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Citation: 2003TCC504
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Date: 20030722
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Docket: 2002-4280(EI)
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BETWEEN:
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LEONARD FOOTT,
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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
Beaubier, J.
[1] This appeal was heard at London,
Ontario, on July 10, 2003. Gregory Caron, Canadian Auto Workers
Union ("C.A.W.") Committee person at International
Truck and Engine Corporation Canada, ("International"),
Chatham, Ontario, testified for the Appellant. The
Respondent called Katherine Sherring, Manager of Human
Resources at International.
[2] The Appellant was an employee of
International at Chatham and a member of the C.A.W. there.
[3] Paragraphs 2 to 6 inclusive of the
Reply to the Notice of Appeal outline the issue. They read:
2.
International Truck and Engine Corporation Canada
(the "Employer") appealed a ruling to the
Respondent that there were no insurable hours associated with the
Scheduled Paid Absence payment ("SPA") paid to the
Appellant by the Employer, within the meaning of the Employment
Insurance Act.
3. By letter
dated August 7, 2002, the Respondent informed the Employer and
the Appellant that it had been determined that there were no
insurable hours, within the meaning of section 9.1 of the
Employment Insurance Regulations, associated with the SPA payment
the Appellant received from the Employer.
4. In making
his decision, the Respondent relied on the following assumptions
of facts:
(a) the Appellant was
laid off by the Employer;
(b) the Employer
issued a Record of Employment to the Appellant which indicated
the Appellant had 652.5 hours of insurable employment, including
39 hours for SPA;
(c) the Appellant
received the SPA payment as a lump sum payment and the Appellant
did not take any leave which could be associated with the SPA
payment;
(d) article 10 of
the Collective Agreement between the Employer and the Employees
deems the SPA payments as vacation pay.
B. STATUTORY
PROVISIONS, GROUNDS RELIED ON AND RELIEF SOUGHT
5. He relies
on section 9.1 of the Employment Insurance Regulations.
6. He submits
that the Appellant had no insurable hours in relation to the SPA
payment he received from the Employer, within the meaning of
section 9.1 of the Employment Insurance Regulations.
[4] Section 9.1 and 10.1 of the
Employment Insurance Regulations read:
9.1 Where a person's earnings are paid on an
hourly basis, the person is considered to have worked in
insurable employment for the number of hours that the person
actually worked and for which the person was remunerated.
...
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 sum amount by the normal
hourly rate of pay.
(3) Where an insured person is remunerated by the
employer for a non-working day and
(a) works on that
day, the person is deemed to have worked in insurable employment
for the greater of the number of hours that the person actually
worked and the number of hours that the person would normally
have worked on that day; and
(b) does not work
on that day, the person is deemed to have worked in insurable
employment for the number of hours that the person would normally
have worked on that day.
[5] The principal provision of the
C.A.W. - International Collective Agreement at issue is paragraph
387 of Article 10 which reads:
387 Employees who have one or
more years of seniority on the eligibility date will be entitled
to Special Paid Absence (S.P.A.) provided they have worked in the
twenty-five weeks prior to the eligibility date and are actively
at work during the S.P.A. period. There are five periods of
(S.P.A.) during this Collective Agreement:
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ELIGIBILITY DATE
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S.P.A. PERIOD
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November 6, 1999
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Jan. 3, 2000 - July 30,2000
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June 3, 2000
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July 31, 2000 - Feb. 25, 2001
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December 18, 2000
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Feb. 26, 2001 - Oct. 14, 2001
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August 27, 2001
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Oct. 15, 2001- May 19, 2002
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February 25, 2002
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May 20, 2002 - Dec. 22, 2002
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[6] Mr. Foott was laid off in November
2001. He was also entitled to one week of SPA. He was entitled to
take it any time during the SPA period, subject to seniority
rules. During employment he had to take the SPA as time off. If
he had elected to take it before the lay off, it would have been
treated as vacation time under the Employment Insurance
Regulations. Once he was laid off, if he had not elected to
take a lump sum payment of pay during the lay off, the lump sum
was paid to him at the end of the lay off. Mr. Foott did not take
the time off before the lay off. Therefore, he was paid the lump
sum by International.
[7] International and the C.A.W.
treated the lump sum as vacation pay and vacation time for
Employment Insurance purposes and the premiums were withheld and
paid as Employment Insurance premiums. They had done this without
objection for ten years before this occurrence.
[8] On August 7, 2002, a decision in
appeal from a ruling determined that:
There are no insurable hours associated with the
Vacation/Scheduled Paid Absence (SPA) payments for the following
reasons. You did not take the leave and, therefore, there is no
work associated to it.
[9] The Respondent's argument is
that Employment Insurance is paid for an hourly worker like Mr.
Foott pursuant to Regulation 9.1(1) "for the number of hours
that the person actually worked." If Mr. Foott had taken his
SPA as time off, then it would have been a "period of paid
leave" under Regulation 10.1(1) and he would have been
"deemed to have worked in insurable employment" for
forty hours. But, upon lay off, Mr. Foott did not receive his SPA
payment "for a period of paid leave", nor did he
receive it on an hourly basis when he "actually
worked."
[10] According to paragraph 387 of the
Collective Agreement, employees are entitled to SPA where
"employees ...have one or more years of seniority
... provided they have worked in the twenty-five weeks prior
to the eligibility date and are actually at work during the
S.P.A. period." Thus it constitutes remuneration which is
calculated based on the number of hours that Mr. Foott actually
worked and for which he was entitled to remuneration in the form
of SPA, although he was paid SPA at a different time than when he
had earned it. But this is no different in principle than
the usual wage cheque which is paid to an employee after the work
is done or on account of vacation. In Mr. Foott's case, he
was paid SPA for forty hours of wages which he earned by working
at International pursuant to the eligibility requirements set out
in the Collective Agreement. In essence, his hourly earnings were
in fact greater than the nominal hourly rate because of his
entitlement to SPA. But he was paid these extra earnings by a
second cheque at a later date. They were earned by his work done
in a different hourly period which is why his actual hourly
remuneration for the hours he actually worked was greater than
his nominal hourly rate.
[11] For these reasons, the Court finds that
Mr. Foott's SPA remuneration is subject to Employment
Insurance premiums because it is remuneration paid on an hourly
basis for work in insurable employment that Mr. Foot actually
worked. However he was laid off, and once laid off Mr. Foott
could not take his SPA as paid leave nor was it associated with
work because he had been laid off, and had no right to return to
work at International.
[12] For these reasons, the appeal is
dismissed.
Signed at Vancouver, British Columbia, this 22nd day of July
2003.
Beaubier, J.
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