Tax Court of Canada Judgments

Decision Information

Decision Content

Date: 19991208

Docket: 98-724-UI

BETWEEN:

LINDA K. DONNAWELL,

Appellant,

and

THE MINISTER OF NATIONAL REVENUE,

Respondent.

Reasons for Judgment

O'Connor, J.T.C.C.

[1] This appeal was heard on November 3, 1999 at Regina, Saskatchewan.

Issue

[2] The issue is whether the Appellant, a member of the support staff employed by the Board of Education of the Regina School Division No. 4 of Saskatchewan ("School Board"), was employed under a contract of service with the School Board during the summer break in 1997 with the result that she would be entitled to employment insurance benefits with respect to the summer break period.

Facts

[3] The Appellant is a member of the support staff employed by the School Board.

[4] Members of the support staff generally work approximately ten months of the year as schools do not operate during July and August when the students are on summer break.

[5] The School Board did not generally provide work during the months of July and August for their support staff.

[6] A large number of support staff returned to their positions at the beginning of each school year.

[7] The school year for schools operated by the School Board is usually from the end of August to the end of June ("Normal School Year").

[8] The Appellant has been working for the School Board for the Normal School Year since August 27, 1981.

[9] The Appellant did not provide any services to the School Board during the summer break.

[10] The Collective Agreement between the School Board and The Canadian Union of Public Employees ("Union") was signed October 10, 1995 and was filed as Exhibit A-1 ("Collective Agreement"). The Collective Agreement was in effect for the period January 1, 1995 to December 31, 1997.

[11] The Appellant was a member of the Union.

[12] The terms and conditions of the Appellant's employment were governed by the Collective Agreement.

[13] The School Board did not notify the Appellant that her employment with it had been terminated as of June 28, 1997 nor was she laid off.

[14] The Appellant did not notify the School Board that she was terminating her employment with it as of June 28, 1997.

[15] The School Board advised the Appellant that the Normal School Year would commence on August 26, 1997 and the Appellant commenced performing services for the School Board on and after that date.

[16] The Appellant did not have to apply to the School Board for a job for the Normal School Year beginning August 26, 1997.

Submissions of the Appellant

[17] Counsel for the Appellant submits that since the Appellant performs no work and receives no pay during the summer break, she cannot be considered as being employed during that period under a contract of service within the meaning of the Employment Insurance Act ("Act"). A collective agreement and its benefits continue in many situations beyond the point of lay-off and the Respondent cannot say that there was a continuing contract of service simply because benefits continued during the summer break. Counsel submits further that the Appellant is paid an "annual" salary but that this does not mean that the Appellant is employed year-round. He refers to Article 24.02 of the Collective Agreement which reads as follows:

24.02 Incremental Credit

Following initial placement in a pay classification, incremental credit will be granted on the following basis:

i) In the month following the date of completion of 200 days of service with pay. Additional increments shall subsequently be granted on an annual basis to the maximum of the pay classification.

Effective July 1, 1991, the number of hours constituting one year for increment purposes shall be six multiplied by the number of school days set by the Minister of Education for each successive school year.

ii) Employees who are employed less than 30 hours per week shall have their service pro-rated and recongized for incremental credit on the same basis as full-time employees.

He argues that this Article establishes that the School Board and the Union agreed that "annual" referred to the school year and not a calendar year.

[18] Counsel states further:

The Education Act of Saskatchewan determines a school year as follows:

163 (1) The school year shall be divided into:

a) two terms, ending on December 31 and June 30 respectively

b) two semesters, ending on January 31 and June 30 respectively, or ending on December 31 and June 30 respectively, or

c) Any other periods that the board of education or the conseil scolare, with the approval of the minister, may determine.

(2) A school year consists of 200 school days, but in any year the minister may, by order, determine for that year any lesser number of school days that the minister considers advisable.

Counsel concludes that a school year determined by legislation determines the working year of employees. This situation is no different than a fisherman whose work year is determined by legislated fishing seasons.

[19] Counsel for the Appellant submits further that the employees do not earn seniority during the summer period and that seniority is an indicia of employment. The Collective Agreement provides that seniority shall not accumulate during breaks in service and that seniority shall accumulate at the rate of 6 hours per day for each day of the school year. Therefore if employees do not accumulate seniority during the summer period and the Collective Agreement stipulates that seniority does not accumulate during a break in service, then the summer period must be a break in service.

[20] Counsel for the Appellant adds that counsel for the Respondent argues that the months of July and August are periods of leave and pursuant to s.10.1 of the Employment Insurance Regulations ("Regulations") are deemed to be insurable employment.

[21] This Regulation requires that the employee be remunerated. The employees in this instance were not remunerated for the period. If they had worked during the period, the Collective Agreement requires at article 14.02 that they receive remuneration for the time worked. The Regulation also requires that the calculation be based upon hours "normally" worked. The employees in this instance do not normally work during the summer period.

[22] The Minister has interpreted the Collective Agreement to imply a leave during the summer. The Collective Agreement does not state that the employees are on leave during the summer neither does it expressly state that the employees are laid-off during the summer. The minister does not have the jurisdiction to interpret a collective agreement. Section 25(1) of The Trade Union Act c-47 Statutes of Saskatchewan 1994, states as follows:

All differences between the parties to a collective bargaining agreement or persons bound by the collective bargaining agreement or on whose behalf the collective bargaining agreement was entered into respecting its meaning, application or alleged violation, including a question as to whether a matter is arbitrable, are to be settled by arbitration after exhausting any grievance procedure established by the collective bargaining agreement.

[23] Counsel further submits that since most staff support are female the determination by the Minister denying benefits in respect of the summer break is discriminatory.

Submissions of the Respondent

[24] Counsel for the Respondent refers to the decision of the Federal Court of Appeal in Re Petts et al. and The Umpire Under Section 92 of The Unemployment Insurance Act, [1974] 2 F.C. 225. That case held that section 158 of the Regulations, dealing with teachers and the summer period, was not a valid exercise of the powers conferred by section 58(h) of the Act, the section authorizing the enactment of Regulations.

[25] At p. 234, Jackett, C.J. stated:

Any regret that I might otherwise have had because I have reached that conclusion is eliminated by the fact that I have not been able to conceive of any problem in connection with the non-teaching period of teachers that is not adequately dealt with by s. 2(1)(n) [the section defining "interruption of earnings"] and s. 21(2) [the section dealing with when a period off is not a period of unemployment]. Whether a teacher receives one-twelfth of his annual salary at the end of each month of the year, one-tenth at the end of each of 10 months of the year, or, as in Alberta, one-twelfth at the end of each of nine months and three-twelfths at the end of a 10th month, if his contract of service continues throughout the year, there has been no "lay-off" or "separation form ... employment" giving rise to an "... interruption ... in ... earnings" and he is receiving his "usual remuneration"; and I do not, therefore, conceive of the circumstances in which s. 158, or some similar provision, is necessary to avoid payment of unemployment benefits to teachers who are not out of work in the ordinary acceptation of that expression.

[26] Petts is cited with approval in the Supreme Court of Canada decision in Dick et al. v. Deputy Attorney General of Canada, [1980] 2 S.C.R. 243.

[27] Further, in Attorney General of Canada v. Lori Fox (1989) 103 N.R. 315 the Federal Court of Appeal stated as follows:

From the definition of "employment" in s. 2 of the Unemployment Insurance Act ... as elaborated on in s. 57(1) of the Regulations ..., the relationship of employer and employee and the existence of employment are not dependent on the actual performance of services under the contract of employment. It is sufficient that a contact of employment exists, which is the situation in this case.

[28] Counsel also referred to CUB 16774 In the matter of a Claim by Singh, David where Reed J., acting as an Umpire stated:

The claimant in this case was not remunerated on a weekly or other periodic basis. The contract was for a year. The salary paid was expressed to be an annual salary. Whether during the football season or outside of it there would be weeks during which the claimant would not receive any money because the times at which his salary instalments were paid to him depended upon the football schedule and not on other timing considerations. Thus "his usual remuneration" was paid by reference to a system under which there would be weeks during which he received no salary instalment because no games were played that week. The payment schedule contemplated this type of irregularity. Therefore, I do not think the claimant has proven that he suffered an interruption of earnings. The weeks during which he received no salary instalment were part of the planned procedure pursuant to which he received "his usual remuneration".

Analysis and Decision

[29] Firstly, I cannot accept Appellant's Counsel's submissions that the Minister does not have jurisdiction to make a determination or that the determination was discriminatory. As to jurisdiction, yes, disputes are referred to an Arbitrator but this is not a dispute. The Minister is simply interpreting the Collective Agreement in the application of the provisions of the Act. As to discrimination, the Act applies generally to all employees and to find that a determination with respect to a group is discriminatory because that group comprises mainly one sex could lead to chaos. One need only consider fishers, the large majority of which are presumably male.

[30] The Collective Agreement was to be effective as of January 1, 1995 and remain in force and effect up to and including December 31, 1997 and from year to year thereafter.

[31] The most relevant provisions of the Act and the Regulations are:

2.(1) In this Act,

...

"employment" means the act of employing or the state of being employed;

...

"interruption of earnings" means an interruption that occurs in the earnings of an insured person at any time and in any circumstances determined by the regulations;

5(1) Subject to subsection (2), insurable employment is

(a) employment in Canada by one or more employers, under any express or implied contract of service or apprenticeship, written or oral, whether the earnings of the employed person are received from the employer or some other person and whether the earnings are calculated by time or by the piece, or partly by time and partly by the piece, or otherwise;

...

7(1) Unemployment benefits are payable as provided in this Part to an insured person who qualifies to receive them.

7(2) An insured person, other than a new entrant or a re-entrant to the labour force, qualifies if the person

(a) has had an interruption of earnings from employment;

(b) has had during their qualifying period at least the number of hours of insurable employment set out in the following table in relation to the regional rate of employment that applies to the person.

...

11(1) A week of unemployment for a claimant is a week in which the claimant does not work a full working week.

11(2) A week during which a claimant's contract of service continues and in respect of which the claimant receives or will receive their usual remuneration for a full working week is not a week of unemployment, even though the claimant may be excused from performing their normal duties or does not have any duties to perform at that time.

11(3) A week or part of a week during a period of leave from employment is not a week of unemployment if the employee

(a) takes the period of leave under an agreement with their employer;

(b) continues to be an employee of the employer during the period; and

(c) receives remuneration that was set aside during a period of work, regardless of when it is paid.

...

Regulations

14.(1) Subject to subsections (2) to (7), an interruption of earnings occurs where, following a period of employment with an employer, an insured person is laid off or separated from that employment and has a period of seven or more consecutive days during which no work is performed for that employer and in respect of which no earnings that arise from that employment, other than earnings described in subsection 36(13), are payable or allocated.

...

(4) Where an insured person is employed under a contract of employment under which the usual remuneration is payable in respect of a period greater than a week, no interruption of earnings occurs during that period, regardless of the amount of work performed in the period and regardless of the time at which or the manner in which the remuneration is paid.

...

(6) A period of leave referred to in subsection 11(3) of the Act does not constitute an interruption of earnings, regardless of the time at which or the manner in which remuneration is paid.

...

36.(8) Where a 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.

[32] The most relevant provisions of the Collective Agreement are as follows:

2.01 The purpose of this Agreement shall be to establish through negotiations, terms and conditions of employment, including rates of pay, hours of work, and a method of resolving grievances; and to establish a harmonious relationship between the Board and the Union.

...

11.07 The Board may lay off or dismiss an employee in accordance with The Labour Standards Act.

...

13.01 Every employee shall be entitled to vacation pay as follows:

a) After one year of service, 3/52 of total gross earnings.

b) After eight years of service, 4/52 of total gross earnings.

c) After 17 years of service, 5/52 of total gross earnings.

d) After 24 years of service, 6/52 of total gross earnings.

Gross earnings shall be determined as the total salary earned for the period beginning with July 1 of one year to the end of June of the next year.

13.02 Vacation pay shall be payable on June 30 of each school year, or upon termination of employment.

13.03 Any annual holidays as may be provided under The Labour Standards Act shall be taken during the periods of school closure at the Christmas, Spring and Summer vacation times as provided by The Education Act.

...

18.01 The annual salary of each employee shall be calculated in accordance with the effective rate of pay. Each employee shall be paid on a ten month basis (July and August excepted), on the last school day of each month, unless otherwise agreed upon.

...

21.03 When an employee is dismissed or suspended for cause, or is given a written reprimand, the employee and the Union shall be notified, in writing, within five working days.

...

23.01 Pension Plan: Employees shall participate in the superannuation and benefit plans provided by the board, and make contributions thereto in accordance with their terms.

...

23.05 Dental Plan

The Board shall provide, and pay the full premiums for, a dental plan which provides for the employee and eligible family members:

(a) full coverage of preventative and minor restorative dental work with no deductible or annual limit,

(b) 50% coverage of major restorative dental work with a $1,500 per person per year limit, and

(c) 50% coverage of orthodontic work, with a $1,500 per person lifetime limit.

...

23.07 Extended Health Care Plan

Effective September 1, 1995, the Board shall provide an Extended Health Care Plan fully funded by the Board. The coverage, benefits and deductibles of the Extended Health Care Plan shall be as agreed by the Union and the Board.

24.03 Salaries

It is understood and agreed that the annual salaries specified in this section are inclusive of pay for all public holidays as defined in The Labour Standards Act.

With respect to Article 13.03 of the Collective Agreement cited above, section 166 of The Education Act, 1995 being Ch. E-0.2 of the Statutes of Saskatchewan, 1995, as amended, provides as follows:

166(1) The following vacation periods are to be observed:

(a) a Christmas vacation, which is to commence not later than December 23 and end not earlier than January 2, both days inclusive;

(b) a spring vacation, which is to be the five days following Easter Sunday;

(c) a summer vacation that is at least six consecutive weeks from the last school day in one school year to the first school day in the following school year and that ends no earlier than the first Monday in August.

[33] The Appellant was under a contract of service covering the period from January 1, 1995 to December 31, 1997. Although not receiving pay, she remained entitled during the summer break to the various benefits provided under the Collective Agreement. The summer break is a vacation period. She was clearly not laid-off and clearly did not terminate her own employment. Her contract of service continued during the summer break notwithstanding that no services were rendered nor income received during that break. Also, it is clear from the Collective Agreement that the Appellant was paid on an annual (12 month) basis notwithstanding that the instalments were paid during the 10 months of the Normal School Year.

[34] The cases cited by counsel for the Respondent related to teachers may not be totally determinative because there is a Regulation (s. 33) specifically applicable to teachers. However, the reasons for the decisions in the teachers' cases and in Singh would appear to support the Respondent's position. Moreover, in Petts the Federal Court of Appeal held the then Regulation on teachers to be invalid and based its decision on the provisions of the Act.

[35] Also section 166 of The Education Act makes it clear that the summer break is a vacation period, i.e., not a lay-off period. In other words, there was no interruption of earnings as contemplated by section 2(1) of the Act and section 14 of the Regulations.

[36] For all of the foregoing reasons the appeal is dismissed and the determination of the Minister is confirmed.

Signed at Ottawa, Canada this 8th day of December 1999.

"T.P. O'Connor"

J.T.C.C.

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