Federal Court Decision #A-516-88 - THE ATTORNEY GENERAL OF CANADA v. JANET, A., HARTMANN

JUDGMENT OF THE FEDERAL COURT OF APPEAL

Date:
October 2, 1989

Docket:
A-516-88

Umpire's Decision:
CUB 14925

CORAM:

MARCEAU J.A.
STONE J.A.
DESJARDINS J.A.

BETWEEN:

ATTORNEY GENERAL OF CANADA,

applicant,

- and -

JANET A. HARTMANN,

respondent.

Heard at Vancouver on Monday, September 18, 1989

REASONS FOR JUDGMENT
(Judgment rendered at Ottawa
on Monday, October 2, 1989)

STONE J.A.:

By this application the Attorney General of Canada attacks the correctness of a decision of an umpire who reversed the Board of Referees by ruling that the Respondent is entitled to benefits under the Unemployment Insurance Act, 1971. S.C. 1970-71-72, c. 48 as amended. ¹ The Attorney General argues that the umpire erred because the Respondent had not experienced an "interruption of earnings from employment" as she must in order to get across the qualifying threshold requirement laid down in paragraph 17(3)(b) of the Act:

17(3) An insured person ... qualifies to receive benefits under this Act if he

(a) ...

(b) has had an interruption of earnings from employment.

The record discloses that up until February 22, 1986 the Respondent had worked an average of 32 hours per week as a food store cashier in Kitimat, B.C. Her hours of work were then reduced to approximately 4 ½ hours per week to be performed on Saturdays only, the first working day at reduced hours falling 7 days later, on Saturday, March 1.

The umpire was of opinion that the Respondent qualified for benefits in that she had had an "interruption of earnings" as that term is defined in paragraph 2(1)(n) of the Act:

2.(1) In this Act,

...

(n) "interruption of earnings" means that interruption that occurs in the earnings of an insured person when after a period of employment with an employer the insured person has a lay-off or separation from that employment or a reduction in his hours of work for that employer resulting in a prescribed reduction in earnings;

58. The Commission may, with the approval of the Governor in Council, make regulations

...

(r) defining and determining when an interruption of earnings occurs.

Subsection 37(1) of the Regulations, some of whose provisions were put in question by the umpire, reads in part:

37.(1) Subject to this section, an interruption of earnings occurs when, following a period of employment with an employer, an insured person has a lay-off or separation from that employment and has or will have 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... (emphasis added)

The first question is whether subsection 37(1) is valid. In my opinion it is. Rather than derogate from the language of paragraph 2(1)(n) the subsection 58(r) are, as they must be, read together. The paragraph 2(1)(n) definition of "interruption of earnings" involves three distinct possibilities for the occurrence of an earnings interruption. These are, "when after a period of employment with an employer" (a) the insured person has a lay-off, or (b) the insured person has a separation from that employment, or (c) the insured person has a reduction in his hours of work for that employer resulting in a "prescribed" reduction in earnings as established by regulation.

It is apparent that there was in this case no interruption of earnings in the sense of this last possibility for the simple reason that the Commission, though it might have done, has not seen fit to treat a reduction of hours of work such as here occurred as "a prescribed reduction in earnings". With respect, the remainder of paragraph 2(1)(n) when read in its statutory context and especially in light of the qualifying language of subsection 58(r) does nor, to my mind, support the conclusion arrived at by the learned umpire, namely that Parliament intended a "lay-off" or "separation from ... employment" to occur at the moment the event takes place and that the Commission lacked authority to provide other wise. The subsection is quite explicit in authorizing the Commission to define and determine when an "interruption of earnings" (as defined in paragraph 2(1)(n)) occurs. I do not think subsection 37(1) of the Regulations derogated from the definition in this respect. ² It appears from the phrase "has or will have" that the questioned language of subsection 37(1) was not designed to delay the occurrence of a lay-off or separation from employment but simply to give the Commission in processing a claim a means of establishing that the event giving rise to it has clearly occurred. That it has will likely be quite evident from the outset in some cases; in others the short delay during which no work is performed by the claimant for his employer will merely furnish clear confirmation. In either case the interruption of earnings will occur on the date of lay-off or separation from employment. Any possible difficulty in interpreting the English text of subsection 58(r) as to the nature of the Commission's authority is surely resolved by reference to the French text of that subsection:

58. La Commission pout avec l'approbation du gouverneur en conseil, établir des reglèments

...

(r) précisant dans quels cas et à quel moment se produit un arrêt de rémunération;

The second question is whether the Respondent, in any event, suffered a "lay-off" or was "separated from ... employment" within the meaning of the Act. In my opinion, she did not. The learned umpire, after taking account of a dictionary definition of "lay-off" ³ and decisions of a number of courts and arbitrators interpreting that term in collective agreements, was able to conclude on page 12 of her decisions:

In my view, the employer's actions amounted to a constructive lay-off or separation from employment. It was not merely "a reduction in the hours of work" as that concept is used in subsection 2(1)(n). The terms of employment were so fundamentally changed as to constitute a new employment. Thus, I think the claimant's situation falls within both the French and English versions of the definition.

I note particularly that the dictionary definition of the term "lay-off" includes "time of reduced activity". More importantly, however, the term in the Unemployment Insurance Act was surely intended to carry a meaning similar to that found in employment law generally. There is no doubt that the claimant's altered position would, in the context of that law, be considered to be a lay-off. I do not think I need decide, for the purposes of this case, the exact dividing line between when a lay-off occurs as opposed to a mere reduction in hours of work.. Suffice it to say that the circumstances in this case are such that the claimant was refused work for five out of six (or seven) days of the week which were normal working days. These days of unemployment were consecutive. In my view, this falls within subsections 17(3) and 2(1)(n) of the Act.

Paragraph 2(1)(n) differentiates between the three different possibilities for the occurrence of an "interruption of earnings" that I have above enunmerated. In my opinion, in order for the present situation to fall within that definition the Commission would have had to treat a reduction of hours of work of the magnitude here involved as a "prescribed reduction in earnings", a step it has not taken.

While dictionary definitions and the interpretations of courts, arbitrators and text-writers ⁴ might be most helpful in assisting in the construction of the word "lay-off" at large or in more limited circumstances, I do not think they can assist in the circumstances of this case where we are faced with the task of construing that word in a particular statutory context. When that context is fully appreciated it may be seen that by utilizing the word "lay-off" and the phrase "separation from ... employment" in the definition of "interruption of earnings", Parliament did not intend that either should embrace a reduction in working hours such as here occurred. Such an eventuality was specifically foreseen and provided for when Parliament, within the framework of that definition, expressly clothed the Commission with authority of prescribing the extent of a reduction of earnings, resulting from a reduction of hours of work, sufficient to constitute an "interruption of earnings". In providing in the same definition for an "interruption of earnings" brought about by a "lay-off" or by a "separation from ... employment", it is evident that Parliament did not intend that a reduction of hours of work and consequent reduction of earnings should also amount to either a "lay-off" or a "separation from ... employment", whether actual or constructive. I must, therefore, respectfully disagree with the learned umpire's conclusion on this point as well.

For the foregoing reasons I would allow this application, set aside the decision of the umpire dated March 6, 1988 and refer the matter back to an umpire for disposition on the basis that the Respondent's appeal from the decision of the Board of Referees dated May 1, 1986 be dismissed.

"A.J. STONE"

"I concur

Louis Marceau J.A."

I concur

Alice Desjardins J.A."

¹ Now R.S. 1985, c. U-2.

² Compare Attorney General of Canada v. Paulsen, et al., [1973] F.C. 377 (C.A.), where Chief Justice Jackett observed at page 385, that subsection 58(r) "authorizes a regulation laying down rules for determining the precise time when an interruption of earnings is to be taken to have occurred for the purpose of section 17(2) as long as those rules are designed to establish 'when' the 'interruption of earnings' as defined by section 2(1)(n) did occur", but did not authorize the determination of a time that would be "quite remote from the time when interruption of earnings occurred...". 2 Compare Attorney General of Canada v. Paulsen, et al., [1973] F.C. 377 (C.A.), where Chief Justice Jackett observed at page 385, that subsection 58(r)

³ "Lay-off" in The Concise Oxford Dictionary (6th ed. 1976) is defined as, inter alia, 3

"discharge (temporarily) owing to shortage of work ... (period of) such temporary discharge, time of reduced activity."

⁴ Compare, for example, Christie, Employment Law in Canada, (Butterworths, Toronto, 1980), at pages 423-436 and Brown and Beatty, Canadian Labour Arbitration, 3rd ed., (Canada Law Books, Aurora, 1988), at pages 6-12 - 6-20.