Trotter v. M.N.R., docket 98-86-UI

Date: 19980930

Docket: 98-86-UI

BETWEEN:

ROBERT TROTTER,

Appellant,

and

THE MINISTER OF NATIONAL REVENUE,

Respondent.

Reasons for Judgment

Mogan, J.T.C.C.

[1] The issue in this appeal is whether the Appellant was engaged in insurable employment in the period May 13, 1994 to November 18, 1996 when he was performing certain services for the province of British Columbia. The Appellant was the only witness and he described the services which he performed.

[2] On May 13, 1994, the Appellant commenced working at the Traffic Engineering Centre of the Ministry of Transportation and Highways for the province of British Columbia. His principal task was to repair electronic control equipment which actuated traffic lights. He also performed acceptance tests on new equipment and other related tasks. For remuneration purposes, he was paid as a contractor on a fee-for-services basis and not as an employee. At first, he was paid by piece work with a specific rate for each job. After a few months, he was changed to an hourly rate of $20.50 per hour. This rate was later increased to $22.00 per hour which was his rate in March 1997 when his work at the Traffic Engineering Centre ("TEC") ended.

[3] Every two weeks, he would submit an invoice to the TEC containing, at first, a list of the jobs he performed times the piece-work rate; and later, the number of hours he worked times the hourly rate. He was always paid the gross amount of his invoice with no source deductions for income tax, Canada Pension Plan contributions or unemployment insurance premiums. There were four other persons in the same position as the Appellant performing the same kind of services. They worked a 35-hour week like all of the regular employees at the TEC; and they were all permitted to work a 40-hour week and "bank" the extra five hours for additional days off. Apart from remuneration (i.e. gross pay with no source deductions), the Appellant said that he was treated like a regular employee in the sense that he was criticized if he was late arriving at work or away too long at lunch.

[4] In 1996, the Ministry of Transportation and Highways decided to move the TEC from Victoria to Delta on the lower mainland, just south of New Westminster. Most of the regular employees did not want to work at Delta and applied to transfer to some other government department in the Victoria area. As a contractor, the Appellant would not have been moved and would have lost his work. On December 17, 1996, the Appellant and two other men doing similar work filed grievances pursuant to Part 8 of the British Columbia Labour Relations Code. The grievances were determined by arbitration between the Government of B.C. (as employer) and the B.C. Government & Service Employees' Union (representing the Appellant and two others).

[5] The arbitrator's award (a four-page decision) is attached to the Appellant's Notice of Appeal and is Exhibit A-1. For the purpose of the arbitration, and on a without prejudice basis, the Government of British Columbia (as employer) agreed that the Appellant plus the two others were employees. The employer disputed the arbitration, however, on the basis that the three grievances were out of time because the union agreement had a 30-day time limit for launching a grievance. The arbitrator did not reject the grievances as untimely because the employer's treatment of the three individuals represented a continuing breach of the collective agreement. Accordingly, the arbitrator limited the remedy which could be provided and declared:

(a) The Grievors are employees and not contractors of the Government of British Columbia; and

(b) The Grievors have status as auxiliary employees, effective November 19, 1996, 30 days prior to the date of this grievance.

[6] The Appellant relies on the arbitrator's decision and the "without prejudice" concession of the Province to argue that he was engaged in insurable employment throughout the time he worked at the TEC (from May 17, 1994 to March 13, 1997). The Respondent concedes that the Appellant was engaged in insurable employment from November 19, 1996 to March 13, 1997 when he had the status of an "auxiliary employee" in accordance with the arbitrator's award. The Respondent relies on the provisions of the Unemployment Insurance Act and related legislation to argue that the Appellant was not engaged in insurable employment from May 17, 1994 to November 18, 1996. Under subsection 3(1) of the Unemployment Insurance Act, insurable employment is defined as employment "that is not included in excepted employment". Subsection 3(2) states:

3(2) Excepted employment is

...

(e) employment in Canada under Her Majesty in right of a province;

[7] The Canada Employment and Immigration Commission is permitted by section 4 to make certain regulations as follows:

4(1) The Commission may, with the approval of the Governor in Council, make regulations for including in insurable employment

...

(d) employment in Canada by Her Majesty in right of a province if the government of the province waives exception and agrees to insure all its employees engaged in that employment;

Part II of the Unemployment Insurance Regulations contains the following provision:

8(1) Employment in Canada by Her Majesty in right of a province that would, except for paragraph 3(2)(e) of the Act, be insurable employment is included in insurable employment if the government of the province enters into an agreement with the Commission whereby it agrees to waive exception and to insure all employees engaged in such employment.

8(2) For greater certainty, employment in Canada by Her Majesty in right of a province, for the purposes of subsection (1), only includes employment in Canada of employees who are appointed and remunerated under the Public Service Act or Civil Service Act of a province or who are employed in Canada by a corporation, commission or other body that is, for all purposes, an agent of Her Majesty in right of the province.

Counsel for the Respondent conceded in argument that the Province of British Columbia agreed, in accordance with subsection 8(1) of the Regulations, to bring all of its employees under the federal unemployment insurance legislation. Therefore, the Appellant was accepted as being in "insurable employment" from and after November 19, 1996 when he was held to be an "auxiliary employee" of the Province. Actually, B.C. Regulation 1/72; O.C. 4721/711 is the unemployment insurance regulation under the Public Service Act which states:

1. The consent of the government of the Province of British Columbia is given to the application of the Unemployment Insurance Act (1971) of Canada, as provided in section 4(1)(d) of that Act, to all employees of the government of the Province.

[8] The substance of the B.C. Regulation is that the province agreed to waive the "excepted employment" provision in paragraph 3(2)(e) of the Unemployment Insurance Act for "employees of the government of the province". According to the arbitrator's award, the Appellant was not an auxiliary employee of the government of the Province prior to November 19, 1996 even though, at common law, he probably was an employee as admitted by the Province, without prejudice, for purposes of the arbitration. In my opinion, even if I should find that the Appellant was, at common law, an employee of the Province from and after May 17, 1994, that finding would not be conclusive in the Appellant's favour because of the expressed restriction in paragraph 3(2)(e) of the Unemployment Insurance Act.

[9] The legislation which gives me the greatest concern is the federal regulation 8(2) quoted above which includes the words:

8(2) For greater certainty, employment in Canada by Her Majesty in right of a province, for the purposes of subsection (1), only includes employment in Canada of employees who are appointed and remunerated under the Public Service Act or Civil Service Act of a province ...

It is important to note the words "for greater certainty" because they qualify what is stated in federal Regulation 8(1). Also, the Regulation applies only to "employees who are appointed and remunerated under the Public Service Act or Civil Service Act of a province. Counsel for the Respondent brought to my attention the following provisions of the Public Service Act of British Columbia:

1 In this Act:

"employee" means a person appointed under this Act other than a person appointed under section 15.

8(1) Subject to section 10, appointments to and from within the public service must

(a) be based on the principle of merit, and

(b) be the result of a process designed to appraise the knowledge, skills and abilities of eligible applicants.

10 Subject to the regulations

(a) section 8(1) does not apply to an appointment that is a lateral transfer or a demotion, and

(b) section 8(1)(b) does not apply to the following:

(i) a temporary appointment of not more than 7 months in duration;

(ii) an appointment of an auxiliary employee;

(iii) a direct appointment by the commissioner in unusual or exceptional circumstances.

[10] The arbitrator decided that the Appellant was an "auxiliary employee" from and after November 19, 1996. The arbitrator could not make a decision with respect to the period of time before November 19, 1996 because of the 30-day limit for launching a grievance in the collective agreement. I am not restricted by such a 30-day limit. I have no difficulty in concluding that the Appellant was an employee of the Province (i.e. engaged in a contract of service) at all relevant times when he worked at the TEC. Therefore, the Appellant would be in "excepted employment" under paragraph 3(2)(e) if it were not for the escape clause in paragraph 4(1)(d). There is no doubt that the Province of British Columbia agreed to insure all of its employees for unemployment insurance purposes. See B.C. Regulation 1/72; O.C. 4721/711 quoted above. Therefore, the employees of the Province of British Columbia are taken out of "excepted employment" and come within "insurable employment".

[11] With respect to section 8(1)(b) of the B.C. Public Service Act, the Appellant acknowledged that, when he was first engaged in May 1994, he did not go through any process designed to appraise his knowledge, skills or abilities. Having regard to section 10(b)(ii) of the B.C. Public Service Act, the Appellant was held (by the arbitrator) to be an auxiliary employee and so section 8(1)(b) did not apply to him. I would therefore conclude that that the Appellant was appointed to the public service of British Columbia under the Public Service Act (specifically, paragraph 8(1)(a)) because his appointment was based on merit (i.e. his ability to repair electronic control equipment) and his employment continued for 34 months. If the Appellant was appointed and remunerated as an auxiliary employee "under the Public Service Act of a province", then he comes under the "for greater certainty" umbrella of subsection 8(2) of Unemployment Insurance Regulations.

[12] In conclusion, I find that the Appellant's work at the TEC was employment under a contract of service. He was not an independent contractor. I find that the Appellant's employment at TEC was not excepted employment because the Province of British Columbia had agreed to insure all of its employees within the meaning of paragraph 4(1)(d) of the Unemployment Insurance Act and subsections 8(1) and 8(2) of the Unemployment Insurance Regulations. The appeal is allowed.

Signed at Ottawa, Canada, this 30th day of September, 1998.

"M.A. Mogan"

J.T.C.C.