Date: 20120622
Docket: A-65-11
Citation: 2012 FCA 190
CORAM: EVANS
J.A.
DAWSON
J.A.
MACTAVISH J.A. (ex officio)
BETWEEN:
TREENA-RAY CHAULK
Applicant
and
THE ATTORNEY GENERAL OF CANADA
Respondent
and
THE GREATER ESSEX COUNTY
DISTRICT SCHOOL BOARD
Intervener
REASONS FOR JUDGMENT
EVANS J.A.
Introduction
[1]
The Canada
Employment Insurance Commission (Commission) ruled that Treena-Ray Chaulk, a
schoolteacher, had received an overpayment of Employment Insurance (EI)
maternity benefits.
[2]
She
appealed that ruling to a board of referees (board), which allowed her appeal
in a decision dated April 1, 2010. The Commission appealed to an umpire who
held that the board had erred in law when it allowed Ms Chaulk’s appeal. Ms
Chaulk has made an application for judicial review to this Court to set aside the
Umpire’s decision (CUB 76095), dated January 6, 2011.
[3]
EI
benefits are reduced by the amount of any earnings arising out of employment that
a claimant receives while in receipt of EI benefits, including payments under a
maternity leave plan: subparagraph 35(2)(c)(ii) of the Employment
Insurance Regulations, SOR/96-332 (Regulations). However, section 38
of the Regulations creates a partial exception to this general rule. Payments
made to a claimant because of pregnancy are not treated as “earnings” for the
purpose of section 35, and thus do not reduce EI maternity benefits, except to
the extent that the payments and the EI benefits combined exceed her “normal
weekly earnings”.
[4]
In the
present case, the Commission decided that the combination of EI benefits and
the salary top-up paid to Ms Chaulk by her employer under the collective
agreement – the Supplemental Employment Insurance Benefit Plan (SEB) – exceeded
her “normal weekly earnings” by $452. According to the Commission, this excess
constituted “earnings”, and thus reduced the amount of EI benefits to which she
was otherwise entitled, and resulted in a weekly overpayment of $452.
[5]
Paragraph
38(a) of the Regulations is the statutory provision directly relevant to
this application.
|
38. The following portion of any
payments that are paid to a claimant as an insured person because of
pregnancy, for the care of a child or children referred to in subsection
23(1) or 152.05(1) of the Act, or for the care or support of a family member
referred to in subsection 23.1(2) or 152.06(1) of the Act, or because of any
combination of those reasons, is excluded as earnings for the purposes of
section 35, namely, the portion that
(a) when combined with the portion of
the claimant's weekly benefit rate from that employment, does not exceed that
claimant's normal weekly earnings from that employment; and
…
|
38. Est exclue à titre de
rémunération pour l’application de l’article 35 la partie de tout
versement payé au prestataire à titre d’assuré en raison d’une grossesse,
des soins donnés à un ou plusieurs enfants visés aux paragraphes 23(1) ou
152.05(1) de la Loi ou des soins ou du soutien donnés à un membre de la
famille visé aux paragraphes 23.1(2) ou 152.06(1) de la Loi, ou d’une
combinaison de ces raisons, qui :
a) d’une part, lorsqu’elle est ajoutée
à la partie du taux de prestations hebdomadaires du prestataire provenant de
son emploi, n’excède pas sa rémunération hebdomadaire normale
provenant de cet emploi;
[…]
|
[6]
The legal
question to be decided in this application concerns the basis for calculating
Ms Chaulk’s “normal weekly earnings”, a term that is not defined in the
legislation. The Commission determined her “normal weekly earnings” by dividing
her annualized salary by the 52 weeks of the year. The intervener, the Greater
Essex District School Board, supports the Commission’s position.
[7]
Ms Chaulk
disagrees. She says that since the collective agreement governing her employment
only requires teachers to work for the 194 days of the school year, her salary
should be attributed to those days. Thus, she argues, her “normal weekly
earnings” should be calculated by dividing her salary by 194, and multiplying
that amount by the 5 days of the working week. On this basis, her EI maternity
benefits and SEB combined did not exceed her “normal weekly earnings” and
therefore no part of the SEB constituted “earnings” for the purposes of section
35. Accordingly, there was no overpayment of EI benefits.
[8]
In my
opinion, Ms Chaulk’s approach to the determination of “normal weekly earnings”
is correct, and the Umpire therefore committed an error of law in allowing the
Commission’s appeal from the Board’s decision. Accordingly, I would allow Ms Chaulk’s
application for judicial review and set aside the Umpire’s decision.
Background
[9]
At all
material times, Ms Chaulk was employed by the Hastings and Prince Edward County
District School Board (employer) as a permanent elementary school teacher. Like
all other elementary school teachers in Ontario, Ms Chaulk was represented in
her relations with her employer by a statutory bargaining agent, the Elementary
Teachers Federation of Ontario (union).
[10]
Subsection
2(3.1) of R.R.O. 1990, Reg. 304, enacted under the Education Act, R.S.O.
1990, c. E.2, provides that every school year shall include a minimum of 194
school days, of which no less than 188 shall be instructional days.
[11]
Article
11.01 of the collective agreement between the union and the employer, which
runs from September 1, 2008 to August 31, 2012, provides that teachers shall
not be required to work any days preceding the official start of the school
year for students, except in those years when 194 days are not available
between Labour Day and June 30. Schools are closed in the months of July and
August for the summer vacation.
[12]
In 2009,
Ms Chaulk earned an annualized salary of approximately $69,000. Under Article
9.02.01 of the collective agreement, teachers are paid their salary “owing or
accruing due” in 26 or 27 equal instalments every second Friday of each month,
commencing the last Friday in August. On a weekly basis, Ms Chaulk was paid
$1,327.
[13]
Ms Chaulk
went on a pregnancy leave from her employment on June 22, 2009. The employer
paid her a lump sum to compensate her for the unpaid portion of the 189/194
school days that she had worked in that school year. This payment included the
salary instalments that otherwise would have been paid to her in July and
August. At the same time, she applied for EI maternity benefits. On July 5,
2009, after the two-week statutory waiting period, she started to receive
weekly EI benefits of $447.
[14]
Article
31.04.06 of the collective agreement defines the amount of SEB payable and provides
as follows.
31.04.06 For Pregnancy Leave
only, and in lieu of the option to access sick leave for the post-partum period
of recovery in accordance with 31.02.05, a Teacher who is eligible for E.I. may
opt for a Pregnancy Leave SEB top-up; such top-up may be in addition to the SEB
which is available for the two-week waiting period.
31.04.06.01
The
Pregnancy Leave SEB top-up is based upon and is subject to Employment Insurance
(E.I.) Regulations.
31.04.06.02
The
Pregnancy Leave SEB top-up shall provide for the difference between what a
Teacher receives from E.I. and 100 percent of her regular salary (based on
1/194) for the maximum of the six week post-partum period of recovery with no
deduction of sick leave this period.
31.04.06.03
For the
nine (9) weeks of Pregnancy Leave following the two-week waiting period and the
six (6) weeks of post-partum recovery, or for the fifteen (15) weeks of
Parental Leave following the two week waiting period, or any portion of both or
either, the Employer shall provide a Pregnancy/Parental Leave SEB top-up equal
to the difference between sixty (60) percent of the Teacher’s regular weekly
salary and the weekly amount of the E.I. benefit.
[15]
Article
31.04.06.02 is the provision directly relevant to this case. As a practical
matter, the “normal weekly earnings” issue only arises in the six weeks covered
by this provision. In the two-week waiting period before a claimant starts to
receive EI benefits, she receives only SEB. In the nine weeks following the
six-week period, a teacher’s SEB is limited to the difference between 60% of her
regular salary and her weekly EI benefits. Thus, in this nine-week period, her
weekly SEB and EI benefits would not exceed her “normal weekly earnings”,
however calculated.
[16]
Pursuant
to the terms of an arbitrator’s award of January 15, 2009, the employer
calculated the weekly SEB payable to Ms Chaulk under article 31.04.06.02 as the
difference between 5/194 of her annualized salary and her EI benefits. Counsel
for the Attorney General objected to the admission of this award and to
references to it in the memorandum of fact and law filed on behalf of Ms
Chaulk, because it was not before the decision-maker and was therefore not part
of the tribunal record. At the hearing the Court dismissed this objection, on
the ground that the award was introduced as explanatory background to the
application, and not as new evidence to contradict a finding of fact made by
the decision-maker.
[17]
In each of
the six weeks in question in this application (starting on July 5 and ending on
August 9, 2009), the combination of EI maternity benefits and SEB gave Ms
Chaulk an income of $1,779. This is $452 per week more than the $1,327 per
week that she would have been paid by her employer in each of these six
weeks had she not been on leave. The Commission says that this $452 constitutes
“earnings” and thus is an overpayment of $2,682 over the six-week period. However,
if calculated on the basis of 5/194 of salary, her “normal weekly earnings”
would be approximately $1785, and thus more than her EI and SEB benefits
combined, so that no portion of the SEB would constitute earnings for the
purpose of section 35.
[18]
The
origins of the dispute underlying the present proceeding are to be found in
disagreements between the employer and the union over the payment of SEB. In an
award dated July 5, 2006, Arbitrator Louise Davie held that, properly
interpreted, the terms of the collective agreement provide for the payment of
SEB during teaching and non-teaching periods, including July and August.
[19]
The
employer was subsequently advised by the Commission that for the purpose of
pregnancy leave top-up, a claimant’s “normal weekly earnings” under section 38
of the Regulations were to be determined on the basis of the employee’s salary
over a 52-week period (1/52 of annual salary). The employer and the union then
jointly sought an interpretation from the Commission of “normal weekly
earnings” in the context of their collective agreement. They submitted that
“normal weekly earnings” should be calculated by reference to the days in the
school teaching year: that is, 5/194 of annual salary.
[20]
The
Commission rejected these submissions and stated that “normal weekly earnings”
were 1/52 of a teacher’s annualized salary. On the basis of this ruling, the employer
took the position that it would limit weekly SEB payments to 1/52 of salary
when, taken together with the EI benefit, 5/194 would exceed “normal weekly
earnings”. The employer relied on article 31.04.06.01 of
the collective agreement which says that the pregnancy leave SEB top-up
payments are subject to the EI Regulations. The parties returned to Arbitrator
Davie for a ruling on this issue.
[21]
In an
award issued on January 15, 2009, the Arbitrator concluded that article
31.04.06.02 of the collective agreement expressly provided that the employer
was to pay SEB to top up a teacher’s EI benefits to “100 percent of her regular
salary (based on 1/194) …” for a maximum of six weeks. The Arbitrator also held
that because teachers worked a school year of 194 days, it was inappropriate
for the Commission to calculate a teacher’s “normal weekly earnings” for the
purpose of section 38 on the basis of 1/52 of a teacher’s salary.
[22]
The
employer proceeded to calculate the SEB payable to Ms Chaulk in accordance with
this award, and so advised the Commission. The Commission maintained its
interpretation of “normal weekly earnings”, stating that it would treat an SEB
payment as “earnings” to the extent that, when combined with Ms Chaulk’s EI
benefit, it exceeded 1/52 of her annualized salary. The Commission issued a
notice of overpayment to Ms Chaulk of $2,682 with respect to the six weeks
commencing July 5, 2009.
Issues and Analysis
(i) standard of review
[23]
The
question to be decided in this application principally involves the
interpretation of the Regulations, although the terms of the collective
agreement provide important context to the interpretation of the disputed words
in section 38, “normal weekly earnings”. Whether the “normal weekly earnings”
of a teacher covered by this collective agreement are to be calculated on the
basis of 1/52 weeks of the calendar year or 5/194 days of the school year is
not limited to the facts of this case. Resolution of the issue in the present
case is likely to have an impact on other teachers employed by this and other
district school boards in Ontario under collective agreements containing
similar provisions, including those relating to the SEB.
[24]
The
question in dispute in this application for judicial review is therefore
properly characterized as one of interpretation, rather than one of application
of the law to the facts: a question of law, rather than one of mixed fact and
law.
[25]
Standard
of review questions occur at two points in the adjudication of disputes arising
from the administration of the employment insurance scheme: on appeal from a
board of referees to an umpire on the limited grounds set out in subsection
115(2) of the Employment Insurance Act, S.C. 1996, c. 23 (Act), and on
an application for judicial review to this Court of an umpire’s decision on an
appeal from a board of referees.
[26]
It has
been consistently held by this Court that both umpires and the Court should
review questions of law involving the interpretation of the employment
insurance legislation on a standard of correctness: see, for example, Canada
(Attorney General) v. Sveinson, 2001 FCA 315, [2002] 2 F.C. 205 at
paras. 12-17 (umpires); Budhai v. Canada (Attorney General), 2002 FCA
298, [2003] 2 F.C. 57 at paras. 42, 48 (boards of referees); Stone v. Canada
(Attorney General), 2006 FCA 27, [2006] 4 F.C.R. 120 paras. 13-18 (boards
of referees).
[27]
Statements
to this effect can also be found in cases decided after Dunsmuir v. New
Brunswick, 2008 SCC 9, [2009] 1 S.C.R. 190 (Dunsmuir), even though Dunsmuir
decided that a specialist tribunal’s interpretation of its enabling statute is
normally reviewed on the reasonableness standard: see, for example, Martens
v. Canada (Attorney General), 2008 FCA 240 at para. 30 (umpires and boards
of referees); MacNeil v. Canada (Employment Insurance Commission), 2009
FCA 306, 396 N.R. 157 at paras. 24-27; Canada (Attorney General) v. Lemire,
2010 FCA 314 at paras. 8-9; Canada (Attorney
General) v. Trochimchuk, 2011 FCA 268, 415 N.R. 88 at para. 7.
[28]
Counsel
for the Attorney General submitted that recent decisions from the Supreme Court
have made it even clearer that courts must almost invariably defer to a
tribunal’s interpretation of its enabling statute: Canada (Canadian Human
Rights Commission) v. Canada (Attorney General), 2011 SCC 53, [2011] 3
S.C.R. 471 at para. 24; Alberta (Information and Privacy Commissioner) v. Alberta
Teachers’ Association, 2011 SCC 61, [2011] 3 S.C.R. 654 at paras. 30 and 34
(Alberta Teachers).
[29]
In my
view, while these decisions emphasize that a tribunal’s interpretation of its
enabling statute is nearly always reviewable on the reasonableness standard
(see especially, Alberta Teachers at para. 34), they do not so
materially alter the understanding of the law established in Dunsmuir as
to warrant this Court’s departing from its well-settled jurisprudence.
[30]
A
reviewing court may avoid a full standard of review analysis if previous
jurisprudence has satisfactorily resolved the issue: Dunsmuir at paras.
57 and 62; Nor-Man Regional Health Authority Inc. v. Manitoba Association of
Health Care Professionals, 2011 SCC 59, [2011] 3 S.C.R. 708 at para. 30; Alberta
Teachers at para. 37 (standard of correctness applied in Northrop
Grumman Overseas Services Corp. v. Canada (Attorney General), 2009 SCC 50,
[2009] 3 S.C.R. 309 “based on precedent” ).
[31]
In any
event, a new regime is likely to be enacted relatively soon for employment
insurance administrative appeals, and the standard of review issue can be
considered afresh in that context: see Bill C-38, An Act to implement certain provisions of the
budget tabled in Parliament on March 29, 2012 and other measures, 41st
Parl. 1st Sess., 2012, cls. 223-250 (first reading in the Senate 18 June 2012). Little is to be gained
by changing this Court’s well-settled law at this late stage of the present
regime. It is the prerogative of the Supreme Court of Canada to correct us if
we have been wrong.
(ii) adequacy of reasons
[32]
Counsel
for Ms Chaulk argued that the Umpire’s decision should be set aside because his
reasons were inadequate as they do not provide a clear indication of the basis
of his decision. Since I have concluded that the Umpire’s interpretation of
“normal weekly earning” was wrong in law, I need not address this issue.
[33]
I would
only add that, in light of the decision in Newfoundland and Labrador Nurses’
Union v. Newfoundland and Labrador (Treasury Board), 2011 SCC 62, [2011] 3
S.C.R. 708, it is likely to be difficult to persuade a reviewing court to
intervene solely on the basis of the inadequacy of the reasons given by a
tribunal. This is especially true when, as here, the issue in dispute is a
question of law to which the standard of correctness applies.
(iii) Was the basis on which
the Umpire determined Ms Chaulk’s “normal weekly earnings” wrong in law?
(a) jurisprudence
[34]
There is
no authority directly on point, and neither the Act nor the Regulations define “normal
weekly earnings” for the purpose of section 38. The Umpire relied on the short
oral reasons in Canada (Attorney General) v. Fox (1997), 220 N.R. 60
(F.C.A.) (Fox), which appears to be the only occasion on which the
meaning of “normal weekly earnings” has been judicially considered.
However, in my view, Fox provides little assistance in resolving the
present dispute.
[35]
First, Fox
involved a very different issue from that in the present case: whether vacation
pay, an annual incentive allowance, and a 25-year service award should be
included as part of the claimant’s “normal weekly earnings”. The Court held
that they should not, because they were more akin to fringe benefits: they did not
accrue weekly and were not paid on a periodic basis. In other words, the
dispute in Fox was about whether particular items were to be included as
part of the claimant’s “normal weekly earnings” and not, as in the present
case, the basis on which earnings are to be calculated.
[36]
Second,
the Court’s definition of “normal weekly earnings” as “the ordinary, usual
earnings that a claimant receives or earns on a regular basis” (at para.
3) (the underlining is mine) does not resolve the issue in our case. If the
amount of earnings received by an employee is determinative, then the
Commission is arguably right because, when not on leave, Ms Chaulk received salary
payments based on 1/52 of her annualized salary. However, if the amount earned
by an employee is determinative, Ms Chaulk can argue that she should succeed
because, as the collective agreement stipulates and counsel for the Commission
conceded, she earns her salary for performing professional duties in the 194
days of the school year.
[37]
Counsel for
Ms Chaulk submits that Dick v. Deputy Attorney General of Canada, [1980] 2 S.C.R. 243
supports her claim. In that case, a collective agreement provided that when a
teacher started a maternity leave she was to be paid a lump sum for services
already rendered. As in Ms Chaulk’s case, the amount paid to Ms Dick at the
start of her maternity leave was calculated on the number of days in the
200-day school year that she had performed her services. Ms Dick first received
EI pregnancy benefits in April; they were payable for fifteen weeks, which
would have taken her to July 24.
[38]
However,
the Commission denied her any benefits after July 4, on the ground that the
lump sum payment she had received from her employer in April included sums she
would otherwise have received in July and August when no services were
required. Consequently, according to the Commission, she was not unemployed in
July and had received her usual remuneration for that month. Like Ms Chaulk, Ms
Dick was paid her salary in instalments spread over twelve months when not on
leave.
[39]
The
Supreme Court of Canada allowed Ms Dick’s appeal and held that she was entitled
to the normal fifteen weeks of pregnancy benefits. The Court agreed with the
Commission that her contract of employment continued after she commenced her
leave, but stated that she was “separated” from her employment when she started
her leave. Consequently, the lump sum payment she received was for the services
she had performed up to the time of separation, and none of it was attributable
to the months of July and August when she was not required to work.
[40]
Counsel
for the Commission argues that Dick does not assist Ms Chaulk because
the present case turns on a different statutory provision: the phrase “normal
weekly earnings” in section 38 of the Regulations, which had not been enacted
when Dick was decided. I agree that Dick is not directly on
point. However, the Court did establish two propositions that are in my view
relevant to the present case.
[41]
First,
whether Ms Dick’s salary was paid in instalments spread over twelve months or
the ten months of the school year was of no legal significance in this case.
The method of payment is no more than an administrative convenience. Second, Ms
Dick’s lump sum payment was for services rendered to the start of the leave,
and none of it was attributable to the months of July and August, when she was
not required to render any services. In my view, Ms Chaulk’s argument is
consistent with these conclusions.
[42]
I agree
with counsel for the Commission that section 36 of the Regulations is not
germane to this case. I shall therefore not review the jurisprudence on the
allocation of income under this provision.
(b) collective agreement
[43]
A
determination of a claimant’s “normal weekly earnings” for the purpose of
section 38 of the Regulations cannot be made in the abstract, but must be made
in the context of the claimant’s employment contract: in this case, the
collective agreement between Ms Chaulk’s union and her employer. I agree with
counsel for the Commission that parties cannot “contract out of” section 38.
However, reference to the terms of a contact of employment is essential in
order to determine, among other things, the number of weeks for which an
employee is being paid.
[44]
In oral
argument, counsel for the Commission conceded that under the terms of the
collective agreement, Ms Chaulk was paid for the number of weeks worked in the
school year. That is, although she received her salary every other week in
instalments spread over twelve months, she was not paid for the months of July
and August when she was not required to work.
[45]
In my
opinion, counsel was right to make this concession. The collective agreement
provides that when teachers leave their employment during the school year, they
are entitled to a payment calculated on the basis of the number of days that
they have worked, divided by the 194 days of the school year. This is a clear
indication that teachers are not paid for the months of July and August, and no
provision in the agreement provides otherwise.
[46]
Counsel
also conceded (again, in view of Dick, correctly in my opinion) that
whether teachers are paid their salary in instalments spread over ten months or
twelve months is not relevant to the calculation of a claimant’s “normal weekly
earnings”.
(c) the “anomaly” argument
[47]
The
Commission’s principal argument was that on the basis of Ms Chaulk’s approach
to the determination of her “normal weekly earnings”, she would be entitled in
the six weeks in question to more than she would have been paid in those weeks
had she not been on leave. Thus, if not on leave, Ms Chaulk would have been
paid $1327 calculated on a weekly basis; whereas, while on pregnancy leave, her
EI benefits and SEB totalled $1779 per week.
[48]
Counsel
argued that the EI benefits paid to Ms Chaulk were intended to go some way to
replacing the income that she lost as a result of her pregnancy. It would thus be inconsistent with the purpose of the scheme
to permit her to retain the full amount of EI benefits in those weeks because,
when they are added to the SEB payments, she would receive more than if she had
not been on leave. Employers and employees cannot by the terms of the contract
of employment bring about a result that Parliament could not have intended. It
is unfair that, in a given period, a teacher on leave should receive more than
a teacher with the same salary who was working. Parliament should not be taken
to create such anomalies.
[49]
On closer
examination, however, this argument is less persuasive than might at first appear.
It depends on limiting the comparator period to the six weeks when Ms Chaulk
was receiving both EI benefits and an SEB top-up to 100% of her regular salary.
As counsel for Ms Chaulk pointed out, if the period of time is expanded beyond
those six weeks, Ms Chaulk received less than if she had not been on leave.
This is because for the nine weeks of pregnancy leave following the six weeks
of post-partum recovery, the SEB top-up is reduced to the difference between
60% of a teacher’s regular salary and the weekly EI benefits.
[50]
Moreover,
as Ms Chaulk commenced her leave after working all but 5 of the 194 days in the
school year, she received more for the six weeks in question than had she not
been on leave, because of the EI benefits. The lump sum payment from her
employer near the end of June included the salary instalments that she would
have received in July and August, less 5/194 of her salary ($1779). The EI
benefits paid to her in the six weeks from July 5 to August 9 totalled $2682
($447 x 6). Thus, regardless of any SEB payment, Ms Chaulk was paid $903 ($2682
- $1779) more for that six-week period than had she not been on leave.
[51]
Thus, in
my opinion the anomaly on which the Commission relies in this complex statutory
scheme is neither unique nor so glaring as to warrant rejecting Ms Chaulk’s
approach to the calculation of her “normal weekly earnings” in the context of
this collective agreement.
Conclusions
[52]
For these
reasons, I would grant the application for judicial review with costs, set
aside the decision of the Umpire, and remit the matter to the Chief Umpire or
his Delegate on the basis that the Commission’s appeal from the board of
referees is dismissed.
“John M. Evans”
“I
agree.
Eleanor
R. Dawson J.A.”
“I
agree.
Anne L. Mactavish J.A.” (ex
officio)
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