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Citation: 2003TCC75
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Date: 20030227
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Docket: 2002-1550(EI)
2002-1552(EI)
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BETWEEN:
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KIRANPAL K. SANDHU,
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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.T.C.C.
[1] The
appellant appeals from two separate decisions issued by the Minister of
National Revenue (the "Minister"). Counsel for the parties agreed
that the two appeals could be heard together and the Respondent's Book of
Exhibits containing documents at tabs 1-6, inclusive, 12–15, inclusive,
and at tab 20, be filed as Exhibit R-1. Reference to a tab number will signify
the documents are to be found within said exhibit.
[2] The
Minister issued a decision – dated January 29, 2002 – wherein it was decided
the employment of the appellant Kiranpal K. Sandhu (Sandhu or worker) with
Param R.S. Malhi (Malhi or payor) during the period of July 6 to
October 24, 1998 was not insurable employment pursuant to the relevant
provisions of the Employment Insurance Act (the "Act")
because she was not employed under a contract of service. This decision is the
subject of appeal 2002-1550(EI)
[3] The
Minister issued a decision – dated January 28, 2002 – wherein it was decided
the employment of Sandhu with Manjit S. Grewal (Grewal) and
Jasvir S. Dhaliwal (Dhaliwal) during the period of August 3 to
November 6, 1999 was not insurable employment pursuant to the Act
because she was not employed under a contract of service. This decision was the
subject of appeal 2002-1552(EI).
[4] Russel
Gill, a qualified interpreter in the Punjabi and English languages, interpreted
the testimony of Kiranpal Kaur Sandhu. Sandhu is a farm worker residing in
Osoyoos, British Columbia. She arrived in Canada - in 1993 - after having
completed Grade 11 in India. She lived in Winnipeg, Manitoba prior to moving to
Osoyoos - in 1995 - where she found jobs in a packing house and at a fast food
outlet. She stated she began working for Malhi and remained until October.
During that period, she worked at thinning, driving tractor to move bins, and
re-locating irrigation equipment. Sandhu stated her husband ‑ Charanpal Sandhu –
had held certain discussions with Malhi concerning an opportunity for
employment and had obtained a $3,000 cheque from Malhi on March 14, 1998 as an
advance against her future wages. Her rate of pay was set at $10 per hour
including vacation pay. Malhi had two other workers - not related to him or his
family – and was a grower of peaches, pears and apples on an orchard located in
Oliver, B.C., a 15-minute drive from the appellant's residence. The appellant
stated she and other workers started work early in the morning so when the heat
became oppressive later in the day they could leave. On occasion - during the
cooler evenings - she would return to work for a few hours. At tab 1, the
appellant identified her Record of Employment (ROE) issued by Susan Kassian
(Kassian) indicating she had 742 insurable hours with $7,420 in insurable
earnings during the period of July 6 to October 24, 1998. Sandhu identified her
application for Employment Insurance (EI) benefits – tab 2 – which had been
completed by her husband. She reviewed the contents and signed it. At page 3 of
tab 4, the appellant was referred to a photocopy of a cheque – dated March 14,
1998 - originally payable to Puneet Orchard but that name had been crossed out
and the payee ‑ Kiranpal Sandhu - had been substituted. The
appellant stated Malhi had made that correction when he issued the cheque. She
received another cheque – from Malhi - in the sum of $1,500 on December 4, 1998
because she needed money in order to travel to India. At tab 5, the appellant
identified a cheque dated June 16, 1999 ‑ payable to Puneet Orchards
– with the notation that it was in respect to "Pay Roll 98". The
appellant's son was born in 1995 and her husband received assistance from her
brother and sister - who were living with them in Osoyoos – in caring for the
child. Puneet Orchard – sometimes appearing in documents as Puneet Orchards - was
the name used by her husband ‑ Charanpal Sandhu – to
operate his orchard business but she stated she was not part of that
enterprise. During her employment with Malhi, she had not maintained any record
of hours worked other than as recorded on a calendar which she used as the
basis for calculating her total hours each week in order that Malhi could use
this number for purposes of his payroll records. In 1999, the appellant stated
she did not return to work for Malhi but found employment with Dhaliwal and
Grewal at an orchard in Oliver. She did pruning, thinning and picked and packed
peaches and apples, some of which were of a late-fall variety. Her rate of pay
was $10 per hour and she worked 6 or 7 days per week. Her husband lived in
Osoyoos and continued to operate Puneet Orchard. Her ROE – tab 12 – pertaining
to her employment with Grewal/Dhaliwal was issued by Susan Kassian on November
5, 1999 and stated her insurable hours were 728 with earnings in the sum of
$7,280 since August 3, 1999. The appellant had applied for EI benefits –
tab 13 – and she identified her signature on said application. The appellant
stated she received her total wages – in the sum of $6,872.56 - by cheque – tab
14 – dated December 7, 1999 issued by J.S. Dhaliwal. At tab 15, the appellant
identified a list of her working time as maintained by her employers. She did
not retain any personal record of hours worked. The appellant stated she worked
at an hourly rate using all the tools and equipment supplied by her employers –
whether Malhi in 1998 or Grewal and Dhaliwal in 1999 – and was not related to
any of those individuals.
[5] In
cross-examination, Kiranpal Sandhu stated she had never attended school while
living in Osoyoos and had not been a partner in Puneet Orchard – operated by
her husband – although she had signed for a mortgage which had been required to
raise capital for the business, as well as some business cheques and an ROE
issued to a Puneet Orchard employee. In 1998, Sandhu denied counsel's
suggestion that Puneet Orchard had employed Malhi's sister-in-law. Since 2001,
the appellant stated she now operated the 45-acre parcel of land comprising
Puneet Orchard because she and her husband separated and he now resides in
Winnipeg. In prior years, the appellant stated her husband would travel to
Winnipeg in December to work as a taxi driver during the winter months and
would return to Osoyoos in order to work at the orchard during the summer. With
respect to her employment with Malhi – in 1998 – Sandhu stated he had issued her
a T4 slip stating her net earnings were in the sum of $5,774.54. Before going
to work for Malhi – on July 6, 1998 – the appellant had been receiving EI
benefits which had expired just two days earlier. The appellant explained the
care of her child was shared between her husband - who took the infant with him
into the fields - and her brother and sister-in-law who helped him after
returning from school. In completing the Questionnaire – tab 10 – dated
December 17, 2001, she referred to duties performed by her as thinning, picking
and packing fruit and changing irrigation but there was no mention of driving a
tractor. At paragraph 3(b) of said Questionnaire, the place where her duties
were performed had been incorrectly entered as 33625‑95 St., Oliver,
B.C., the address for Puneet Orchard. Sandhu stated she worked 7 days per week
with the exception of a day off now and then. In the Questionnaire – at
paragraph 6 – the appellant agreed she had responded to questions concerning
work patterns by stating she worked – most of the time - from Monday to
Saturday, between 7:00 a.m. and 4:00 p.m. The appellant was referred to a
letter – Exhibit R-2 – signed by her - in which it states she had asked Malhi
to "make the cheque payable to Puneet Orchard. I did not know that it
would be a problem, it was easier for me to deposit the cheque if it was
payable to Puneet Orchard". Sandhu stated she did not recall when
that letter was written or by whom. She stated the cheque – at tab 4 – in the
sum of $3,000 – dated March 14, 1998 – was an advance against future
earnings. This did not strike her as unusual because Puneet Orchard would also
have provided a salary advance to a worker, if required. After beginning work
for Malhi in July, she received small amounts of cash which she used to buy gas
for her vehicle in order to drive to and from work. Sandhu recalled requesting
Malhi to issue her final cheque – dated June 16, 1999 - in the sum of
$1,200 – in the name of Puneet Orchard. In Sandhu's opinion, someone had added
– later – the notation "Pay Roll 98" because it was present when the
cheque was written. She received the total sum of $5,700 from Malhi, in the
form of three cheques together with a further amount of cash which she had not
bothered to record. In 1998 and 1999, the appellant stated she had not been
involved in the management of Puneet Orchard but was aware of most of the
cheques issued in respect of the operation of the business. Malhi had informed
the appellant that he would not be able to pay the balance of her wages until
June, 1999, more than 7 months following the termination of her employment.
Sandhu stated Malhi supervised her work and the Puneet Orchard employee who
earned approximately $6,000 working for Puneet Orchard - during the summer
of 1998 – was not related to Malhi. Turning to the second period of employment
with Grewal and Dhaliwal, the appellant stated she had worked at their Orchard
at Oliver, B.C. between August 3 and November 6, 1999, even though her ROE
shows November 5 as her last day. She had been receiving EI benefits until
July 3, 1999. Sandhu recalled there had been an investigation into
circumstances surrounding the issuance of ROEs – by Puneet Orchard – but denied
she had ever signed any ROEs or related documents but had limited her participation
to recording hours of work. Counsel questioned the appellant concerning her
activity in completing ROEs that were fraudulent together with her compliance
in participating in an activity designed to receive EI benefits to which she
was not entitled. The appellant responded that she could not remember paying
any fines or administrative penalties in connection with any investigation.
Sandhu stated she cannot recall having issued an ROE to Jasbal Sandhu in 1998,
1999 and/or 2000. She was not sure whether she had assisted him to complete an
EI benefits application form but may have deposited some of his EI cheques in
her personal account or in the business account of Puneet Orchard. Again, when
questioned by counsel as to whether she had paid a penalty in the sum of $5,912
– in relation to her conduct concerning EI procedures – the appellant stated
she did not remember receiving notice of any penalty as described. Sandhu
agreed she had signing authority on the Puneet Orchard bank account as at
August 5, 1997 (Exhibit R-3). On November 9, 1999, the appellant submitted
her own application for EI benefits – tab 13 – relating to her recently
concluded employment. As for her duties at the orchard operated by Grewal and
Dhaliwal, the appellant stated she did thinning, picking and packing of
peaches, prune plums, apples and some apricots. She did not recognize the names
of Harminder Kaur Gill, Amerjit Singh Gill or Ranjit Kaur Gill as fellow
workers at that particular orchard. During the winter of 1998-1999, the appellant
stated her husband had again worked - as a cab driver – in Winnipeg. As late as
November, Sandhu stated she was engaged in cleaning up the orchard and pruning
peaches. In October, there had been some late apples to pick and she had also
done some pruning. Sandhu stated she could not recall having told a Canada
Customs and Revenue Agency (CCRA) interviewer that she began work at
7:00 a.m. nor did she recollect a conversation with another interviewer –
a few months later – during which she was alleged to have stated she had
started at 8:00 a.m. each day. Sandhu identified her signature on a letter
– Exhibit R-4 – dated November 15, 2001- directed to the Chief of Appeals at
CCRA - in which she expressed her desire to appeal the decision of the Minister
disallowing her EI benefits relating to the period of August 3 to November 6,
1999. The letter went on to state, "I did work for Manjit Singh Grewal and
Jasvir Singh Dhaliwal and I was paid cash for the work." The appellant was
directed to examine – at tab 14 – a cheque dated December 7, 1999 - in the sum
of $6,872.56 - payable to herself. Sandhu stated she thought this cheque had
been deposited into the Puneet Orchard business account and did not know why
she had referred to receiving her wages in cash when sending the letter of
November 15, 2001 to the Chief of Appeals. The appellant was referred to a
photocopy – Exhibit R-5 – of an extract from the Puneet Orchard statement
at the Osoyoos Credit Union which indicated that a cheque - in the sum of
$6,037.52 - had been cleared through the account on December 10, 1999 followed
by a cash withdrawal on December 15, 1999 in the sum of $5,600. The appellant
stated she was still living with her husband in December, 1999 and he was in
charge of operating the orchard business. At the Grewal/Dhaliwal orchard, the
appellant stated Dhaliwal supervised most of the work. She also recalled
working with Dhaliwal's sister for only a few weeks.
[6] In
re-examination, the appellant identified the Questionnaire – tab 20 – she had completed
on December 20, 2001.
[7] Charanpal
Sandhu testified he came to Canada in August, 1990, lived in Winnipeg until the
end of 1994, then moved to Oliver, B.C. where he lived until 1997 until he took
up residence on the leased orchard land in Osoyoos. Currently, he works as a
taxi driver and truck driver in Winnipeg after moving there in June, 2001. He
started the Puneet Orchard business in 1996 and operated it by himself until
June, 2001 when he turned it over to his wife - the appellant - following their
decision to separate. Charanpal Sandhu stated that until he left the marital
home, the appellant had not participated in the management of the orchard
business and he had hired employees to work on the property, probably 4 or 5 at
the beginning – in 1996 - and 7 or 8 during the 2000 season. He stated the
appellant had not been granted signing authority on the business bank account
but had been required to sign documents for a loan because the Credit Union
requested additional security before it would advance a line of credit.
Charanpal Sandhu stated he knew Param Singh Malhi but was not related to
him nor was he related to Manjit Grewal and/or Jasvir Singh Dhaliwal. During
the growing seasons of 1998 and/or 1999, he denied having employed Malhi's
sister-in-law because – to his knowledge - Malhi had no such relative.
Charanpal Sandu stated he was living in Osoyoos and recalled the appellant
worked for Malhi – in 1998 - at the orchard in Oliver. In 1998, he had not gone
to Winnipeg - in the winter - to drive taxi and had not returned there until
around Christmas, 1999, in order to work. Their child had been born in 1995 and
he took care of the infant while the appellant worked away from their home - in
1998 - and also in 1999 when she worked for Grewal and Dhaliwal.
[8] In
cross-examination, Charanpal Sandhu reiterated he had not visited Winnipeg - in
1998 - and had operated Puneet Orchard during that year and throughout the
growing season of 1999. He stated he had not granted authority to the appellant
to sign cheques on behalf of Puneet Orchards or to complete any ROEs for
workers. During the evenings, she may have helped out from time to time after
finishing her own workday elsewhere. Many employees were paid in cash and
issuing documents such as ROEs were his responsibility. The 45-acre orchard
operated by Puneet Orchard required his attention to various matters including
the sale of fruit to the cooperative. On occasion, he stated he would buy small
quantities of fruit from other farms in order to sell to peddlers if he did not
grow some particular varieties on his own property. For example, if he had sold
Puneet Orchard peaches to one of the many peddlers who operated fruit stands in
the area and someone also wanted a small amount of cherries, he would obtain
the cherries from an outside source and supply them - together with the peaches
– to the customer. In 1998, he stated he was responsible for the care of their
three‑year‑old son and when the appellant's sister returned from
school she would assist him in caring for the child. Charanpal Sandhu was
referred to a cheque – at tab 9 – dated December 10, 1999 – in the sum of
$6,037.52 - drawn on the Puneet Orchard account in favour of Malhi. He
stated the cheque may have been in payment of juice apples and peaches he had
purchased from Malhi and agreed there was no notation on the cheque to assist
in determining the purpose of the payment. He recalled speaking with Brian
Lundgren, investigator with Human Resources Development Agency (HRDC), on
several occasions but could not confirm whether he had held a conversation with
Lundgren early in the morning of June 28, 2001. Lundgren recalled talking with
Malhi – early in 1998 – before the appellant began working on his farm. He
asked Malhi for some financial assistance and Malhi subsequently issued a
cheque in the sum of $3,000 as an advance against the appellant's future wages.
At tab 9, Charapal Sandhu was referred to a sheet listing certain fruit –
apparently purchased from Malhi – for a total of $6,038.52. However, he stated
he had not prepared that document. Charanpal Sandhu could not recall the number
of workers at Puneet Orchard during 1998 and 1999 but stated the work force
would expand during picking time. He could not recall whether Harminder Kaur
Gill worked for him but if a ROE or other document had stated the appellant had
been her supervisor that information would have been incorrect. He could not
recall whether Amarjit Singh Gill had worked for him. He permitted the
appellant to deposit her pay cheques into the Puneet Orchard account and would
often withdraw cash from the account in order to pay wages to employees. He
could not recall the purpose for the withdrawal of the sum of $5,600 on
December 15, 1999 but had deposited the appellant's pay cheque – dated December
7, 1999 – in the sum of $6,872.56 – received on her behalf from Malhi, since
the appellant was in India at that time. Probably, that cheque was included in
that day's deposit of $6,901.20, as shown on the account statement
(Exhibit R‑5). Charanpal Sandhu stated he had withdrawn other large
sums of cash at different times in order to pay employees or his lease payment.
With regard to the need to pay employees wages - in December when the fruit
season was over - he explained that sometimes the orchard business did not have
enough funds on hand to pay employees on a regular basis, notwithstanding the
previous balance in the account was within the limit of the $10,000 line of
credit. He could not recall whether the appellant had the ability to withdraw
funds from the Puneet Orchard account even though her pay cheques were
deposited into it. He denied having collected EI benefits on behalf of Jasbal
Sandhu who had been employed at Puneet Orchard for 3 or 4 years. He did not
recall any details concerning a specific penalty - in the sum of $5,912 - that
had been levied against Puneet Orchard by an agency of the federal government
concerned with administration of the EI system but stated he had received a
number of other penalties that had been assessed without ever having been
interviewed by any official. He agreed it was possible the appellant had filled
out a benefits application form for Jasbal Sandhu but was unaware whether the
appellant had completed the ROE for that worker. Charanpal Sandhu admitted it
was possible he had cashed some of the cheques issued to Jasbal Sandhu - in
order to accommodate him – but does not know the extent of his wife's
participation in matters leading to the issuance of any specific monetary
penalty because they separated in June, 2001.
[9] In
response to questions from the Court, Charanpal Sandhu stated he thought the
cheque – at tab 4 – in the sum of $3,000 had been made out – originally - to
Puneet Orchard but because the work was going to be done by Kiranpal Sandhu it
was changed – probably by Malhi – and the cheque was deposited into the
Puneet Orchard account. He stated the appellant was more qualified than
other workers because she could drive a tractor. As a result, her wage was $10
per hour rather than the minimum wage or the approximate rate of $9 per hour
earned by cherry pickers on the basis of piecework.
[10] Brian
Lundgren testified he has been employed for 20 years as an investigator for
HRDC and had conducted investigations concerning the two periods of employment
at issue in the within appeals. In the course of his inquiry, he undertook
searches of accounts in financial institutions, obtained payroll information
and spoke with several individuals, including the appellant and Malhi. Lundgren
stated that, as a matter of practice, he examined daily time records in order
to determine the start and finish time applicable to each worker on site. He
examined the documents - at tabs 3 and 4 – including time records and cheques,
pertaining to the appellant's employment with Malhi. Lundgren took note of the
cheque – in the sum of $3,000 – which had been issued by Malhi nearly 4 months
before the commencement of any work by the appellant. He also noticed the
original payee had been Puneet Orchard and that the cheque had been deposited
into the business account of that entity. Lundgren also received a copy of the
cheque – tab 5 – dated June 16, 1999 – issued by Malhi to Puneet Orchards – in
the sum of $1,200. To the best of his recollection, the notation "Pay Roll
98" was present on the left hand side of the cheque. Lundgren stated he
took into account that this cheque had been issued more than 7 months after the
appellant had been laid off. Lundgren spoke to Malhi on the morning of June 28,
2001 and, as a result of their conversation, later attended at the office of
Susan Kassian, Malhi's bookkeeper. As Lundgren entered Kassian's office – just
behind Malhi – at approximately 11:00 a.m. - he noted Malhi was presenting a
sheet of paper to Kassian. A photocopy of that document is at tab 9. Lundgren
stated he was somewhat surprised at this turn of events because Malhi – earlier
that morning – had led him to believe that this record had already been
provided to Kassian in the course of her performing normal accounting duties for
Malhi's business. Having worked in the Osoyoos area for three years, Lundgren
stated he had acquired some working knowledge on methods of operation used by
orchard owners. The Puneet Orchard operation was about twice the size of
the one owned by Malhi, and Lundgren stated he thought it odd that Malhi's
smaller farm would be selling a substantial quantity of fruit to Charanpal
Sandhu at the larger farm. He interviewed three or four Puneet Orchard workers
- in relation to the 1998 farming season - and came to the conclusion that
Charanpal Sandhu was absent for part of the season but the appellant resided on
the property. Lundgren conducted interviews with workers pertaining to the 1998
season and – again - came to the conclusion that Charanpal Sandhu was absent
for some portion of the growing season. Lundgren interviewed persons who had
worked for the Grewal/Dhaliwal orchard and in respect of the 1999 season came
to the conclusion there had been only one worker and it had not been the
appellant. Lundgren described the Grewal/Dhaliwal property as comprising only 6
acres including the area for the house and yard. In his opinion, it was more
consistent with a farm operated on a part-time basis. Based on his experience
in the Osoyoos area, Lundgren stated he would not expect someone to be picking
peaches in September, October or November since that fruit is usually harvested
by the middle of August. There are 7 or 8 kinds of apples – including a late
variety – that may be picked in early October but not much later because –
normally - by the end of September the apples trees are bare. Lundgren was
referred to a document at tab 15, and identified it as a time sheet that had
been prepared by Kassian. In Lundgren's opinion, that record is inadequate
because it merely purported to show the number of hours worked by the appellant
in one week. It did not specify the days or the hours per day. The cheque – at
tab 14 – dated December 7, 1999 – in the sum of $6,872.56 - was issued by
Dhaliwal to the appellant. It was negotiated one week later and did not give
rise to any concern even though it was issued 6 weeks - or more - after the
termination of the employment because – in his experience – between 40 to 50
per cent of all employers in the orchard business pay their employees a lump
sum at the end of the season, usually on the last day of work. However, the
wages must be paid in full prior to the completion of the applicable ROE in
which the earnings are reported.
[11] In
cross-examination by counsel for the appellant, Brian Lundgren admitted he did
not have any personal knowledge of the matters testified to concerning the
purported absence of Charanpal Sandhu during the 1998 and/or 1999 growing
seasons. Both ROEs – at tabs 1 and 12 – relating to the appellant's employment
with Malhi and Grewal/Dhaliwal, respectively – had been issued by Kassian, the
bookkeeper for the payor(s). Lundgren stated that about 60% of employers in the
area maintain detailed daily records. With respect to the cheque – at tab 4 –
where the payee had originally been Puneet Orchard - later crossed out and the
name Kiranpal Sandhu added - Lundgren agreed the handwriting relating to the
two names was not the same. He was aware that two or three cheques issued
to the appellant had been deposited in the Puneet Orchard business account and
accepted the proposition that a spouse could assist the other by turning over a
personal pay cheque to assist in the operation of a business. Lundgren agreed
he was not an expert on apples but – from his experience - still expected even
the late variety to have been harvested by the early part of October.
[12] In
re-examination by counsel for the respondent, Brian Lundgren stated that in the
course of 20 years experience as an HRDC investigator, he had never encountered
the situation – as in the within appeals relating to employment with Malhi –
where an employee's cheque had been made payable to a business entity.
[13] Charanpal
Sandhu testified – in rebuttal – that the harvest of the Fuji apple is very
late – compared to other varieties – and the picking time in Oliver – being
further north – is about one week later than Osoyoos so that the Fuji can be
picked close to the end of October and even during the first week of November,
depending on the season.
[14] In
response to questions from the Court, Charanpal Sandhu stated he was familiar
with the orchard operated by Grewal and Dhaliwal and had visited it many times.
He knew they grew Fuji apples on the property and was well aware of the
particular crops produced by each of his fellow farmers in the immediate area.
[15] Counsel
for the appellant submitted there was no evidence to support the contention
that the appellant had issued any documents with respect to workers at Puneet
Orchard. With respect to her employment with Malhi, counsel submitted the
evidence had demonstrated the Minister had relied on incorrect information in
order to arrive at certain assumptions of fact as set forth in paragraph 3 of
the Reply to the Notice of Appeal (Reply). Counsel submitted the evidence had
demonstrated that the appellant was in insurable employment with Malhi during
the relevant period. With respect to the appellant's employment with
Grewal/Dhaliwal, counsel conceded the appellant had not been paid in cash by
Dhaliwal, as alleged by her in a letter filed as Exhibit R-4. However, counsel
submitted the evidence had shown the appellant had been engaged in insurable
employment with Grewal and Dhaliwal during the relevant period.
[16] Counsel
for the respondent submitted the evidence of the appellant should be rejected
as it related to significant matters at issue because of the large number of
inconsistencies and the lack of corroboration on material matters at issue.
Concerning the period of employment – in 1998 – with Malhi, counsel submitted
the comment contained in the document – Exhibit R-2 – that the appellant had
requested Malhi make her cheque – in the sum of $3,000 - payable to
Puneet Orchard – as a matter of convenience – had not been supported by
other evidence. The so-called time records – at tabs 3 and 4 – pertaining to
her employment with Malhi have no entries between September 28 and
October 12, inclusive. The cheque – at tab 5 – dated June 16, 1999 – in
the sum of $1,200 – should not have been included as insurable earnings in the
ROE - as prepared by Kassian - because it had not been paid at that time and –
therefore - was excluded from such calculation by the appropriate provision of
the Employment Insurance Regulations issued pursuant to authority
granted by the Act. The T4 slip issued by Malhi - in the sum of
$5,777.54 - did not seem to account for amounts of cash the appellant stated
she received from time to time. As for her pay cheques being issued to
Puneet Orchard - instead of herself - counsel submitted this would not
have been any more convenient than merely paying her in the normal course that
one would associate with an ordinary employer-employee relationship. With
respect to the employment with Grewal/Dhaliwal, counsel pointed out the ROE
should not have been issued on November 5, 1999 - showing the last day
worked as at November 6, 1999 – and certifying insurable earnings in the
sum of $7,280, because the appellant was not paid any wages until she received
a cheque dated December 7, 1999. Taking all of the evidence into account,
counsel submitted the decisions of the Minister pertaining to both periods of
employment should be confirmed.
[17] Dealing
first with the appeal concerning employment with Malhi during the period of
July 6 to October 24, 1998, the Minister relied on the following assumptions as
set forth in the relevant Reply:
(a) during the Period, the Appellant resided in
Osoyoos, B.C., where she and her spouse operated an orchard called Puneet
Orchard;
(b) Malhi operates an orchard in Oliver, B.C.,
which is about a 10 to 15‑minute drive from Osoyoos;
(c) Malhi issued a Record of Employment to the
Appellant indicating that she had worked for him in the Period and that she had
742 insurable hours and insurable earnings of $7,420.00;
(d) in accordance with the T4 issued by Malhi
in respect of the Appellant, the Appellant's net earnings for the Period should
have been $5,777.54;
(e) Malhi provided the following cheques marked
"Pay Roll" purporting to be in respect of the Appellant's wages for
the Period:
Date of cheque
Amount
March 14, 1998 3,000.00
December 4, 1998 1,500.00
June 16, 1999 1,200.00
TOTAL $5,700.00
(f) the cheque dated March 14, 1998 was made
payable as follows: Puneet Orchard (Kiranpal Sandhu);
(g) the cheque dated June 16, 1999 was made
payable to Puneet Orchard;
(h) during the Period, the Appellant's spouse
was living in Winnipeg, Manitoba and selling fruit there;
(i) during the Period, the Appellant was the
manager of Puneet Orchard in Osoyoos;
(j) during the Period, the Appellant had a
4-year-old son who could not be left alone;
(k) Malhi's sister-in-law, who lived in Oliver,
received a Record of Employment from Puneet Orchards indicating that she worked
from July 20, 1998 to October 17, 1998 purportedly performing the same
duties as the Appellant purportedly performed for Puneet;
(l) the Appellant did not perform any services
for Malhi in the Period; and
(m) the Record of Employment issued to the
Appellant by Malhi was issued solely to allow the Appellant to qualify for EI
benefits to which she was not otherwise entitled.
[18] The
assumptions which have been refuted by the appellant are 3(h), (i) and (k), in
that the appellant and her husband both testified he was not living in Winnipeg
during the 1998 season and had not been in that city since moving to Oliver in
1995. Charanpal Sandhu testified he was the manager of Puneet Orchard during
1998 and 1999 and had taken care of their young child during the day until his
sister-in-law returned from school and was able to relieve him. He testified
that Malhi did not have a sister-in-law and no such person had received a ROE
from Puneet Orchard during the period alleged, or at all. The appellant
testified she worked for Malhi and there is some documentary evidence - albeit
riddled with inconsistencies - to support that contention.
[19] I
wish to deal with some evidence as it related to administrative penalties
apparently imposed by HRDC or CCRA relating to certain matters investigated in
2000 or 2001 pertaining to events occurring during those years and perhaps
having a connection with the 1998 and 1999 growing seasons. Initially, I
included – in these reasons - testimony concerning this matter on the basis it
could have had a bearing on credibility of the appellant and her spouse -
Charanpal Sandhu - who also testified as part of the case for the appellant. In
order to be permitted to advance certain evidence later, counsel was required
to put certain allegations to the appellant and her husband as they related to whether
she had signed ROEs for Puneet Orchard or had acted otherwise in a
management capacity concerning her alleged participation in obtaining EI
benefits for Puneet Orchard workers. However, the evidence of Brian Lundgren
merely established that some sort of administrative penalty had been levied but
he could not confirm it had been issued to the appellant in the sense she had
been served with the appropriate documentation in that regard. As a result of
the lack of specificity concerning this penalty - arising after the periods at
issue in the within appeals - and the obvious capacity for this sort of
evidence to be more prejudicial than probative, I chose – thereafter - to
ignore evidence concerning the entire matter surrounding the EI benefits issued
to Jasbal Sandhu in 2000 and/or 2001 because it does not assist me in the task
of deciding the within appeals on the basis of relevant evidence. The purported
conclusion concerning authorship of certain documents - perhaps issued during
the relevant periods in the within appeals - was – again – totally based on
hearsay. The Minister would have been well aware of the position of the
appellant, namely, that she had worked during the relevant period(s) and was
entitled to her EI benefits on the basis she had been employed in insurable
employment in 1998 and 1999. If the Minister had wished to prove certain acts
of the appellant in relation to her participation – at Puneet Orchard - in
obtaining EI benefits for someone under inappropriate circumstances or unlawfully
appropriating cheques issued to some worker - who may or may not have been
entitled to receipt of same - then it would have been necessary to
produce witnesses having direct knowledge of these matters. Information
gathered by an investigator perusing some interdepartmental memoranda is not –
without more – adequate to prove a particular theory relevant to the legitimacy
of the employment which is the central issue of the within appeals. Certainly,
the appellant must carry the burden of proof throughout but once an assumption
of fact has been attacked – directly - then there is an evidentiary shift and
the Minister cannot expect the Court merely to reject the evidence of witnesses
with respect to a particular point in contention and to reinvigorate an assumption
of fact – contained in the Reply – by reassigning the unassailable quality to
which it was formerly entitled.
[20] The
appellant's purported employment with Malhi was peculiar in some respects.
First, it is strange that a husband – operating an orchard in his own right –
would obtain an advance payment – in the sum of $3,000 – from a prospective
employer of his wife and then deposit that cheque into the orchard business
account. The explanations offered by the appellant and her husband are not
consistent and are unsatisfactory. The final cheque – in June, 1999 – in the
sum of $1,200 was also payable to Puneet Orchards. The so-called time records
are inadequate. It is apparent she did not begin to work for Malhi – even
though she had already obtained an advance of $3,000 through the efforts of her
husband – until July 6, 1998, two days after her EI benefits had expired. The
evidence disclosed Malhi operated a substantial orchard and had other workers.
The appellant was paid the sum of $10 per hour because she is apparently more
experienced. Since her husband departed in 2001, she now operates Puneet
Orchard on her own. It is not particularly significant that the appellant
provided slightly different versions of details concerning a typical work week
because the summer growing season required long days and it would be difficult
to recall – precisely – a specific schedule several months later. The appellant
admitted performing some work on Puneet Orchard property and that is logical
because her spouse was the lessee and the operator of the business where their
family residence was also located. There is no requirement that spouses employ
each other – and often decline to do so with good reason - because that has
often given rise to a denial of benefits because of the impact of marital
status upon a working relationship. Once the appellant and her husband had
rebutted the assumptions of fact – referred to above – there was no other
evidence to support the contention of the Minister that the appellant had not performed
any services for Malhi during the relevant period or that the ROE had been
issued by Malhi – to the appellant – solely to allow her to qualify for EI
benefits to which she was not otherwise entitled. Charanpal Sandhu denied the
allegation that a worker employed by Puneet Orchard was a relative of Malhi. On
December 10, 1999, nearly a year later, Charanpal Sandhu issued a
Puneet Orchard cheque to Malhi – in the sum of $6,037.52 – ostensibly in
payment of purchases of fruit - as recorded in a sheet found at the tab 9 –
together with an adding machine tape displaying certain entries and a total
amount of $6,038.52. This document was provided by Malhi to the bookkeeper –
Kassian – in an extremely timely fashion since Malhi arrived in her office only
steps ahead of Lundgren, the investigator for HRDC. Curiously, the account and
the amount shown on the tape is $1.00 greater than the cheque issued for
payment. Earlier that morning, Malhi had assured Lundgren that this record of
fruit purchases by Puneet Orchard had already been supplied to Kassian.
This sheet identifies certain types of fruit and Charanpal Sandhu testified he
would purchase certain varieties not grown on his own property in order to
re-sell these small quantities – together with his own produce - to persons
operating fruit stands.
[21] The
appellant's employment with Grewal/Dhaliwal - appeal 2002-1552(EI) - concerns
the period of August 3 to November 6, 1999. The appellant had been receiving EI
benefits until August 3, 1999. The relevant property was only 6 acres and it
appeared to Lundgren - from an examination of the payors' records - that only
one other person had worked there. At the time the ROE was prepared by
Susan Kassian – an unauthorized individual for that purpose – the appellant
had not been paid her wages. Dhaliwal issued a cheque on December 7, 1999 – in
the sum of $6,872.56 – in payment of all wages earned by the appellant during
the relevant period. That cheque was deposited in the Puneet Orchard account on
December 15, 1999 (presumably as part of the deposit totalling $6,901.20,
as shown on Exhibit R-5) and the sum of $5,600 was withdrawn the same day
by Charanpal Sandhu, the appellant's husband. The appellant was in India
at that time and her husband had obtained the cheque and made the subsequent
deposit. He could not recall the reason for withdrawing such amount except to
speculate that it may have been to pay some late wages owed to employees
because he often paid them in cash including amounts attributable to arrears.
There were no other cash withdrawals greater than $700 shown on the account
extract – Exhibit R-5 – during the period of November 29 to December 31. The
assumptions of fact relied upon by the Minister – as stated at paragraph 3 of
the Reply – are:
(a) during the Period, the Appellant resided in
Osoyoos, B.C., where she and her spouse operated an orchard called
Puneet Orchard;
(b) the Partnership operates an orchard in
Oliver, B.C., which is about a 10 to 15 minute drive from Osoyoos;
(c) the Partnership issued a Record of
Employment to the Appellant indicating that she had worked for them in the
Period and that she had 728 insurable hours and insurable earnings of
$7,280.00;
(d) the Partnership provided one cheque in the
amount of $6,872.56 marked "Farm Labour" purporting to be in respect
of the Appellant's wages for the Period;
(e) during the Period, the Appellant's spouse
was living in Winnipeg, Manitoba and selling fruit there;
(f) during the Period, the Appellant was the
manager of Puneet Orchard in Osoyoos;
(g) during the Period, the Appellant had a
5-year-old son who could not be left alone;
(h) the Partnership's business consisted of 1
acre of cherries, 3 acres of peaches, 2 acres of apples and a few plum and
apricot trees;
(i) the partners lived on their orchard along
with 3 of Jasvir Dhaliwal's sisters and his mother;
(j) no record was kept of the actual days
worked or the number of hours worked each day by the Appellant;
(k) the last sale of fruit made by the
Partnership was on September 18, 1999;
(l) the Appellant did not perform any services
for the Partnership in the Period; and
(m) the Record of Employment issued to the
Appellant by the Partnership was issued solely to allow the Appellant to
qualify for EI benefits to which she was not otherwise entitled.
[22] The
evidence of the appellant and her husband rebutted the assumption that he had
lived in Winnipeg during the relevant period and was selling fruit there. The
appellant testified concerning other workers who had been at the Grewal/Dhaliwal
orchard and stated she did not recognize the names provided to her but recalled
she had worked with Dhaliwal's sister for a few weeks. If the last sale of
fruit was September 18, 1999, it is difficult to accept the appellant
would be working until November 6, even considering the factor of the
late-harvest Fuji apples because the small acreage had only 2 acres devoted to
production of apples. No record was maintained of hours or days worked. The
conclusion drawn by the Minister is that the appellant's purported employment
with the Grewal/ Dhaliwal partnership was a sham designed solely to permit the
appellant to obtain an ROE showing sufficient hours to permit her to qualify
for EI benefits. Counsel for the respondent referred to the withdrawal of the sum
of $5,600 – the same day as the deposit of the cheque from Dhaliwal – as an
unusual event for which no rational explanation was offered and submitted the
Minister was entitled to conclude the money was being returned to
Grewal/Dhaliwal because no services had ever been performed by the appellant
and that the whole object of the exercise had been to obtain an ROE for the
appellant who was visiting in India. The appellant had applied for EI benefits
– tab 13 – on November 9, 1999 at a time when she had not yet been paid
one cent by her purported employer. The ROE issued by Kassian was incorrect and
misleading. At that date, the appellant had no insurable earnings from any
alleged employment with Grewal/Dhaliwal. The ROE was issued one day before the
appellant's last day of employment, another example of pre-emptive expediency
on the part of Kassian, acting as agent for the payors.
[23] There
have been many appeals under the Act pertaining to farm and orchard
workers. Often, the records – if they exist at all – have been poorly
maintained and are replete with mathematical errors, incorrect entries and
various other inconsistencies. Payments to workers are often late. Cheques are
either post-dated, back-dated or workers are – on occasion – paid a lump sum at
the end of a season. As a result of a lack of proper documentation, it becomes
a difficult process for all involved to determine several issues beginning with
the primary question as to whether there was actual insurable employment during
a relevant period. If that hurdle is overcome by an appellant, the next task is
to demonstrate the number of insurable hours worked and the amount of the
insurable earnings. The number of insurable hours will determine eligibility
for EI benefits, the amount of which will be determined by the insurable
earnings. In order to be included as insurable earnings, a worker must have
received payment for work done within the relevant period, unless there was an
amount attributable to wage arrears and this default had been the subject of a
complaint to a tribunal having jurisdiction to deal with employment standards.
It is the duty of an appellant to prove – on a balance of probabilities – each
of these ingredients. If a worker does not maintain a personal time record - in
a form that can be produced later – and is unable to prove payments received in
cash, either as to amount, time and place received, and other salient details,
then it serves to create ongoing problems when the worker is later required to
prove his or her case.
[24] In
the case of Narang v. Canada (Minister of National Revenue – M.N.R.),
[1997] T.C.J. No. 99, the Honourable Judge Margeson, T.C.C., dealt with appeals
concerning several workers who alleged they were employed for short periods of
time by the employer to perform office, maintenance and field work on his berry
farm. At paragraph 136 – and following – of his judgment, Judge Margeson
commented:
[136] Some of the records upon which the Appellant and the Intervenors relied
were prepared by the Appellant himself, allegedly by way of recopying of
records purportedly prepared by other bookkeepers. This exercise, as viewed by
any reasonable person, would have to be considered redundant at best, was
without any reasonable explanation and without evidence from any other person
who might have prepared the other records.
[137] The evidence of the income from cash sales in 1993 was only an estimate
and was not based upon any acceptable or reasonable facts. The figures produced
by the Appellant in this regard do not appear to be reasonable even if they
were produced in the income tax return of the business for 1993 and they were
inconsistent with a reasonable calculation of the Appellant's income in 1993
using the percentages that were supplied by the Appellant to the agent from
Revenue Canada.
[138] The manner of payment of the wages was not normal. It is not a good
idea to pay cash to employees and then obtain a receipt from them. In one case
part of the wages were not even paid to the worker but allegedly to her husband.
[139] There were obviously no strawberries raised by this operation and yet
one worker claimed to have picked one or the other or both. This is not
something that a worker would forget easily.
[140] Apart from the fact that the wages were allegedly paid in cash, which
is abnormal, the wages were purportedly paid in lump sums at the end of the
work period, when the workers needed the money and in any event the periodic
payment as set out in the ROEs was obviously incorrect.
[141] It is no answer to say that someone from Revenue Canada led the
Appellant to believe that the ROE was unimportant in that regard. The ROE is
important, it is the basis for the determination and what is alleged therein
should be established.
[142] Surely if Kamaljit K. Gill had worked at the times she said that she
did and was paid what she said that she was paid she would have had a better
knowledge of who worked there at the same time and as to when she worked. The
information given to the interviewer would have been consistent with her
evidence in Court. There would have been substantially more evidence of
supervision, she would have had some further proof of her receipt of wages,
there would have been some independent corroboration of the fact that she had
worked such as the evidence of other workers. The very nature of the work that
she was said to have performed was suspect under the circumstances given her
very limited knowledge of anything else that was alleged to have gone on there.
[143] If Raj R. Narang had been engaged in
insurable employment as alleged here she would have known exactly what she did,
what kind of berries she picked, she would have received her wages regularly
and she would have been more knowledgeable about the names of fellow workers.
The Court is extremely doubtful that she would have been employed during the
last one and a half months picking up garbage and performing the other chores
that she was said to have performed. She would have received all of her wages
and they would not have been paid to her husband. There would be no doubt in
her mind when those wages were received.
[25] In
the case of Khunkhun v. Canada (Minister of National Revenue – M.N.R.),
[2002] T.C.J. No. 483, The Honourable Judge Miller, Tax Court of Canada,
encountered similar difficulties. The appeal involved whether the appellant had
worked in insurable employment - in an orchard – during the summer of 2000,
and, if so, what was the correct number of insurable hours. In the Khunkhun
matter, the Agricultural Compliance Team had visited the orchard on a day when
the appellant was not present. Also, the appellant had not maintained a record
of her hours and her husband – whom it had been suggested had kept track of her
hours – was not produced as a witness. Cheques had been made out – by the payor
– to the worker on a more or less regular basis but the appellant had actually
received payment all at once at the end of the growing season in October. As in
the within appeals, it was necessary to examine conflicting documents, assess credibility
of witnesses and sort through a variety of documents, mainly of which were in
apparent conflict in order to determine whether a true employer/employee
relationship had existed and then to undertake the appropriate calculations in
order to fix the amount of insurable hours and earnings.
[26] First,
I will deal with the appellant's claim concerning her employment with Malhi
during the period of July 6 to October 24, 1998. While there are many oddities
about this working relationship - including the payment of the $3,000 advance
by cheque originally payable to Puneet Orchard and deposited into the business
account – I accept the appellant was employed in insurable employment with
Malhi during this period. The Malhi operation was reasonably large and there
was evidence provided by the appellant in relation to her duties, work schedule
and other related pieces of information that were sufficiently credible to
sustain her position that she had been employed in insurable employment.
However, the sum of $1,200 received by cheque – dated June 16, 1999 – in
payment of wages earned by the appellant during the 1998 season cannot be
included in the calculation of insurable earnings.
[27] I
turn now to a consideration of the issue of the appellant's employment – in
1999 – with Grewal/Dhaliwal. In this matter, one must bear in mind the orchard
was very small and the last sale of fruit occurred on September 18, 1999. There
was some reference to a record of days and/or hours allegedly worked by the
appellant but none was produced in evidence. The payment for wages was made by
one cheque – dated December 7, 1999 – deposited to the Puneet Orchard account,
followed by an immediate withdrawal of cash by Charanpal Sandhu – husband of
the appellant – while the appellant was visiting in India. There was no
adequate explanation provided for this transaction. It is not probable that the
appellant worked on the small property of Grewal/Dhaliwal until November 6,
1999. The appellant responded to a question in the Questionnaire – tab 20 –
concerning a detailed explanation of duties performed and she responded,
"picked and packed fruit" and "general cleanup". The ROE -
issued on November 5, 1999 by Susan Kassian - bookkeeper for the payors –
certified that the appellant had be paid the sum of $7,280 when she had – at
that point – received nothing. Then, there was the curious assertion by the
appellant as contained in her letter of November 15, 2001 – directed to the
Chief of Appeals at CCRA handling her matter – that she was paid cash for her
work. The evidence disclosed she had a working knowledge of the business of
Puneet Orchard and access to its books, records and statements of account at
the Credit Union and she ought to have known that payment for her wages had
been the subject of a cheque issued by Dhaliwal, unless the entire arrangement
for her alleged employment had been the subject of a bargain made between her
husband and Dhaliwal and/or Grewal.
[28] The
process of establishing insurable employment and – with it – the subsequent
entitlement to EI benefits is not an exercise in hide-and-seek. It is also not
intended to replace the popular party game – charades - where one player has to
divine the meaning of some phrase, and/or identify a word, person or object by
relying on obscure and – usually – obtuse clues poorly communicated. The
Minister - prior to issuing the decision which later becomes the subject of an
appeal – is not required to conduct an extensive forensic accounting
examination or analyze every possible aspect of a working relationship in order
to formulate a plausible theory that may account for glaring inconsistencies
inherent in the material and statements submitted – at various times - by the
worker. During the course of hearing an appeal, the Court is not required to
accept a bald assertion from an appellant that there was a genuine
employer-employee relationship and - in the absence of credible evidence - to
undertake revision of a misleading ROE or to repair various defects in
documentation pertaining to the working relationship. The Court must consider
whether there is sufficient credible evidence to demonstrate the existence of
insurable employment. Each case is different and, in those involving several
persons working for the same payor, it is often necessary to examine the
evidence as it specifically relates to each person rather than relying on a
blanket approach. In the same vein, appeals dealing with several periods of
employment ‑ particularly involving different payors - can
produce varied results.
[29] Taking
into account all of the evidence, I am not satisfied the appellant was engaged
in insurable employment with the payors Grewal/Dhaliwal during the period of
August 3 to November 6, 1999. As a result, appeal 2002-1552(EI) is hereby
dismissed.
[30] Appeal
2002-1550(EI) – pertaining to the appellant's employment with Malhi – in
1998 – is hereby allowed and the decision of the Minister if varied to
find:
the appellant was engaged in insurable employment with
Param R. S. Malhi during the period of July 6 to October 24, 1998;
her insurable hours were 742 with insurable earnings in the sum of $6,220.
Signed at Sidney,
British Columbia, this 27th day of February 2003.
D.J.T.C.C.
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