Date: 20091016
Docket: A-76-09
Citation: 2009 FCA 296
CORAM: SHARLOW
J.A.
RYER
J.A.
TRUDEL
J.A.
BETWEEN:
ATTORNEY GENERAL OF CANADA
Applicant
and
JOHN WILLIAM GREEY
Respondent
REASONS FOR JUDGMENT
TRUDEL J.A.
[1]
This
is an application for judicial review of a decision of Umpire David G. Riche
(the Umpire), dated December 2, 2008, CUB 71639, whereby he denied the appeal
filed by the Canada Employment Insurance Commission (the Commission) against a
decision of the Board of Referees (the Board).
[2]
Once
again, this Court is called upon to discuss “employment” in the context of
“just cause”, this time in the case of a person who quits full time paid
employment to take an unpaid volunteer position.
[3]
Subparagraph
29(c)(vi) of the Employment Insurance Act (S.C. 1996, c. 23) (the
Act) provides as follows:
|
Employment Insurance Act (S.C. 1996, c. 23)
29. For the purposes of sections 30 to
33,
…
(c) just cause for voluntarily
leaving an employment or taking leave from an employment exists if the
claimant had no reasonable alternative to leaving or taking leave, having
regard to all the circumstances, including any of the following:
…
(vi) reasonable assurance of another employment
in the immediate future,
…
(emphasis added)
|
Loi sur l’assurance-emploi (L.C. 1996, ch. 23)
29. Pour l’application des articles 30 à 33 :
[…]
c) le prestataire est fondé à quitter
volontairement son emploi ou à prendre congé si, compte tenu de toutes les
circonstances, notamment de celles qui sont énumérées ci-après, son départ ou
son congé constitue la seule solution raisonnable dans son cas :
[…]
(vi) assurance raisonnable d’un autre emploi
dans un avenir immédiat,
[…]
(je souligne)
|
[4]
The
issues, as framed by the parties, are whether the volunteer position assumed by
Mr. Greey constituted “employment” within the meaning of the Act and, if so,
whether, having regard to the circumstances of this case, it met the
overarching “no reasonable alternative” test under section 29 of the Act.
[5]
For
the reasons that follow, I would allow this application for judicial review
without costs on the basis that the work performed by Mr. Greey did not
constitute employment.
Relevant Facts
[6]
Mr.
Greey’s work history shows that from 2005 until April 14, 2006, he worked full
time at Tim Hortons in Newfoundland. During the same
period, he also worked part-time at Sobeys. Although these occupations allowed
Mr. Greey to earn a living, they did nothing in terms of bringing him closer to
his goal of becoming a commercial pilot. Mr. Greey, who already had his
commercial pilot license (contrary to the Umpire’s statement, at page 2 of his
reasons), needed to accumulate flying hours on his log book certificate as it
would enable him to eventually fly for commercial airlines.
[7]
So,
in April 2006, Mr. Greey left his position with Tim Hortons in Newfoundland and
moved to Ontario where, on
the weekends from May until August of 2006, he provided his services to Skydive
Toronto Inc. (Skydive) without remuneration.
[8]
Mr.
Greey was known at Skydive, where he had successfully completed a Parapilot
course in 2005 after graduating from Moncton Flight College with his
diploma in Aviation Technology. In the summer of 2005, he had also flown planes
for Skydive as a junior pilot.
[9]
At
the same time, Mr. Greey also managed to get a transfer to a Sobeys location in
Ontario where he
worked part-time. He did not, however, seek a transfer to a Tim Hortons
location in that province (a) because it was difficult in view of the fact that
these businesses are operated as franchises, but mostly (b) because he did not
like the work.
[10]
After
the summer of 2006, Mr. Greey accepted a position with the Moncton Flight College in New
Brunswick
where he worked from October 2006 until December 26, 2006. He then filed an
application for Employment Insurance benefits (EI benefits).
Procedural History
[11]
In
the first round of litigation, the Commission and the Board of Referees
determined that Mr. Greey did not qualify for EI benefits because he had
voluntarily left his employment at Tim Hortons without just cause, and
therefore his hours of work there could not be used to establish a claim for
benefits. As a result, Mr. Greey had insufficient hours of insurable
employment.
[12]
Following
an appeal by Mr. Greey, Umpire Teitelbaum, in CUB 69882, quashed the decision
of the Board of Referees and returned the matter to a newly constituted Board
with instructions to address the claimant’s argument with respect to whether
Mr. Greey’s unpaid position with Skydive constituted employment.
[13]
Applying
itself to that task, the new Board, in turn, found that Mr. Greey had just
cause to leave his employment at Tim Hortons and decided that he was entitled
to EI benefits. The Crown appealed the Board’s decision to an Umpire. The
appeal was denied by Umpire Riche, who upheld the finding of the newly
constituted Board (CUB 71639), hence the within application for judicial review
by the Crown.
Position of the parties
[14]
Citing
the decision of our Court in Bérubé v. Canada (Employment and Immigration
Commission)
(F.C.A.) [1990] F.C.J. No. 137 [Bérubé], the Crown argues that the
Umpire failed to address the argument that a claimant who provides his services
free of charge is not thereby performing work within the meaning of the
relevant provision. Therefore, “employment only exists when a person expects to
derive financial benefit from the activity in question” (applicant’s memorandum
of fact and law, at paragraph 35).
[15]
The
Crown argues in the alternative that the Umpire also failed to apply the proper
legal test in assessing the question of just cause. The Umpire ignored both the
“no reasonable alternative” test and the overall scheme of the Act (applicant’s
memorandum of fact and law, at paragraph 43).
[16]
Mr.
Greey did not file a notice of appearance, nor did he file a memorandum of fact
and law. Although he had ample opportunity to make written and oral submissions
in this matter, he did not do so except in an irregular fashion by way of a
letter prior to the hearing. The panel was able to assess Mr. Greey’s position
from that letter and from the comments of Mr. Greey’s father, who was permitted
to speak on behalf of Mr. Greey at the hearing. A further request by Mr. Greey
to file post-hearing submissions was denied.
[17]
Simply
put, Mr. Greey’s position is that the Skydive position was employment under the
Act. Skydive’s owner owned the planes, set the work schedule, assigned duties,
set pilot selection criteria, required references, and dismissed pilots for
rudeness to customers, poor attendance or reckless behaviour. For Mr. Greey, no
other “alternative, full time, paid employment came even close to matching the
Skydive Toronto economic benefit, nor offered to provide work experience in
Greey’s chosen field as a commercial pilot” (respondent’s letter of August 14,
2009 to this Court). Therefore, he satisfies the “no other alternative” test.
Standard of Review
[18]
In
Canada (Attorney General) v. Campeau, 2006 FCA 376, citing Tanguay v.
Canada (Unemployment Insurance Commission), [1985] F.C.J. No. 910, this
Court found at paragraph 17 that the determination of what constitutes “just
cause” is a question of law. I am of the view that the scope and meaning of
“employment” within the context of the just cause provision is a question of
statutory interpretation, which is a question of law. As already held by our
Court, the standard of review of a decision of a Board of Referees and an
Umpire on questions of law is correctness (Martens v. Canada (Attorney
General),
2008 FCA 240).
[19]
As
a result, the decision as to whether the Umpire asked himself the correct legal
question should be reviewed on a standard of correctness. However, the proper
application of the legal test is a question of mixed fact and law that should
be reviewed on the standard of reasonableness (Ibid., at paragraph 31).
[20]
After
a careful review of the Umpire’s reasons, I conclude that the decision of the
Umpire cannot stand because it is based on an error of law, namely, a
misinterpretation of “employment” in section 29 of the Act.
Analysis
[21]
Should
the position with Skydive be considered “employment”? No. The answer to this
question is dispositive of the application. Therefore, it will be unnecessary
to address the issue regarding the “no reasonable alternative” test.
[22]
Subsection
2(1) of the Act defines ‘employment’ as follows: “… the act of employing or
the state of being employed”. Although obvious, for the purposes of this
application, it is useful to note that the word ‘or’ is not used
here to illustrate a set of alternatives as the state of employment necessarily
ensues from the act of employing. A mutual agreement is needed to form a
contract of employment where the employee’s services have been or will be
compensated by the employer.
[23]
In
the case at bar, Skydive clearly states that Mr. Greey was not an employee (see
applicant’s record, pages 81 and 93). Of course, that statement alone does not
suffice to characterize the relationship between Skydive and Mr. Greey. For
reasons that need not be discussed here, it could be advantageous for an
employer to deny having employed someone.
[24]
As
mentioned earlier, Mr. Greey has argued in his letter that he was an employee
of Skydive because the latter owned the planes and scheduled Mr. Greey’s
activities while demanding quality service for its clients. I accept that the
elements of ownership of equipment and degree of control can be of assistance
in determining the nature of the relationship between Skydive and Mr. Greey.
[25]
However,
“[w]hat must always remain of the essence is the search for the total
relationship of the parties” (emphasis added) (see Wiebe Door Services Ltd. v. Canada (Minister of National
Revenue - M.N.R.),
[1986] 3 F.C. 553, at paragraph 15).
[26]
While
explaining his working relationship with Skydive, Mr. Greey has written that he
“bartered his time in return for free flying hours”, which resulted for him in
an “immediate non-pecuniary benefit worth over $14 000” (respondent’s letter of
August 14, 2009, at page 3).
[27]
He
argued that the Digest of Benefit Entitlement Principles, Chapter 5
“Earnings” (Ottawa: Human
Resources and Social Development Canada, online
http://www.hrsdc.gc.ca/en/ei/digest /chp5.shtml) (the Digest) recognized
that a barter arrangement could constitute employment.
[28]
The
Digest is an interpretive guide that is not binding on this Court (see Canada
(Attorney General) v. Savard (F.C.A.), 2006 FCA 327, [2007] 2 F.C.R. 429,
at paragraphs 18 and 28), but I accept that it is entitled to consideration and
may constitute an important factor in the interpretation of statutes (see Silicon
Graphics Ltd. v. Canada (C.A.), 2002 FCA 260, [2003] 1 F.C. 447).
[29]
At
section 5.3.1.1 of the Digest, a barter arrangement is defined as
follows:
A barter
arrangement, which is an agreement to exchange services between individuals, is
considered employment because one person is providing services to another. To
that extent, there is the existence of an expectation of services to be
performed and an expectation of payment in the form of an exchange of services
to be received.
[30]
In
the case at bar, I fail to see how this definition can advance Mr. Greey’s
position. There was no evidence on record allowing the Umpire to conclude to
the existence of an agreement to exchange services between Mr. Greey and
Skydive.
[31]
Even
if Mr. Greey had succeeded at showing the existence of an expectation of
services to be performed by him, there was clearly no expectation of payment
in the form of an exchange of services to be received from Skydive. The
benefit claimed by Mr. Greey, free flying time and the accumulation of flying
hours, did not constitute a service by Skydive in exchange for the services Mr.
Greey provided to Skydive. In a barter situation, although there is no money
exchanged for services that are rendered, the value of the services exchanged
could be said to be non-pecuniary income arising out of employment. But here,
no services were exchanged.
[32]
The Digest
also includes at Chapter V a section dealing with benevolent or volunteer work.
Under Chapter 5.3.2.1, it is mentioned that “benevolent or volunteer work is
generally understood to be work performed without any expectation of monetary
reward” (applicant’s record, at page 114).
When the volunteer receives, or expects to
receive, remuneration or material benefit, it no longer is benevolent work but
rather employment.
[33]
So
Mr. Greey’s thesis based on the Digest fails if employment is not
proven.
[34]
This
then brings us back to the basic principle that when determining what
constitutes employment under the Act, one must necessarily look at the
remuneration or material benefit derived from the employment by a
claimant.
[35]
In
his reasons, the Umpire started his discussion on the subject of employment by
rejecting the Board’s finding that “the claimant was not an employee of the
airline company as he had not received wages” (Umpire’s reasons, at page 1).
The Umpire concluded that this was not “the test whether work of a volunteer
nature can be considered to be insurable employment” (Umpire’s reasons, at page
1). He then stated what he considered to be the proper test upon which he would
ground his analysis.
[36]
Applying
himself to that task, he borrowed the words of Addy J. in CUB 5560 (CUB Samson)
who had written:
If a claimant who works
for an employer is to be considered employed within the meaning of the Unemployment
Insurance Act and specifically within the meaning of the above two
sections, [21(1) of the Unemployment Insurance Act and 155(1) of the
Regulations as they were then] it is absolutely essential that an
employer-employee relationship exists between the employee and the person
receiving his services. This type of relationship necessarily implies that
during or subsequent to employment, remuneration is payable to the employee by
the employer for services rendered or, at least, the employee must tender his
services for the specific purpose of eventually receiving remuneration, or
monetary or material benefit of some kind from his employer.
[37]
In
CUB Samson, a decision dated 27 April 1979, it had been found that Ms.
Samson was working at her brothers’ business without remuneration as a form of
therapy to improve her mental and physical health. She did not entertain any
hopes of obtaining subsequent employment there. Her case was examined in light
of subsection 21(1) of the Unemployment Insurance Act (later subsection
10(1) of the Unemployment Insurance Act, R.S. 1985, c. U-1), which then
provided that “a week of unemployment for a claimant is a week in which he does
not work a full working week”.
[38]
Surprisingly,
the Umpire took support from CUB Samson, upheld by a decision of our
Court delivered by Pratte J. in December 1979 (Attorney General of Canada v.
Françoise Samson, [1980] 1 F.C. 620) [Samson] without mentioning
that Pratte J., 10 years later, wrote in Bérubé, supra:
I believe I was wrong to
say, in Samson, that a person providing his services to another free of
charge can still be performing work within the meaning of s. 10 (1) of the Unemployment
Insurance Act. It now seems to me that the only work with which the Unemployment
Insurance Act is concerned, and consequently the only work referred to in
s. 10(1) and the Regulations, is work which is done for oneself or for another with
the aim or in the expectation of deriving a financial benefit therefrom
(emphasis added).
[39]
One
should know that Mr. Bérubé had been denied EI benefits at all levels on the
ground that he was not unemployed. He worked without pay for 50 hours a week in
a canteen owned by his mother. The Board of Referees, affirmed by the Umpire,
had concentrated solely on the number of hours worked by the claimant,
regarding the fact that his work was unpaid as irrelevant.
[40]
Hugessen
J., writing for this Court in Bérubé, held that:
It can clearly be seen
from all the foregoing not only that the board of referees erred in ignoring
the unpaid nature of the applicant's work but also that, in the circumstances
of the case at bar, one of the main questions that it had to answer was
precisely that of whether the said work was really unpaid, namely if the
applicant did not really expect to derive any financial benefit from it
(emphasis added).
[41]
More
recently, and in line with Bérubé, this Court held in Canada (Attorney
General) v. Traynor, [1995] F.C.J. No. 836 [Traynor], at paragraph
9, that “[r]emuneration, actual or eventual, for the services rendered is
necessary in order for a job to constitute “employment” for the purposes of the
Act.” I would note that Ms. Traynor in that case had been told that she would
not receive any income in the form of a stipend during her internship; Justice
Marceau’s use of the word ‘remuneration’ was therefore also in reference to a
financial benefit (Traynor, supra, at paragraph 2).
[42]
Although
the Umpire had distanced himself from the test applied by the Board, he adopted
the Board’s reasoning and came to the same conclusion, but with his own chosen
test.
[43]
He,
therefore, noted with approval, at page 3 of his reasons, that “… while the
claimant did not receive immediate cash remuneration for the work performed, he
did receive great benefits in the use of the expensive aircraft at no charge
which enabled him to accumulate valuable flight hours…”. The Umpire also wrote
that “[t]he Board found that the claimant will get direct and eventual
remuneration through the accumulation of flying time.” Furthermore, the Umpire
held that “If [Mr. Greey] did not do it in this manner, it would have cost him
considerable amounts of money to hire aircraft or find some other employer who
was prepared to take him on to perform services for them.”
[44]
He
then concluded, at page 3 of his reasons, that he was “satisfied that the
employer-employee relationship existed because the employer scheduled his work
time and the claimant received a material benefit of some kind in that
he obtained his hours which he needed” (emphasis added).
[45]
With
respect, while these statements demonstrate the Umpire’s understanding of the
requirements to be a pilot and the costs involved in training and accumulating
flying hours, they also show that the Umpire improperly addressed the legal
question presented to him. He committed an error of law.
[46]
Following
the teachings of Bérubé, supra and Traynor, supra,
the Umpire should have first identified the elements of the relationship
between the parties which implied detecting some form of employment and the
presence of a financial benefit or remuneration received or to be received in
exchange for the provision of services.
[47]
In
other words, the proper test was whether Mr. Greey expected to derive any financial
benefit therefrom, that is from Skydive, and not “some kind” of benefit
independent of Skydive. Instead, the Umpire concluded that the accumulation of
flight time constituted a material benefit to Mr. Greey without asking himself
as to the nature and source of that benefit.
[48]
I
agree with the Crown that:
The purpose of the Act
is not to subsidize the pursuit of the laudable goal of professional
advancement. One cannot rely on the EI system when one quits paid full time
employment in order to volunteer. Qualifying such activities as “employment”
could expand the EI system into a subsidy program for informal means of
education through volunteering (applicant’s
memorandum of fact and law, at paragraph 38).
[49]
The
Crown’s statement is consistent with the scheme of the Act. The Act sets up an
insurance scheme under which unemployed persons are protected against the loss
of income resulting from unemployment. The purpose of the scheme is obviously
to compensate unemployed person for a loss; it is not to pay benefits to those
who have not suffered a loss (see Canada (A.G.) v. Walford, [1978]
F.C.J. No. 185 at paragraph 8; Canada (Attorney General) v. Lesiuk (C.A.),
[2003] 2 F.C. 697 at paragraph 15; Reference re Employment Insurance Act
(Can.), ss. 22 and 23, [2005] S.C.J. No. 57) at paragraph 18).
[50]
In
reality, Mr. Greey took a break from his jobs to pursue his own interest and
his long term career aspiration. Luckily for him, his plan worked and apparently
“he has been successful in obtaining a paid position flying with a commercial
airline” (respondent’s letter of August 14, 2009 to this Court). However, the
process of accumulating flying hours, although it was exactly what Mr. Greey
was searching for, when volunteering, was not a financial benefit, actual or
eventual, derived from Skydive.
[51]
Had
the Umpire assessed Mr. Greey’s thesis having in mind the proper test and the
overall scheme of the Act, I am of the view that he would have reached a different
conclusion and held that Mr. Greey’s position at Skydive did not constitute
employment under the Act.
[52]
For
these reasons, I would allow this application for judicial review, I would set
aside the decision of the Umpire, and I would remit the matter back to the
Chief Umpire, or his or her designate, for redetermination on the basis that
the appeal by the Commission should be allowed, and Mr. Greey should be
disqualified from receiving EI benefits as his volunteer position with Skydive
did not constitute employment under the Act. As the Crown has not sought
costs, none should be awarded.
“Johanne
Trudel”
“I agree.
K. Sharlow
J.A.”
“I
agree.
C. Michael Ryer J.A. »
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