc. covering a period of employment from June 17 to
September 16 with 679 insurable hours and September 5, 2000
to September 28 with 84.75 insurable hours;
w) in 1999 the
Appellant received a record of employment from Mahil Farms
alleging a period of employment from May 3 to June 26, 1999
with 377 insurable hours;
x) the
Appellant was laid off from Mahil Farms on June 26, 1999;
y) in all
Periods the Appellant did not work the hours shown on the records
of employment issued by Mahil Farms;
z) the
Appellant and Mahil Farms entered into an arrangement to qualify
the Appellant for employment insurance benefits to which she
would otherwise not be entitled;
[21] Dealing first with those assumptions of
fact intended to apply to all the relevant periods, the evidence
disclosed the appellant did not live on the Mahil family farm
property, as assumed by the Minister at subparagraph 8(c) of the
Reply. The appellant did exercise supervision over other workers
- particularly casual pickers who worked only a few hours or days
- and was in charge of the farm while her parents were working at
their own employment. The end harvest dates for blueberries - the
major crop grown by Farms - was assumed - at subparagraph 8(g) of
the Reply to be September 20 in 2002, October 10 in 2000 and
September 27 in 1999. Counsel for the respondent conceded the
evidence adduced by the appellant had rebutted this assumption
since the evidence established the blueberries grown by Farms
were not a late-bearing variety and would have been totally
harvested by the end of August. The Minister's assumption - at
subparagraph 8(k) - that the appellant was placed on the payroll
based on her non-arm's length relationship with Farms is a
conclusion not supported by the evidence. The other assumptions
in this group - subparagraphs 8(a) to 8(m) - remained intact.
Re: 2002
[22] The thrust of the assumptions of fact
contained in subparagraphs 8(n) to 8(q) of the Reply are clearly
intended to support the proposition that the appellant needed to
be placed on the payroll of Farms in order to acquire enough
insurable hours in order to qualify for EI benefits. However, the
appellant acquired a total of 814 insurable hours that year - 444
hours from her employment with Nursery between March 25 and June
14 - and 370 hours at Farms. The appellant did not work for Farms
in 2001 because her work at Nursery was extended further into the
season. The reason for the appellant's layoff - by Farms - on
August 24, 2002, was that the blueberry season had ended and did
not extend to September 20, as assumed by the Minister.
Re: 2000
[23] In this year, the appellant was laid
off by Farms on August 25, 2000, which coincided with the end of
blueberry season. The appellant also worked at Packers from June
15 to September 1 - and again from September 5 to September 28 -
thereby acquiring 324 and 84.75 insurable hours, respectively.
She also worked 466.50 hours - at Farms - for a total of 875.25
insurable hours, an amount I infer was more than sufficient to
qualify for EI benefits following loss of her employment at
Universal Packers on September 28, 2000 (Only 630 hours of
insurable employment were required in 2002 to qualify for EI
benefits). The Minister drew the conclusion that the appellant
could not have worked at Farms and also at Packers during that
overlapping period from June 15 to August 25, 2000. In addition,
the Minister relied on the fact the appellant attended morning
ESL classes from September 20, 1999 to June 16, 2000. There would
have been a scheduling conflict only during that period from June
5 to June 15 when the appellant was working at Farms and from
September 5 to September 20 when she was working at Packers.
However, from September 5 to September 28, 2000, the appellant
only worked 84.75 hours at Packers. In her testimony, the
appellant stated that when she worked at two jobs on the same
day, she attended an ESL class during the evening instead of the
usual one between 9:00 a.m. and noon.
RE: 1999
[24] In 1999, according to the assumptions
of fact relied on by the Minister, the appellant worked a total
of 763.75 insurable hours - during two separate periods - at
Packers. One period was - from June 17 to September 16, a total
of 679 insurable hours. However, that second period - from
September 5 to September 28 - amounting to 84.75 insurable hours
was applicable to the year 2000, as previously mentioned, and not
1999. In addition, the appellant worked 377 insurable hours at
Farms for a total of 1,056. In the 1999 year, the Minister
assumed - at subparagraph 8(y) - that the appellant did not
work the hours shown on the records of Farms. Obviously, the
position of the Minister is set out in the subsequent assumption
- 8(z) - where it is assumed that Amarjit Mahil and her parents -
doing business as Mahil Farms - entered into an arrangement to
qualify the appellant for EI benefits to which she would
otherwise not be entitled. However, that conspiracy theory
suffers a crippling blow when one takes into account that Amarjit
Mahil only worked at Farms from May 3 to June 26, 1999 - a total
of 377 insurable hours - and then left to work exclusively
thereafter for Packers. During the period from June 17 to June
26, the appellant worked at two jobs but, after leaving
Farms on June 26, 1999, did not return to work there during the
rest of 1999. The theory of the Minister is that the sole purpose
behind Farms employing the appellant was to permit her to acquire
enough insurable hours to qualify for EI benefits at the end of
the season and - moreover - that the purported hours of work are
false in that the appellant did not provide services to Farms, as
set forth in the relevant ROEs. If that is so, then why would the
appellant leave that cushy setup in order to work more than 679
hours at Packers during the next three months? Each employment
obtained by the appellant during the periods relevant to the
within appeal was seasonal in nature whether on a farm, a nursery
or at a cannery. There are bound to be specific seasons for
picking or canning within an overall growing season. If one
intended to enter into a phony arrangement to "top up"
the overall amount of insurable hours so as to become entitled to
EI benefits, then one would suspect that stratagem to be utilized
at the end of a season when the amount of the shortfall would be
a known quantity, rather than during the early part of said
season. I point out - again - that Amarjit Mahil did not work for
Farms during 2001 because the work at Nursery extended throughout
the season and she had no need to undertake other work.
[25] The evidence of Amarjit Mahil, Meena
Mahil and Bagga Singh Dhillon satisfies me that the work was done
at Farms during the particular periods in issue. It is apparent
from an examination of all the evidence that the Minister relied
on irrelevant facts - such as the supposed major conflict in her
schedule arising from her attendance at ESL classes - and drew
faulty conclusions as to the purpose of the appellant's
employment with Farms which was assumed to have been undertaken
only to permit her to qualify for EI benefits to which she would
not otherwise have been entitled. In the case of Adolfo Elia
v. M.N.R., [1998] F.C.J. No. 316, a decision of the
Federal Court of Appeal dated March 3, 1998, at page 2 of the
certified translation Pratte, J.A. stated:
...Contrary to what the judge thought, it is not necessary, in
order for the judge to be able to exercise that power, for it to
be established that the Minister's decision was unreasonable
or made in bad faith having regard to the evidence before the
Minister. What is necessary is that the evidence presented to the
judge establish that the Minister acted in bad faith, or
capriciously or unlawfully, or based his decision on irrelevant
facts or did not have regard to relevant facts. The judge may
then substitute his decision for that of the Minister.
[26] The Minister assumed - incorrectly -
that the appellant lived at the same residence as her parents
during the periods at issue. Ordinarily, that would not be
particularly significant but it does advance the theory of the
Minister that the working relationship was unduly governed by
close family ties instead of conforming to those indicia of
employment common to an unrelated employer and employee. The
Minister drew the wrong conclusion from the harvest dates of
blueberries grown at Farms in that the inference was drawn that
the appellant was laid off - in 2000 and 2002 - while there was
still harvesting work to be done because she had already
accumulated enough insurable hours to qualify for
EI benefits.
[27] For the reasons expressed in the
preceding paragraphs, I conclude the decision of the Minister
cannot be permitted to stand and I must intervene. As a result, I
must analyze the evidence in order to decide whether the
appellant was engaged in insurable employment during the relevant
periods or whether her employment constituted excluded
employment. It is worthwhile at this juncture to restate the
relevant provision of the Act - paragraph 5(3)(b) -
which reads:
(3) For the purpose of paragraph
(2)(i),
...
(b) if the
employer is, within the meaning of that Act, related to the
employee, they are deemed to deal with each other at arm's
length if the Minister of National Revenue is satisfied that,
having regard to all the circumstances of the employment,
including the remuneration paid, the terms and conditions, the
duration and the nature and importance of the work performed, it
is reasonable to conclude that they would have entered into a
substantially similar contract of employment if they had been
dealing with each other at arm's length.
Remuneration:
[28] The evidence of Meena Mahil was that
all workers were paid the applicable minimum wage. According to a
response provided by the appellant at Question 19 of the
Questionnaire - tab 1 - the minimum wage changed (I take judicial
notice it was increased) between 1999 and 2002. The appellant -
like other workers for Farms - and like many other workers within
the berry-farming industry in the Abbotsford area, received her
pay at the end of the season. The evidence of a long-time
farmer - Bagga Singh Dhillon - established it is not unusual for
workers to be paid at the end of the season in accordance with a
final settling of accounts, taking into consideration any
advances that may have been paid - on request - during the
season. The appellant performed some supervisory functions with
respect to other workers but the main component of the business -
selling to canneries and other commercial enterprises - was
conducted by Shamsher Mahil and Meena Mahil. In 2002, after
obtaining her driver's licence, the appellant
"occasionally" provided rides to other workers. She
supervised other pickers during the respective harvest seasons of
various berry crops. Within that particular industry, it is fair
to conclude that the wage commonly paid to farm workers is the
current minimum wage set in accordance with provincial labour
standards legislation. The supervisory function carried out by
the appellant during her various, relatively short, periods of
employment with Farms was not sufficiently different - either in
time spent or degree of difficulty - from work performed by other
workers to call for any significantly higher wage. The appellant
and Farms were free to strike their own bargain in this regard.
Obviously, the supervisory work performed by the appellant was
easier - from a physical standpoint - than working continuously
in the fields.
Terms and Conditions:
[29] The hours of work were reasonable
considering the nature of the industry and the duration of the
growing season. There are seasons within seasons and - during a
hiatus - the appellant obtained employment with other business
entities. The appellant's working hours were recorded by her
father - Shamsher Mahil - and she was satisfied with that
arrangement. From time to time, there was some juggling required
in order for the appellant to meet the demands of her busy
schedule which sometimes involved working at two places and
attending ESL classes, either in accordance with the usual
schedule or at another more convenient time. The time sheets -
Exhibit A-3 - used to record her hours during the 1999 season,
indicate she worked a maximum of 10 hours on a few days - with
the usual range being 7.5 to 9 hours - and at the other end of
the scale, a minimum of 3 - 6 hours on other days. Usually, the
appellant worked 6 days per week and - once or twice - worked 7
consecutive days. There is nothing in the evidence to suggest her
work pattern constituted a departure from the norm either at
Farms or within the local industry.
Duration:
[30] As discussed earlier in these reasons,
the appellant was laid off - in 2000 and 2002 - at the end of the
blueberry season. In 1999, she worked at Farms from May 3
until June 26, but had begun working at Packers on June 17 where
she remained until September 16. In 2002, she worked at Nursery
until June 14 and then worked for Farms between July 8 and August
24, the end of the berry season. I do not find anything untoward
with respect to the duration of work taking into account the
nature of the business operated by Farms. The other employers of
Amarjit Mahil during 1999-2002, inclusive, were also engaged
in seasonal businesses and her work at those enterprises was
dependent on a need for workers at various times within the
overall season.
Nature and importance of the work performed:
[31] It is apparent the work purported to
have been done by the appellant was done. Bagga Singh Dhillon
stated he saw her on the farm on numerous occasions and bought
berries from her. I have no reason to reject the evidence of the
appellant and/or her mother - Meena Mahil - regarding the nature
of the work and/or how it was performed. The work had to be done
and it is better to have an experienced person available to work
during certain peak periods than having to hire itinerant pickers
who are interested in working only long enough to earn what Meena
Mahil characterized in her testimony as "pocket
money".
[32] The evidence pertaining to the working
relationship between the business partnership of Sharmsher Mahil
and Meena Mahil and the appellant - and other workers - revealed
certain discrepancies, anomalies and probable breaches of
provincial labour standards regulations particularly in recording
hours of work and dating cheques to make it appear as though
workers were being paid on a regular bi-weekly basis when they
were not paid their full wages until after the end of the season.
However, that method of payment to workers appears to be normal
within the industry, at least in the Abbotsford area. If the
workers are content to wait until the berry crop has been sold by
the farmer, then that may have other consequences but it does not
- without more - taint the employer/employee relationship to the
point where the worker is relegated to the category of excluded,
non-insurable employment. At first glance, it is somewhat unusual
to see a worker deposit a pay cheque into a joint account with
the employer. However, the explanation is reasonable in that
Amarjit Mahil arrived in Canada - in 1998 - and was not able to
speak and write English well enough to handle her own banking
and, thereafter, her work schedule was such that it was often
difficult for her to attend at her bank. The Guaranteed
Investment Certificate (GIC) - tab 10 - was registered in the
joint names of Amarjit Mahil and Meena Mahil with a right of
survivorship.
[33] In the case of Barbara Docherty v.
M.N.R. - 2000-1466(EI), dated October 6, 2000 I
commented as follows:
The template to be utilized in making a comparison with
arm's length working relationships does not require a perfect
match. That is recognized within the language of the legislation
because it refers to a "substantially similar contract of
employment". Any time the parties are related to each other
within the meaning of the relevant legislation, there will be
idiosyncrasies arising from the working relationship, especially
if the spouse is the sole employee or perhaps a member of a small
staff. However, the object is not to disqualify these people from
participating in the national employment insurance scheme
provided certain conditions have been met. To do so without valid
reasons is inequitable and contrary to the intent of the
legislation.
[34] In my view, many employers are causing
themselves - and, more significantly, their employees -
unnecessary grief by not maintaining proper records and otherwise
failing to comply with applicable labour standards by refusing to
pay workers - promptly - in accordance with those requirements.
That breach is then compounded when documentation is prepared
later to make it appear as though everything was done properly
during the period of employment. Farm workers are at the other
end of the economic scale. It is not surprising they would accept
most business practices that are - basically - thrust upon them
by their employers. In effect, the employers within this industry
are using their pool of workers as a bank. Without the burden
imposed by a line of credit or an overdraft on a business
account, these employers do not have to pay interest and can
avoid those dreaded calls from nervous loan account managers.
However, these deficiencies in labour standards within the
farming industry are not my concern for purposes of these
reasons. Having said that, any time there is evidence of a
departure from what the Minister regards as the norm in terms of
remuneration, working conditions and frequency of pay, there will
be questions asked. Then, during that subsequent process, if some
assumptions are made that are not soundly based in fact and
erroneous conclusions are drawn therefrom, it takes
time-consuming litigation to sort out the situation. I have been
persuaded by the evidence adduced by the appellant that her
employment - in each instance - was genuine and that she was
fully paid for her services. She is a hardworking individual who
was able to earn a living by putting in a lot of hours during the
typical growing and canning season. Even at minimum wage, that
sort of effort can produce a reasonable income during the course
of five or six months.
[35] I have considered the various factors -
as required by the relevant provision of the Act - and
conclude the appellant and Farms would have entered into
substantially similar contracts of employment if they had been
dealing with each other at arm's length.
[36] The appeal is allowed and the decision
of the Minister is varied, to find:
- that the appellant
was employed in insurable employment with Shamsher Mahil and
Meena Mahil, doing business as Mahil Farms, during the following
periods:
a) July 8 to August 24,
2002
b) June 5 to August 25, 2000
c) May 3 to June 26,
1999
Signed at Sidney, British Columbia, this 23rd day of October
2003.
Rowe, D.J.
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