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Date: 20060926

Docket: A-619-05

Citation: 2006 FCA 313

 

CORAM:       LÉTOURNEAU J.A.

                        NOËL J.A.

                        PELLETIER J.A.

 

BETWEEN:

STÉPHANE SARRAZIN

Applicant

and

 

ATTORNEY GENERAL OF CANADA

Respondent

 

 

 

Hearing held in Montréal, Quebec, on September 26, 2006.

Judgment delivered from the bench at Montréal, Quebec, on September 26, 2006.

 

REASONS FOR JUDGMENT OF THE COURT BY:                                       LÉTOURNEAU J.A.

 


Date: 20060926

Docket: A-619-05

Citation: 2006 FCA 313

 

CORAM:       LÉTOURNEAU J.A.

                        NOËL J.A.

                        PELLETIER J.A.

 

BETWEEN:

STÉPHANE SARRAZIN

Applicant

and

 

ATTORNEY GENERAL OF CANADA

Respondent

 

 

 

 

REASONS FOR JUDGMENT OF THE COURT

(Delivered from the bench at Montréal, Quebec, on September 26, 2006)

LÉTOURNEAU J.A.

[1]               This is an application for judicial review of CUB 64729, in which the Umpire found that the money that the applicant had received constituted earnings under subsections 35(1) and (2) of the Employment Insurance Regulations, SOR/96-332 (the Regulations).

 

 

[2]               The Umpire also found that this money had to be allocated in accordance with subsection 36(8) of the Regulations. The reference to subsection 36(8) should be a reference to subsection 36(9). These subsections read as follows:

 

Determination of Earnings for Benefit Purposes

 

 

35. (1) The definitions in this subsection apply in this section.

“employment” means

(a) any employment, whether insurable, not insurable or excluded employment, under any express or implied contract of service or other contract of employment,

(i) whether or not services are or will be provided by a claimant to any other person, and

(ii) whether or not income received by the claimant is from a person other than the person to whom services are or will be provided;

Détermination de la rémunération aux fins du bénéfice des prestations

 

35. (1) Les définitions qui suivent s’appliquent au présent article.

« emploi »

a) Tout emploi, assurable, non assurable ou exclu, faisant l’objet d’un contrat de louage de services exprès ou tacite ou de tout autre contrat de travail, abstraction faite des considérations suivantes:

(i) des services sont ou seront fournis ou non par le prestataire à une autre personne,

(ii) le revenu du prestataire provient ou non d’une personne autre que celle à laquelle il fournit ou doit fournir des services;

(b) any self-employment, whether on the claimant’s own account or in partnership or co-adventure; and

b) tout emploi à titre de travailleur indépendant, exercé soit à son compte, soit à titre d’associé ou de coïntéressé;

(c) the tenure of an office as defined in subsection 2(1) of the Canada Pension Plan. (emploi)

c) l’occupation d’une fonction ou charge au sens du paragraphe 2(1) du Régime de pensions du Canada. (employment)

“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)

“pension” means a retirement pension

(a) arising out of employment or out of service in any armed forces or in a police force;

(b) under the Canada Pension Plan; or

(c) under a provincial pension plan. (pension)

« pension » Pension de retraite provenant de l’une des sources suivantes:

a) un emploi ou un emploi à titre de membre des forces armées ou de toute force policière;

b) le Régime de pensions du Canada;

c) un régime de pension provincial. (pension)

« 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) 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 has occurred and the amount to be deducted from benefits payable under section 19 or subsection 21(3) or 22(5) 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;

(b) workers’ compensation payments received or to be received by a claimant, other than a lump sum or pension paid in full and final settlement of a claim made for workers’ compensation payments;

(2) Sous réserve des autres dispositions du présent article, la rémunération qu’il faut prendre en compte pour déterminer s’il y a eu un arrêt de rémunération et fixer le montant à déduire des prestations à payer en vertu de l’article 19 ou des paragraphes 21(3) ou 22(5) 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;

b) les indemnités que le prestataire a reçues ou recevra pour un accident du travail ou une maladie professionnelle, autres qu’une somme forfaitaire ou une pension versées par suite du règlement définitif d’une réclamation;

(c) payments a claimant has received or, on application, is entitled to receive under

(i) a group wage-loss indemnity plan,

(ii) a paid sick, maternity or adoption leave plan,

(iii) a leave plan providing payment in respect of the care of a child or children referred to in subsection 23(1) of the Act, or

(iv) a leave plan providing payment in respect of the care or support of a family member referred to in subsection 23.1(2) of the Act;

c) les indemnités que le prestataire a reçues ou a le droit de recevoir, sur demande, aux termes:

(i) soit d’un régime collectif d’assurance-salaire,

(ii) soit d’un régime de congés payés de maladie, de maternité ou d’adoption,

(iii) soit d’un régime de congés payés pour soins à donner à un ou plusieurs enfants visés au paragraphe 23(1) de la Loi,

(iv) soit d’un régime de congés payés pour soins ou soutien donnés à un membre de la famille visé au paragraphe 23.1(2) de la Loi;

(d) notwithstanding paragraph (7)(b) but subject to subsection (3), the payments a claimant has received or, on application, is entitled to receive from a motor vehicle accident insurance plan provided under a provincial law in respect of the actual or presumed loss of income from employment due to injury, if the benefits paid or payable under the Act are not taken into account in determining the amount that the claimant receives or is entitled to receive from the plan;

d) malgré l’alinéa (7)b) et sous réserve du paragraphe (3), les indemnités que le prestataire a reçues ou a le droit de recevoir, sur demande, dans le cadre d’un régime d’assurance-automobile prévu par une loi provinciale pour la perte réelle ou présumée du revenu d’un emploi par suite de blessures corporelles, si les prestations payées ou payables en vertu de la Loi ne sont pas prises en compte dans l’établissement du montant que le prestataire a reçu ou a le droit de recevoir dans le cadre de ce régime;

(e) the moneys paid or payable to a claimant on a periodic basis or in a lump sum on account of or in lieu of a pension; and

e) les sommes payées ou payables au prestataire, par versements périodiques ou sous forme de montant forfaitaire, au titre ou au lieu d’une pension;

(f) where the benefits paid or payable under the Act are not taken into account in determining the amount that a claimant receives or is entitled to receive pursuant to a provincial law in respect of an actual or presumed loss of income from employment, the indemnity payments the claimant has received or, on application, is entitled to receive pursuant to that provincial law by reason of the fact that the claimant has ceased to work for the reason that continuation of work entailed physical dangers for

(i) the claimant,

(ii) the claimant’s unborn child, or

(iii) the child the claimant is breast‑feeding.

f) dans les cas où les prestations payées ou payables en vertu de la Loi ne sont pas prises en compte dans l’établissement du montant que le prestataire a reçu ou a le droit de recevoir en vertu d’une loi provinciale pour la perte réelle ou présumée du revenu d’un emploi, les indemnités que le prestataire a reçues ou a le droit de recevoir, sur demande, en vertu de cette loi provinciale du fait qu’il a cessé de travailler parce que la continuation de son travail mettait en danger l’une des personnes suivantes:

(i) le prestataire,

(ii) l’enfant à naître de la prestataire,

(iii) l’enfant qu’allaite la prestataire.

 

  Allocation of Earnings for Benefit Purposes

 

 

36. (1) Subject to subsection (2), the earnings of a claimant as determined under section 35 shall be allocated to weeks in the manner described in this section and, for the purposes referred to in subsection 35(2), shall be the earnings of the claimant for those weeks.

 

Répartition de la rémunération aux fins du bénéfice des prestations

 

36. (1) Sous réserve du paragraphe (2), la rémunération du prestataire, déterminée conformément à l’article 35, est répartie sur un nombre donné de semaines de la manière prévue au présent article et elle constitue, aux fins mentionnées au paragraphe 35(2), la rémunération du prestataire pour ces semaines.

(2) For the purposes of this section, the earnings of a claimant shall not be allocated to weeks during which they did not constitute earnings or were not taken into account as earnings under section 35.

(2) Pour l’application du présent article, la rémunération du prestataire ne peut être répartie sur les semaines durant lesquelles elle n’avait pas valeur de rémunération ou n’avait pas été comptée comme rémunération selon l’article 35.

(3) Where the period for which earnings of a claimant are payable does not coincide with a week, the earnings shall be allocated to any week that is wholly or partly in the period in the proportion that the number of days worked in the week bears to the number of days worked in the period.

(3) Lorsque la période pour laquelle la rémunération du prestataire est payable ne coïncide pas avec une semaine, la rémunération est répartie sur les semaines comprises en totalité ou en partie dans cette période proportionnellement au rapport que représente le nombre de jours travaillés dans chacune de ces semaines sur le nombre de jours travaillés dans cette période.

(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.

(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.

(5) Earnings that are payable to a claimant under a contract of employment without the performance of services or payable by an employer to a claimant in consideration of the claimant returning to or beginning work shall be allocated to the period for which they are payable.

(5) La rémunération payable au prestataire aux termes d’un contrat de travail sans que soient fournis des services ou la rémunération payable par l’employeur au prestataire pour qu’il revienne au travail ou commence à exercer un emploi est répartie sur la période pour laquelle elle est payable.

(6) The earnings of a claimant who is self-employed in employment other than farming, or the earnings of a claimant that are from participation in profits or commissions, shall be allocated to the week in which the services that gave rise to those earnings are performed and, where the earnings arise from a transaction, they shall be allocated to the week in which the transaction occurred.

(6) La rémunération du prestataire qui est un travailleur indépendant exerçant un emploi non relié aux travaux agricoles ou la rémunération du prestataire qui provient de sa participation aux bénéfices ou de commissions est répartie sur la semaine où ont été fournis les services qui y ont donné lieu ou, si la rémunération résulte d’une opération, sur la semaine où l’opération a eu lieu.

(7) The earnings of a claimant who is self-employed in farming shall be allocated

(a) if they arose out of a transaction, to the week in which the transaction occurred; and

(b) if they were received in the form of a subsidy, to the week in which the subsidy was paid.

(7) La rémunération du prestataire qui est un travailleur indépendant exerçant un emploi relié aux travaux agricoles est répartie de la façon suivante:

a) si elle résulte d’une opération, elle est attribuée à la semaine où l’opération a eu lieu;

b) si elle lui est versée sous forme de subvention, elle est attribuée à la semaine où la subvention a été versée.

(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.

(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.

(9) Subject to subsections (10) and (11), all earnings paid or payable to a claimant by reason of a lay-off or separation from an employment shall, regardless of the nature of the earnings or the period in respect of which the earnings are purported to be paid or payable, be allocated to a number of weeks that begins with the week of the lay-off or separation in such a manner that the total earnings of the claimant from that employment are, in each consecutive week except the last, equal to the claimant’s normal weekly earnings from that employment.

 

(9) Sous réserve des paragraphes (10) et (11), toute rémunération payée ou payable au prestataire en raison de son licenciement ou de la cessation de son emploi est, abstraction faite de la nature de la rémunération et de la période pour laquelle elle est présentée comme étant payée ou payable, répartie sur un nombre de semaines qui commence par la semaine du licenciement ou de la cessation d’emploi, de sorte que la rémunération totale tirée par lui de cet emploi dans chaque semaine consécutive, sauf la dernière, soit égale à sa rémunération hebdomadaire normale provenant de cet emploi.

 

 

[3]               The dispute before us concerns the characterization of the money received and, therefore, the allocation of that money by the Employment Insurance Commission (the Commission). The money consisted of amounts paid out as vacation pay.

 

[4]               To our knowledge, and according to the case law that the parties brought to our attention, this is the first time since 1994 that this issue has come before us.

 

[5]               The applicant, who was a seasonal employee, maintains that this money was paid to him as he earned it, and that, pursuant to an agreement with the employer, it is not earnings under the Regulations, but savings. The aforementioned vacation pay consisted of weekly deductions of 6% for savings, which were deposited in a savings account set up by the employer, who administered, controlled and managed it. The money accumulated was paid out to the applicant as a result of a separation from employment. The terms of the agreement, as summarized by the Umpire in his decision, are set out below:

.           The claimant and the other employees involved in this appeal had 6% of their earnings deducted every week for savings. After statutory tax and other deductions were made, the money deducted was deposited into a savings account set up by the employer;

 

.        The account into which the deductions in question were deposited was not a trust account. This account was controlled by the employer, which could have accessed it had it wanted to. However, the employer never accessed this account for operational purposes, and the account was used exclusively for the purposes of the agreement with the employees;

 

.        The employees could ask at any time to receive a portion or all of the money that was withheld in their names and kept in the account in question;

 

.        The employer emptied the account each year by giving the employees the money that was owed to them;

 

.        In the event of a separation from employment, the money accumulated was paid out to the employee in question.

 

 

[6]               With respect, we are of the view that the Umpire was correct in interfering with the decision of the Board of Referees. The Board erred in determining that the fact that the employer deposited the amounts in a regular savings account, rather than a trust account, was a mere technicality that in no way altered the nature of these amounts.

 

[7]               On the contrary, the decisions of our Court are consistent on this point, and have taken on the character of a judicial policy that gives subsection 36(9) of the Regulations a practical and functional meaning, a meaning that reflects the intention of Parliament that vacation pay, paid or payable by reason of a lay-off or separation from an employment, be allocated to a number of weeks that begins with the week of the lay-off or separation. This is the intention of subsection 36(9) “regardless of the nature of the earnings or the period in respect of which the earnings are purported to be paid or payable.”

 

[8]               In Bryden v. Canada Employment and Immigration Commission, [1982] 1 S.C.R. 443, the Supreme Court of Canada held that vacation pay deposited in a trust fund on behalf of employees can be considered savings, and our Court adopted this principle in a number of subsequent cases. However, as Umpire Rouleau observed in CUB 20811, it is an exception that substantially alters the stipulation contained in the Regulations, notwithstanding Parliament’s clear intention “to include vacation pay as earnings, regardless of how the monies are managed, set aside or paid out.”

 

[9]               In The Attorney General of Canada v. Haycock, A-47-90, Mr. Justice Marceau referred to those decisions, and reaffirmed the conditions required in order for money normally characterized as earnings to acquire the status of savings:

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.]

 

 

[10]           In Canada (Attorney General) v. Brière, [1994] F.C.J. No. 1708, which followed, on this issue, Attorney General of Canada v. Leblanc, [1990] 124 N.R. 321 (F.C.A.), Liberati and Labonté v. Employment and Immillgration Commission, F.C.A., A-454-92, September 29, 1993, Canada (Attorney General) v. Nield, (1990) 124 N.R. 333 (F.C.A.) and Haycock, supra, our Court held that the existence of a trustee was “one of the essential conditions for vacation pay to lose its status as pay and acquire that of savings.”

 

[11]           Counsel for the applicant has not persuaded us to deviate from these earlier decisions, which establish parameters and requirements for purposes of the Employment Insurance Act. Without them, the intention of Parliament could easily be thwarted, and subsection 36(9) of the Regulations would become either irrelevant or inapplicable to the issue of vacation pay.

 

 

 

[12]           For these reasons, the application for judicial review will be dismissed with costs.

 

 

“Gilles Létourneau”

J.A.

 

 

 

 

 

Certified true translation

Mary Jo Egan, LLB

 


FEDERAL COURT OF APPEAL

 

SOLICITORS OF RECORD

 

 

 

DOCKET:                                                                              A-619-05

 

APPLICATION FOR JUDICIAL REVIEW OF THE DECISION OF UMPIRE GOULARD, OF THE CANADA EMPLOYMENT INSURANCE COMMISSION, DATED NOVEMBER 3, 2005, CUB 647289.

 

STYLE OF CAUSE:                                                              STÉPHANE SARRAZIN v. ATTORNEY GENERAL OF CANADA

 

 

PLACE OF HEARING:                                                        Montréal, Quebec

 

 

DATE OF HEARING:                                                          September 26, 2006

 

 

REASONS FOR JUDGMENT OF THE COURT BY:       LÉTOURNEAU J.A.

                                                                                                NOËL J.A.

                                                                                                PELLETIER J.A.

 

DELIVERED FROM THE BENCH BY:                            LÉTOURNEAU J.A.

 

APPEARANCES:

 

Gilbert Nadon

FOR THE APPLICANT

 

Carole Bureau

FOR THE RESPONDENT

 

 

SOLICITORS OF RECORD:

 

Ouellet, Nadon & associés

Montréal, Quebec

 

FOR THE APPLICANT

 

 

John H. Sims, Q.C.

Deputy Attorney General of Canada

FOR THE RESPONDENT

 


 

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