[2004] 3 F.C.R. D-5
EMPLOYMENT INSURANCE
Canada (Attorney General) v. Roch
A-685-01, A-684-01, A-686-01, A-687-01, A-688-01, A-689-01, A-690-01, A-691-01
2003 FCA 356, Desjardins J.A.
26/9/03
32 pp.
Case involving seven identical applications for judicial review of umpire's decision—Umpire dismissed Employment Insurance Commission's (Commission) appeals and upheld board of referees' decision that sums received by respondents did not constitute earnings within meaning of Employment Insurance Regulations (Regulations), s. 35(2)—Other applications for judicial review attached to docket number A-685-01, that of Gaston Roch, master file—Laiterie Dallaire (division of Les Aliments Parmalat Inc.), respondents' employer, decided in 1998 to reorganize its production and to discontinue production of fluid milk and industrial milk—To do so, employer implemented downsizing program—In order to minimize negative impact of reorganization and with approval of union representing respondents, it obtained financial assistance from Emploi-Québec as part of program referred to as "Plan d'aménagement et de réduction du temps du travail" ["Work Time Reduction and Distribution Plan" (ARTT plan or plan)]—As result of severance, respondents received various termination benefits such as vacation pay, sick leave credits and severance pay, worth $24,177, and allocation itself not disputed—Amounts involved herein those paid as part of ARTT plan—Respondent, Gaston Roch, received total amount of $12,000 in installments over 36-month period—On October 26, 1998, respondent applied for employment insurance benefits, indicating had left his employment on October 14, 1998—Benefit period established for him beginning October 18, 1998—In second letter dated May 25, 2000, Commission informed respondent that receipt of sum of $12,000 under ARTT plan would modify allocation calculated previously—Total income increased from $24,177 t o $36,177—Consequently, no benefit would be paid to him from October 18, 1998 to November 13, 1999—Benefit period would be extended by 52 weeks and would end on October 14, 2000—Respondent contested decision, alleging that sum of $12,000 not earnings because money did not come from his employer—On November 17, 2000, board of referees rescinded Commission's decision—Board allowed respondent's appeal and found sum received not earnings but rather relief grant pursuant to Regulations, s. 35(7)(c)—Commission appealed decision to umpire—Latter dismissed board of referees' finding termination benefits were relief grant—Found amount received under plan not earnings under Regulations, s. 35(2) because benefit received had no relationship to respondents' past or present work—Must be determined, first, whether sum received by respondent under ARTT plan "earnings" within meaning of Employment Insurance Act , ss. 19, 54(s) and Regulations, s. 35—Act, s. 19 providing that if claimant receives earnings during period for which benefits claimed, amount must be deducted from these benefits—Must be determined if amount of $12,000 earnings within meaning of Regulations, s. 35—Based on case law, earnings within meaning of Act and Regulations correspond to whatever is earned by employee as result of his work, i.e. in return for his work—Amount not in consideration of work done in traditional sense can be earnings within meaning of Act and Regulations on condition that amount comparable to earnings and that "certain connection" or a "sufficient connection" between claimant's employment and sum received—Herein, money received came from third party and not from employer, although paid by employer—This factor, however, does not detract from employment relationship as Regulations, s. 35(1) provides that money may be received "from an employer or any other person" (definition of "income")—Employer receiving money from Emploi-Québec bound to make payments in accordance with Plan, i.e., to those employees who agreed to free up hours of work for benefit of other employees—Money received as incentive in order to encourage those who received it to give up their work hours—Even if no specific equivalence between sum received and former salary, and even if received when respondents had already left their jobs, sum of $12,000 had all characteristics of earnings—Earnings include any receipt or consideration received for work done—If, as result of variable market conditions, worker receives sum of money on condition that he give up his work or that he surrender his hours of work to another employee, amount that he receives has effect of compensating for his diminished earnings—Amount received represents compensation for his undertaking not to work—Also mitigates situation in which workers find themselves when no longer receiving salary—Sum becomes consideration for not working—Does not necessarily correspond to same amount as salary, but makes up for its absence—At same time, amount one of conditions of termination of employment and has all of characteristics of earnings even if, in sense, not earnings within traditional meaning because no work done in consideration for amount received—No reason why notion of earnings cannot be adapted to labour market conditions if determined that sum received, even from third party, comparable to consideration for freeing up position—Umpire right to say that sum received "benefit based on a commitment not to resume a given position"—Incorrect, however, for him to state that "benefit has nothing to do with the beneficiary's past or present work"—Herein, respondent waived his hours of work in favour of somebody else—Not waiving right to reinstatement—Giving up his employment—True that in giving up his hours of work, respondent giving up his seniority, and that seniority was right recognized by collective agreement which operates under aegis of legislation—Cannot be argued that amounts received conditional upon waiver of rights in collective agreement not "earned by" respondent's employment—Collective agreement product of negotiation—Thus, when claimant waives benefit therein, can be said that he is waiving right that pertains to his conditions of work, but not right given to him by law—Essentially, amount paid under ARTT plan constitutes earnings because has all of characteristics of such given variable conditions of job market—In alternative, respondent submits that board of referees' decision to effect that amount received was relief grant within meaning of Regulations, s. 35(7)(c) reasonable and that umpire erred in overturning it—To determine whether amount relief grant, Court has held that three factors must be analyzed; (1) circumstances giving rise to loss, (2) type of loss for which compensation being paid and (3) nature of compensatory scheme: Canada (Attorney General) v. King, [1996] 2 F.C. 940 (F.C.A.)—With respect to first test, true that, as respondent argues, definitive interruption in one part of production of company for which respondent was working could constitute unusual or irregular circumstances—However, with respect to second test, type of loss incurred by respondents essentially voluntary—Consented to reduction of work hours and to layoff—Not unexpected and sudden loss, for example—But with respect to third test, umpire correctly understood from terms of memorandum of agreement that [] "The main objective of the ARTT plan was not to compensate for a loss suffered by the beneficiary but instead to ensure that the hours he was freeing up would provide employment for another worker and that the beneficiary would not attempt to resume employment with the employer"—Umpire set aside board of referees' decision that amounts received constituted relief grant—Error in law for board of referees to characterize amount received as such, and umpire's intervention warranted—If amount in question earnings, which of allocation measures applicable?—Given conclusion reached by board of referees and umpire, their decisions are silent on manner in which earnings should be paid—Therefore no reason to refer to it—True that amount of $12,000 paid to respondent in three installments over three years—However, in light of earlier finding that these are "earnings paid or payable … by reason of … separation from an employment", allocation must be effected in accordance with s. 36(9), which applies "regardless … of the period in respect of which the earnings are purported to be paid or payable"—Applications for judicial review should be allowed with costs, and cases must be returned to Commission for reallocation of amounts received in accordance with Regulations, s. 36(9)—Employment Insurance Regulations, SOR/96-332, s. 35 (as am. by SOR/97-31, s. 18)—Employment Insurance Act, S.C. 1996, c. 23, ss. 19, 54.