Date: 20130225
Docket: A-333-12
Citation: 2013 FCA 52
CORAM: NOËL
J.A.
TRUDEL
J.A.
MAINVILLE
J.A.
BETWEEN:
THE ATTORNEY GENERAL OF CANADA
Applicant
and
BERNARD LAPOINTE
Respondent
REASONS FOR JUDGMENT
NOËL J.A.
[1]
This is an
application for judicial review of a decision by Umpire Jacques Blanchard (the
Umpire) dismissing an appeal by the Employment Insurance Commission (the
Commission) against an earlier decision of a Board of Referees. The Umpire
found that the Board of Referees had not erred in determining the earnings of
Bernard Lapointe (the respondent) pursuant to sections 35 and 36 of the Employment
Insurance Regulations (SOR/96-332) (the Regulations) and therefore
dismissed the Commission’s appeal.
[2]
The issue relates to
amounts deducted from the respondent’s income by his employer and remitted on
his behalf to the Commission de la Construction du Québec (CCQ). The CCQ was then to pay
these amounts to the respondent as vacation pay in July and December of each
year (Board of Referees’ Decision, p. 2).
[3]
The respondent, who
was receiving benefits, failed to include these amounts in the calculation of
the earnings he reported to the Commission. Following an investigation, the
Commission notified the respondent that the amounts in question constituted
earnings and had to be allocated, resulting in an overpayment of $150.
[4]
For the purposes of
the Employment Insurance Act, S.C. 1996, c. 23 (the Act), earnings are defined at
sections 35 and 36 of the Regulations, the relevant portions of which
provisions read as follows:
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35. (1) The definitions in this subsection apply in this section.
. . .
“income”
“income” means any pecuniary or
non-pecuniary income that is or will be received by a claimant from an
employer or any other person, including a trustee in bankruptcy. (revenu)
. . .
(2) Subject to
the other provisions of this section, the earnings to be taken into account
for the purpose of determining whether an interruption of earnings under
section 14 has occurred and the amount to be deducted from benefits payable
under section 19, subsection 21(3), 22(5), 152.03(3) or 152.04(4) or section
152.18 of the Act, and to be taken into account for the purposes of sections
45 and 46 of the Act, are the entire income of a claimant arising out
of any employment, including
(a) amounts
payable to a claimant in respect of wages, benefits or other remuneration
from the proceeds realized from the property of a bankrupt employer;
. . .
36 (4) Earnings that are payable to a claimant under a contract of
employment for the performance of services shall be allocated to the period
in which the services were performed.
. . .
(8) Where vacation pay is paid or
payable to a claimant for a reason other than a lay-off or separation from an
employment, it shall be allocated as follows:
(a) where the vacation pay is
paid or payable for a specific vacation period or periods, it shall be
allocated
(i) to a number of weeks that begins with
the first week and ends not later than the last week of the vacation period
or periods, and
(ii) in such a manner that the total
earnings of the claimant from that employment are, in each consecutive week,
equal to the claimant's normal weekly earnings from that employment; and
(b) in any other case, the
vacation pay shall, when paid, be allocated
(i) to a number of weeks that begins with
the first week for which it is payable, and
(ii) in such a manner that, for each week
except the last, the amount allocated under this subsection is equal to the
claimant's normal weekly earnings from that employment.
[Emphasis added.]
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35. (1) Les définitions qui suivent s’appliquent au présent
article.
[…]
« revenu »
« revenu » Tout revenu en espèces
ou non que le prestataire reçoit ou recevra d’un employeur ou d’une autre
personne, notamment un syndic de faillite. (income)
[…]
(2) Sous réserve des autres dispositions
du présent article, la rémunération qu’il faut prendre en compte pour
vérifier s’il y a eu l’arrêt de rémunération visé à l’article 14 et fixer le
montant à déduire des prestations à payer en vertu de l’article 19, des
paragraphes 21(3), 22(5), 152.03(3) ou 152.04(4), ou de l’article 152.18 de
la Loi, ainsi que pour l’application des articles 45 et 46 de la Loi, est le
revenu intégral du prestataire provenant de tout emploi, notamment :
a) les
montants payables au prestataire, à titre de salaire, d’avantages ou autre
rétribution, sur les montants réalisés provenant des biens de son employeur
failli;
[…]
36(4) La
rémunération payable au prestataire aux termes d’un contrat de travail en
échange des services rendus est répartie sur la période pendant laquelle ces
services ont été fournis.
[...]
(8) Sauf si elle est payée ou
payable par suite de son licenciement ou de la cessation de son emploi, la
paie de vacances payée ou payable au prestataire est répartie de la façon
suivante :
a) si
elle se rapporte à une ou plusieurs périodes de vacances précises, elle est
répartie :
(i) sur un nombre de semaines qui
commence par la première semaine de ces périodes et se termine au plus tard
par la dernière semaine de celles-ci,
(ii) de sorte que la rémunération totale
tirée par lui de cet emploi dans chaque semaine consécutive soit égale à sa
rémunération hebdomadaire normale provenant de cet emploi;
b) autrement
elle est répartie, lorsqu’elle est payée :
(i) sur un nombre de semaines qui
commence par la première semaine pour laquelle elle est payable,
(ii) de sorte que le montant attribué en
vertu du présent paragraphe à chacune de ces semaines, sauf la dernière, soit
égal à la rémunération hebdomadaire normale du prestataire provenant de cet
emploi.
[Je souligne.]
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[5]
The Board of Referees
was of the view that the respondent did not have to report the amounts remitted
to the CCQ, since these were to be allocated under subsection 36(8), not
subsection 36(4) as the Commission had concluded. According to the Board
of Referees, subsection 36(8) [translation]
“establishes the mode of allocation of income earned and paid as vacation pay”
(Board of Referees’ Decision, p. 2).
[6]
In disposing of the
resulting appeal, the Umpire agreed with the Board of Referees’ reasoning but
also provided further reasons. According to the Umpire, the CCQ, upon receiving
the amounts deducted by the employer, acts as a trustee and in that capacity
holds them on the respondent’s behalf. The effect of this relationship is that these
amounts lose their character of earnings and become savings. The Umpire relies
in particular on two decisions of this Court: Canada (Attorney General) v. Brière, [1994] F.C.J. No. 1708
[Brière], and Canada (Attorney General) v. Whelan, [1989] F.C.J. No. 531 [Whelan] (Reasons,
pp. 2 and 3).
[7]
In support of his
application for judicial review, the applicant submits that these decisions do
not have the effect attributed to them by the Umpire. He adds that, if the
Board of Referees’ decision were to be upheld, the consequence would be that the
amounts in question would never be taken into account for the purposes of the
Act: neither when they are paid in the form of wages, nor when they are paid in
the form of vacation pay.
Analysis and decision
[8]
I agree with the
applicant’s assertion that neither of the decisions cited by the Umpire supports
his finding. The rule laid down by the Supreme Court in Bryden v. Canada
Employment and Immigration Commission, [1982] 1 S.C.R. 443 [Bryden],
and reiterated by this Court in, among other cases, Whelan, Brière and,
more recently, Sarazin v. Canada (Attorney General), 2006 FCA 313
at paragraph 8, is to the effect that vacation pay paid out by a trustee to a
claimant after having been remitted to the trustee by the employer no longer
has the character of earnings but constitutes, rather, savings (Bryden,
p. 449).
[9]
In this case, the
sole issue is whether the amounts remitted to the CCQ by the employer on the
respondent’s behalf constitute earnings.
[10]
With regard to that,
it is well established that the amounts withheld by an employer from the
earnings of an employee and remitted to a trustee for the employee’s benefit
have the character of earnings at the time they are so remitted (Canada (Attorney
General) v. Nield, [1990] F.C.J. No. 862 (FCA), 124 N.R. 333 [Nield]; see
also Canada (Attorney General) v. Haycock, [1990] F.C.J. No. 863 (FCA)).
It is not until the amounts are paid out by the trustee to the employee that
they lose their character of earnings and acquire that of savings (Nield,
para. 5):
In order for the vacation pay to lose its normal
character of earnings and acquire that of savings, the moneys have to be
clearly set aside at each period of pay, after deduction of income tax and
unemployment insurance premiums, since they are part of the employee’s
remuneration; and thereafter they must be kept separate and beyond the
needs and control of the employer’s operations. Anything less would make it
impossible to claim, at the time they are remitted to the employee, that
the moneys have already been paid and were merely being kept and “saved” on behalf
of the employee.
[Emphasis
added.]
[11]
Both the Umpire and
the Board of Referees confused these two payments and failed to take into
account the fact that the issue before them concerned the first payment. In
short, the amounts remitted by the employer to the CCQ are not covered by the
cases cited by the Umpire and cannot be treated as vacation pay under
subsection 36(8) of the Regulations because that is not their character.
[12]
I would therefore
allow the application for judicial review, set aside the Umpire’s decision and refer
the matter back to the Chief Umpire or his designate for redetermination on the
basis that the respondent’s earnings within the meaning of
subsection 35(2) include the amounts withheld from his salary and remitted
to the CCQ for later payment to the respondent as vacation pay, and that these
amounts should therefore have been allocated under subsection 36(4) of the Regulations.
“Marc Noël”
“I agree.
Johanne Trudel J.A.”
“I agree.
Robert M. Mainville J.A.”
Certified true translation
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