CUB 25143
JUDGMENT OF THE FEDERAL COURT OF APPEAL
Date:
November 15, 1995
Docket:
A-496-94
Umpire's Decision:
CUB 25143
CORAM :
STONE J.A.
MACGUIGAN, J.A.
ROBERTSON, J.A.
BETWEEN :
THE ATTORNEY GENERAL OF CANADA,
applicant,
-and-
EMMANOUIL (MIKE) YANNELIS,
respondent.
Heard at Ottawa, Wednesday, November 1, 1995.
REASONS FOR JUDGMENT
(Judgment rendered at Ottawa on
Wednesday, November 15, 1995)
STONE J.A.:
On July 27, 1990, the respondent was locked-out by his employer. Soon afterward he made a claim for benefit under the Unemployment Insurance Act, as a result of which a benefit period was established effective July 29, 1990. On November 3, 1990, the respondent received a cheque from his employer representing outstanding vacation pay. The amount received was allocated by the Commission to weeks of unemployment commencing October 28, 1990.
The present case is brought as a test case, there being a number of additional employees of the same employer whose vacation pay was received in November 1990 and who dispute allocation to the same weeks of unemployment.
According to the record, "all employees were paid their vacation pay entitlement on the pay period ending November 3, 1990" because "[t]his money had to be paid out by the end of the year and the employer paid it November 3 at the union's request". The record also indicates that the amount paid to the respondent represented "his remaining vacation entitlement". 1
The only question before the Court is whether the learned Umpire erred in law in reversing the majority of the Board of Referees on the ground that the vacation pay received by the respondent was not to be so allocated for the reason, apparently, that it became "payable" on January 1, 1990.
The allocation of vacation pay is provided for in subsection 58(8)(a) of the Unemployment Insurance Regulations, which reads:
(8) Where vacation pay is paid or payable to a claimant for reasons 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 no later than the last week of the vacation period or period 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 it is 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 paragraph is equal to the claimant's normal weekly earnings from that employment.
It is not contended that the vacation pay was "paid or payable for a specific vacation period" under paragraph 58(8)(a). Accordingly, for what period of time the vacation pay is to be allocated depends on the true construction of subparagraph 58(8)(b)(i) in the light of the evidence, and in particular the words therein:
...the vacation pay shall, when it is paid, be allocated...to a number of weeks that begins with the first week for which it is payable... .
I note that the predecessor of paragraph 58(8)(b) of the Regulations was worded somewhat differently. By former paragraph 58(13)(c) vacation pay had to be allocated "...to a number of consecutive weeks beginning with the week in which it is paid or payable..." (emphasis added). Paragraph 58(8)(b) on the other hand requires simply that vacation pay be allocated "to a number of weeks that begins with the first week for which it is payable..." (emphasis added).
The applicant submits that the vacation pay became payable for the period for which it was received and accordingly that it was properly allocated to that period. He submits that there was no evidence on which the Umpire could decide - contrary to the minority decision of the Board of Referees - that the vacation pay was payable on any date previous to the date on which it was requested by the respondent's union. The only evidence, counsel submits, is that the money was paid in November 1990 at the union's request and, accordingly, that it did not become payable before that request was made.
The respondent contends that the vacation pay became "payable" when the employer came under a legal obligation to pay it and not merely when it was requested. According to this submission, as the vacation pay was fully earned as of January 1, 1990 and became a debt owing by the employer as of that date, the employer came under a legal obligation to pay it even though it was not actually requested until ater in the year. The respondent also contends that inequity would result if the allocation made by the Commission was allowed to stand because those employees who happened to have taken their vacations and received their vacation pay prior to the lock-out would remain eligible to receive full benefit under the Act while those who did not would receive reduced benefit only because they happened not to have received their vacation pay before the lock-out commenced. I should say here that an argument based on lack of equity cannot prevail over the language of the legislation if that language dictates a different result.
Under the law of Ontario an employer is required to "give to each employee a vacation with pay". 2 a vacation with pay (emphasis added). The amount of the vacation pay for this vacation must be "not less than an amount equal to 4% of the wages of the employee in the twelve months of employment for which the vacation is given...". 3 the vacation is given... By the same Ontario statute, a vacation must be "given ... not later than ten months after the end of the twelve-month period for which the vacation was given". 4 vacation was given The timing of an employee's vacation is left to the employer to determine. 5 No provision is made in the statute for allowing an employee to request his vacation pay. Presumably, this is left for the agreement of the parties under a contract of employment or a collective agreement.
The terms and conditions of employment are evidenced by a Collective Agreement made between the employer and the union. Article 14 of that agreement allows for the receipt by an employee of vacation credits for each year in which an employee has worked. Article 14.01.20 provides for the calculation of such credits as follows:
14.01.20 An employee's vacation credits shall be calculated (to the nearest hundredth) as soon as possible after January 1st of each year and the number of credits so determined shall be used to determine the employee's vacation entitlement for the current year.
Articles 14.02 to 14.08 contain a scheme for the taking of annual vacation and for vacation pay. These provide for annual vacations ranging from a few days for employees with the least seniority to a maximum of seven weeks for employees with the most seniority. Article 14.02.30 serves to illustrate the scheme. It reads:
14.02.30 An employee with five or more vacation credits but less than nine vacation credits calculated to January 1 shall receive three weeks of vacation with vacation pay of 6 per cent of the total wages paid to such employee during the previous calendar year.
(Emphasis added)
Article 14.03 provides for the paying of a vacation bonus in the following circumstances:
In calculating vacation pay for employees entitled to a regular vacation in accordance with Article 14.02 a vacation bonus equivalent to 20 percent of the regular vacation pay shall be paid in addition to the regular pay except as provided in Article 14.08. Vacation bonus shall be paid by separate cheque on a common date selected by the Company prior to May 15 each year.
It is to be noted, in contrast with the remainder of Article 14, that the vacation bonus fixed pursuant to those provisions was to be paid on an agreed date in each year.
In general, annual vacations were to be scheduled pursuant to Article 14.06 in the "prime time period" which includes the months of May through October. The expectation, according to Article 14.07, is that "eligible employees must take vacations". The Collective Agreement makes no provision for the payment of vacation pay while an employee was locked-out.
The word "payable" is not a term of art. Nor is it defined in the Regulations. I do not see that it was used in any special sense. In my view, therefore, it should be interpreted in the light of ordinary dictionary definitions. (See R. Sullivan, Driedger on Construction of Statutes, 3rd ed. (Toronto: Butterworths, 1994), at pages 11-13; P.-A. Côté, The Interpretation of Legislation in Canada, 2nd ed. (Yvon Blais: Cowansville, 1991), at pages 219-221). In The Shorter Oxford English Dictionary the word "payable" is defined as follows:
that is to be paid; due; falling due (usually at or on a specified date, or to a specified person);
Webster's Third New International Dictionary defines the word as:
requiring to be paid...: capable of being paid...: due... .
In Legge v. The Attorney General of Canada (Court File No. A-71-95, judgment rendered August 30, 1995) 6, a case involving the construction of subparagraph 58(8)(b)(i), this Court accepted the caution of Strayer J. (as he then was) in CUB 14683 7 against the adoption of interpretations of the words "paid or payable" in former subparagraphs 58(13)(a) and (b) of the Regulations which would "produce widely varying results depending on pure chance or the possession of special knowledge". Strayer J. then added at page 3 of that decision:
It is absurd to make the allocation or non-allocation of that money depend on when the employee happened to ask for it or when the employer happened to get around to paying it.
Such, indeed, would be the situation here if we were to give effect to the applicant's contention that the vacation pay in question did not become "payable" until it was requested by the respondent's union in November 1990 even though he may have been entitled to it earlier in the year.
It is instructive to examine some of the decided cases in order to better understand the meaning of the word "payable". In R. v. Palmer (1980), 14 Alta. L.R. (2d) 265 (C.A.), the Court had to determine whether compensation for flood damage was "payable" under a provincial statute. In deciding that it was not, Stevenson J. (as he then was), speaking for the Court, stated at page 267:
At the stage of this application, at least, there is no compensation payable under the Act or the regulations and, in my view, the section has no application. This is consistent with the generally understood meaning of "payable", namely (Jowitt's Dictionary of English Law, 2nd ed., p. 1337):
"A sum of money is said to be payable when a person is under an obligation to pay it. 'Payable' may therefore signify an obligation to pay at a future time, but when used without qualification 'payable' means that the debt is payable at once, as opposed to 'owing"'.
At issue in Latilla v. Inland Revenue Commissions [1943] A.C. 377 (H.L.) was whether income had become "payable" by a partnership to a company which was one of the two partners. In concluding that it had, Viscount Simon L.C., at page 383, adopted the following views of Lord Greene M.R., speaking for the Court of Appeal, [1974] 1 All E.R. 214, at page 217:
The company is entitled to call upon its partner to do whatever may be necessary, for example, by signing a cheque on the banking account of the partnership to enable the company to obtain its share. In the partnership accounts the company's undrawn share of profits would appear as a debt owing to the company. If the profits were under the control of the other partner, the company could by appropriate proceedings compel him to pay over its share. If this is not income "payable" to the company, we do not know what it is.
In short, the income had become "payable" because it was a debt which the company was in a posit ion at law to enforce by way of legal proceedings. In concurring, Lord Porter observed as follows with respect to the meaning of the word "payable", at page 384:
"Payable" is not a term of art, and, though a partner cannot sue the partnership or the partners individually for the purpose of recovering partnership assets, yet, as the Master of the Rolls points out, he has at his disposal means whereby he can ensure that his share reaches his hands. In such circumstances it seems to me that the word "payable" is appropriately used and accurately conveys the process by which the income finds its way into the pocket of the individual.
See also Glass v. Defence Force and Retirement Death Benefits Authority (1992), 38 F.C.R. 534 (Fed. Ct. Aust.), at page 537 in which it was held that the word "payable" in a statute signified that "something is presently capable of being paid".
That the vacation pay is "earnings" is not disputed. The question is whether it should escape allocation during the weeks to which it was allocated for the reasons given by the Umpire. It is evident from the mere fact of the payment that the respondent had not been paid all of his vacation pay prior to the lockout. We are concerned here with that portion of the respondent's vacation pay which was not received until November 1990 while the lock-out ensued. The existence of the lock-out, in my view, did not relieve the employer of paying the vacation pay in the current year pursuant to the laws of Ontario and the terms of the Collective Agreement.
I have come to the conclusion that the word "payable" in subparagraph 58(8)(b)(i) refers to the point in time when vacation pay is due to a claimant in the sense that he is entitled by his contract of employment or by the general law to have it paid to him and his employer is under an obligation to pay it. In other words, it is payable when a claimant is in a position at law to enforce payment. That point in time, as was held in Legge, supra, should not depend on when unpaid vacation pay happened to have been requested if, as a matter of law, it became payable in the above sense at an earlier time. In the present case, it seems obvious that the vacation pay was a debt owing to the respondent as of January 1, 1990. Whether it became "payable" on that date or on a subsequent date depends on the terms of the Collective Agreement which the employer was able to negotiate with the respondent's union. I do not read that agreement as creating a right in the respondent to be paid any vacation pay on January 1, 1990 or as imposing an obligation on the employer to pay it as of that date. Rather, the Collective Agreement entitled the respondent to receive and obliged the employer to grant "vacation with vacation pay" in 1990. There is no evidence in the record before us that the respondent had arranged for his vacation to commence on January 1, 1990 and that he took it. In my view, where vacation pay is "payable" in the sense that payment could be enforced, it is to be allocated as provided in subsection 58(8). Vacation pay which is "payable" should not escape allocation simply because a claimant has not requested payment; nor should it be allocated at the time he happened to request payment if it was in law "payable" sometime previous to that time.
In practical terms, if the vacation pay was "payable" to the respondent sometime before the lock-out commenced on account of his taking of annual vacation in accordance with the Collective Agreement but for some reason personal to him he was not paid his vacation pay until November 1990, then it should not be allocated to the weeks commencing with the week in which it was paid but to the weeks for which it was payable. If the vacation pay was not "payable" until after the lock-out commenced, then it was correctly allocated by the Commission in the circumstances of this case.
Given that the evidence is not entirely clear as to whether the respondent took vacation prior to the lock-out but did not receive the vacation pay which would have been then due to him, I would allow the application and remit the matter to the Chief Umpire or his designate for return to the Board of Referees for rehearing and redetermination in a manner consistent with these reasons.
"A.J. STONE"
J.A.
"I agree.
Mark R. MacGuigan J.A."
"I agree.
J.T. Robertson J.A."
2 The Employment Standards Act, R.S.O. 1990 c. E. 14, subsection 28(1)
2011-01-10