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Citation: 2003TCC85
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Date: 20030403
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Docket: 2000-1428(EI)
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BETWEEN:
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SERGE SICARD DE CARUFEL,
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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
Tardif J.T.C.C.
[1] This is an appeal from a determination dated
February 24, 2000, in which the Respondent notified the Appellant, employed by
Groupe Devesco Ltée, carrying on business as "Les Constructions et Pavages
Continental Inc.", that he had 32 insurable weeks and $13,483.82 in
insurable earnings for the last 20 weeks for the 1993 period, and 15 insurable
weeks and $10,250.25 in insurable earnings for the 1994 period.
[2] In support of his decision, the Respondent
alleged the following facts:
(a) The Payor operated
a road and highway paving business.
(b) The Payor kept two
different sets of books for the wages it paid.
(c) The time recorded
on the workers' timesheets was not to exceed 44 hours per week per worker and any
excess was recorded on a second timesheet.
(d) The Payor was
banking time for the workers.
(e) The Appellant worked
as a foreman for the Payor.
(f) On December 8,
1993, the Payor issued a record of employment to the Appellant for the period
from May 10, 1993 to November 26, 1993, indicating 27 insurable weeks and
insurable earnings of $14,643.
(g) On May 18, 1994,
the Payor issued a record of employment to the Appellant for the period from
January 3, 1994 to April 22, 1994, indicating 14 insurable weeks and insurable earnings
of $13,179.
(h) The records of
employment do not reflect the actual number of insurable weeks and amount of
insurable earnings.
(i) For 1993 and
1994, the Appellant's actual insurable earnings and insurable weeks are those
described in an appendix to the Reply to the Notice of Appeal.
[3] After being sworn in, the Appellant denied the
content of paragraphs (b), (c), (d), (h) and (i). The Appellant, who was paid
as the foreman of a group of employees, denied completely that was associated
in any way with a system under which certain hours of work were accumulated in
order to form an insurable week. This is the procedure generally known as "time
banking" or "bundling of hours". Under this practice, certain
hours worked are bundled together in order to constitute full weeks, giving the
worker the maximum employment insurance benefits. If the hours in question were
accounted for as they should be, the benefits paid would then be significantly
lower.
[4] During the periods in issue, the Appellant was
the foreman of a group of employees in a business where "bundling of hours"
was practiced. The employer had set up two registers to record the hours worked
by its employees so that the records of employment that were issued when they
were laid off indicated that they had worked full weeks with maximum insurable earnings.
In reality, these workers had performed the work bundled in a single week over
a much more extended period.
[5] The Appellant denied having participated in
the system of banking hours of work so as to later bundle them into insurable
weeks.
[6] He testified articulately and gave detailed
replies to a number of questions. He argued that the fact that he was paid by the
week rather than by the hour excluded him from the parallel accounting of the
hours recorded in the "time bank". To support and confirm his submissions,
he produced a document, a sort of reconstitution of his whereabouts during one
of the periods in issue.
[7] The document was put together using
information that became available two or three weeks before the trial. After
stating that he lost all the relevant documents as a result of a fire at his
residence, the Appellant said that he recovered the precise information
concerning his schedule during the periods mentioned in the document in
question.
[8] The Respondent, for his part, submitted
several exhibits and documents from which some quite definitely compelling but
not necessarily hard and fast conclusions can be drawn. I refer in particular
to various computer records that were among the documents seized from the
employer, and to copies of invoices on which the Appellant's signature appeared,
on dates when he was not supposed to be at work.
[9] Weekly remuneration can make it unnecessary to
count hours worked; consequently, that method of remuneration can be a
reasonable explanation for certain unpaid hours of work, given that the overall
remuneration generally covers the unscheduled work.
[10] Such a form of remuneration does not explain
everything. It does not automatically prevent a person from participating in a "bundling
of hours" scheme.
[11] Although "time banking" or "bundling
of hours" suggests that the hours are accounted for one by one, it is also
possible and even common for the "time bank" to be made up of full days.
Generally speaking, a week in which the employee works one, two or even three
days is not insurable to the maximum, hence the interest in combining these
days with others.
·
For example, an
employee might accumulate 40 insurable hours based on work performed over a
period of several weeks at the rate of one, two or three consecutive days of
work or half-days or overtime, thus exceeding the insurable maximum for the
week in which the hours were worked.
[12] Following a mega-investigation, it was
determined that the Appellant's employer was practicing this system on a very
extensive scale.
[13] The company possessed two different pay
registers. One recorded either overtime or the hours worked at the rate of
several per week, and the other recorded the number of hours sufficient to
constitute an insurable week.
[14] The findings of the mega-investigation led to criminal
proceedings; the companies concerned pleaded guilty and were punished with
imposing fines.
[15] Ms. Vaugeois, who was responsible for the
cases, stated that several boxes of documents were seized. An analysis of all
the documents seized, she said, enabled the investigators to draw some decisive
conclusions concerning the involvement in the scheme of the great majority, if
not all, of the employees.
[16] The Respondent then identified specific
documents pertaining to each of the employees. For example, in support of the
decision in the Appellant's file, the Respondent relied on the following
documents:
·
Computer files
describing and relating specific information as to his work schedule.
·
Various invoices on
which the Appellant had affixed his signature; the dates appearing on the
invoices in question were dates when he was reportedly not working.
[17] To rebut the Respondent's allegations, the Appellant
argued:
·
that he had no control
over his employer's deeds and actions in regard to the recording of hours
worked and the various registers used for that purpose;
·
that obviously his
employer had completely fabricated the computer record in question;
·
that his personal
agenda refuted the data appearing on the seized documents; and
·
that the way in which
he was remunerated automatically excluded him from any participation in the
practice of "bundling hours".
[18] The Appellant's evidence has the merit of raising
doubts as to the possibility that he was not associated with the parallel time
accounting system set up by his employer.
[19] Are such doubts sufficient to find in his
favour, on a balance of probabilities?
[20] The Appellant emphasized a document the
content of which was updated in the weeks preceding the trial; he testified on
the data appearing therein with clock-like precision.
[21] However, he was fairly ambiguous with regard
to the documents on which his signature appeared. I refer in particular to his
signature on some invoices the dates of which did not correspond to the work
periods described on his records of employment. In this regard, the Appellant
essentially claimed that he signed the invoices on a different date and that
this was a common practice.
[22] As to the other records, just as compelling
and inconsistent with his submissions, the Appellant argued that his employer
had a very elastic conscience and that these were clearly a falsification explained
by his employer's interest in recording more hours so as to maximize expenses
or overbill customers.
[23] The direct and circumstantial evidence
concerning the scope of the parallel bookkeeping shows beyond a doubt that a "bundling
of hours" system was being used. Moreover, this finding was confirmed by
the entering of a guilty plea. Can such decisive and compelling evidence be outweighed
by mere suppositions and a document prepared in the weeks leading up to the
trial?
[24] As stated previously, the Appellant was the
foreman of a crew of employees associated with the "time banking" or "bundling
of hours" system. If I am to accept the Appellant's submissions, he would
have to have been absent from the worksite when the men for whom he was
responsible were working the hours entered in the "time bank".
[25] In this regard, the Appellant submitted no
explanation other than that his weekly remuneration as a foreman required him
to perform certain unpaid duties. I fail to see how this form of remuneration required
the Appellant to act as an unpaid foreman when he was in charge of employees
whose hours of work were part of the "time bank".
[26] Moreover, if being paid by the week forced him
to perform unpaid work, why did the employer have a specific file in his name
in regard to the time he worked? I do not think the employer created false
individual files for some of its employees.
[27] Assuming and stating more than once that his
employer had fabricated, falsified or doctored certain books of account, the Appellant
no doubt told himself that there was no harm in putting together a coherent
document with his claims, hence the content and the numerous details contained
in the principal document, the basis for his submissions.
[28] The Appellant was certainly not the only
foreman remunerated in this way. Why did he not call some of the others to
testify? I doubt that it was impossible to identify one or more persons able to
establish that the Appellant was an exception.
[29] The evidence submitted by the Appellant did
raise some doubts, but I certainly do not think these doubts are sufficient to outweigh
the preponderance of the conclusions resulting from the investigation, analysis
and reference to the documents adduced by the Respondent.
[30] The burden of proof was on the Appellant; he
had to establish the merits of his submissions on a balance of probabilities.
The suspicions raised by the Appellant's evidence are not so decisive as to
discredit the grounds of the determination under appeal.
[31] Accordingly, the appeal is dismissed.
Signed at Ottawa, Canada, this 3rd day of April 2003.
J.T.C.C.
Translation certified
true
on this 9th day of
March 2009.
Brian McCordick,
Translator
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