Date: 20000505
Docket: 1999-1517-EI
BETWEEN:
DIANE MOREAU,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Reasons for Judgment
Tardif, J.T.C.C.
[1]
This is an appeal from a determination by which the respondent
refused to pay the appellant employment insurance benefits on the
ground that she had accumulated no insurable hours.
[2]
The facts assumed in support of the determination were all
admitted and it is appropriate to reproduce them here:
[TRANSLATION]
. . .
(a)
the payer operates a dental clinic;
(b)
prior to the period in issue, the appellant had been employed by
the payer as a secretary-receptionist for some 10 years;
(c)
until November 1997, the appellant usually worked 30 hours a
week;
(d)
from December 8, 1997 to June 28, 1998, the appellant was on sick
leave;
(e)
during that period, the appellant received wage loss insurance
benefits;
(f)
on the date of her scheduled return to work, namely June 29,
1999, the payer eliminated the appellant's position and
terminated her employment;
(g)
in July 1998, the payer paid the appellant $6,571.26 in
severance, the equivalent of three months' wages;
(h)
the appellant rendered no services to the payer after December 4,
1997.
[3]
After admitting the above facts, the appellant explained that she
had had to be absent from her work for a number of months as a
result of illness. She said that she had received health
insurance benefits during that absence.
[4]
After recovering to the point where she could resume her work,
she learned that her position had been abolished as a result of
an administrative reorganization.
[5]
Saddened by the situation, particularly since the appellant had
worked for him for some 10 years, the employer paid her
severance representing three months' wages. Before doing so,
he had checked with the employment office to determine whether
this would enable the appellant to qualify for employment
insurance benefits.
[6]
The appellant testified that the authorities consulted confirmed
at that time her eligibility for benefits.
[7]
However, following her formal application accompanied by her
separation certificate and record of employment, the appellant
was denied employment insurance benefits on the ground that she
did not have enough insurable hours to qualify.
[8]
To add to her frustration, she learned that the severance she had
received from her employer was subject to premium payments since,
in the respondent's view, it represented insurable
earnings.
[9]
The appellant, who testified in a frank, spontaneous and very
open manner, admitted that she had not worked at the end of her
period of absence due to illness. She also admitted that her
employer had made every effort to enable her to receive
employment insurance benefits.
[10] She added
that, if her employer had been well informed by the
respondent's representative, it would no doubt have been
possible to enable her to qualify by going to her employer's
clinic to do some sort of work and thus be credited with the
required insurable hours.
[11] On this
point, I think it important to point out that this Court must
rule on the basis of the actual facts revealed by the evidence,
not by relying on assumptions or on facts which might have been
if the parties had known or been aware of certain requirements of
the Employment Insurance Act (the
"Act").
[12] The facts
in this case are very simple and not the least bit confusing and
do not lend themselves to interpretation. They may be summarized
as follows: the appellant's position was eliminated; the time
at which her employment was terminated coincided with the time
when she was able to resume her work. As she had worked for the
same employer for 10 years, that employer, in a gesture of
appreciation and cooperation, paid her severance corresponding to
three months' wages, believing, after checking with the
respondent's representatives, that this would qualify the
appellant for employment insurance benefits. It was admitted and
acknowledged that this was compensation, as the appellant had
performed no work in consideration of this lump sum amount.
[13] Of
course, the appellant and her employer could have agreed to have
her go to the office every day and perform various tasks or
duties during the period covered by the compensation, in which
case the hours put in would actually have been hours worked. The
amount paid would essentially have been wages paid for work
actually performed or, in other words, for hours actually
worked.
[14] However,
both the testimony and documentary evidence clearly show that
this amount was compensation equal to three months' wages
paid in consideration of faithful service rendered by the
appellant to her employer over 10 years. The appellant's
case is especially compelling since she is in a way a victim of
the transition period resulting from the major changes to the
Act.
[15] This
observation is unfortunately insufficient to qualify the
appellant for employment insurance benefits, particularly since
the Act is very clear.
[16] The
situation as revealed by the evidence does not give rise to
benefits under the Act for two reasons. First, the amount
received did not constitute insurable earnings and Parliament has
specifically stated what constitutes insurable earnings.
[17] Under the
heading "Interpretation" in the Insurable Earnings
and Collection of Premiums Regulations, subsection 1(1)
provides as follows:
The definitions in this subsection apply in these
Regulations.
"Act" means the Employment Insurance Act.
(Loi)
"Minister" means the Minister of National Revenue.
(ministre)
"pay period" means the period in respect of which
earnings are paid to or enjoyed by an insured person.
(période de paie)
"retiring allowance" means an amount received by a
person
(a) on or after retirement of the person from an office or
employment in recognition of the person's long service,
or
(b) in respect of a loss of an office or employment of the
person, whether or not received as, on account or in lieu of
payment of, damages or pursuant to an order or judgment of a
competent tribunal. (allocation de retraite)
[18] The
evidence in this case suggests that the compensation or severance
corresponding to three months' wages was paid upon the loss
of the appellant's employment. This amount must accordingly
be excluded from insurable earnings. In other words, as the
respondent ruled, it did not constitute insurable earnings.
[19] Second,
Parliament has clearly expressed its intent with regard to the
requirements for the insurability of employment. The new
provisions now speak of insurable hours, not insurable weeks.
[20] Section
9.1 of the Employment Insurance Regulations is worded as
follows:
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.
(My emphasis.)
[21] To
prevent workers from being penalized for taking certain paid
leave in the context of their employment, Parliament has adopted
the following provisions:
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.
10.2 For the purposes of sections 9.1, 10, 10.1 and
22,
(a) an hour of work performed in insurable employment
is considered to be a single hour of insurable employment, even
if the hour is remunerated at an overtime rate of pay; and
(b) if the addition of hours of insurable employment
falling between the first day and the last day worked in a given
period of employment results in a total number of hours that
contains a fraction of an hour, the fraction shall be counted as
a whole hour.
[22] On a
reading of the various requirements laid down by the Act,
there is no doubt that the compensation equal to three
months' wages does not meet those requirements. This is
particularly true and obvious since it is clearly indicated in
boxes 17 and 18 of the record of employment (Exhibit I-1) that
the amount constitutes compensation representing three
months' wages paid as a result of the termination of the
contract between the appellant and her employer. Moreover, on the
record of employment, the employer very clearly expressed the
reasons for the layoff in the following terms:
[TRANSLATION]
Three months' wages - Compensation
Position eliminated and two positions merged
[23] For all
these reasons, I have no choice but to dismiss the
appellant's appeal.
Signed at Ottawa, Canada, this 5th day of May 2000.
"Alain Tardif"
J.T.C.C.
Translation certified true on this 28th day of February
2001.
Erich Klein, Revisor
[OFFICIAL ENGLISH TRANSLATION]
1999-1517(EI)
BETWEEN:
DIANE MOREAU,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard on March 6, 2000, at Sherbrooke,
Quebec, by
the Honourable Judge Alain Tardif
Appearances
For the
Appellant:
The Appellant herself
Counsel for the
Respondent:
Yanick Houle
JUDGMENT
The appeal is dismissed and the Minister's decision
confirmed in accordance with the attached Reasons for
Judgment.
Signed at Ottawa, Canada, this 5th day of May 2000.
J.T.C.C.
Translation certified true
on this 28th day of February 2001.
Erich Klein, Revisor
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