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Citation: 2003TCC390
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Date: 20030616
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Docket: 2002-2844(EI)
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BETWEEN:
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SHERRI-LYNN MULVENNA,
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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
Miller J.
[1] In 1997, upon the birth of her
second child, Ms. Mulvenna took a pregnancy and parental leave
from work, receiving employment insurance benefits plus a top-up
from her employer to 75 per cent of her salary. Several months
after returning to work, her husband was transferred to Toronto
from Kingston, and she consequently left her employment seeking
employment insurance benefits. She received 20 weeks of benefits
based on hours of insurable employment which included no hours
during the pregnancy/parental leave. Ms. Mulvenna claims her
insurable hours should be increased to justify a greater benefit
period than 20 weeks. Further, she maintains the denial of such
is discriminatory against women pursuant to section 15 of the
Canadian Charter of Rights and Freedoms ("the
Charter").
[2] While the facts of this matter are
not much more complicated than stated in the opening paragraph,
the procedural morass through which Ms. Mulvenna has had to
wander to reach this point is anything but simple. This arises
due to the two streams of appeal an employee has under the
employment insurance legislation, depending on the nature of the
complaint: one avenue is via the Minister of National Revenue
("the Minister"); the other avenue is via the Canada
Employment Insurance Commission. They share administrative
responsibilities under the Employment Insurance Act
("the Act"). The procedure is further
complicated as Ms. Mulvenna has also brought a
constitutional challenge, which has its own procedural
requirements. In an effort to untangle this procedural web and
get at the crux of the matter, I will present the facts
chronologically:
January
1996:
Ms. Mulvenna gives birth to her first child and leaves work
to go on pregnancy/parental leave.
January 1996 to
July 1996:
Ms. Mulvenna is on maternity leave followed by parental
leave. For a number of years prior to January 1996
Ms. Mulvenna worked at St. Mary's of the Lake
Hospital ("St. Mary's) in Kingston. She had worked
full-time for 12 years prior to the birth of her first
child.
July 1996 to March
1997:
Ms. Mulvenna works full-time at St. Mary's.
March 1997
Ms. Mulvenna gives birth to her second child. Just prior to
this she signed a St. Mary's form indicating she wished
to continue employee benefits.
March 1997 to September 1997: Ms. Mulvenna
is on pregnancy and parental leave. She receives employment
insurance benefits plus a top-up of $89 per pay period from
St. Mary's, which brings her income to 75 per cent of
her salary. The top-up is a requirement of the Collective
Agreement with St. Mary's. Ms. Couldridge, an
employee of St. Mary's payroll department, describes
Ms. Mulvenna's leave as unpaid leave.
August
1997:
Mr. Mulvenna finds work in Toronto.
September 1997 to March 1998: Ms. Mulvenna
returns to work full-time at St. Mary's. She accumulates
726 hours of insurable employment.
March
1998:
Ms. Mulvenna leaves employment to join her husband in
Toronto. There was some delay in moving to Toronto as the sale on
the Kingston property did not proceed as quickly as planned.
There was some interim accommodation for the Mulvennas in Whitby
as they could not move into their new home in Markham until
July.
April
1998:
Ms. Mulvenna applied for employment insurance and was
advised her entitlement was 20 weeks based on 726 insurable
hours.
May - June
1998:
Ms. Mulvenna looked for work in Toronto. The Kingston
employment insurance office required her to look for work in
Kingston, because she could not provide a permanent Toronto
address as yet. She felt compelled to comply with the request,
though certainly recognized the futility of such a search.
August
1998:
The Mulvennas move into their new home in Markham, Ontario.
Employment insurance benefits run out. Sometime during this
period of April to August 1998 Ms. Mulvenna appealed to the
Board of Referees.
January
1999:
The Board of Referees dismiss Ms. Mulvenna's claim
indicating her entitlement to 20 weeks benefit, based on 726
hours of insurable employment, was correct.
The Board also confirmed that the top-up received by
Ms. Mulvenna from March 1997 to September 1997 was not
subject to employment insurance deductions. Ms. Mulvenna
appeals the Referee's decision to the Umpire, also raising a
constitutional challenge.
October
2000:
The Umpire adjourns the appeal so that Ms. Mulvenna can
comply with section 57 of the Federal Court of Appeal
Act requiring notification of a constitutional challenge to
all Attorney Generals across the country.
February
2001:
The Umpire orders a Motion record, after the constitutional
notice has been sent.
April
2001:
Ms. Mulvenna sends out the required constitutional
notice.
July
2001:
The Umpire determines there can be no decision until the Tax
Court of Canada ("TCC") makes a ruling on the correct
number of insurable hours. Only then can the Umpire determine the
number of weeks of benefit available to Ms. Mulvenna.
August
2001:
A request for insurability ruling is filed with Canada Customs
and Revenue Agency ("CCRA") from Human Resources
Development Canada ("HRDC"), citing the reason for such
a request being an Order of the Court. The periods of
insurability covered are March 1997 to September 1997 and
September 1997 to March 1998. While there was no direct
documentary evidence of the ruling, the following actions by
Ms. Mulvenna indicate there must have been a ruling between
August 2001 and December 2001.
December
2001:
Ms. Mulvenna appeals to the Chief of Appeals CCRA Ottawa,
from Ruling CE200159789239, which letter of appeal is
forwarded to the Chief of Appeals London. This appeal addresses
the issue of whether she met the criteria for insurable
employment during her pregnancy/parental leave.
April
2002:
CCRA advises Ms. Mulvenna, St. Mary's and HRDC of
their ruling that "It has been decided that the monies
received to increase the pregnancy and parental benefits paid
during the above mentioned period are excluded from insurable
earnings. Insurable hours are not attributable to these
earnings". CCRA also advised Ms. Mulvenna that if she
disagreed with that decision she could appeal to the TCC.
May
2002:
Ms. Mulvenna sends out a second set of constitutional
notices to Attorneys General across the country.
July
2002:
Ms. Mulvenna appeals to the TCC.
August
2002:
CCRA advises the TCC of Ms. Mulvenna's appeal of
December 2001, along with their decision of April 2002.
October
2002:
The Minister files a Reply to the Notice of Appeal in the TCC.
While the Reply refers to the insurability of the top-up
payments during the pregnancy/parental leave period in 1997,
there is no reference to the Umpire's directions.
April
2003:
Ms. Mulvenna sends out her third set of constitutional
notices. Three days prior to the hearing, the Respondent makes
representations in the TCC to adjourn this matter as more time is
required to prepare for the constitutional argument.
Ms. Mulvenna wishes to proceed as scheduled. I denied the
adjournment application.
[3] In April 1998 Ms. Mulvenna
advised the government she believed she was entitled to 40 weeks,
not 20 weeks, of employment insurance benefits. Five years have
passed. She has sent out constitutional notices on three separate
occasions. She has dealt with the Minister, HRDC, Canada
Employment Insurance Commission, Board of Referees, two Umpires,
at least two employment insurance officers and at least two CCRA
officers. She has appeared at the TCC on two occasions, once
because the Respondent sought an adjournment. She has been
advised by the government that she should look for work in
Kingston, when they knew full well she was in the throes of
moving to Toronto. I am not the least bit surprised that
Ms. Mulvenna became somewhat emotional in describing her
circumstances. How do we instil in the public a confidence in our
administrative, quasi-judicial and judicial system when what
appears to be a relatively simple question - you have
short-changed me my employment insurance benefits - takes such a
long and laborious course to answer? It is not my role to
legislate, regulate or establish administrative practices; that
is, to set the rules of the game. I do however see an
Appellant's justifiable frustration where the rules and the
administration of the rules become so burdensome that despair
sets in. This is not healthy. The very fairness that presumably
the rules are meant to ensure leave a lasting impression to the
opposite effect.
[4]The question for this Court is how many, if any, insurable
hours of employment did Ms. Mulvenna accumulate during her
leave from March 1997 to September 1997? The Respondent says
none. The Respondent also argues that even if I find there were
insurable hours, this will not help Ms. Mulvenna as those
hours fall outside the "qualifying period". A
qualifying period is the period in which Ms. Mulvenna must
accumulate sufficient insurable hours to establish a claim. I
wish to deal with this point first. I disagree with the
Respondent's counsel's characterization of the qualifying
period in this case. He indicated the qualifying period:
... will be the shorter of that 52 week period I
mentioned, or in effect the time since the Appellant's last
benefit period ended.
So for the Appellant you would not go back - she made her claim
in March of 1998 for EI benefits - you do not go back 52 weeks to
March of 1997 to figure out whether the Appellant had enough
hours of insurable employment. You go back to September of 1997
when her benefits had run out, her parental and pregnancy
benefits had run out. So you are only counting the hours
essentially from September - the only relevant hours, the hours
from September to March - September of 1997 to March of 1998.
(Transcript page 37, lines 11 to 24)
....
... even if you make a decision here that says the
Appellant has whatever number of insurable hours during the
period of her maternity and parental leave, that would really
still not get her very far in terms of being eligible for
benefits because those hours would not be part of her qualifying
period.
(Transcript page 40, lines 6 to 12)
[5] But section 8 of the Act
reads as follows:
8(1) Subject to subsections (2)
to (7), the qualifying period of an insured person is the shorter
of
(a) the
52-week period immediately before the beginning of a benefit
period under subsection 10(1), and
(b) the
period that begins on the first day of an immediately preceding
benefit period and ends with the end of the week before the
beginning of a benefit period under subsection 10(1).
[6] This does not suggest to me that
the qualifying period excludes a preceding benefit period, but
explicitly includes a preceding benefit period by referring to a
period that begins on the first day of an immediately
preceding benefit period - not the last day of an
immediately preceding benefit period. Ms. Mulvenna's
benefit period of March 1997 to September 1997 appears on a plain
reading of section 8 to be part of her qualifying period for the
purposes of calculating insurable hours that accrue to the next
benefit period.
[7] Having found her benefit period
from March to September 1997 can be considered as part of the
qualifying period, for purposes of determining insurable hours,
the calculation of such hours becomes the issue. For this
determination, it is necessary to turn to Part I of the
Employment Insurance Regulations, ("the
Regulations") specifically section 10.1 which
reads:
10.1(1) Where an insured person is remunerated by the employer
for a period of paid leave, the person is deemed to have worked
in insurable employment for the number of hours that the person
would normally have worked and for which the person would
normally have been remunerated during that period.
(2) Where an insured
person is remunerated by the employer for a period of leave in
the form of a lump sum payment calculated without regard to the
length of the period of leave, the person is deemed to have
worked in insurable employment for the lesser of
(a) the
number of hours that the person would normally have worked and
for which the person would normally have been remunerated during
the period, and
(b) the number
of hours obtained by dividing the lump
[8] If I find Ms. Mulvenna
qualifies under section 10.1 as being on paid leave, she
would have, according to this section, 32.5 hours of insurable
employment each week during her leave, as that is the number of
hours per week she normally worked. So, for 26 weeks, this would
be 845 hours.
[9] The Respondent argues that just
because she received a top-up of $89 per pay period during
this period, that is not sufficient to characterize
Ms. Mulvenna's leave as "paid leave". The
Respondent raises a number of arguments. First, if subsection
10.1(2) is considered, (that is the subsection dealing with a
lump sum paid to an employee on leave) the number of hours is
determined on the basis of the lesser of two items, one being the
lump sum divided by the normal hourly rate. If such an approach
was taken with Ms. Mulvenna's actual receipts, the hours
would be dramatically lower.
[10] Indeed, the Respondent suggested it was
absurd that simply because of the method of payment - lump sum
versus periodic - such drastic differences would result. The lump
sum versus periodic distinction however is one in income tax laws
which can indeed create a dramatic difference. I have not heard
the Crown raise absurdity in such situations. If the Respondent
believes an absurdity results, it is not for this Court to
rewrite the legislation. The fact is Ms. Mulvenna did not
receive a lump sum. I am not persuaded that a plain meaning of
subsection 10.1(1) of the Regulations can be
ignored.
[11] Second, the Respondent referred to
Alberta v. Alberta Union of Provincial Employees and MOLO,[1] a 1985
case of the Alberta Court of Appeal for some guidance on how
"leave" is defined. The case suggests "leave"
imports the idea of permission by the employer to the employee to
be away from work. This case would appear to help
Ms. Mulvenna, as certainly she was away from work and it was
with the permission of her employer, albeit granted through the
terms of the Collective Agreement. I find Ms. Mulvenna was
on leave.
[12] Third, the Respondent argues that if
this type of absence is to be considered leave, it is not paid
leave, notwithstanding she received the top-up from her employer.
The Respondent compares Ms. Mulvenna to an employee on
pregnancy/parental leave who does not receive a top-up. Surely,
argues the Respondent, this person is not on paid leave. It would
therefore be unfair and illogical to afford Ms. Mulvenna any
benefit just because she got the top-up. The Respondent is asking
me to apply some principle of fairness or logic to override what
I read as very clear legislative wording. The Respondent has
undoubtedly been on the beneficial end of many tax issues where
the sense of unfairness and illogic have screamed out at the
taxpayer. I am not at all swayed that in this case, firstly,
there is an unfairness, or secondly, if it is an appropriate
principle upon which to rule in favour of the government, when
the government wrote the legislation. The Respondent's
argument does not fly. The reason I am not even convinced there
is an unfairness is because a union may introduce a top-up
provision such as this to obtain the very benefit at issue for
its members. The employee who is not a member of such a union is
not treated unfairly because of the employment insurance
legislation, but if at all, because of the vagaries of different
employment contracts.
[13] Fourth, the Respondent points to the
testimony of the employer's payroll officer who said she did
not consider Ms. Mulvenna to be on paid leave. With all due
respect, I do not find Ms. Couldridge's testimony
persuasive as far as the definition of paid leave for purposes of
section 10.1 of the Regulations. She did not purport to
have been involved in negotiations of the Collective Agreement to
be able to shed any light on the Union's perception of the
import of the top-up provision. There is no doubt these
payments constituted pay.
[14] The Respondent went through the
Collective Agreement and noted that it does not refer to this
leave in terms of paid leave. Yet, it neither refers to it as
leave without pay, which is an expression found elsewhere in the
Collective Agreement. I find the Collective Agreement does not
support a position that Ms. Mulvenna's leave is not paid
leave. It specifically covers the level of pay Ms. Mulvenna
was to receive during this particular leave period.
[15] Finally, I turn to the real crux of the
Respondent's argument which is simply that to treat
Ms. Mulvenna's leave as paid leave for purposes of
section 10.1 of the Regulations just does not make
sense in the context of the whole employment insurance scheme, as
it means treating the time during which she received employment
insurance benefits as time that qualifies her for more employment
insurance benefits. The Respondent compares Ms. Mulvenna to
the person actually working, who receives hours of insurable
employment for hours actually worked. He suggests that
Ms. Mulvenna gets better coverage, and that, again, is
absurd. I can see that Ms. Mulvenna might get the same
coverage but fail to see how the coverage is better. The point
the Respondent is driving at is that Ms. Mulvenna was not
working and should not be entitled to the benefit of any
insurable hours. This reasoning flies in the very face of section
10.1 of the Regulations. The Act explicitly accepts
that someone not working can still have insurable hours counted.
The Respondent's approach also fails to recognize the very
core of the issue Ms. Mulvenna is attempting to make; that
is, that just as her seniority continues to accrue while on this
type of leave, so too should her accrual of insurable hours.
Being on leave for the purposes of giving birth should no more
take away the status of an employee than being on a paid leave
for any other purpose.
[16] The Respondent's real concern is
that the $89 per pay period from the employer is not sufficient
to justify the benefit; that is, that paid leave should imply
full-paid leave by the employer. The Respondent provided no
precedent, no definition and no interpretation in tax laws or
employment laws or labour laws to suggest that a top-up
payment to get an employer's salary to 75 per cent
of her full salary is not sufficient to constitute a "paid
leave". Just as the legislation provided in subsection
10.1(2) for a calculation based on the amount actually paid, so
too could subsection 10.1(1) have provided something similar. It
does not. It simply relies upon the expression "paid
leave". Ms. Mulvenna was certainly on leave and she was
certainly paid. I find nothing absurd or unfair in the treatment
of a woman, having worked full-time for 12 years, having her time
for pregnancy/parental leave continue to count towards insurable
hours for purposes of insuring against the risk of a subsequent
unforeseen need for insurance - a husband's transfer for
example. In that context I interpret subsection 10.1(1) of
the Regulations as applying to Ms. Mulvenna. Given
this finding it is unnecessary for me to address the
constitutional issues raised.
[17] I allow Ms. Mulvenna's appeal
and refer the matter to the Umpire on the basis that
Ms. Mulvenna accumulated an additional 845 hours of
insurable employment during the qualifying period over and above
the 726 hours already allowed.
Signed at Ottawa, Canada, this 16th day of June, 2003.
J.T.C.C.
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