Date: 19990521
Docket: 98-609-UI,
98-610-UI,
98-611-UI
BETWEEN:
ALAIN LEBEL,
ANDRÉ LANDRY,
MICHEL DION,
Appellants,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Reasonsfor
Judgment
Tardif, J.T.C.C.
[1]
These three appeals were heard together on common evidence.
[2]
The question at issue is whether the amounts paid to the
appellants outside the time periods indicated on the various
records of employment constituted insurable earnings.
[3]
The respondent argued that the amounts were wages received in the
course of the same employment as that which was characterized as
insurable, the dates of which are shown on the various records of
employment.
[4]
The appellants, for their part, argued that the amounts were
primarily reimbursements for expenses incurred in the course of
customer recruiting activities; they admitted that part of the
amounts may have been wages.
[5]
Initially, the work for the time periods indicated on the records
of employment was determined to be insurable. The respondent
assumed that the work performed outside those periods was
insurable as well.
[6]
For employment to be insurable, however, it must be held under a
genuine contract of service, failing which it is not insurable
employment.
[7]
The Court is in no way bound by whatever characterization the
respondent may give to particular employment for a specified
period. Nor can the Court assume that amounts paid by the payer
outside the periods characterized as insurable are also insurable
earnings.
[8]
To be characterized as insurable, employment must satisfy certain
basic criteria that cannot be presumed to have been met but must
be proved on a preponderance of evidence.
[9]
After determining that the employment for which the periods are
specified on the records of employment was insurable, the
respondent concluded that the amounts of the cheques issued by
the payer in the appellants' names for periods not covered by
their records of employment provided a sufficient basis for
concluding that the fact that cheques were issued indicated that
there was employment and, much more, that this alleged employment
was insurable.
[10]
Insurability may not be presumed; there are essential conditions
that must be met, including, inter alia, the performance
of work and the payment of remuneration based on the quality and
quantity of the work performed. In addition, the person receiving
the remuneration must be subject to the authority and supervisory
power of the payer or its representative.
[11] In the
case at bar, there was no evidence that the alleged work met the
conditions required for it to be characterized as insurable.
[12] Were the
amounts shown on the various cheques issued to the appellants and
cashed by them for weeks that were not covered by the records of
employment insurable earnings? To answer this question in the
affirmative would imply that all the essential conditions for
insurability had been met. However, there was no evidence that
the alleged work performed by the appellants met the requirements
for it to be determined to be insurable. Moreover, there was no
evidence or allegation that the work determined to be insurable
was exactly the same for the periods at issue.
[13] The
respondent initially determined that the work performed by the
appellants for the periods described on the records of employment
was insurable. Subsequently, the fact that the payer business
operated throughout the year and that cheques had been issued
appears to have been sufficient for the respondent to conclude
that the employment outside the periods indicated was insurable
as well.
[14] The Court
is not bound by the respondent's intuitive
determinations.
[15] In
support of his decision, the respondent alleged the
following:
Alain Lebel, 98-609(UI)
[TRANSLATION]
(a) the payer was incorporated in 1983 under the name of
Construction Rémi Landry et Fils;
(b) in August 1985, the company changed its name to Protection
Garvex Inc.;
(c) the shareholders of the payer were
Alain Landry 29% of the shares
Rémi Landry 17% of the shares
Gaston Landry 29% of the shares
Michel Landry 17% of the shares
Colette Landry 5% of the shares
André Landry 3% of the shares
(d) the payer specialized in the installation and maintenance
of fire and theft security systems, restaurant equipment and
propane gas equipment;
(e) the payer's business operated throughout the year;
(f) the payer provided no explanation to the appeals officer
concerning payments of money to the appellant;
(g) the appellant was a technician employed by the payer;
(h)
on November 6, 1991, the payer issued to the appellant a record
of employment for the period from February 18, 1991, to
September 20, 1991, indicating 16 weeks of employment and
total earnings of $6,400.00;
(i)
on June 15, 1992, the payer issued to the appellant a record of
employment for the period from March 16, 1992, to June 12, 1992,
indicating 11 weeks of employment and total earnings of
$4,520.00;
(j)
on December 18, 1992, the payer issued to the appellant a record
of employment for the period from July 20, 1992, to December 4,
1992, indicating 8 weeks of employment and total earnings of
$3,478.00;
(k) the appellant received amounts of money from the payer
both before and after his alleged periods of employment;
(l) the number of weeks worked and remuneration paid shown on
the appellant's records of employment are false;
(m) in 1991, the appellant was employed by the payer for 34
weeks and received insurable earnings of $10,447.11;
(n) in 1992, the appellant was employed by the payer for 32
weeks and received insurable earnings of $11,597.40.
André Landry, 98-610(UI)
[TRANSLATION]
(a) the payer was incorporated in 1983 under the name of
Construction Rémi Landry et Fils;
(b) in August 1985, the company changed its name to Protection
Garvex Inc.;
(c) the shareholders of the payer were
Alain Landry 29% of the shares
Rémi Landry 17% of the shares
Gaston Landry 29% of the shares
Michel Landry 17% of the shares
Colette Landry 5% of the shares
André Landry 3% of the shares
(d) the payer specialized in the installation and maintenance
of fire and theft security systems, restaurant equipment and
propane gas equipment;
(e) the payer's business operated throughout the year;
(f) the payer provided no explanations to the appeals officer
concerning payments of money to the appellant;
(g) the appellant was a technician employed by the payer;
(h)
on November 27, 1991, the payer issued to the appellant a record
of employment for the period from January 7, 1991, to October 18,
1991, indicating 15 weeks of employment and total earnings of
$6,750.00;
(i)
on December 14, 1992, the payer issued to the appellant a record
of employment for the period from January 13, 1992, to
December 11, 1992, indicating 16 weeks of employment
and total earnings of $7,344.00;
(j)
on December 30, 1993, the payer issued to the appellant a record
of employment for the period from April 19, 1993, to December 17,
1993, indicating 20 weeks of employment and total earnings of
$9,000.00;
(k)
the appellant received amounts of money from the payer both
before and after his alleged periods of employment;
(l)
the number of weeks worked and remuneration paid shown on the
appellant's records of employment are false;
(m)
in 1991, the appellant was employed by the payer for 16 weeks and
received insurable earnings of $6,019.87;
(n) in 1992, the appellant was employed by the payer for 35
weeks and received insurable earnings of $12,925.04;
(o) in 1993, the appellant was employed by the payer for 38
weeks and received insurable earnings of $14,786.38.
Michel Dion, 98-611(UI)
[TRANSLATION]
(a) the payer was incorporated in 1983 under the name of
Construction Rémi Landry et Fils;
(b) in August 1985, the company changed its name to Protection
Garvex Inc.;
(c) the shareholders of the payer were
Alain Landry 29% of the shares
Rémi Landry 17% of the shares
Gaston Landry 29% of the shares
Michel Landry 17% of the shares
Colette Landry 5% of the shares
André Landry 3% of the shares
(d) the payer specialized in the installation and maintenance
of fire and theft security systems, restaurant equipment and
propane gas equipment;
(e) the payer's business operated throughout the year;
(f) the payer provided no explanations to the appeals officer
concerning the photocopies of cheques relating to the worker;
(g) the appellant was a technician employed by the payer;
(h) on April 25, 1991, the payer issued to the
appellant a record of employment for the period from August 20,
1990, to September 14, 1990, indicating 4 weeks of
employment and total earnings of $2 000.00;
(i)
on July 10, 1992, the payer issued to the appellant a record of
employment for the period from August 26, 1991, to June 19, 1992,
indicating 16 weeks of employment and total earnings of
$7,200.00;
(j) the appellant received amounts of money from the payer
both before and after his alleged periods of employment;
(k) the worker's record of employment of July 10, 1992, is
false;
(l) in 1991, the appellant was employed by the payer for 32
weeks and received insurable earnings of $9,423.02;
(m) on June 19, 1992, the appellant did not stop working for
the payer;
(n) in 1992, the appellant was employed by the payer for 44
weeks and received insurable earnings of $13,776. 69.
[16] There was
no evidence or allegation that the work supposedly performed
during the periods at issue was done under a genuine contract of
service. The evidence, moreover, did not establish that the work
performed for the periods referred to on the various records of
employment was insurable.
[17] The
respondent assumed that the Court would concur in his
determination regarding the insurability of the employment for
the periods indicated on the appellants' records of
employment. However, that determination is not part of the
instant cases and, accordingly, is not relevant to the
disposition of these appeals.
[18]
Furthermore, it cannot be assumed that determining work to be
insurable for a specific period makes work performed outside that
period insurable as well. The Court finds that it has not been
shown by a preponderance of evidence that genuine contracts of
service were involved here.
[19]
Accordingly, the Court does not have to decide whether the
amounts paid by cheque should be characterized as real wages,
disguised wages, a reimbursement of expenses, a percentage of
sales or anything else.
[20] The
parties had a multitude of means at their disposal to provide the
Court with evidence that could have brought to light all the
facts and circumstances relating to the alleged employment.
Likely fearing to take any action that might have effects
contrary to those they were looking for, the parties preferred to
withhold such evidence from the Court no doubt in the belief that
the Court possessed a divine power to discover the whole truth
all by itself, without any evidence, and to guess the facts that
were unavailable from the evidence.
[21] The
appellants argued that the amounts they received were essentially
reimbursements of expenses. In this regard, it would be somewhat
surprising that the outlays required for travel throughout huge
territories should prove to have been exactly the same from one
week to the next. Instead, I think a formula was involved that
allowed the employer to have employees the cost of whom was met
in part through unemployment insurance benefits. If this was so,
there was never any genuine contract of service, since the
agreement would have had features that were incompatible with the
existence of a genuine contract of service.
[22] I do not
believe I have jurisdiction to rule on periods that are not the
subject of any dispute, namely, the periods acknowledged and
determined by the respondent to be insurable. And if I
appropriated such jurisdiction to myself, there would be nothing
for me to determine, since there was no evidence relating to
those periods that would enable me to make a determination.
[23] I must
render my decision essentially with respect to the periods at
issue and on the basis of the evidence adduced by the parties. In
this regard, not only did the respondent do a poor job of
preparing the cases, the investigation that led him to make the
determination he did was incomplete and slapdash. The
determination was thus basically intuitive; it certainly does not
meet the requirements for concluding that the employment in
question was insurable.
[24] The
appellants, for their part, were involved in a process that they
made no effort to correct, since that could have run counter to
the goal they were seeking. Although the burden of proof rested
upon each appellant's shoulders and although the allegations
in each Reply to the Notice of Appeal were presumed to be true
until the contrary was proved, it was not in the appellants'
interest to explain anything or, by offering explanations, to
correct the assumptions relied on by the respondent.
[25] The
allegations supporting the determination were incomplete and in
no way justified the conclusions on which was based the
characterization of the amounts received as remuneration paid
under a contract of service.
[26] The
weight of the evidence essentially established that the
appellants had done work for Protection Garvex Inc. in return for
which they had received cheques. The work they performed seems to
have extended well beyond the periods shown on the records of
employment. This in itself could lead one to believe that the
appellants and Protection Garvex Inc. had entered into a sort of
arrangement allowing the company to receive the benefit of the
appellants' work without having to pay them a full salary,
since unemployment insurance benefits made up the difference.
[27] One thing
is certain, the evidence before the Court does not support a
conclusion that there was a genuine contract of service within
the meaning of the Unemployment Insurance Act, and
consequently the amounts on the cheques could not be determined
to be insurable earnings.
[28] For these
reasons, the Court allows the appeals since it was not shown that
the appellants had performed work under a genuine contract of
service during the period at issue.
Signed at Ottawa, Canada, this 21st day of May 1999.
"Alain
Tardif"
J.T.C.C.
Translation certified true on this 15th day of January
2002.
[OFFICIAL ENGLISH TRANSLATION]
Erich Klein, Revisor
[OFFICIAL ENGLISH TRANSLATION]
98-609(UI)
BETWEEN:
ALAIN LEBEL,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard on common evidence with the
appeals of André Landry (98-610(UI)) and
Michel Dion (98-611(UI)), on April 29, 1999, at Rimouski,
Quebec, by
the Honourable Judge Alain Tardif
Appearances
Counsel for the Appellant:
Valère M. Gagné
Counsel for the
Respondent:
Suzanne
Morin
JUDGMENT
The
appeal is allowed and the decision of the Minister of National
Revenue is vacated in accordance with the attached Reasons for
Judgment.
Signed at Ottawa, Canada, this 21st day of May 1999.
"Alain
Tardif"
J.T.C.C.
Translation certified true
on this 15th day of January 2002.
Erich Klein, Revisor
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