Date:
20090506
Docket: A-397-08
Citation: 2009 FCA 149
CORAM: LÉTOURNEAU
J.A.
BLAIS
J.A.
TRUDEL
J.A.
BETWEEN:
PAUL-ANDRÉ
BRULOTTE AND OTHER CO-APPLICANTS
Applicants
and
ATTORNEY GENERAL OF CANADA
Respondent
REASONS FOR JUDGMENT OF THE
COURT
(Delivered
from the Bench at Québec, Quebec, on May 6, 2009)
TRUDEL J.A.
[1]
This
is an application for judicial review of a decision by Umpire Marin (CUB 70719, dated
June 30, 2008) dismissing the representative appeal filed by the applicant.
The Umpire’s decision, binding 118 other claimants (Applicant’s Record, at pages 100
et seq.), specifically involves subsections (9) and (19) of section
36 of the Employment Insurance Regulations, SOR/96-332 (the Regulations)
relating to the allocation of earnings for benefit purposes.
[2]
In
the case at bar, we will refer only to the specific facts of the applicant’s
case, albeit keeping in mind that this is a test case the result of which on
appeal will also apply to the claimants who agreed to participate in the
representative appeal.
[3]
On
October 24,
2001,
the applicant and his co-workers were laid off after their employer, Davie
Yards Inc. (Davie), went bankrupt. Under paragraph 136(1)(d) of the Bankruptcy
and Insolvency Act, R.S.C. 1985, c. B-3, they all acquired the status of
preferred creditors in the Davie bankruptcy, being eligible for up to $2000 each.
[4]
After
he was laid off, the applicant filed a claim for employment insurance benefits,
resulting in the establishment of a benefit period for him, effective
October 28, 2001.
[5]
The
lay-off also triggered section 36 of the Regulations as the laid-off
employees were, under their collective agreement, entitled to certain benefits,
such as statutory holidays and vacation pay (Respondent’s Memorandum, page 3).
[6]
The
relevant subsections of section 36 read as follows:
|
(9) Subject to subsections (10) and
(11), all earnings paid or payable to a claimant by reason of a lay-off or
separation from an employment shall, regardless of the nature of the
earnings or the period in respect of which the earnings are purported to be
paid or payable, be allocated to a number of weeks that begins with the
week of the lay-off or separation in such a manner that the total
earnings of the claimant from that employment are, in each consecutive week
except the last, equal to the claimant’s normal weekly earnings from that
employment.
. . .
(19) Where a
claimant has earnings to which none of subsections (1) to (18) apply, those
earnings shall be allocated
(a) if they arise from the performance of
services, to the period in which the services are performed; and
(b) if they arise from a transaction, to the week in
which the transaction occurs.
[Emphasis added]
|
(9) Sous réserve des paragraphes (10) et (11),
toute rémunération payée ou payable au prestataire en raison de son
licenciement ou de la cessation de son emploi est, abstraction faite de
la nature de la rémunération et de la période pour laquelle elle est
présentée comme étant payée ou payable, répartie sur un nombre de semaines
qui commence par la semaine du licenciement ou de la cessation d’emploi,
de sorte que la rémunération totale tirée par lui de cet emploi dans chaque
semaine consécutive, sauf la dernière, soit égale à sa rémunération
hebdomadaire normale provenant de cet emploi.
[…]
(19) La
rémunération non visée aux paragraphes (1) à (18) est répartie :
a) si elle est reçue en échange de services, sur la période où ces
services ont été fournis;
b) si elle résulte d’une opération, sur la semaine où l’opération
a eu lieu.
[je souligne]
|
[7]
The
particularity of this case is that the employer’s obligation to pay these
earnings passed to the trustee named by the creditors in the Davie bankruptcy. The earnings
were therefore paid by the trustee in the normal course of its administration
of the bankruptcy. The applicant’s earnings were paid on September 11, 2008 (affidavit of
Diane Brunet: Applicant’s Record, page 35 at paragraph 2).
[8]
As
the decision of the Commission which gave rise to this dispute reports, in
accordance with section 46 of the Employment Insurance Act, S.C.
1985, c. 23, the trustee informed the Commission, in November 2006, that
the applicant was entitled to a gross amount of $1420.97 for unpaid vacation
pay. As a result of the trustee’s letter, the Commission notified the applicant
that the income payable as a dividend constituted earnings to be deducted from
the benefits received based on the applicant’s regular weekly wage fixed at
$840.40. The Commission thus decided that the applicant was not owed any
benefits from October 28 to November 3, 2001, and that a balance of
$219 would be allocated to the week starting November 4,
2001.
The Commission also added that any sum paid to the applicant by the trustee
would be used to refund the Commission for the overpayment (Applicant’s Record,
page 91).
[9]
This
gave rise to the applicant’s unsuccessful appeals to the Board of Referees and
the Umpire, both of which confirmed the Commission’s decision.
[10]
Speaking
on behalf of the Court, our colleague Justice Létourneau wrote as follows
concerning subsection 36(9):
. . . the
decisions of our Court are consistent on this point, and have taken on the
character of a judicial policy that gives subsection 36(9) of the Regulations a
practical and functional meaning, a meaning that reflects the intention of
Parliament that vacation pay, paid or payable by reason of a lay-off or
separation from an employment, be allocated to a number of weeks that begins
with the week of the lay-off or separation. This is the intention of subsection
36(9) “regardless of the nature of the earnings or the period in respect of
which the earnings are purported to be paid or payable.” (Sarrazin v. Canada,
2006 FCA 313, at paragraph 7).
[11]
This
means that a payment made under subsection 36(9) of the Regulations covers
“any part of the earnings that becomes due and payable at the time of
termination of the contract of employment and the commencement of unemployment”
(Lemay v. Canada, 2005 FCA 433 at paragraph 4).
[12]
The
applicant is not questioning this “judicial policy”. Instead he argues that the
facts of the case trigger subsection 36(19) of the Regulations. According
to the applicant, the transaction described in subsection 36(19) would be,
in the case at bar, either the sale by the trustee, on October 14, 2006,
of the debtor’s company to a third-party corporation (Applicant’s Memorandum at
paragraph 42) or the trustee’s decision, a month later, to pay [translation] “vacation dividends” to Davie’s employees or
former employees (Applicant’s Memorandum at paragraph 38). We
are of the view that this approach is incorrect.
[13]
With
regard to the allocation of the earnings, subsection 36(9) of the
Regulations emphasizes the reason for which the earnings are paid and not the
timing of that payment.
[14]
Subsection 36(19)
of the Regulations cannot apply in the circumstances given its suppletive
nature and the fact that it is triggered only when none of subsections (1)
to (18) apply.
[15]
For all of
those reasons, this application for judicial review will be dismissed with costs.
“Johanne Trudel”
Certified
true translation
Johanna
Kratz
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