Docket: 2003-3651(EI)

BETWEEN:

JACOB PETE,

Appellant,

and

THE MINISTER OF NATIONAL REVENUE,

Respondent.

____________________________________________________________________

Appeal heard on April 23, 2004, at Edmonton, Alberta, by

The Honourable Justice C.H. McArthur
Appearances:
Counsel for the Appellant:	Arnold Goodman
Counsel for the Respondent:	Karen Wood and Shaun Ung (Student-at-law)

____________________________________________________________________

JUDGMENT

          The appeal pursuant to subsection 103(1) of the Employment Insurance Act is dismissed and the decision of the Minister of National Revenue, on the appeal made to him under section 91 of that Act, is confirmed.

Signed at Ottawa, Canada, this 16th day of August, 2004.

"C.H. McArthur"

McArthur J.

Citation: 2004TCC559

Date: 20040816

Docket: 2003-3651(EI)

BETWEEN:

JACOB PETE,

Appellant,

and

THE MINISTER OF NATIONAL REVENUE,

Respondent.

REASONS FOR JUDGMENT

McArthur J.

[1]      This appeal under the Employment Insurance Act is from a determination by the Minister of National Revenue that the Appellant had 588 hours of insurable employment with Pehdzeh Ki First Nation (the Payor) from May 6, 2002 to July 25, 2002 (the Period). During the hearing of this appeal, the Respondent conceded another 172 hours, bringing the total hours not in dispute to 760. As a "new entrant" to the employment insurance regime, the Appellant required 910 insurable hours in the "qualifying period" from January 6, 2002 to January 4, 2003. The Appellant argued that he had over 910 insurable hours.

[2]      The Appellant was retained as the senior administrative officer for the Payor, a native band of approximately 200 members in the Northwest Territories. He was hired effective May 1, 2002 by Chief Percy Hardisty of the Payor. Three and one-half months later, Chief Hardisty was replaced by Chief Lennie by what was described as a coup d'état. As of August 15, 2002, the Appellant was no longer employed by the Payor, his contract having been terminated by Chief Lennie who hired Mike Canadien in place of the Appellant.

[3]      The Appellant and a former co-worker, James Allan Smith, were the only witnesses. Mr. Smith's evidence was of very little assistance. The Appellant argued that in addition to the 760 hours of insurable employment, the evidence established the following additional hours:

Education Director Position (2001)	430 hours
Unpaid "regular" hours in May	33.5 hours
Overtime worked but not paid (May 6 to July 25)	224 hours
Time worked but unpaid (September to December)	160 hours

The issue is whether these hours can be included as insurable hours for the relevant period. The parties agreed that he was paid hourly and, therefore, Regulation 9 of the Act applies.

[4]      In addition to the 760 hours, the Appellant submits that the following be included:

(i)       Time he worked as education director in 2001 (430 hours) for Kwanlin Dun First Nation (unrelated to the Payor);

(ii)       Unpaid regular hours in May 2002 while he waited several days for a flight out of Edmonton;

(iii)      Overtime worked but not paid between May 6 and July 25, 2002; and

(iv)      Time worked but not paid from September to December, 2002.

I will deal with these four submissions in the order presented.

[5]      430 hours for Kwanlin Dun First Nation in 2001: These are not insurable hours because they do not fall within the statutory "qualifying period". The qualifying period is set out in subsections 8(1) and 10(1) of the Act which is not in issue. In effect, it is the calendar year 2002.

[6]      Unpaid "regular" hours in May: The parties agreed at trial that the contract date began May 1. The Appellant's time journal includes 33.5 hours of time worked for the dates of May 1 to 5,[1] although his representative argued that the time should be counted as eight hours per day for 2.5 days, or 20 hours.[2] These hours were not paid, as the first day of pay began on May 6, when he arrived in the Northwest Territories.[3] According to the Insurable Earnings and Collection of Premiums Regulations, unpaid hours will only be included in insurable hours if they have been the subject matter of a complaint to the relevant federal or provincial authorities.[4] The complaint filed by the Appellant was only for unpaid hours from July 26 onwards and overtime for the entire contract period. Since the complaint that was filed did not include these May 2002 hours, they are not to be included in the total insurable hours. As stated, the Appellant was credited with the 172 hours claimed in his complaint.

[7]      Overtime worked but not paid (May 6 to July 25): The hours of overtime worked but not paid are not clearly outlined in the evidence. To determine these, the Appellant's work journal[5] must be compared to the time sheets submitted by the Respondent.[6] From these documents, the difference is approximately 223.5 hours, which represents the total amount of unpaid overtime from May 6 to July 25. The question arises whether unpaid overtime hours count as "insurable hours". Under the Employment Insurance Regulations, where earnings are unpaid for one of the reasons described in Regulation 2(2), the amount is to be included in calculating the insurable earnings.[7] Regulation 2(2) of the Regulations includes in total insurable earnings the amounts that remain unpaid because of non-payment of remuneration where the person has filed a complaint with the relevant authorities. Both parties agree that this has been done. However, Regulation 2(2) specifically excludes "any unpaid amount that is in respect of overtime or that would have been paid by reason of termination of the employment".

[8]      The number of unpaid overtime hours worked by the Appellant is unclear. The difference between the parties is 223 hours between May 6 and July 25, 2002. The Appellant based his calculation on his journal entries filed in evidence as Exhibit A-14. The Respondent referred to time sheets submitted by the Appellant's employer. In any event, it must be determined if the overtime hours are "insurable hours". The Regulations are of some guidance.

[9]      Pursuant to section 9.1 of the Regulations, the Appellant must establish the hours he actually worked "and for which he was remunerated". Section 9.2 provides:

9.2        Subject to section 10, where a person's earnings or a portion of a person's earnings for a period of insurable employment remains unpaid for the reasons described in subsection 2(2) of the Insurable Earnings and Collection of Premiums Regulations, the person deemed to have worked in insurable employment for the number of hours that the person actually worked in the period, whether or not the person was remunerated.

Subsection 2(2) of the same Regulations provides as follows:

2(2)       For the purposes of this Part, the total amount of earnings that an insured person has from insurable employment includes the portion of any amount of such earnings that remains unpaid because of the employer's bankruptcy, receivership, impending receivership or non-payment of remuneration for which the person has filed a complaint with the federal or provincial labour authorities, except for any unpaid amount that is in respect of overtime or that would have been paid by reason of termination of the employment.                                                              (Emphasis added)

Subsection 2(2) specifically excludes "any unpaid amount that is in respect of overtime or that would have been paid by reason of termination of the employment". The Appellant concedes that he was not paid for the overtime he now claims in excess of 760 hours allowed.

[10]     As stated, the Appellant did establish that he did file a complaint for 172 hours and pursuant to section 9.2 of the Regulations, these hours are added to the original 588 hours to bring the total hours accepted by the Respondent to 760.

[11]     The Appellant's counsel urges the Court to use a humane and compassionate method to interpret the words of subsection 2(2) because it is social legislation, particularly when dealing with a fixed statute.

[12]     Where the statutory language is clear and unambiguous, the plain meaning rule requires this Court to apply the language of the statute. To do otherwise would have me assume the function of the legislature. If the words of subsection 2(2) were unambiguous and capable of various meanings, I could consider selecting the interpretation recommended by the Appellant's counsel.

[13]     The words in subsection 2(2) are clear and I must follow them. They do not lead to an absurdity. The plain meaning of subsection 2(2) clearly prevents unpaid overtime from being included in insurable hours unless it was included in a complaint. The following statement by the respected author, Vern Krishna, in The Fundamentals of Canadian Income Tax, Seventh Edition, is a clear answer to the Appellant's counsel's submission that the purpose of the legislation must be considered when interpreting it:

            To summarize: the purpose rule is not a substitute for the plain meaning rule. It is used where statutory language is obscure or ambiguous and a court needs assistance in determining legislative intention. Otherwise, unambiguous legislative language is interpreted according to its plain meaning, but not so literally as to produce absurd results. The presumption in favour of the taxpayer is residual in nature and should play only an exceptional part in the interpretation of tax legislation. Thus, every effort should first be made to determine the meaning of the Act. Only when this proves to be impossible, or produced bona fide alternative interpretations, is it legitimate to apply the presumption in favour of the taxpayer.

[14]     Time worked but unpaid from September to December. 2002: The Appellant submits that he continued a liaison with Chief Hardisty from September to December in an effort to have Chief Hardisty reinstated. Both Chief Hardisty and the Appellant remained in Edmonton. The Appellant never did return to his work with the Band in the Northwest Territories. Chief Hardisty was not reinstated nor was the Appellant. The efforts the Appellant made with the former Chief cannot be considered employment under any express or implied contract of service. His contract had been terminated. He had no status with the new Chief and he had been replaced as senior administrative officer. There is no evidence that the Appellant's activity after August 15, 2002 was insurable employment.

[15]     For these reasons, the appeal is dismissed.

Signed at Ottawa, Canada, this 16th day of August, 2004.

"C.H. McArthur"

McArthur J.

CITATION:

2004TCC559

COURT FILE NO.:

2003-3651(EI)

STYLE OF CAUSE:

Jacob Pete and The Minister of National Revenue

PLACE OF HEARING:

Edmonton, Alberta

DATE OF HEARING:

April 23, 2004

REASONS FOR JUDGMENT BY:

The Honourable Justice C.H. McArthur

DATE OF JUDGMENT:

August 16, 2004

APPEARANCES:

Counsel for the Appellant:

Arnold Goodman

Counsel for the Respondent:

Karen Wood and Shaun Ung (Student-at-law)

COUNSEL OF RECORD:

For the Appellant:

Name:

Arnold Goodman

Firm:

Mah Law Office

For the Respondent:

Morris Rosenberg Deputy Attorney General of Canada Ottawa, Canada

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