Chayer v. M.N.R., docket 97-643-UI

Date: 19980520

Docket: 97-643-UI; 97-644-UI

BETWEEN:

NICOLE CHAYER,

ARMAND AND ARMANDE CHAYER,

Appellants,

and

THE MINISTER OF NATIONAL REVENUE,

Respondent.

Reasons for Judgment

Pierre Archambault, J.T.C.C.

[1]            The appellants are contesting a determination made by the Minister of National Revenue ("the Minister") under the Employment Insurance Act ("the Act"). The Minister decided that Nicole Chayer's employment with Les Entreprises A. Chayer ("Entreprises") during the period from December 12 to 18, 1996 ("the relevant period") was not insurable. Entreprises is owned by Armand and Armande Chayer. The Minister argued that Nicole Chayer did not perform any work during that period or that if she did, her employment was "employment of convenience".

[2]            Counsel for the Minister confirmed that the Minister had not applied paragraph 5(2)(i) of the Act and did not intend to rely on that provision. I have therefore concluded that the terms and conditions of Ms. Chayer's employment — if in fact there was a contract of employment — would have been substantially similar even if she and Entreprises had been dealing with each other at arm's length. The Minister also confirmed that Ms. Chayer's employment for the period from June 17 to November 15, 1996 was insurable.

[3]            In making his decision, the Minister relied, inter alia, on the following facts:

[TRANSLATION]

(a)            the payer operates a business specializing in cardboard and fabric recycling under the firm name Les Entreprises A. Chayer;

(b)            the business is owned by Armand and Armande Chayer, the appellant's parents;

(c)            the appellant worked for Autobus Rive-Nord Inc. from May 27 to June 21, 1996;

(d)            from June 17 to 21, 1996, the appellant worked for the payer in the evenings, from 5:00 to 9:30 p.m.;

(e)            after June 21, 1996, the appellant began working for the payer full time;

(f)             she sorted the materials to be recycled;

(g)            on November 22, 1996, the appellant applied for unemployment insurance benefits;

(h)            the appellant needed another week to qualify;

(i)             on November 27, 1996, Guylaine Bergeron sent Revenue Canada a verification request;

(j)             on December 13, 1996, Johanne Di Mauro of Revenue Canada explained to the appellant that although she had held two jobs during the week of June 17 to 22, 1996, she had accumulated only one week of employment that week;

(k)            on December 19, 1996, the worker went to the employment centre with another record of employment that included one week of work for the appellant, from December 12 to 18, 1996;

(l)             in the payer's payroll, the week of June 17 to 22, 1996, was erased with regard to the appellant;

(m)           for the week ending November 21, 1996, the following was noted in the payroll: [TRANSLATION] "pay wages from June 17 to 21";

(n)            the five days allegedly worked from December 12 to 18, 1996, began on a Thursday and ended on a Wednesday, whereas all the other weeks recorded ended on a Friday;

(o)            the payer and the appellant entered into an arrangement so that the appellant could qualify for unemployment insurance benefits;

(p)            there was no genuine contract of service between the appellant and the payer during the period at issue.

[4]            Ms. Chayer admitted all of these facts, with the exception of paragraphs (h), (l), (m), (o) and (p).

[5]            Nicole Chayer and both of her parents testified at the hearing. The evidence established the following additional facts. Nicole Chayer explained the circumstances that led to her being hired during the relevant period. According to her, a trailer full of materials to be recycled was delivered to Entreprises, which meant that an extra person had to be hired. She said that her father called her to come work and that she worked between 30 and 40 hours over the five days. Her mother confirmed that she looked after Ms. Chayer's children during that time, while her father, who supervised her, confirmed that he saw her do the work in question.

[6]            A copy of the payroll was filed at the hearing. It showed that Nicole Chayer worked from June 17 to November 15 and for five days in December, starting on the 12th. The paycheques were filed, including the one dated December 18, 1996, covering the relevant period.

Analysis

[7]            Counsel for the Minister argued that Ms. Chayer did not do the work she claims to have done. He did not assign much credibility to the testimony at the hearing. Nicole Chayer was hired during a rather slow period for Entreprises. Moreover, she started working not at the beginning of the week but on Thursday, December 12, 1996. Furthermore, Ms. Chayer acknowledged that she worked because she needed another week to be entitled to employment insurance benefits.

[8]            Although it is possible to have doubts about the coincidence of Ms. Chayer being hired for the period from December 12 to 18, 1996, I am satisfied on the balance of probabilities that she genuinely performed services during the relevant period. Her testimony was corroborated by her parents'. Since she was paid wages and performed work and since there was a relationship of subordination, all of the elements essential for there to be a contract of employment were present.

[9]            Even though there was a contract of employment and services were performed, counsel for the Minister argued that the employment was not insurable because it was "employment of convenience". However, the courts have acknowledged that employment of convenience may be regarded as insurable employment for the purposes of the Act. In Canada (Attorney General) v. Rousselle, [1990] F.C.J. No. 990, Hugessen J.A. of the Federal Court of Appeal stated the following:

I do not think it is an exaggeration to say, in light of these facts, that if the respondents did hold employment this was clearly "convenience" employment, the sole purpose of which was to enable them to qualify for unemployment insurance benefits. These circumstances certainly do not necessarily prevent the employment from being insurable, but they imposed on the Tax Court of Canada a duty to look at the contracts in question with particular care; it is apparent that the motivation of the respondents was the desire to take advantage of the provisions of social legislation rather than to participate in the ordinary operation of the economic forces of the market place.

                                                                                                                [Emphasis added.]

[10]          It is thus clear that employment of convenience can be insurable employment. However, this Court has a duty to look at the contract with care to ensure that all of the requirements for there to be insurable employment have been met. In the instant case, I have already concluded that all of the requirements for there to be a contract of employment have been met.

[11]          For these reasons, the appellants' appeals are allowed and the Minister's decision is varied on the basis that Nicole Chayer's employment from December 12 to 18, 1996 was insurable.

Signed at Ottawa, Canada, this 20th day of May 1998.

"Pierre Archambault"

J.T.C.C.

[OFFICIAL ENGLISH TRANSLATION]

Translation certified true on this 16th day of December 1998.

Kathryn Barnard, Revisor