2001-3756(EI)
2001-3757(EI)
BETWEEN:
STEFAN REID,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeals heard on November 8, 2002, at Montréal, Quebec, by
The Honourable D.G.H. Bowman, Associate Chief Judge
Appearances
Counsel for the Appellant: Robert C. Potvin, Esq.
Counsel for the Respondent: Vlad Zolia, Esq.
JUDGMENT
It is ordered that the appeals from the decisions made under the Employment Insurance Act be allowed and the decisions be varied on the basis that the appellant's employment relationship with The Montreal Football Club terminated at the end of the football season and did not resume until he attended training camp in the spring of the following year and the hours of insurable employment in each of the years 1996, 1997 and 1998 were 745.
Signed at Ottawa, Canada, this 20th day of December 2002.
|
"D.G.H. Bowman" |
A.C.J.
Date: 20021220
Dockets: 2001-3756(EI)
2001-3757(EI)
BETWEEN:
STEFAN REID,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
REASONS FOR JUDGMENT
Bowman, A.C.J.
[1] These appeals are from two decisions of the Minister of National Revenue dated July 18, 2001. These decisions were that the appellant, a football player, was employed in insurable employment
(a) from May 11, 1996 to February 15, 1997 with insurable earnings of $41,400 in the period January 1, 1997 to February 15, 1997 and 140 insurable hours;
(b) from June 7, 1997 to February 15, 1999 with insurable earnings of $91,397 and 1,700 insurable hours in the period.
[2] The appellant's employer, whatever may have been the period when he was employed or the number of insurable hours, was The Montreal Alouettes Football Club (1996) Inc. until late 1996, and, after it went bankrupt, 9032-9756 Québec Inc., both of which operated under the name of The Montreal Football Club (the "Club"). I shall refer to the employer as the Club.
[3] The appellant's position is that his periods of insurable employment in 1996, 1997 and 1998 ended on November 18, November 3 and November 15 respectively.
[4] The question can be stated briefly. Mr. Reid plays football for the Club. His active engagement is from late May or early June in each year when he attends training camp until some time in November when the football season is over. When he stops playing in November depends, of course, on whether his team makes it to the Grey Cup. When the season is over he goes back to British Columbia where he looks for other work. He is not under the control of the Club after the football season ends and he is free to work at anything else that he chooses except that he may not play football for any other football club.
[5] It is not contested that during the period of employment, whatever that turns out to be, he was engaged under a contract of service rather than a contract for services. Both parties agree he was an employee, not an independent contractor.
[6] Exhibit A-1 is a document prepared by the appellant and it sets out the average Canadian Football League schedule. It is accepted by the respondent as accurate and it is applicable to each of the three years in question. It reads:
CFL Seasonal Schedule
The CFL season consists of 18 regular season games and two pre-season games. In addition, there is the potential of three play-off games. Each regular season game is played on average of one game per week. Pre-season games are held within the three-week training camp period.
Pre-season consists of 18 days of daily practices. 10 days of two 2.5 hr practices plus 3 hours of meetings. 8 days of one 2.5 hr practice plus 3 hours of meetings.
- 10 days @ 8 hours per day = 80 hours
- 7 days @ 5.5 hours per day = 38.5 hours
- 1 day of travel and practice = 8.5 hours
- TOTAL = 127 hours
Regular season consists of 18 games. Games are played on average, once a week. A regular workweek consists of 5 workdays of 4.5 hrs per day.
Mandatory practice times
- 5 days @ 4.5 hrs/day = approx 22.5 hrs/week
- 9 travel days for road games average 5 hours travel + 3.5 hours practice = 8.5 hours (8.5-4.5 = 4 hours times 9 games = 36 additional hours per regular season)
- 22.5 hrs for 18 weeks = 405 + 36 = approx 441 hours
Additional work
- 3 times per week - 2 hours per day for injury treatment and/or weight and cardio training = 6 hours for 18 weeks = 108 hours
- Compulsory team promotions:
￮ Team introduction = 2 hours
￮ Blood drive = 2 hours
￮ Gold tournament = 8 hours
￮ Total promo work = 12 hours
- Total additional work = 120 hours
Total regular season = approx 561 hours
Play-off is a three-week work period. Eastern Championship Game is a two-week work period.
- 22.5 hrs for 2 weeks = approx 45 hrs
- 3 times per week - 2 hours per day for injury treatment and/or weight and cardio training = 6 hours for 2 weeks = 12 hours
- Total play-off = approx 57 hours
Total hours worked through average CFL season:
- Pre-season 127
- Regular season 561
- Post-season 57
-----------------------------------
Total approx 745 hours
[7] He was paid 18 instalments of his salary over the course of the season. Clauses 1, 2 and 3 of the CFL standard player contract, which the parties agreed governed the relations between the appellant and the Club during the relevant periods, read as follows.
1. The term of this contract shall be from the date of execution hereof until the 15th day of February following the close of the football season commencing in 19__, subject however to the right of prior termination as specified herein.
2. The Player agrees that during the term of this Contract he will play football and will engage in activities related to football only for the Club and will play for the Club in two Pre-Season games, and eighteen (18) regular season games and Canadian Football League playoff games and any other game approved by the Canadian Football League Players' Association; and the Club, subject to the provisions hereof, agrees during such period to employ the Player as a skilled football Player. The Player agrees during the term of this Contract to report promptly for the Club's training sessions and at the Club's directions to participate in all practice sessions.
3. For the Player's services as a skilled football Player during the term of this contract, and for his agreement not to play football, or engage in activities related to football, for any other person, firm, Club or corporation during the term of this contract and for the option hereinafter set forth giving the Club the right to renew this contract and for the other undertakings of the Player herein, the Club promises to pay the Player the sum of $ Canadian Dollars to be payable as follows:
100% percent of said sum to be divided into eighteen (18) equal instalments and paid to the Player within forth-eight (48) hours of each regular season game whenever the Club schedule permits it to be practicable. It is understood between the parties hereto that payment to the Player by the Club for League Playoff Games will be made as hereinafter provided.
[8] The appellant claimed employment insurance benefits on the basis that his period of employment ended in November when the football season ended and when the Club stopped paying him and when he was free to seek other work. The respondent's position is that the appellant was employed by the Club during the period up to February 15 because the contract specifically provides that its term was from the date of execution (generally the spring of the particular year) until February 15 of the following year.
[9] The record of employment ("ROE") for 1996 states that the appellant's first day of work was June 1, 1996 and the last day worked was November 17, 1996. The ROE for 1997 states the first day worked to be May 31, 1997 and the last day for which he was paid to be November 2, 1997. For 1998 the first and last days shown are July 1, 1998 to November 15, 1998.
[10] The contract for 1996 was originally with the Ottawa Rough Riders but it seems the appellant was traded to Montréal and the contract was assumed by the Club. The contract in Exhibit R-1 was dated on May 11, 1995, but the preamble to an addendum dated June 5, 1997 reads as follows.
ADDENDUM: TO THE 1996 C.F.L. STANDARD PLAYER CONTRACT (#0000) BETWEEN THE OTTAWA ROUGH RIDERS FOOTBALL CLUB INC. (THAT HAS BEEN ASSUMED BY THE MONTREAL ALOUETTE FOOTBALL CLUB) AND STEFEN REID DATED MAY 11, 1996 ATTACHED TO AND FORMING PART OF SAID COTNRACT AND PROVIDED ADDITIONALLY ...
[11] I presume therefore that the contract covered both the 1995 and 1996 seasons.
[12] The contract for 1998 was signed on December 26, 1997. Clause 1 reads:
The term of the contract shall be from the date of execution hereof until the 15th day of February following the close of the football season commencing in 1998 subject however to the right of prior termination as specified herein.
[13] The result is that we have, on the one hand, a period of actual work that extends from about May to mid-November in any year, during which the appellant was under the control of his employer and during which he was paid and, on the other hand, a contract that provided that its term extended to February 15 of the following year. Can it be said that this provision extends the appellant's period of employment to February 15?
[14] I shall set out in its entirety the assumptions of fact upon which the decision relating to the period June 17, 1997 to February 15, 1999 is based.
5. In making his decision referred to in paragraph 4 herein, the Respondent relied upon the following assumptions of fact:
(a) prior to the Period, the Club was operated by The Montreal Alouettes Football Club (1996) Inc. (the "Corporation";
(b) the Corporation went into bankruptcy in late 1996 and the Club has been operated since then by 9032-9756 Quebec Inc.;
(c) the Club is a member of the Canadian Football League (the "CFL") which has a collective agreement (the "Agreement") with the Canadian Football League Players' Association (the "Association");
(d) when the members of the CFL enter into contracts with players, they use a CFL Standard Player Contract (the "Contract") which binds the parties to the terms and conditions of the Agreement;
(e) the term of the Contract is from the date of execution until the 15th day of February following the close of the football season that the Contract is for, i.e., February 15, 1998 for the 1997 football season;
(f) the Appellant initially entered into a contract with the Ottawa Rough Riders Football Club for the 1995 and 1996 football seasons;
(g) sometime in 1996, the Appellant's Contract for the 1996 season was assumed by the Club;
(h) the Appellant subsequently entered into Contracts with the Club for the 1997 and 1998 football seasons;
(i) the Contracts provided that the Appellant would play football and engage in activities related to football only for the Club and would play for the Club in 2 preseason games and 18 regular season games and CFL playoff games and any other games approved by the Association and that the Club agree to employ the Appellant as a skilled football player;
(j) the Contracts stated that for the Appellant's services as a skilled football player and for his agreement not to play football for any other person during the term of the Contracts, the Club would pay the Appellant an agreed amount set out in each Contract in 18 equal instalments payable within 48 hours after each regular season game;
(k) the Contracts also provided for additional amounts and bonuses to be paid to the Appellant once certain conditions were met;
(l) pursuant to the Contracts, the Club paid for the Appellant's travel expenses including board and lodgings while he was travelling to play football for the Club, except for games in the Club's home city;
(m) the Club provided the Appellant with the equipment necessary to perform the services and also provided him with a uniform;
(n) the Club's coaches and trainers trained the Appellant and supervised him in the performance of the services;
(o) pursuant to the Contracts, the Club could sell, exchange, assign and transfer the Contracts and the Appellant's services to another CFL member team, provided that all amounts to be paid under the Contracts were paid to the Appellant by that other team;
(p) at any time before the expiration date, the Contracts may be renewed until the 15th day of February following the expiration date and the Contracts provided the terms for such renewal;
(q) other terms of the Contracts provided for:
· statutory deductions,
· contributions to the Association's medical and pension plans,
· the use by the Club of the Appellant's picture for publicity purposes,
· medical examinations,
· disciplinary measures, suspensions and fines,
· implications in case of injury to the Appellant,
· termination of the contract, and
· the Appellant's rights upon termination or retirement;
(r) the Appellant subsequently entered into a Contract to play football for the Club in the 1999 season;
(s) the Appellant was employed by the Club during the entire term of the Contracts, which is the Period in question;
(t) the Appellant did not incur any expenses in performing the services;
(u) the Appellant was an integral part of the Club's business;
(v) the Club paid the Appellant $91,397.00 in the Period; and
(w) no record was kept of the actual number of hours worked by the Appellant in the Period.
[15] A number of the assumptions relate to the question whether the appellant was an employee, a point that is no longer in issue, if it ever was. For the purposes of these appeals the crucial assumption is (s), that he was employed by the Club throughout the entire term.
[16] Do indicia of employment exist between the end of the football season in mid-November and February 15 of the following year? To start with, there is the contract itself. There is the appellant's obligation to keep himself in good physical shape or risk disciplinary action. There is the obligation not to play football or engage in activities related to football for any other person, firm, club or corporation. There is also the option given to the Club to renew the contract.
[17] Do these factors outweigh the fact that he works for the club for about 23 weeks in the year and is paid only during that period? His only obligation after the season ends is to stay in shape and not play football for anybody else. He could engage in any other type of work that he chose, including professional sports. He was not under the control of the Club after the end of the season. He did no work for it and was not paid. It is unrealistic to conclude that because of the option and the obligation not to play football for anyone else he continued to be employed by the Club.
[18] Numerous cases were cited, most of which deal with the position of teachers during the summer vacation. I do not think that they are of much assistance here. Teachers during the summer vacation are generally regarded as continuing to be employed by the school board to whom they return in the fall. That is in my view a far cry from saying a contract providing for what is essentially a limited restrictive covenant plus an option entitling but not requiring the employer to renew the employment contract means that the employee, whose obligations to work and whose right to be paid terminated in November, continued to be employed until the following February.
[19] I do not read the Federal Court of Appeal decision in Canada v. Sirois, [1999] F.C.J. No. 523, as supporting such a proposition. Paragraphs 5, 6, 7 and 8 of the reasons read in part as follows.
5 Under that agreement the defendant's pre-retirement leave began on December 20, 1995 and ended on December 20, 2000, the date on which she undertook to take her retirement. During that five-year period, the agreement stipulated that the defendant would be on paid leave 14 hours a week, on paid sick leave 2.625 hours a week and on unpaid leave 18.375 hours a week. Accordingly, during that period the defendant did not have to provide any work to the payer but, pursuant to s. 168 of the Regulation, she continued to participate in group insurance plans and pay a contribution to the pension plan for the 16,625 paid hours per week. By paragraph 8 of the agreement the employment relationship between the defendant and the payer would not be finally broken until the date on which the defendant was eligible for a retirement pension without actuarial penalty, namely December 20, 2000.
6 During the pre-retirement period the unemployment insurance premiums were collected from the defendant's salary. On August 28, 1996, in response to a request for a decision by the defendant, who objected to these premiums being deducted from the amounts she was receiving from the payer, the Minister of National Revenue ("the Minister") decided that the defendant had to pay these premiums as an employer-employee relationship continued to exist between herself and the payer during the period in question. The Minister indicated in his decision that it was based on ss. 3(1)(a) and 61(1) of the Act, which provided the following:
...
7 The defendant appealed this decision to the Tax Court of Canada. The trial judge quashed the Minister's decision on the ground that the defendant did not hold insurable employment within the meaning of s. 3(1)(a) of the Act during the relevant period. He wrote:
[TRANSLATION]
... since the pre-retirement agreement between the appellant and the payer no control or supervision, or integration of the appellant into the payer's business, or obligation by the appellant to provide any service whatever, has existed: the employer's only existing obligation has been to provide remuneration, without any return on the part of the appellant.
The Court accordingly arrives at the conclusion that this was not a contract of service within the meaning of s. 3(1)(a) of the Unemployment Insurance Act.
8 In my opinion, the judge erred in concluding that no contract of service existed on the ground that the defendant was no longer providing any work. The courts have recognized that even if an employee, who is still receiving money from his or her employer, is no longer working it does not necessarily follow that there is no longer a contract of service between the employee and the employer. The Court has to consider whether the employment relationship has been broken.
[20] The facts in that case are essentially different from those which I have outlined above. It is obvious that in the Sirois case the indicia of employment, and in particular the payment of remuneration, continued until December 20, 2000.
[21] I have concluded that the appellant's employment relationship with the Club terminated at the end of the football season of the Club and did not resume until he attended training camp in the spring of the following year and the hours of insurable employment in each of the years 1996, 1997 and 1998 were 745.
[22] The appeals are allowed and the decisions of the Minister are varied in accordance with these reasons.
Signed at Ottawa, Canada, this 20th day of December 2002.
|
"D.G.H. Bowman" |
A.C.J.
COURT FILE NOS.: 2001-3756(EI), 2001-3757(EI)
STYLE OF CAUSE: Between Stefan Reid and
The Minister of National Revenue
PLACE OF HEARING: Montréal, Quebec
DATE OF HEARING: November 8, 2002
REASONS FOR JUDGMENT BY: The Honourable D.G.H. Bowman
Associate Chief Judge
DATE OF JUDGMENT: December 20, 2002
APPEARANCES:
Counsel for the Appellant: Robert C. Potvin, Esq.
Counsel for the Respondent: Vlad Zolia, Esq.
COUNSEL OF RECORD:
For the Appellant:
Name: Robert C. Potvin, Esq.
Firm: Bélanger Sauvé
Montréal, Quebec
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada