Date: 19991125
Docket: 1999-2603-EI
BETWEEN:
MARY LOU MCKENNA,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Reasons for Judgment
Weisman, D.J.T.C.C.
[1] This is an appeal under subsection 103(1) of the
Employment Insurance Act (the "Act").[1]
The Issue
[2] At issue is whether the Appellant accumulated sufficient
insurable hours to qualify for unemployment benefits during the
relevant period.
The Employment of the Appellant
[3] The Appellant was employed by York University as a writing
instructor during the 1997-98 academic year. She received a fixed
wage in the amount of $9,806.80 payable in equal monthly
instalments over the 35-week life of the contract.
[4] She was required by the terms of that contract to spend at
least 174 contact hours in one-on-one tutoring sessions with
individual students. In addition, she was responsible for group
teaching, committee work, the training and supervision of
teaching assistants, liaison work with writing-intensive courses,
participation in professional development activities, or any
other activities that would make her expertise in the teaching of
writing available to her colleagues in the Faculty of Arts.
[5] The Appellant, accordingly, had considerable discretion
both in the number of insurable hours she could work, and in the
proportion thereof she could work at home.
The Regulations
[6] The method of determination of hours of insurable
employment where a person's earnings are not paid on an
hourly basis is covered by section 10 of the Employment
Insurance Regulations (the "Regulations")[2] the relevant
subsections of which provide as follows:
"10.(1) Where a person's earnings are not paid on an
hourly basis but the employer provides evidence of the number of
hours that the person actually worked in the period of employment
and for which the person was remunerated, the person is deemed to
have worked that number of hours in insurable employment.
(2) Except where subsection (1) and section 9.1 apply, where
there is doubt or lack of specific knowledge on the part of the
employer as to the actual hours of work performed by a worker or
by a group of workers, the employer and the worker or group of
workers may, subject to subsection (3) and as is reasonable in
the circumstances, agree on the number of hours of work that
would normally be required to gain the earnings referred to in
subsection (1), and, where they do so, each worker is deemed to
have worked that number of hours in insurable employment.
(3) Where the number of hours agreed to by the employer and
the worker or group of workers under subsection (2) is not
reasonable or no agreement can be reached, each worker is deemed
to have worked the number of hours in insurable employment
established by the Minister of National Revenue, based on an
examination of the terms and conditions of the employment and a
comparison with the number of hours normally worked by workers
performing similar tasks or functions in similar occupations and
industries.
(4) Except where subsection (1) and section 9.1 apply, where a
person's actual hours of insurable employment in the period
of employment are not known or ascertainable by the employer, the
person, subject to subsection (5), is deemed to have worked,
during the period of employment, the number of hours in insurable
employment obtained by dividing the total earnings for the period
of employment by the minimum wage applicable, on January 1 of the
year in which the earnings were payable, in the province where
the work was performed.
(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."
The Position of the Appellant
[7] The position of the Appellant is that her actual hours of
insurable employment in the period of employment were not known
or ascertainable by her employer. Subsection 10(4) is accordingly
applicable, and if applied, results in sufficient insurable hours
for her to qualify for unemployment benefits.
[8] The Appellant admitted that she did not maintain a log or
diary of her actual hours worked in insurable employment.
However, because of her 12 prior years experience in performing
the same duties, she was able to calculate a reliable and
accurate average of the insurable hours that she worked. She
accordingly arrived at the sum of 720 insurable hours. She
further admitted to completing an Application for Unemployment
Benefits, which indicated that she worked 12 hours per week or
420 hours over the life of the contract. She did this in the
mistaken belief that her Application had to be congruent with the
Record of Employment, which indicated 420 hours.
[9] The Appellant's Director confirmed that he did not
know and was not able to ascertain the number of actual hours of
insurable employment worked by the Appellant in the period of
employment. It was his testimony that the various activities
undertaken by the Appellant were all contemplated by the terms of
her contract, and that the total of 720 insurable hours was
reasonable and comparable to the number of hours that he himself
worked in similar circumstances.
The Position of the Respondent
[10] The position of the Respondent is that section 10 of the
Regulations propounds a scheme based generally upon the
degree of the employer's knowledge of the actual hours worked
by the employee. It was argued that subsection 10(1) applies
where the employer has full knowledge, subsection 10(4) applies
where there is no knowledge, and that subsection 10(3) applies in
situations such as the present, where the employer has partial
knowledge of the actual number of hours worked, in this case 174.
A comparison of the English and French versions of subsection
10(3) leads to the conclusion that the words "no agreement
can be reached" does not mean that the parties must have
tried and failed to agree. In the Respondent's view,
subsection 10(4) should be narrowly construed and applied only as
a last resort, because it perpetuates the abuses the new
regulatory scheme was designed to obviate, and leads to absurd
results.
[11] The new system is based on total earnings and hours,
rather than weeks of work. The old scheme gave rise to situations
where some employees had hours of work of greater value for
unemployment insurance purposes than did others. To apply
subsection 10(4) to the present fact situation is to defeat the
intent of Parliament, and leads to the absurd result that the
Appellant is deemed to have worked over 1430 insurable hours.
This is almost twice the number she herself claimed. The
Regulations must not be construed in a manner which is
likely to produce arbitrary or capricious results.[3]
[12] The Respondent relied upon three different documents in
determining that the Appellant's actual hours of work
totalled 420, thereby disqualifying her from unemployment
benefits. First, there was a chart derived from a random sample
of universities, which did not apply to writing instructors, and
ascertained only how each institution calculated insurable hours.
The criteria specified in subsection 10(3) were not addressed.
Second, another chart was produced that purportedly contained
hourly equivalents for reporting employment insurance earnings.
This was based upon a formula devised by an academic staff
relations person at York University, and was used to complete its
Records of Employment. It, however, did not reflect actual hours
of work and related only to teachers and not to writing
instructors. Finally, the Respondent referred to the
Appellant's Application for Unemployment Benefits wherein she
indicated that she worked 420 hours over the life of the
contract, as aforesaid.
[13] Recognizing that the Minister of National Revenue took
irrelevant factors into account in exercising his discretion
under subsection 10(3) of the Regulations, counsel invited
me to invoke the doctrine in Tignish Auto Parts Inc. v.
M.N.R.[4] and
Canada (A.G.) v. Jencan Ltd.[5], and find that the Appellant's
insurable hours totalled 420 pursuant to her Application for
Unemployment Benefits.
The Jurisprudence
[14] I have been referred to two reported decisions offering
guidance in the interpretation of section 10 of the new
Regulations.
[15] Franke v. M.N.R.[6] dealt with the meaning of "the employer
provides evidence of the number of hours that the person actually
worked" in subsection 10(1). The Appellant taught
Political Science courses at the University of Victoria. He had
considerable discretion as to the number of insurable hours he
worked outside the classroom in such responsibilities as
preparation, writing lectures, and marking examinations. At
trial, he produced a detailed breakdown of the number of hours he
spent in carrying out his duties. The evidence of the employer as
to the Appellant's insurable hours was derived in part from
the application of a formula negotiated between the Canadian
Association of University Teachers and employment insurance
officials. The Court held that the formula failed to provide
evidence of the number of hours that the Appellant actually
worked. In the result, the appeal was allowed and the
Minister's decision was varied under subsection 103(3) of the
Act, to accord with the Appellant's documented
insurable hours.
[16] In Furtado v. M.N.R.[7], the Appellant was employed as
superintendent of a building owned by the employer. Her
responsibilities consisted of rent collection and cleaning the
premises. The employer disagreed with the Appellant's claimed
hours, but could not specify the actual number of hours she
worked. In the result, subsection 10(4) was applied. The
Appellant was found to lack sufficient insurable hours to qualify
for unemployment benefits, and her appeal was dismissed.
Analysis
[17] The Respondent's arguments were convoluted and
unconvincing. This is a direct result of attempting to fit this
fact situation into subsection 10(3) of the Regulations,
where it plainly does not belong. Subsection 10(3) deals with
hours normally worked and not hours actually worked. It applies
where the number of hours normally worked as agreed to by the
employer and the worker or group of workers under subsection
10(2) is unreasonable, or no agreement on hours normally worked
can be reached. Subsection 10(3) makes no mention of hours
actually worked and is inapplicable thereto.
[18] Before me is a clear case in which the Appellant's
actual hours of insurable employment in the period of employment
were not known or ascertainable by the employer within the
meaning of subsection 10(4) of the Regulations. Formulae
may be of assistance in determining hours normally worked under
subsection 10(3), but not hours actually worked under
subsection 10(4)[8].
[19] If this conclusion may lead to results that are not in
accord with the intent of Parliament in enacting the new
Regulations, that is a matter for Parliament to address
and not the courts[9].
[20] The appeal will be allowed and the decision of the
Minister varied under paragraph 103(3)(a) of the
Act to provide that the number of insurable hours worked,
and for which the Appellant was remunerated during the 1997-98
academic year, was 720.
Signed at Toronto, Ontario, this 25th day of November
1999.
"N. Weisman"
D.J.T.C.C.
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