Date: 20010316
Docket: 1999-3894-EI
BETWEEN:
MARJORIE DESCHAMBAULT,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
and
BOARD OF EDUCATION OF THE POTASHVILLE SCHOOL DIVISION NO. 80
OF SASKATCHEWAN,
Intervenor,
AND
Docket: 1999-3895-EI
LORI SUTHERLAND,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
AND
Docket: 1999-3896-EI
VERONICA M. ULMER,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Reasons for Judgment
Porter, D.J.T.C.C.
Introduction
[1]
These appeals were heard on common evidence by consent of the
parties at Regina, Saskatchewan, on July 5, 2000.
[2]
The issue, which is the same in each case, is whether the
Appellants, all support workers employed in schools by the
Potashville School Division No. 80 of Saskatchewan (the
"School Board"), are entitled to benefits under the
Employment Insurance Act (the "EI Act")
for the months of July and August 1998, when the schools were
closed and they performed no services.
[3]
Each of the Appellants was employed by the School Board
throughout 1997 and 1998 as support staff; Deschambault was a
secretary and teacher assistant; Sutherland was a library
assistant and teacher assistant, and Ulmer was a school
secretary.
[4]
The Minister of National Revenue (the "Minister") on
the 25th of June 1999 issued a decision that the employment of
each Appellant from August 18, 1997 to August 24, 1998, that is
from the commencement of the 1997/1998 school year right through
to the commencement of the 1998/1999 school year and in
particular, the months of July and August for 1998, was insurable
employment under the provisions of the EI Act. In doing
so, he sought to rely on section 2, subsection 7(2) and
paragraph 5(1)(a) of the EI Act, as well as
regulation 14(1) of the Employment Insurance Regulations
(the "EI Regulations").
[5]
The Appellants have brought their appeals from that decision to
this Court on the basis that they were "laid off or
separated from that employment" as at June 30, 1998 and
thus suffered an "interruption of earnings", leading
to an eligibility for employment insurance benefits throughout
the period in question, that is to say from the 1st of July 1998
to August 24, 1998 when the school reopened.
[6]
It is common ground between the parties that the Appellants
provided no services during the period in question, when the
schools were closed for what is described in both the Collective
Agreement and the Saskatchewan Education Act as the
"summer vacation period". The simple question to be
answered is whether the Appellants were employed and paid over a
12-month period, "annually", or whether they
were employed and paid for 10 months at a time, "the school
year", and "laid off" or
"separated" from their employment for the summer
vacation period.
[7]
The School Board has intervened in the appeals in support of the
Appellants.
[8]
The Canadian Union of Public Employees (the "Union"),
although not officially intervening in the appeal, represented
the Appellants at the hearing of the appeals and generally
supports their position.
The Law
[9]
The relevant statutory and regulatory provisions read as
follows:
[10] Section 2
of the EI Act defines "interruptions of
earnings" as follows:
""Interruption of earnings" means an
interruption that occurs in the earnings of an insured person at
any time and in any circumstances determined by the
regulations;"
[11]
Subsection 5(1) of the EI Act reads:
"Subject to subsection (2), insurable employment is
(a)
employment in Canada by one or more employers under any express
or implied contract of service or apprenticeship, written or
oral, whether the earnings of the employed person are received
from the employer or some other person and whether the earnings
are calculated by time or by the piece or partly by time and
partly by the piece or otherwise."
[12]
Subsection 7(2) reads as follows:
"An insured person, other than a new entrant or a
re-entrant to the labour force, qualifies if the person
(a)
has had an interruption of earnings from employment;
..."
[13]
Subsection 14(1) of the EI Regulations reads:
"Subject to subsections (2) to (7), an interruption of
earnings occurs where, following a period of employment with an
employer, an insured person is laid off or separated from
that employment and has a period of seven or more
consecutive days during which no work is performed for that
employer and in respect of which no earnings that arise
from that employment, other than earnings described in subsection
36(13), are payable or allocated." (emphasis
added)
[14] The
Education Act of Saskatchewan defines "school
year" as:
"the period commencing on July 1 in one calendar year
and ending on June 30 in the next calendar year;"
[15]
Subsections 163(2) and 163(3) of the Education Act read as
follows:
"(2) A school year consists of 200 school days, but in
any year the minister may, by order, determine for that year any
lesser number of school days that the minister considers
advisable.
(3) Subject to subsection (1) and (2), the board of Education
... shall determine:
(a)
the opening and closing dates of the schools; and
(b)
the general schedule of operation for the school year and for any
term, semester or other period of the school year, as the case
may be."
[16] The
Labour Standards Act defines "lay-off" as
follows:
"... the temporary termination by an employer of the
services of an employee for a period exceeding six consecutive
days."
[17] Section
43 of the Labour Standards Act reads as follows:
"43.
Except for just cause other than shortage of work, no employer
shall discharge or lay off an employee who has been in his
service for at least three continuous months without giving that
employee at least:
(a)
one week's written notice, if his period of employment is
less than one year;
(b)
two weeks' written notice, if his period of employment is
one year or more but less than three years;
(c)
four weeks' written notice, if his period of employment is
three years or more but less than five years;
(d)
six weeks' written notice, if his period of employment is
five years or more but less than 10 years;
(e)
eight weeks' written notice, if his period of employment is
10 years or more."
[18] It can be
seen that "interruption of earnings" is statutorily
defined in subsection 2(1) of the EI Act as meaning
an interruption that occurs in the earnings "at any time
and in any circumstances determined by the
Regulations". Those two propositions are
conjunct, that is, an interruption in the earnings occurring
"at any time and in any circumstances" as determined
by the Regulations. Both the time and circumstances are to
be determined by reference to the Regulations. That is
imperative as if the two were disjunctive, different
considerations might apply.
[19] The
Regulation in question is 14(1) of the General
Regulations. The issue in this case has to be resolved within
the context of the following words in this Regulation:
•
"Laid off or separated" and
•
"in respect of which no earnings that arise in that
employment are payable or allocated."
[20] Thus, the
question becomes first whether the Appellants were "laid
off" or "separated" and whether any of their
salary or earnings is "payable" or
"allocated" in respect of that lay-off or separation.
At the outset, I might say that the words "laid off"
or "separated" seem to me to have different
connotations.
[21] I would
also hasten to add that this is a different situation from that
of teachers, who now have special provisions which apply to their
two-month non-teaching period in the summer. I am
mindful of the case of Re Petts and the Alberta Teachers
Association (1975), 6 N.R. 356, which was cited with approval
by McIntyre J. in Dick v. U.I.C. (1980), 32 N.R. 552. I
will refer to this case later.
[22] I am also
very mindful of the decision of my brother Judge O'Connor
T.C.J. in the recent case of Donnawell v. M.N.R., [1999]
T.C.J. 851, Court File #98-724(UI), where a similar situation
presented itself before him. I am indebted to him for his
comprehensive reasoning in that case and I have approached the
case before me on the basis of the desirability of having
consistent decisions in the same Court. Nevertheless, there are
some factual differences to which I must apply my mind, not the
least of which is the wording of the collective agreement in the
case before me, which has significant differences from that in
the case before Judge O'Connor.
The Facts
[23] The
Minister, in coming to his decision, was said in the Replies to
the Notices of Appeal, to have relied upon the following
assumptions of fact:
"(a) the
Payor is responsible for and operates all schools within its
boundaries;
(b)
the Appellant (Marjorie Deschambault) was hired by the Payor as a
School Secretary and Teacher Assistant;
(b)
the Appellant (Lori Sutherland) was hired by the Payor as a
Library Assistant and Teacher Assistant;
(b)
the Appellant (Veronica M. Ulmer) was hired by the Payor as a
School Secretary;
(c)
school years (hereinafter "the School Year") for
schools operated by the Payor are usually as follows :
(i)
August 25, 1997 to June 29, 1998, or
(ii)
August 24, 1998 to June 30, 1999;
(d)
the School Year generally consists of 200 school days;
(e)
neither the Payor nor the Appellant dispute that the Appellant
was employed by the Payor under a contract of service while
performing services;
(f)
the Appellant was a member of the Canadian Union of Public
Employees;
(g)
the terms and conditions of the Appellant's employment with
the Payor was governed by a Collective Agreement;
(h)
the Appellant worked 37.5 hours per week;
(i)
the Appellant was paid an annual salary which was paid on a
10-month basis, the months excluded being July and
August;
(j)
the Appellant received vacation pay on each paycheque;
(k)
the Appellant was covered in respect of the benefits plans
provided by the Payor, including life insurance, accidental death
and dismemberment insurance and long-term disability
insurance during the Period;
(l)
the Appellant retained her accumulated sick leave credits,
seniority, and other benefits during the Period;
(m) the
Appellant participated in a Municipal Employee Pension Plan
during the Period;
(n)
the Municipal Employee Pension Plan provides termination benefits
upon termination of employment;
(o)
the Appellant did not notify the Municipal Employee Pension Plan
of a termination of employment during the Period or otherwise
claim and entitlement to termination benefits in respect of the
Period;
(p)
the Payor did not notify the Appellant that her employment with
them was being terminated during the Period;
(q)
the Appellant did not notify the Payor that she was terminating
her employment with them during the Period;
(r)
the Appellant's contract of service with the Payor was not
terminated during the Period;
(s)
the Appellant was not laid-off or otherwise separated from
employment by the Payor during the Period;
(t)
the Appellant was in receipt of the usual remuneration from
employment by the Payor during the Period;
(u)
there was no interruption of earnings from employment during the
Period;
(v)
the Payor advised the Appellant that the School Year would
commence on August 24, 1998;
(w) the
Appellant did not have to reapply to the Payor for a job during
the Period."
[24] The facts
are not greatly disputed by the Appellants, save for the
essential issues. Thus, they agreed with items (a) to (h), (j) to
(m), (o), (v) and (w).
[25] The
Appellants disagreed with items (i), (n) and (p) to (u).
[26] Evidence
was given by Veronica Ulmer, a teaching assistant with the School
Board. Her evidence was said to be representative of the three
Appellants. The only difference in their respective situations
was in the tasks they performed. Basically they worked from
August 25, 1997, when school opened, to June 29, 1998 when it
closed. They did not work again until August 24, 1998. They
claim that they had an interruption of earnings as at
June 29 which lasted until August 24, 1998 as they did not
work and were not paid in respect of that period. In effect, they
claimed to have been laid off or separated from their employment
during that period.
[27] Veronica
Ulmer entered into evidence the Collective Agreement
(Exhibit A-1) between the Union and the School Board which
governed the employment of the Appellants. She also entered a
Seniority List showing the seniority status of the three
Appellants with the School Board (Exhibit A-2), as
well as a letter from Revenue Canada dated July 29, 1999 signed
on behalf of K. Wolchuk, Chief of Appeals for the Minister
of National Revenue (Exhibit A-4). This letter set out
the basis upon which the decisions had been made by the Minister.
It reads as follows:
"1.
According to the union contract, the workers receive an annual
salary which is paid on a ten month basis. This indicates that
the workers earn income through out the year (annually) but is
only paid ten times.
2.
According to the union contract, an employee must be laid off in
writing. The workers did not receive a written lay off notice,
only ROE's.
3.
According to the union contract, the workers participates
[sic] in numerous benefits plans. Some of these plans are
funded solely by the payor. These plans continue through the
summer.
4.
According to the union contract, vacation pay is paid on each pay
cheque. The workers last day of work was June 27.
5.
According to the union contract, recalls shall be automatic
following the school vacations periods unless the Board has
served a termination or indefinite lay off notice pursuant to
Section 43 of The Labour Standards Act.
6.
Employee benefits carry on through the summer even though the
employees are not working.
7.
The workers were guaranteed a job when they returned in the
fall."
[28] This
letter is clearly an amplification of the reasons given in the
initial decision. I note in particular that it states that the
Union contract specifies the worker shall receive an annual
salary, which is paid on a 10-month basis. I see no such
reference to this in the union contract. It contained only a
vaguely worded Schedule "A" and Schedule
"B" which, in my view, have no meaning of and in
themselves and they have no context within the terms of the
contract. Certain classification wage rates are set out. The
three classified positions carried a requirement of 7.5 hours
work per day throughout the year, designated as "school
year". The evidence is clear that whatever the designated
salary was, it was paid by 10 monthly instalments. No payments
were made at the end of July or August. The question, thus, is
whether it was a 12-month salary payable over
10 months, or whether it was a 10-month salary payable
over 10 months in respect of those 10 months.
[29] Various
Articles of the Collective Agreement are relevant to the
issues.
"PREAMBLE
The purpose of this Agreement is:
a)
To maintain and improve harmonious relations and settled
conditions of employment between the Board and the Union;
b)
To recognize the mutual value of joint discussions and
negotiations;
c)
To encourage efficiency in operation;
d)
To promote an amicable method of settling differences or
grievances which may arise with respect to matters covered by
this Agreement; and
e)
To identify the negotiated terms and conditions of
employment.
ARTICLE 4 - SENIORITY
4.1
Definition
a)
Seniority shall be determined on the basis of continuous service
that an employee has accumulated, calculated on the basis of
actual time worked, commencing from the first day of
uninterrupted service with the Board.
b)
The normal interruptions during the scheduled school vacation
period shall not constitute a break in service.
ARTICLE 5 - LAY OFF, RECALL, VACANCIES AND
PROBATION
5.1
Automatic Lay off
Employees who work on the basis of the school year shall be
deemed to be laid off for the summer vacation period. Recall
following the school vacation periods shall be automatic unless
the Board has served a termination or indefinite lay off notice
pursuant to Section 43 of The Labour Standards
Act. This Article will service as notice of lay-off and
recall for the school vacation periods during the term of this
Agreement.
5.3
Recall
...
b)
Pursuant to Article 4.2 entitled "Seniority Lost",
during a lay off, employee shall maintain, but not
accrue, all previously earned benefits and rates of pay.
(emphasis added)
ARTICLE 6 - ANNUAL VACATION AND STATUTORY
HOLIDAYS
6.1
Entitlement
a)
Payment
It is understood and agreed that the wages of school year
employees are inclusive of all monies owing with respect to
vacation pay and statutory holiday pay in accordance with The
Labour Standards Act.
...
ARTICLE 7 - LEAVES OF ABSENCE
7.1
General Leave
Subject to operational feasibility and where the employee has
provided good and sufficient reasons for a leave, the Board shall
grant a leave of absence without pay and without loss or accrual
of seniority to a maximum of one (1) school year or
such other period of time as maybe mutually agreed to between the
employee and the Board. The request will be in writing at least
fifteen (15) working days in advance of the date of the requested
leave.
ARTICLE 9 - TERM OF AGREEMENT
9.1
Duration
This Agreement shall be effective January 1st, 1995, and shall
remain in force until December 31, 1997, and thereafter from year
to year, unless written notice is given as provided in Article
9.2 entitled "Written Notice."
SCHEDULE "A"
FULL TIME EQUIVALENT
HOURS OF WORK BY CLASSIFICATION
Classification
Hours of Work per Day
Year*
Library
Assistant
7.5
School
Teacher
Assistant
7.5
School
School
Secretary
7.5
School
* includes paid leave during four (4) teacher
inservice days"
[30] The
provisions in Article 4.1(a) and (b) ensure that the
interruptions in work service which occur during school vacations
each year during the period of question (June 30th to August
24th) do not constitute a break in service for the purpose of
calculating seniority. Without this clause, which is limited to
the question of seniority, presumably these interruptions would
create a break of service. However, it was also clear from the
evidence that no hours were counted towards seniority in the
course of such interruptions. In other words, it did not affect
the continuity of service for the purpose of calculating the
seniority, but it also did not contribute anything to the
calculation of hours for seniority purposes. This is confirmed
again in Article 5.3(b).
[31] Article
7.1 indicates that even during a leave of absence for a period of
up to one year without pay, which would clearly be an
interruption of earnings, there would be no loss of or accrual of
seniority. Thus, the fact that there is no loss of seniority with
respect to the summer period of non service, is not in any way
conclusive of there being no interruption of earnings.
[32] Ms. Ulmer
said that she considered herself laid off during the summer
weeks. She received a record of employment under the EI
Act from the School Board. She actively looked for other
work and applied for employment insurance benefits. In
cross-examination, she said the record of employment came
automatically with her last pay cheque at the end of June. It was
not something for which she asked. It was clearly issued in
accordance with Article 5.1 of the Agreement. She also said
that she received vacation pay as part of her monthly cheques.
The Municipal Benefits Plan was paid by the employer and benefits
already accrued thereunder remained in effect during the school
breaks, including the summer period in question.
[33] Evidence
was also given by Michael Keith, a national representative of the
Canadian Union of Public Employees. He said he was aware that the
School Board employees claimed employment insurance benefits
over summer breaks. He said that he was the chief negotiator for
the union when this collective agreement was established. His
understanding was that the employees only work throughout the
academic year. He said that with respect to the Municipal
Employees Pension Plan, the employees only receive 20
months' credit over a two-year period, but that the
Plan still ran and did not terminate during the summer breaks.
Again, there was no accrual of benefits but no loss of benefits
during that period. A copy of the plan was filed as
Exhibit A-5. Quite frankly, I did not find the
evidence in relation to the Municipal Plan particularly helpful
as it depended upon its own specific terms. However, the witness
did say that prior to the signing of the Collective Agreement,
these categories of employees were paid over a 10-month
period. The implication of his evidence was that the Collective
Agreement did not purport to change the prior arrangement, but
rather sought to support and extend it.
[34] That
really was the sum total of the evidence put before me.
Appellants' Submissions
[35] The basic
position of the Appellants is premised upon Article 5.1 of the
Collective Agreement, which provides for the automatic
lay-off of the Appellants (on the 29th of June 1998) and
the automatic recall on the 24th of August 1998. The question
arises as to whether that was a genuine lay-off and recall in
accordance with the Labour Standards Act of Saskatchewan
or whether it was just a fiction. For what it is worth, other
benefits remained in existence throughout the summer break, such
as seniority, insurance, sick leave and pension, although it is
clear that none actually accrued during that period. Thus, they
were maintained but did not accrue. They were not terminated or
cancelled, but they did not increase. Further, there appears to
have been some life insurance in place that was maintained over
that period of time.
[36] The
Union, on behalf of the Appellants, made the argument that there
was no work for these people during the period in question and
that the situation is thus the same as any other occupation where
lay-offs occur, whether as a seasonal lay-off, on account of lack
of work, or weather or for any other good reason. It likens the
situation to a slow-down at General Motors. I would liken it more
to a situation where a plant or factory closes down for a period
annually for maintenance or retooling purposes. The Union argues
that these are examples of ongoing employment where the employee
suffers an interruption of earnings and that the situation at
hand is the same.
[37] The Union
also advanced the proposition that the wording in
Article 5.1 of the Collective Agreement was an official
lay-off notice and an official recall notice as agreed between
the bargaining unit and the employer. They agreed to do it that
way rather than encumber the employer with having to do it each
time individually in accordance with the Labour Standards
Act. However, they say the effect and the intent were the
same.
[38] Lastly,
the Appellants argued that they were free to seek other
employment during the period in question before being called back
and that, they say, is not consistent with being in employment
throughout that period with the School Board. They could
not, they say, have two employers at the same time. In point of
fact, they did not find other employment during that period of
time, but their submission is that they were entitled to do so if
it had been available.
[39] They also
rely on the fact that a record of employment was issued to each
of them by the School Board prior to the 29th of June.
School Board Submissions
[40] I am
indebted to counsel for the School Board who filed a
comprehensive and helpful Brief on behalf of the Intervenor in
support of the Appellants.
[41] The Brief
traces the responsibility of school boards in the Province of
Saskatchewan to the Education Act and also provided a copy
of the teachers' Collective Agreement for the calendar year
1997. It is noteworthy in that agreement that the salary
provisions referred to an "annual rate of basic
salary". It is also noteworthy that the provisions of the
Education Act relating to teachers do not relate to
workers such as the Appellants. On the other hand, the Labour
Standards Act does apply to these workers, but not to
teachers. Thus, clearly there is a distinction to be drawn
between teachers and these other workers in the provincial
statutes governing terms of work.
[42] The
School Board stresses that the Collective Agreement with the
Appellants dealt with the "school year" as opposed to
"annually" or "year round".
[43] The Board
points to Article 6.1 relating to annual vacations and statutory
holidays. It says that vacation and statutory holiday pay is
included in the wages specified in Schedule "A" to
comply with the Labour Standards Act. The Appellants, it
says, received their annual holiday pay with their monthly wages
because they did not work for a full calendar year. If they had
done so, this would have triggered an entitlement to annual
holidays. Thus, they received the pay instead of time off with
pay.
[44] The Board
also refers to Seniority being maintained but not calculated in
respect of the period in question.
[45] The Board
submitted that the length of notice of lay-off or termination to
be given to employees is prescribed by section 43 of the
Labour Standards Act and that the negotiated provisions in
the Collective Agreement relating to notice, complies with that
section of the Provincial statute.
[46] The Board
argued that both it and the Union recognized the period in the
summer when school was shut down as being a period where there
was no work for certain employees and as being a true lay-off.
They rely on the definition of "lay-off" in
section 2 of the Labour Standards Act as being "the
temporary termination by an employer of the services of an
employee for a period exceeding six consecutive days".
They urge that a temporary termination of services corresponds to
a temporary termination of earnings; however this is not always
so as the case law reveals.
[47] The Board
submitted that there is a difference between scheduling work and
shut down. It makes the point that sometimes there is no work for
a day or two mid-week during the school year when the Appellants
would not be required to work. An example, I suppose, would be
teachers' educational development days. That is a period of
time which is to be distinguished from a shut down between the
last day of school in one school year and the first day of school
in the following year.
[48] The Board
pointed out that there is a difference in the EI Act
between termination of employment and lay-off. They say:
"A permanent contract or continuing contract of
employment does not preclude the fact that there may be periods
of lay-off."
[49] Again,
the Board referred to the difference between the situation of the
Appellants and that of teachers whom it submitted are employed on
a year-round basis. The teachers negotiate with the Board
whether they will receive their annualsalary in 12
instalments or 10, but in either event, it is an annual salary.
The implication is that the Board pays the Appellants only for 10
months rather than an annual salary in 10 monthly
instalments.
[50] The Board
submitted that the effect of "lay-off" in the
employment relationship is generally different to the effect of
"termination". The aspect they have in common is that
there are no services provided by the employee and no earnings
received by the employee. Any aspect of the employment
relationship which continues or survives through the lay-off must
be expressly provided for either by the collective agreement or
the employment contract. Such provisions, and they gave examples,
which preserve continuity of employment for express purposes,
only affect the impact of the lay-off in those express ways.
[51] The Board
made the point on several occasions that the Minister is applying
the same criteria to the word "lay-off" as he would
to a case of "permanent separation", which they
say is not the same.
[52] The Board
cited the case of Baldassi et al. v. Commission CUB 22437,
a decision of Cullen J. sitting as an umpire where he said:
"... but in the context of the Unemployment Insurance
Act, an employee is deemed to have suffered a loss of
employment when he has suffered an interruption in earnings,
whether this happens to coincide or not with a complete and final
severance of the employee/employer relationship in other
contexts."
[53] Finally,
the Board drew a distinction between the situation which existed
in this case and the case of Donnawell (above). It pointed
out that many of the factors are different and argues that it
should be distinguished.
Submissions of the Minister
[54] I am
equally indebted to counsel for the Minister for her full and
comprehensive written submission in support of the Minister. She
correctly outlines the basic question to be answered by the Court
as:
"Whether the Appellants experienced an interruption of
earnings within the meaning of subsection14(1) of the EI
Regulations."
[55] She
identifies three requirements of subsection 14(1) of the EI
Regulations:
(i)
LAY-OFF or SEPARATIONfrom employment;
(ii)
At least seven consecutive days when no work is performed
...; and
(iii) At
least seven consecutive days in which no earnings arising from
that employment are allocated.
[56] She
argued that the Appellants have failed to meet the first and
third requirements, by implication conceding the second
requirement had been met. Clearly, there were more than seven
consecutive days during which no work was performed.
[57] She
maintained that there was no termination of the employer/employee
relationship. She submitted that the Appellants therefore, were
not "laid off" within the meaning of
subsection 14(1) of the EI Regulations. She said that
a lay-off occurs "when the employee/employer
relationship is permanently severed" (my emphasis)
and that Article 5.1 of the Collective Agreement is not a true
lay-off within the meaning of subsection 14(1) of the EI
Regulations. She cites no authority for the proposition that
the employment relationship must be "permanently
severed". Indeed, that proposition is not supported by
the case law and I will return to this point later on in the
Reasons.
[58] She
referred to the Federal Court of Appeal decision in Canada
(Attorney General) v. Enns (1991), 126 N.R. 393, as
authority for the proposition that to establish a
"lay-off" a person must prove not only that his
salary was interrupted, but also that he was laid off from work.
That is not an entirely accurate representation of that case
which, in my reading of it, stands for the proposition that in
order for there to be a lay-off there must be a cessation of
payment of remuneration and a cessation of the provision of
services. Whilst the former might be evidence of a lay-off, it is
not necessarily conclusive. In the case in question a clergyman
continued to provide the same services for little or no further
remuneration. The Court held that his contract continued in
effect. It said:
"... He was expected by the congregation to continue to
do exactly what he had done while being paid and he, in fact, did
precisely that."
I would point out that the circumstances in the Enns
case (above) were somewhat unique and are not in any way the same
as those in the case at bar.
[59] Counsel
for the Minister also argued that "lack of salary alone was
inconclusive". I have no difficulty with the submission
that non-payment of salary is just one of two aspects which must
be considered pursuant to the Enns case (above).
[60] She
maintained that lack of services alone was inconclusive. She
referred to the case of Canada (Attorney General) v.
Verrault (1988), 86 N.R. 389 (F.C.A.), which is
really the other side of the coin from the situation in
Enns. In that case, the employees were shut out from their
employment when the plant closed on July 1, 1994. They were each
given a cheque for their salary and vacation pay to cover the
next two months and told that they would be dismissed at the end
of the two-month period. Unemployment benefits were claimed
by each employee whilst they were on leave over that
two-month period. Pratte J. said, in dealing with the
finding of the umpire that the employment had ended when the
plant closed rather than at the end of the two-month leave
period:
"... the Umpire himself made an error of law as it seems
quite certain that the parties to a contract of employment can
legally agree to extend the contract for a period in which the
employee will not be required to do any work."
The Court thus held that the employment did not end until two
months after the closure. Clearly, there was payment of full
remuneration during the two-month period in this case, but
no requirement to work, that is, both criteria were not in place.
The reasoning in this case would imply that in the same way as
parties to a contract of employment can legally agree to extend
it, so to they must be able to agree to interrupt it or terminate
it on a temporary basis.
[61] Counsel
compared the calculation at bar to Maternity and Adoption Leaves
of absence. I agree with her submissions that there is a
uniqueness to these situations. They do, however, stand for the
proposition that a contract of employment can in certain
circumstances, either statutorily or by contract, be interrupted
or terminated on a temporary basis.
[62] Counsel
argued that the Collective Agreement contemplated two different
types of lay-offs, that is a "deemed lay-off" and an
"indefinite lay-off". Without authority and support,
she maintained that before an employment relationship can be
terminated, the Appellants would have to be served with an
indefinite lay-off notice. For the termination to be permanent or
final, I would agree, but I see no need for such in the case of a
temporary termination or interruption of a contract in the
circumstances of the case at hand. The provisions of the
Collective Agreement are said to comply with the written
requirements of the Labour Standards Act and were included
expressly, in order to do so.
[63] Counsel
took issue with the written submission on behalf of the School
Board, which pointed out the factual differences between the case
at bar and those that existed in the Donnawell case
(above). She submitted that the substance not the form should
govern this determination and that the employment relationship is
the same as that which existed in Donnawell. With respect,
I disagree and will deal with the differences as I see them at a
later stage in these reasons. She took issue with the parties for
endeavouring to "deem" an employee to be laid off in
the contract. I see no reason why the parties should not do so in
order to govern the relationship between themselves. I agree with
counsel that it is a question of fact, but I consider it one also
of law, whether such a "deemed lay-off" amounts to a
"lay-off" as the term is used in subsection 14(1) of
the EI Regulations.
[64] Counsel,
such as reference by the School Board to General Motors,
maintained that other employment relationships were irrelevant
and that no evidence was produced in the case at bar to support
the arguments advanced by the School Board in this respect. The
Court is entitled to take judicial notice of the many seasonal
occupations which pass before it in numerous reported cases, not
the least typical of which at this time would be the fishing
cases from the Maritime Provinces.
[65] Counsel
also submitted that in the circumstances of an industry
slow-down, employees would have to receive a lay-off notice and
they would have no automatic right of recall. I am not aware of
any basis for such a submission, as she cited nothing in support
of it. She did refer to the example of the oil industry and the
fact that there is no guarantee that an individual once laid off
will be rehired. She indicated that they must reapply for any
open position and that they lose their benefits. I consider this
nothing more than an example of a situation which would have to
be weighed in light of its own particular facts in order to
decide whether those employees had been laid off or suffered an
interruption of earnings. These factors are all matters which
would have to be weighed by a Court in any particular
situation.
[66] Counsel
submitted that the purpose of the employment insurance scheme is
to insure individuals against the "unforeseen" and
"unknown" risks of losing their job and argues that
this is not the situation at hand. That, of course, ignores the
seasonal nature of many of the occupations across this country
where it is well known by the parties ahead of time that there
will be a lay-off period each year.
[67] Counsel
dealt with the difference between the words
"termination" and "lay-off" and referred
to the School Board assertion that the Minister is confused
between the concept of "termination of employment"
and "lay-off". Counsel noted the definition of
"lay-off" in Black's Law Dictionary, which she
cites:
"A termination of employment at the will of the
employer. Such may be temporary (e.g. caused by seasonal or
adverse economic conditions) or permanent."
She said that termination of employment means termination of
the employer/employee relationship and maintained that there had
not been a termination of the relationship in the case at hand as
there had been no lay-off. With respect, I think she overlooks
other definitions of the word "lay-off" and also that
a termination may be temporary, indefinite or permanent as
indicated by Heald J. in the case of Attorney General of
Canada v. C. Gray, [1978] 1 F.C. 808 F.C.A., a matter to
which I will refer later.
[68] Counsel
further submitted that the true nature of summer period is a
vacation, saying that a summer period is not a lay-off period,
but rather a vacation period. She relies upon subsection 161(1)
of the Education Act. The difficulty she has in asserting
that the period is a vacation for all persons governed by the
Education Act is that the vacation entitlements of the
Appellants are said to be governed by the Collective Agreement
and the Labour Standards Act, not the Education
Act.
[69] She also
relies on the decision of O'Connor T.C.J. in the
Donnawell case (above) that the summer-break period
is a vacation period not a lay-off period. I will deal with that
submission later on in these reasons. When counsel referred to
Article 4.1(b) of the Collective Agreement, it was clear to
me that this provision refers to an interruption in the
employment during the "scheduled school vacation
period" as not constituting a break in service for the
purpose of maintaining seniority, which would otherwise be
the case. In other words, without such a clause, such an
interruption in the employment as occurs during the summer
vacation period could have led to a loss of seniority as it would
have created a lack of continuous service.
[70] Counsel
submitted that the Appellants had each been paid on the basis of
an annual salary. That was certainly the case in Donnawell
(above) and was also the situation of the teacher in the
Petts case (above). However, that is the salient issue in
the case at hand. There is nothing, in my view, in the Collective
Agreement which specifically supports this proposition. Counsel
submitted that the Collective Agreement is silent on the point
and that there is no evidence given by Veronica Ulmer
specifically which would refute the assumption of fact relied
upon by the Minister. With respect, there is. The wording of the
Collective Agreement itself, that the employees are deemed to be
laid off and recalled, following the school vacation period is
evidence with which the Court must deal. Further the evidence of
the record of employment issued by the School Board to the
Appellants is evidence that the School Board did not consider
that it was paying any salary with respect to these weeks in
question. There is nothing in the contract to say that it was an
"annual salary" payable over 10 months as was the
case in Donnawell (above).
[71] Counsel
also submitted that the continuation of seniority, sick leave
credits or employee benefits plans over the summer months, which
thus applies on an annual basis, lead to an implication that the
term "wages" also applies on an annual basis. The
difficulty with this is that those benefits did not continue to
accrue during the summer period. They were not lost, but did not
accrue. They were in a state of suspension pending the
anticipated recall of the Appellants. It would be a huge jump to
say that putting the benefits into a state of suspension when
they were no longer accruing, somehow means that the remuneration
was payable on an annual basis as an annual salary.
[72] In
dealing with the question of vacation pay, counsel conceded that
the Appellants received their holiday pay along with their
regular monthly pay throughout the rest of the year, but
indicated that the Collective Agreement is silent on this point.
In fact, the Collective Agreement is not silent on the point as
it says they are paid in accordance with the Labour Standards
Act.
[73] Finally,
counsel for the Minister submitted that because benefits were
still available to the Appellants under section 8.2 of the
Collective Agreement during the summer period, these should be
considered as earnings. Again, I note that the vast majority of
benefits were simply placed into a period of suspension over the
period in question. This was true of both seniority and pension
benefits, which did not continue to accrue. Life insurance, it
would appear, remained in effect during the period in question,
and it is certainly appropriate for the Court to consider whether
or not this amounted to earnings within the meaning of subsection
14.1 of the EI Regulations. The maintenance of benefits,
during a period of suspension of their accrual, could not, in my
view, be considered as earnings. It might well be a different
story if all of those benefits had continued to accrue.
[74] That is a
summary of the arguments presented by counsel for the
Minister.
Case Law
[75] It seems
to me that in order to arrive at a proper conclusion as to
whether there was an "interruption of earnings" over
the summer period in this case, consideration has to be given to
the meanings properly attributable to a number of different
words.
[76] First,
the words "interruption of earnings" has to be
interpreted within the context of subsection 14.1 of the EI
General Regulations. Its statutory definition is defined as
"at any time and in any circumstances" determined by
the Regulations. "Time" and
"circumstances" are conjunct and thus for an
interruption of earnings within the context of the EI Act
to lead to the payment of benefits, it must be an interruption of
earnings that falls within the ambit of this Regulation.
Subsection 14.1 is the relevant Regulation, both as to the
time and the circumstances relative to the case in question.
[77]
Subsection 14.1 says that an interruption of earnings occurs
where, following a period of employment with an employer, which
there clearly was in this case, an insured person is:
(i)
(a)
laid-off; or
(b)
separated
from that employment; and
(ii)
there be a period of 7 or more consecutive days during which no
work is performed for that employer; and
(ii)
there be no earnings from that employment that are payable or
allocated to that period (of 7 or more consecutive days).
[78] Thus,
consideration must first be given to the meaning of the words
"laid-off" and "separated" and whether or
not they have the same meaning and if not, how they differ.
[79]
Consideration of the word "lay-off" inevitably leads
to a consideration of the word "termination of
employment" as it is used in the case law.
[80] Then
consideration has to be given to the meaning of the word
"earnings" and whether or not they are allocated or
payable in respect of the 7 or more day period following the
lay-off or separation from the employment.
[81] There are
many cases to which I have been referred by counsel to assist me
with the meaning of these words. It might be useful to start with
the words of Chief Justice Jacket in the Petts case
(above) when after holding that a regulation made with respect to
non-payment of unemployment insurance benefits to teachers
in non-teaching periods was not valid, said:
"Any regret that I might otherwise have had because I
have reached that conclusion is eliminated by the fact that I
have not been able to conceive of any problem in connection with
the non-teaching period of teachers that is not adequately
dealt with by section 2(1)(n) and section 21(2). Whether a
teacher receives 1/12 of his annual salary at the end of
each month of the year, 1/10 at the end of each of ten months of
year, or as in Alberta, 1/12 at the end of each of nine months
and 3/12 at the end of a tenth month, if his contract of
service continues throughout the year, there has been no
"lay-off" or "separation from ...
employment" giving rise to an "... interruption
... in ... earnings" and he is receiving his
"usual remuneration"; and I do not, therefore,
conceive of the circumstances in which Regulation 158, or
some similar provision, is necessary to avoid payment of
unemployment benefits to teachers who are not out of work in the
ordinary acceptation of that expression."
I have underlined the words "annual salary"
upon which this decision is clearly predicated. There is no doubt
that if the salary paid to the Appellants in the case at bar is
an "annual salary" payable over 10 months, as
was also the case in Donnawell (above), then there is not
an interruption of earnings. If, however, it is not an
"annual salary", the situation may well be
different.
[82] In the
case of Canada (Attorney General) v. Hartmann, F.C.A.
(1989) 102 N.R. 386, Stone, J.A. dealt with the
question of the meaning to be attributed to "interruption
of earnings". In that case, the umpire had held a reduction
of hours of work amounted to a constructive lay-off. Stone,
J.A. said this:
"The second question is whether the respondent, in any
event, suffered a "lay-off" or was "separated
from .... employment" within the meaning of the Act.
In my opinion, she did not."
and
"Section 2(1)(n) differentiates between the three
different possibilities for the occurrence of an
"interruption of earnings" that I have above
enumerated. In my opinion, in order for the present situation to
fall within that definition the Commission would have had to
treat a reduction of hours of work of the magnitude here involved
as a "prescribed reduction in earnings", a step it
has not taken.
While dictionary definitions and the interpretations of
courts, arbitrators and text-writers might be most helpful
in assisting in the construction of the word "layoff"
at large or in more limited circumstances, I do not think they
can assist in the circumstances of this case where we are faced
with the task of constructing that word in a particular statutory
context. When that context is fully appreciated it may be seen
that by utilizing the word "layoff" and the phrase
"separation from ... employment" in the
definition of "interruption of earnings", Parliament
did not intend that either should embrace a reduction in working
hours such as here occurred. Such an eventuality was specifically
foreseen and provided for when Parliament, within the framework
of that definition, expressly clothed the Commission with
authority of prescribing the extent of a reduction of earnings,
resulting from a reduction of hours of work, sufficient to
constitute an "interruption of earnings". In
providing the same definition for an "interruption of
earnings" brought about by a "layoff" or by a
"separation from ... employment", it is evident
that Parliament did not intend that a reduction of hours of work
and consequent reduction of earnings should also amount to either
a "layoff" or a "separation from ...
employment", whether actual or constructive."
I note, also, the footnote to that decision where the learned
Justice refers to the Concise Oxford Dictionary of the term
"layoff" as being, inter alia:
"discharge (temporarily) owing to shortage of work
... (period of) such temporary discharge, time of reduced
activity."
[83] The
Supreme Court of Canada dealt with a similar situation in the
case of Dick and Others v. The Unemployment Insurance
Commission (1980), 32 N.R. 552. The issue was
whether a teacher who took maternity leave in March 1976 could
claim maternity benefits under the Unemployment Insurance
Act for the months of July and August following her cessation
of work. McIntyre, J. cited the Petts case (above) with
approval. The question in issue was whether the employment
contract of the Applicant had come to an end in March 1976. The
Minister in that case argued that the employment continued to
exist after March and that the lump sum the Appellant received
was attributable to July and August. The Court agreed with the
Court of Appeal that if the contract of employment had
"terminated" when she left work in March 1976, the
payment made in the adjustment of her salary could not have been
applied to the following months of July and August. The Court of
Appeal, however, had decided that the contract of employment was
not "terminated", even though it was clear that there
was a separation from employment. It was this proposition that
the Supreme Court went on to examine. McIntyre, J. said this:
"As the Court of Appeal said, if the contract of
employment had terminated when she left work in March of 1976,
the payment made in the adjustment of her salary could not have
been applied to the months of July and August. It would have been
applied as provided in the employment agreement to the part of
the year already taught. The court also was of the view, however,
that since the contract of employment was not terminated -
even though it is clear that there was a separation from
employment - the adjustment monies were properly
attributable to July and August. It is this last proposition
which must be examined.
Article 2 of the employment agreement deals with this point.
It provides that the teacher's salary will be paid in
twelve equal monthly installments. It provides, as well,
that 200 teaching days shall be the total number of days taught
and it is a matter of common knowledge of which courts can take
notice, that those days fall within the months of September to
June, so that no teaching duties are imposed upon teachers during
the months of July and August. While the contract of employment
was not brought to an end when the appellant left her work on the
26th of March 1976, she having sought only a leave of absence,
there was a separation from employment and, in my view, there was
within the meaning of Article 2 of the employment contract a
withdrawal by the appellant from the service during her year of
service and before its completion.Therefore the adjustment
provisions of Article 2 were brought into play and the appellant
was paid a sum of money which had the effect of paying her in
full for services rendered up to the date of her withdrawal of
service. She received, when the sum of $1,878.07 was added to
what she had already received, that portion only of her annual
salary which equalled the portion of the school year which she
had taught. This is in complete accordance with the agreement
which provides that these monies will be applied to the part of
the year taught and this provision is also in accordance with
Regulation 173(3) which provides: (emphasis added)
Wages or salary payable to a claim in respect of the
performance of services shall be allocated to the period in which
the services were performed.
I cannot find that in receiving this sum she received anything
in respect of July and August.
The appellant contended that the teachers' salary was an
annual salary, paid in twelve equal monthly installments. The
salary, however, was earned by the performance of 200 days
teaching during the months of September to June inclusive. It was
said that the payment of the salary in twelve monthly
installments, providing for the receipt of funds in July and
August was merely a device whereby teachers, who earned their
annual salary by the performance of services in the other ten
months of the year, would receive monthly payments in July and
August for convenience in their personal budgeting. Whatever the
reason for the division into twelve installments, in the case of
a teacher terminating employment before the completion of the
year, the application of the adjustment provisions of the
employment contract will do no more than pay the teacher in full
for the period taught, whether the salary for a full year's
services is paid in ten or twelve installments and whether the
contract of employment is abrogated or preserved in existence for
future years." (emphasis added)
[84] I note
from this case, first, that the Court might take judicial notice
that the 200 teaching days provided for in the contract fall
within the period of September to June so that there are no
duties imposed upon teachers in the months of July and
August.
[85] Secondly,
I note the major point made by McIntyre, J. of the fact of the
contract of employment not being brought to an end in March but
there still being a "separation from employment".
This indicates to me that the bar over which one must go to reach
a "separation from employment" is considerably
lower than that required for a "lay-off" and
can be in existence despite the continued existence of the
contract of employment. McIntyre, J. went on in the same Judgment
to say:
"... Even though the contract had not been
terminated, the appellant had clearly been separated from
her employment and this fact was recognized by her employer
in making the adjustment payment." (emphasis mine)
Again, McIntyre, J. makes the point that there is a
distinction to be drawn between the "ongoing contract of
employment", the "termination of services" and
"separation from employment".
[86] The
Federal Court of Appeal dealt with the subject of
"interruption of earnings" in the case of Enns
above. As has already been seen, this case dealt with the
clergyman who whilst not continuing to be paid, was continuing to
provide the same services to his congregation. The Court was of
the view that for there to be a "lay-off", the
Applicant would have to both not be paid and to have
ceased to provide his services. Thus it follows in the case
before me, and this is clear, if (and I emphasize
"if"), despite there being no services being provided
over the summer period, the salary is an annual salary payable
simply over 10 months, there can be no lay-off and thus no
interruption of earnings.
[87] The
Verrault case (above) clearly stands for the proposition
that the parties can extend their contract of employment despite
there being no services provided. Any remuneration attributable
to such extended period would clearly lead to a decision that
there was no "lay-off" and thus no
"interruption of earnings" until the end of that
period. By implication, the parties are free to agree that there
are no earnings attributable to a period when there are no
services being provided.
[88] In the
case of A.G. v. Gray (above), the Federal Court of Appeal
visited the term "lay-off" in the context of
severance pay within the Public and Service Employment
Act, not the EI Act. The case was somewhat
unique and came to be decided on its own particular
circumstances. The worker in that case worked for the Post Office
Department and was informed as a result of a strike by other
employees that there was no work for him and he would not be
paid. He collected unemployment insurance benefits for some five
weeks, but also claimed severance pay. The Court dealt with the
meaning of the word "lay-off" within the context of
the collective agreement, which fell under the heading
"Severance Pay". In the circumstances that
existed in that case, the Court found that the words were
clearly used in a context of the permanent ending of the
employment. The Court, however, was open to the proposition that
lay-off had several meanings and could involve a temporary,
prolonged or permanent separation from employment. Pratte, J.
said this:
"The expression ‘lay-off', in common
parlance, does not necessarily imply a termination of employment.
However, what is here in issue is not the usual or even the
dictionary meaning of the expression but its meaning as used in
the collective agreement." (emphasis mine)
and
"Therefore, in my opinion, when they used the expression
‘lay-off' in the collective agreement, one is
entitled to presume, in the absence of any indication of a
contrary intention, that they intended to refer to a termination
of employment."
[89] Heald, J.
in the same case said this:
"The generally accepted definition of
"lay-off" when used as a labour term is:
"Temporary, prolonged, or final separation from
employment as a result of a lack of work".
and
"Lay-off" as used in article 30, must be
considered in the context of the collective agreement as a whole,
and more particularly having regard to the context of the article
in the agreement of which it forms part."
[90] It was
decided on the facts of that particular case, that the word
"lay-off", as it was used in Article 30 of the
collective agreement, referred to a final separation from
employment. However, it was made perfectly clear by the Court
that such was not necessarily the general meaning to be attached
to that word.
[91] Lastly, I
come to the case of Donnawell (above). I am mindful of the
need for consistency in decisions in the same Court. However, it
strikes me that although the question was the same in that case
as the one before me, in the case at bar, the facts were
significantly different. The question was again whether the
employee, a member of the support staff employed by the Regina
School District, was employed during the same summer period. The
collective agreement between the Board and the Union was,
however, a different one. The contract in that case provided for
an "annual salary" (in many places) and "gross
earnings" being for the period beginning on July 1st of
each year to the end of June in the next year. The case is quite
the contrary in the matter before me. Annual holidays under the
Labour Standards Act were to be taken during periods of
school closure and vacation pay was paid on the 30th of June in
that case. All these things were dealt with totally differently
in the case before me. It was also perfectly clear in that case,
in the words of O'Connor, T.C.J.:
"... Also, it is clear from the Collective Agreement
that the Appellant was paid on an annual (12 month) basis,
notwithstanding that the instalments were paid during the
10 months of the normal School Year."
[92] It was
clear from the evidence in the Donnawell case, that the
collective agreement called for an annual salary to be paid over
12 months. In the case before me, the situation is quite
different. The Appellants are said to be employees who work on
the basis of the school year in scheduling. Such employees are
said, in Clause 5.1 of the Agreement, to be deemed to be laid off
and recalled automatically. It is probably beyond question that
this contract is most poorly worded. Nonetheless, it is clear
that the Appellants worked and were paid on the basis of the
school year, not annually. In the Donnawell case,
it is clear that "the contract of employment continued
during the summer break, notwithstanding that no services were
rendered nor income received during that break". However,
in the case at bar, it is clear that the contract itself purports
to interrupt the employment throughout the summer break, or at
the very least, cause a separation from the employment, something
it did not do in the Donnawell case.
[93] The
provisions of the Education Act of Saskatchewan are, of
course, a factor in each case. O'Connor J. says:
"... section 166 of The Education Act makes
it clear that the summer break is a vacation period, i.e., not a
lay-off period."
However, with respect, as I read it, The Education Act
is not dealing with the vacations of employees. That is dealt
with either in the Collective Agreement or the Labour
Standards Act. The vacation period referred to in The
Education Act is clearly the vacation taken by the students.
One can take judicial notice of the summer holidays taken by
students universally. This does not make it vacation for others
who might either continue to work or to be laid off for lack of
work, as in the case here. I am fortified in that approach by the
fact that section 166 comes under the heading
"Operation of Schools", which in turn comes under
Part 4 of The Education Act which deals with
"pupils, programs and services". Part 5, for
example, goes on to deal with the qualifications and employment
of teachers. Terms and conditions of employment are not dealt
with under this Part.
[94] In
summary, it seems to me that there is a distinction to be drawn
between the words "lay-off" and "separation
from" employment. Lay-off has variously been interpreted in
the case law to be temporary, prolonged or permanent.
"Separation from employment" would seem to me to
generally imply a more temporary state of affairs and may well
come about despite the continued existence of a contract of
employment. In either case, it is not beyond the contemplation of
the EI Act that either may involve something other than
final or permanent termination of the contract of employment. The
EI Act requires that it be at least seven consecutive
days. The Labour Standards Act of Saskatchewan, in the
light of which the Union contract was negotiated and drafted, and
must be interpreted, uses the word to mean a period of six
consecutive days or more and thus, again, appears to look at
something that may be temporary or may be more permanent.
[95] Neither
the words "lay-off" nor "separation from"
in subsection 14(1) of the EI Regulations in my opinion
automatically and necessarily mean a permanent termination or
ending of the employment. They may have that meaning in a certain
context (see A.G. v. Gray (above)), but in the case of
subsection 14(1) of the EI Regulations, they do not. Nor
does the word "lay-off" necessarily have the meaning
attributed to it in the Saskatchewan Labour Standards Act.
Clearly, the words "lay-off" as they are used in the
Collective Agreement have the meaning attributed to them by the
Labour Standards Act as that Agreement is clearly defined
within the context of and governed by that Act, several
references being made therein to that Statute. However, the
meaning of the word "lay-off" in subsection 14(1) of
the EI Regulations encompasses any of "temporary,
prolonged or final separation from employment as a result of lack
of work". That was a definition approved by Heald, J. in
the Gray case, above, and I see no reason to derogate from
that definition. If the lay-off is temporary, then the situation
is covered by the requirement of the Regulation itself
that there be no work done for at least seven consecutive days
and that no earnings are attributable to the period in question.
If the words "lay-off" in the EI Act were
intended to be restricted to only permanent separation or
terminations, I would doubt the need for the second and third
requirements. Also, of course the Commission could have used the
words "permanent separation or termination" if it had
so chosen, but it did not.
[96] In order
for an employer to lay-off or discharge an employee in
Saskatchewan, some written notice is required depending on the
length of service, pursuant to section 43 of the Labour
Standards Act. Thus, in order to lay-off the Appellants each
year, the School Board would have been required to give written
notice. The Union contract short-circuited this process by making
provision for termination, and automatic recall in the contract
itself. This wording was used with the specific intent, according
to the Union, of complying with the provisions of the Labour
Standards Act.
[97] With
respect to whether or not there was an interruption of earnings,
in this case under the EI Act, I am of the view that
clearly the first requirement was met in that the Appellants were
laid off. There was, temporarily, no work for them to do during
the school closure for the summer vacation period. The Collective
Agreement contained a clause whereby the Appellants were deemed
to be laid off during the period in question by the words of the
Agreement itself. Article 5.1 has a heading "Automatic
Lay-off". It specifies that the Article itself will serve
as a notice of lay-off and recall. Obviously, this is done to
comply with the provisions of the notice requirements
contained in the Labour Standards Act and it saved the
School Board from having to issue a series of notices of lay-off
and recall each year. It was said to be an administratively
convenient way of dealing with the situation. I see no reason why
notices of lay-off and recall should not be done in this manner.
The Agreement could not be clearer in saying that they are laid
off for the school vacation periods which included the summer
vacation periods. Similarly, recall was automatic unless a
termination or indefinite lay-off notice was issued pursuant to
section 43 of the Labour Standards Act. Clearly, the
word "termination" in that context refers to a
"permanent ending of the employment". The word
"indefinite" would undoubtedly refer to a prolonged
lay-off. The lay-off in question was clearly a temporary lay-off
for the period of the school summer vacation. The
School Board, I note, issued the appropriate records of
employment.
[98] The
second requirement of subsection 14(1) is not in dispute by the
Minster, that is that no work was performed for a minimum of
seven consecutive days, and I have no need to dwell on that
further.
[99] The third
requirement that there be no earnings attributable to the period
in question would also appear to me to be met. The Minister
contends that it was an annual salary which was paid, payable
over 10 months. That comes up again as the first reason given by
K. Wolchuk, Chief of Appeals, in her letter of July 29,
1999. I see nowhere in the contract where such is so clearly
expressed. Indeed, the contract seems to be expressly to the
contrary, purporting to exclude the summer period from the
employment. One might argue that the Union contract, in providing
for a lay-off and automatic recall, is a fiction. If so, what was
its purpose. The Union argues that it was worded in this fashion
in order to save the administration from having to formally write
letters of lay-off and recall with respect to each employee each
year, and that the contract by itself served that purpose, the
lay-offs being temporary in such circumstances. This is certainly
a much more logical argument than to hold the clause to be a
fiction and to be of no effect. The Board might just as easily
have issued lay-off notices and recall notices, but to what end.
They endeavoured to do so, in the contract itself and I am
satisfied that such complied with the Labour Standards Act
and was effective to achieve the result, which they sought,
lay-off and recall over a set and predetermined period of
time.
[100] I am unable to
accept artificial arguments that the summer period is vacation
time for the Appellants. They received their vacation pay monthly
as a percentage of their salary. Such pay had no correspondence
with the seven weeks during which they did no work during the
summer period. The school was on vacation in the sense commonly
understood of the students having a summer holiday. That cannot,
in my opinion, be mixed up with the question of whether or not
the same period was vacation under the Labour Standards
Act or under the Collective Union Agreement for employees.
Vacation periods for students, under the Education Act,
are not the same as legal vacation time for employees under the
Labour Standards Act, or under the Collective Agreement.
The question, then, arises as to whether any of their earnings
were attributable to the summer period. No benefits accrued, but
some were left in a state of suspension under the contract.
[101] I am satisfied on
the evidence that their salaries and benefits were attributable
only to the period up to June 30th. Benefits were maintained but
did not accrue during the period in question and thus, cannot be
said to be payable or allocated with respect to the summer
period. Thus, in my view, the third requirement is also met in
this case.
Conclusion
[102] In conclusion, I am
mindful of the words of Madam Justice Wilson of the Supreme Court
of Canada who, in dealing with a case involving benefits under
the former Unemployment Insurance Act, said in Abrahams
v. AG Canada, [1983] 1 S.C.R. 2 at page 10:
"... Since the overall purpose of the Act is to make
benefits available to the unemployed, I would favour a liberal
interpretation of the re-entitlement provisions. I think any
doubt arising from the difficulties of the language should be
resolved in favour of the claimant."
[103] I am satisfied that
there was an interruption of earnings under the EI Act.
There was no provision of services for a minimum seven days.
There was a lay-off for the period in question set out in the
contract of employment itself. At the very least, this amounted
to a separation from employment. I am more inclined to the view
that it was a lay-off, temporary in nature, brought about by a
lack of work as occurs routinely at certain times of the year in
many other industries across the country. No earnings in the
enlarged sense of that word, as benefits or emoluments, under the
Regulations, arising from the employment were payable or
allocated to the period in question. Any doubt in the
difficulties of the language are to be resolved in favour of the
Appellants.
[104] For the above
reasons, I hold that there was an "interruption of
earnings" under the EI Act with respect to each of
the Appellants throughout the period in question. None of them
were in insurable employment during the time in question. Each of
the appeals is allowed and the decisions of the Minister in this
respect are vacated.
Signed at Calgary, Alberta, this 16th day of March 2001.
"Michael H. Porter"
D.J.T.C.C.
COURT FILE
NO.:
1999-3894(EI)
STYLE OF
CAUSE:
Marjorie D. Deschambault and M.R.N. and
Board of Education of the Potashville School
Division No. 80 of Saskatchewan
PLACE OF
HEARING:
Regina, Saskatchewan
DATE OF
HEARING:
July 5, 2000
REASONS FOR JUDGMENT
BY:
the Honourable Deputy Judge M.H. Porter
DATE OF
JUDGMENT:
March 16, 2001
APPEARANCES:
Agent for the
Appellant:
Don Moran
Counsel for the
Respondent:
Stacy Cawley
For the
Intervenor:
No one appeared
COUNSEL OF RECORD:
For the
Appellant:
Name:
Firm:
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
For the
Intervenor:
Name:
Firm:
COURT FILE
NO.:
1999-3895(EI)
STYLE OF
CAUSE:
Lori Sutherland and M.R.N
PLACE OF
HEARING:
Regina, Saskatchewan
DATE OF
HEARING:
July 5, 2000
REASONS FOR JUDGMENT BY: the
Honourable Deputy Judge M.H. Porter
DATE OF
JUDGMENT:
March 16, 2001
APPEARANCES:
Agent for the
Appellant:
Don Moran
Counsel for the
Respondent:
Stacy Cawley
COUNSEL OF RECORD:
For the
Appellant:
Name:
Firm:
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
COURT FILE
NO.:
1999-3896(EI)
STYLE OF
CAUSE:
Veronica M. Ulmer and M.R.N.
PLACE OF
HEARING:
Regina, Saskatchewan
DATE OF
HEARING:
July 5, 2000
REASONS FOR JUDGMENT
BY:
the Honourable Deputy Judge M.H. Porter
DATE OF
JUDGMENT:
March 16, 2001
APPEARANCES:
Agent for the
Appellant:
Don Moran
Counsel for the
Respondent:
Stacy Cawley
COUNSEL OF RECORD:
For the
Appellant:
Name:
Firm:
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
1999-3894(EI)
BETWEEN:
MARJORIE DESCHAMBAULT,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
and
BOARD OF EDUCATION OF THE POTASHVILLE
SCHOOL DIVISION NO. 80 OF SASKATCHEWAN,
Intervenor.
Appeal heard on common evidence with the
appeals of Lori Sutherland (1999-3895(EI)) and
Veronica M. Ulmer (1999-3896(EI)), on July 5, 2000
at
Regina, Saskatchewan, by
the Honourable Deputy Judge Michael H.
Porter
Appearances
Agent for the
Appellant:
Don Moran
Counsel for the
Respondent:
Stacy Cawley
For the
Intervenor:
No one appeared
JUDGMENT
The
appeal is allowed and the decision of the Minister is vacated in
accordance with the attached Reasons for Judgment.
Signed at Calgary, Alberta, this 16th day of March 2001.
D.J.T.C.C.
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