REASONS FOR JUDGMENT
Favreau J.
[1]
René Cloutier appeals before this Court the
June 30, 2015 decision of the Minister of National Revenue (the "Minister")
regarding the insurability of his employment at Les Cartes Sportives de la
Capitale Inc. (the "payor")
for the period from May 25, 2014, to October 26, 2014 (the "period at issue").
[2]
In letters dated June 30, 2015, the
Canada Revenue Agency (the "CRA")
informed the appellant and the payor of the following decision:
(a)
During the period at issue, the appellant was an
employee and his employment with the payor was insurable under
paragraph 5(1)(a) of the Employment Insurance Act, S.C. 1996 (the "Act").
(b)
Under subsection 2(1) of the Insurable
Earnings and Collection of Premiums Regulations SOR/97-33, the appellant
accumulated insurable earnings totalling $8,607 during the period at issue.
(c)
Under section 9.1 of the Employment
Insurance Regulations SOR/96332, the appellant accumulated
676 insurable hours during the period at issue.
[3]
The appellant’s employment status is not
disputed. The appellant was employed in insurable employment within the meaning
of paragraph 5(1)(a) of the Act and under a contract of employment within
the meaning of article 2085 of the Civil Code of Québec (the "CCQ").
However, the amount of insurable earnings and the number of hours of insurable
employment he accumulated with the payor during the period at issue are in
dispute.
[4]
In making his decision, the Minister made the
following assumptions of fact:
(a) The
payor was a corporation carrying on the business of buying and selling
collectors’ items.
(b) The payor’s sole shareholder was
Sylvain Martineau.
(c) The
payor operated year-round, but business was slower in the summer, from June to
August.
(d) The contract of employment between the appellant and the
payor had been entered into verbally in the province of Quebec.
(e) The
appellant had been hired by the payor as an employee.
(f) The appellant’s job
was to greet the payor’s customers and to organize events that allowed the
payor’s employees to purchase collectors’ items.
(g) The appellant worked
mostly in the payor’s office.
(h) The appellant was paid
$12 an hour when he worked in the payor’s office.
(i) The appellant marked
down his hours when he was in the payor’s office.
(j) The appellant
occasionally worked on the road.
(k) The appellant was paid
a flat rate of $100 per day when he worked on the road.
(l) The appellant was paid
every week by direct deposit.
(m) The appellant was
reimbursed in cash for money spent on meals and gas when he was on the road.
(n) The appellant
generally worked Wednesday to Sunday from 9 a.m. to 5 p.m.
(o) There were weeks
during the period at issue when the appellant worked less than 40 hours.
(p) The appellant did not work
any overtime for the payor during the period at issue.
(q) The appellant had
filed a complaint with the Commission des normes du travail for unpaid
overtime.
(r) The
appellant had been unable to provide evidence showing that he had worked
overtime.
(s) The
payor had issued a Record of Employment to the appellant when he left.
(t) The
Record of Employment showed insurable earnings of $8,606.62 for the period at
issue.
(u) The
Record of Employment showed 675.49 insurable hours for the period at issue.
[5]
At the outset of the hearing, the appellant
filed, with the consent of counsel for the respondent, a response to the reply
to the notice of appeal, claiming that the respondent had not taken into
account the following facts:
(a) The
payor was a corporation carrying on the business of buying and selling gold and
silver and collectors’ items across Canada and online.
(d) The
contract of employment between the appellant and the payor had been entered
into verbally and later in writing in the province of Quebec.
(f) The
appellant’s job was to greet the payor’s customers and to organize events that
allowed the payor’s employees to purchase gold, silver and collectors’ items.
(g) The
appellant worked in the payor’s office and spent a minimum of 45 days
working on the road across Canada in 2014.
(i) The
appellant marked down the days when he worked on the road and punched in and
out when he worked in the office.
(j) The
appellant spent a minimum of 45 days working on the road during the period
at issue and is entitled to wages for that time since, according to Quebec
labour standards, an employee is deemed to be at work when travel is required
by the employer.
(k) The
appellant was paid a flat rate of $125 per day when he worked on the road.
(l) The
appellant was paid every week by direct deposit and in cash by the payor for
those weeks when he worked over 40 hours.
(m) The
appellant was reimbursed in cash for money spent on meals and gas and for those
hours worked in excess of the 40 weekly hours when he was on the road.
(n) The
appellant usually worked from 8:30 a.m. to 5 p.m. when he worked in
the office and from 7 p.m. on Tuesday to 8 p.m. on Sunday when he was
on the road.
(n) The appellant worked a minimum of 275 hours of
overtime for the payor during the period at issue.
(q) The
appellant had filed two complaints with the Commission des normes du travail: a
complaint for a prohibited practice and a pecuniary complaint concerning unpaid
wages and overtime paid in cash and at straight time.
(r) The
appellant provided all the evidence necessary to show that the employment
relationship had been terminated on October 26, 2014, and that he was
entitled to reinstatement under section 123 of the Act respecting
labour standards; the payor paid him for his outstanding hours on
May 8, 2015, and August 20, 2015.
(s) The
payor did not issue a Record of Employment to the appellant when he left; at
the appellant’s request, Service Canada sent him an electronic copy on
February 3, 2015.
(t) The
Record of Employment showed 660 insurable hours for the period from
May 25, 2011, to October 26, 2014; whereas the Record of
Employment from the previous year showed 808.50 insurable hours for the
period from September 19, 2013, to January 22, 2014.
[6]
Only Mr. Cloutier testified at the hearing.
He said that he had received $3,329 from the payor in cash for overtime worked
during the period at issue, and that those hours had been paid at straight
time. He submitted that, for all of 2014, he had received $3,809 from the payor
in cash; this amount was added to his income for the 2014 taxation year
and assessed by the CRA in a reassessment dated September 21, 2015.
According to the appellant, his gross insurable earnings for 2014 were
$11,935.82.
[7]
When the appellant was hired by the payor on
August 19, 2013, there was no written contract of employment. A
contract of employment was entered into between the payor and the appellant on
January 12, 2015, as a result of an out-of-court settlement agreement
reached between the parties in respect of a complaint for a prohibited practice
and a pecuniary complaint filed with the Commission des normes du travail.
Under the settlement agreement, the employee was to be reinstated:
•
on January 20, 2015;
•
to the same position;
•
under the previous conditions;
•
subject to the following condition:
Contract of
employment signed on 2015-01-12 by the parties;
•
with all the privileges and benefits accorded to
the employee prior to his dismissal.
[8]
The contract of employment entered into on
January 12, 2015, provided that the appellant was to act as a
purchaser, work for an indeterminate period beginning on
January 13, 2015, be paid $125 a day when on the road, and be
reimbursed for travel and entertainment expenses authorized by the employer on
the presentation of vouchers.
[9]
Under the contract of employment dated
January 12, 2015, the appellant worked for the payor only the week of
January 13 to 18, 2015, and he received a $780 cheque for the
65 hours worked.
[10]
Since the employee could not be reinstated, on
May 19, 2015, the parties entered into an agreement under the
guidance of the Commission des relations du travail whereby the appellant
waived his right to reinstatement in exchange for payment by the payor of the
sum of $2,000. In consideration of the parties’ compliance with their
respective obligations, the parties exchanged a full and final release from any
right or recourse arising from the job, the employment relationship and its
termination on October 26, 2014, including the complaints filed by
the appellant with the Commission des normes du travail.
[11]
The appellant testified that the payor had not
counted the overtime as insurable hours for Employment Insurance purposes.
Those overtime hours were worked when he was travelling on behalf of the payor.
When he was on the road, the appellant was entitled to a daily rate of $125 for
a 40-hour week. Any hours worked in excess of the 40 weekly hours were
paid in cash at straight time every week. The 40 weekly hours were paid by
direct deposit.
[12]
According to the appellant’s notes, he spent
45 days working on the road during the period at issue, including
14 consecutive days in June 2014 in PEI and New Brunswick. He
worked in several places in Quebec and even went to Toronto. When he was
working off-site, he was always with another employee. The appellant would fill
out time cards indicating the number of hours worked each day at the straight
time or overtime rate and the places where he worked.
[13]
The Minister did not accept the appellant’s
claims, because the information he had provided was not corroborated by the
payor or by the employees who had accompanied him. With regard to the two
complaints, the Commission des normes du travail did not accept that the
appellant had worked overtime paid in cash during the period at issue.
[14]
The appellant adduced no evidence of his travel
expenses. Such evidence would have clearly shown the places he went along with
the exact dates and distances travelled each day. However, the appellant did
adduce as evidence certain ads made by the payor announcing the arrival of its
experts in an area and providing the dates, locations and addresses, as well as
the times at which people could go meet with them (usually 9 a.m. to
5 p.m.). These events were even held on Saturdays and Sundays.
[15]
The respondent thinks it possible that the
appellant was paid a flat rate of $125 per day by direct deposit and paid in
cash for overtime, but finds that the appellant’s method of calculation is
imprecise and that it is consequently difficult to determine the appellant’s exact
earnings for the period at issue. It is even harder to determine the number of
insurable hours because the payor provided no evidence of the number of hours
that the appellant actually worked.
[16]
According to the respondent, the number of hours
of insurable employment must be determined in accordance with
subsection 10(5) of the Insurable Earnings and Collection of Premiums
Regulations SOR/97-33, which reads as follows:
10(5) In the absence of evidence indicating
that overtime or excess hours were worked, the maximum number of hours of
insurable employment which a person is deemed to have worked where the number
of hours is calculated in accordance with subsection (4) is seven hours
per day up to an overall maximum of 35 hours per week.
[17]
Despite the application of
subsection 10(5), the Minister accepted the 40 weekly hours based on
the payor’s information.
[18]
In any event, I believe that the appellant’s
appeal should be allowed. He has convinced me that, during the period at issue,
he worked overtime that was paid in cash. His testimony was credible, and the
documentary evidence adduced, though lacking and vague in some respects, was
sufficient to show the number of overtime hours worked.
[19]
The appellant was consistent in his version of
the facts. He filed complaints with the Commission des normes du travail and
reported in his tax return for 2014 the sums received from the payor in
cash.
[20]
For all of these reasons, the appeal is allowed
and the matter is referred back to the Minister for redetermination on the basis
that the appellant accumulated 808 insurable hours and insurable earnings
totalling $11,935 during the period at issue.
Signed at Ottawa, Canada, this 24th
day of August 2016.
"Réal Favreau"
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