Date: 20000505
Docket: 1999-1517-EI
BETWEEN:
DIANE MOREAU,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Reasons for Judgment
Tardif, J.T.C.C.
[1] This is an appeal from a determination by which the respondent refused to pay the appellant employment insurance benefits on the ground that she had accumulated no insurable hours.
[2] The facts assumed in support of the determination were all admitted and it is appropriate to reproduce them here:
[TRANSLATION]
. . .
(a) the payer operates a dental clinic;
(b) prior to the period in issue, the appellant had been employed by the payer as a secretary-receptionist for some 10 years;
(c) until November 1997, the appellant usually worked 30 hours a week;
(d) from December 8, 1997 to June 28, 1998, the appellant was on sick leave;
(e) during that period, the appellant received wage loss insurance benefits;
(f) on the date of her scheduled return to work, namely June 29, 1999, the payer eliminated the appellant's position and terminated her employment;
(g) in July 1998, the payer paid the appellant $6,571.26 in severance, the equivalent of three months' wages;
(h) the appellant rendered no services to the payer after December 4, 1997.
[3] After admitting the above facts, the appellant explained that she had had to be absent from her work for a number of months as a result of illness. She said that she had received health insurance benefits during that absence.
[4] After recovering to the point where she could resume her work, she learned that her position had been abolished as a result of an administrative reorganization.
[5] Saddened by the situation, particularly since the appellant had worked for him for some 10 years, the employer paid her severance representing three months' wages. Before doing so, he had checked with the employment office to determine whether this would enable the appellant to qualify for employment insurance benefits.
[6] The appellant testified that the authorities consulted confirmed at that time her eligibility for benefits.
[7] However, following her formal application accompanied by her separation certificate and record of employment, the appellant was denied employment insurance benefits on the ground that she did not have enough insurable hours to qualify.
[8] To add to her frustration, she learned that the severance she had received from her employer was subject to premium payments since, in the respondent's view, it represented insurable earnings.
[9] The appellant, who testified in a frank, spontaneous and very open manner, admitted that she had not worked at the end of her period of absence due to illness. She also admitted that her employer had made every effort to enable her to receive employment insurance benefits.
[10] She added that, if her employer had been well informed by the respondent's representative, it would no doubt have been possible to enable her to qualify by going to her employer's clinic to do some sort of work and thus be credited with the required insurable hours.
[11] On this point, I think it important to point out that this Court must rule on the basis of the actual facts revealed by the evidence, not by relying on assumptions or on facts which might have been if the parties had known or been aware of certain requirements of the Employment Insurance Act (the "Act").
[12] The facts in this case are very simple and not the least bit confusing and do not lend themselves to interpretation. They may be summarized as follows: the appellant's position was eliminated; the time at which her employment was terminated coincided with the time when she was able to resume her work. As she had worked for the same employer for 10 years, that employer, in a gesture of appreciation and cooperation, paid her severance corresponding to three months' wages, believing, after checking with the respondent's representatives, that this would qualify the appellant for employment insurance benefits. It was admitted and acknowledged that this was compensation, as the appellant had performed no work in consideration of this lump sum amount.
[13] Of course, the appellant and her employer could have agreed to have her go to the office every day and perform various tasks or duties during the period covered by the compensation, in which case the hours put in would actually have been hours worked. The amount paid would essentially have been wages paid for work actually performed or, in other words, for hours actually worked.
[14] However, both the testimony and documentary evidence clearly show that this amount was compensation equal to three months' wages paid in consideration of faithful service rendered by the appellant to her employer over 10 years. The appellant's case is especially compelling since she is in a way a victim of the transition period resulting from the major changes to the Act.
[15] This observation is unfortunately insufficient to qualify the appellant for employment insurance benefits, particularly since the Act is very clear.
[16] The situation as revealed by the evidence does not give rise to benefits under the Act for two reasons. First, the amount received did not constitute insurable earnings and Parliament has specifically stated what constitutes insurable earnings.
[17] Under the heading "Interpretation" in the Insurable Earnings and Collection of Premiums Regulations, subsection 1(1) provides as follows:
The definitions in this subsection apply in these Regulations.
"Act" means the Employment Insurance Act. (Loi)
"Minister" means the Minister of National Revenue. (ministre)
"pay period" means the period in respect of which earnings are paid to or enjoyed by an insured person. (période de paie)
"retiring allowance" means an amount received by a person
(a) on or after retirement of the person from an office or employment in recognition of the person's long service, or
(b) in respect of a loss of an office or employment of the person, whether or not received as, on account or in lieu of payment of, damages or pursuant to an order or judgment of a competent tribunal. (allocation de retraite)
[18] The evidence in this case suggests that the compensation or severance corresponding to three months' wages was paid upon the loss of the appellant's employment. This amount must accordingly be excluded from insurable earnings. In other words, as the respondent ruled, it did not constitute insurable earnings.
[19] Second, Parliament has clearly expressed its intent with regard to the requirements for the insurability of employment. The new provisions now speak of insurable hours, not insurable weeks.
[20] Section 9.1 of the Employment Insurance Regulations is worded as follows:
9.1 Where a person's earnings are paid on an hourly basis, the person is considered to have worked in insurable employment for the number of hours that the person actually worked and for which the person was remunerated.
(My emphasis.)
[21] To prevent workers from being penalized for taking certain paid leave in the context of their employment, Parliament has adopted the following provisions:
10.1 (1) Where an insured person is remunerated by the employer for a period of paid leave, the person is deemed to have worked in insurable employment for the number of hours that the person would normally have worked and for which the person would normally have been remunerated during that period.
(2) Where an insured person is remunerated by the employer for a period of leave in the form of a lump sum payment calculated without regard to the length of the period of leave, the person is deemed to have worked in insurable employment for the lesser of
(a) the number of hours that the person would normally have worked and for which the person would normally have been remunerated during the period, and
(b) the number of hours obtained by dividing the lump sum amount by the normal hourly rate of pay.
(3) Where an insured person is remunerated by the employer for a non-working day and
(a) works on that day, the person is deemed to have worked in insurable employment for the greater of the number of hours that the person actually worked
and the number of hours that the person would normally have worked on that day; and
(b) does not work on that day, the person is deemed to have worked in insurable employment for the number of hours that the person would normally have worked on that day.
10.2 For the purposes of sections 9.1, 10, 10.1 and 22,
(a) an hour of work performed in insurable employment is considered to be a single hour of insurable employment, even if the hour is remunerated at an overtime rate of pay; and
(b) if the addition of hours of insurable employment falling between the first day and the last day worked in a given period of employment results in a total number of hours that contains a fraction of an hour, the fraction shall be counted as a whole hour.
[22] On a reading of the various requirements laid down by the Act, there is no doubt that the compensation equal to three months' wages does not meet those requirements. This is particularly true and obvious since it is clearly indicated in boxes 17 and 18 of the record of employment (Exhibit I-1) that the amount constitutes compensation representing three months' wages paid as a result of the termination of the contract between the appellant and her employer. Moreover, on the record of employment, the employer very clearly expressed the reasons for the layoff in the following terms:
[TRANSLATION]
Three months' wages - Compensation
Position eliminated and two positions merged
[23] For all these reasons, I have no choice but to dismiss the appellant's appeal.
Signed at Ottawa, Canada, this 5th day of May 2000.
"Alain Tardif"
J.T.C.C.
Translation certified true on this 28th day of February 2001.
Erich Klein, Revisor
[OFFICIAL ENGLISH TRANSLATION]
1999-1517(EI)
BETWEEN:
DIANE MOREAU,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard on March 6, 2000, at Sherbrooke, Quebec, by
the Honourable Judge Alain Tardif
Appearances
For the Appellant: The Appellant herself
Counsel for the Respondent: Yanick Houle
JUDGMENT
The appeal is dismissed and the Minister's decision confirmed in accordance with the attached Reasons for Judgment.
Signed at Ottawa, Canada, this 5th day of May 2000.
|
"Alain Tardif" |
J.T.C.C.
Translation certified true
on this 28th day of February 2001.
Erich Klein, Revisor
[OFFICIAL ENGLISH TRANSLATION]