Citation: 2006TCC489
Date: 20060912
Dockets: 2005-1290(EI), 2005-1291(EI),
2005-1292(EI),
2005-1293(EI),
2005-1499(EI)
BETWEEN:
2158-3331 QUÉBEC INC.,
o/a LA MAISON DU PÊCHEUR,
and
NADINE BEAUDRY,
Appellants,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
[OFFICIAL ENGLISH TRANSLATION]
REASONS FOR JUDGMENT
Tardif J.
[1] The facts of the
five instant appeals are similar enough that the parties consented to have all
the appeals heard on common evidence.
[2] The Appellant
Nadine Beaudry did not attend. However, Georges Mamelonet, the
principal shareholder of the corporation, filed a power of attorney authorizing
him to appear on her behalf.
[3] At the outset, Mr.
Mamelonet admitted to all the facts alleged by the Respondent. Consequently, he
is not contesting the facts set out in the statutory declarations, nor is he
contesting the contents of the numerous documents considered during the audit
and the analysis that led to the determinations under appeal.
[4] Thus, Mr. Mamelonet
has stated that his objections to the assessments are essentially based on the
interpretation of the uncontested facts.
[5] Even though all the
facts were admitted to, the parties called witnesses.
[6] For its part, the
Appellant corporation called chef Sylvio Asselin, who has been working for
the corporation for several years. Mr. Asselin explained that he liked his job
and was very proud to be a member of the staff of the restaurant that operates
as La Maison du Pêcheur.
[7] He testified that
he began working at the restaurant at the bottom of the ladder, gradually working
his way up by means of traineeships through specialized schools.
[8] He acknowledged
that, in addition to the periods of work stated on the Records of Employment
(ROEs), he would sometimes go to the restaurant to check on the delivery of
products that he had ordered from home. In his view, this was a minimal task
and accounted for an utterly marginal number of hours, which he was unable to
estimate.
[9] He said that he did
this in order to ensure that the restaurant ran properly. In addition, he
said that he sometimes liked to go to his workplace, not to work, but to chat
with his co-workers.
[10] The persons concerned
by the instant appeals lived in the small community where the restaurant is
located. They carried out responsibilities and made decisions in order to ensure
that the business ran smoothly.
[11] The president of the
corporation explained that the people in question had been working for the
business for several years; some, in fact, had 15 to 20 years of experience. He
also said that they started at the bottom, and that since they demonstrated
ability as well as keen interest in their work, the corporation invested in
developing their knowledge to such an extent that, over the years, they became
the heads of their respective departments.
[12] Based on these
facts, Mr. Mamelonet said that the people in question were very proud of their
work and were concerned about the smooth operation of the business. He also
emphasized that the people in question took initiatives without his direct or
indirect involvement. In other words, he did not ask the persons concerned by
the appeals to report to work or carry out certain tasks outside the periods
stated in their ROEs.
[13] When people share a
passion, and live in a small community far from major centres, it is quite
normal and legitimate for bonds of friendship, solidarity and mutual assistance
to form and develop over the years. In a context of this kind, it is easy to
conceive of many unique situations where human relationships are very different
from the standard that is often set based on what occurs in major cities.
[14] Be that as it may,
the provisions of the Employment Insurance Act remain applicable.
[15] One must consider
the context, that is to say, the complaints or unusual observations that raise
legitimate suspicions about the accuracy of the facts set out in the ROEs.
[16] The investigators
noticed that the dates on various invoices that were issued to the business, but
also bore the names of certain employees, sometimes preceded or were subsequent
to the periods stated on those employees' ROEs. Based on these observations,
they doubted the accuracy of the dates on which the periods of employment were
said to have begun and ended.
[17] At this stage, the
person responsible for the file determined that the people whose names were
stated on the invoices had performed work outside the periods stated in the
Records of Employment. He assumed that the people concerned had worked eight
hours on the date that their name was stated on the invoice, even though it
takes only a few seconds to affix one's signature.
[18] The Court must choose
between two versions of the facts. According to the first version, the
employees were at work for short times during the periods in question. This
version was put forth in the testimony of the person who runs the corporation,
as well as the cook, who is directly concerned by one of the instant appeals. The
second version was put forth by the person responsible for analyzing the file,
who made the determination that the employees worked full eight-hour days based
on the fact that their names were found on an invoice.
[19] I tried to find out
whether the investigation revealed that the practice of working certain hours,
but not reporting them, was engaged in by all the corporation's 40 or so
employees — in other words, whether it was generalized or very
widespread. The findings with respect to this practice concerned only some
employees, specifically, those who had important duties within the organization
and had been working at the restaurant for many years (i.e. 15 years or more).
[20] I have frequently stated
that the employment insurance program is not a business support program or a
way for businesses to reduce their payroll. I have also stated that all work
must generally be remunerated.
[21] I have often heard
explanations like "It was not work, it was volunteering," or "It
was not work because I wasn't being paid." In most cases where such
statements are made, the parties are not dealing with each other at arm's length.
[22] In the case at bar,
the parties concerned by the employment contract were dealing with each other
at arm's length, and the seasonal factor is not part of the equation.
[23] The facts are not in
dispute. However, they are interpreted very differently. I feel it is
important to note, from the outset, that the parties to the employment contract
are not related to each other and are at arm's length from each other.
[24] After examining all
the relevant facts, I find that I have no reason not to accept Mr. Mamelonet's
explanations regarding the circumstances that account for the presence of
certain employees on restaurant premises at times when the ROEs adduced in
evidence stated that they were not working. I have no reason to reject his
testimony, which I found, under the circumstances, to be reasonable and
credible.
[25] These were very
short, sporadic attendances which frequently had nothing to do with the paid
work. The employees in question had accrued several years of service, and, over
the years, they had developed an attachment to the restaurant, which was a
source of pride for them.
[26] They were passionate
about their work and cared a great deal about the smooth operation of the
business. Since their community was small, they developed bonds of friendship
and solidarity that extended beyond the framework of the employment
relationship; it is because of this very special context and these equally
exceptional facts that I find for the Appellants.
[27] The case at bar is
comparable to that of a model employee who, while watching television, thinks
about the next day, plans his work, and precisely schedules each of the
different tasks that he will need to perform.
[28] Such mental work,
which, though unsolicited, is beneficial to the employer, is most often unpaid.
[29] However, people who
demonstrate such a dynamic, enthusiastic attitude toward their job are often
recognized for their efforts and build a solid foundation for their career
development, thereby compensating, in a sense, for the lack of pay. Naturally,
this is an unusual situation where it is difficult, if not impossible, to come
to an absolute conclusion, because human beings are enigmatic.
[30] Based on the jobs that
were done by the persons concerned by the instant appeals, they were clearly
key players in the business. They carried out their responsibilities with
dedication and interest.
[31] Consequently, the
appeals are allowed and the determinations of the Minister of National Revenue
are vacated.
Signed at Ottawa, Canada,
this 12th day of September 2006.
"Alain Tardif"
Translation certified true
on this 28th day of June, 2007.
Brian McCordick, Translator
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