CUB 18566
JUDGMENT OF THE FEDERAL COURT OF APPEAL
Date:
November 29, 1991
Docket:
A-769-90
Umpire's Decision:
CUB 18566
"TRANSLATION"
CORAM :
PRATTE J.
MARCEAU J.
DÉCARY J.
IN THE MATTER of an application to review and set aside pursuant to section 28 of the Federal Court Act, R.S.C. 1985, c. F-7;
AND IN THE MATTER of an umpire's decision rendered on July 13, 1990 by Dubé J. in the matter of CUB 18566, in relation to an application made pursuant to section 95 of the Unemployment Insurance Act, R.S.C. 1985, c. U-1;
AND IN THE MATTER of a decision made pursuant to section 79 of the Unemployment Insurance Act, R.S.C. 1985, c. U-1 by the Canada Employment and Immigration Commission in relation to a claim for benefits made by GASTON SYLVAIN
BETWEEN :
ATTORNEY GENERAL OF CANADA,
Applicant,
- and -
GASTON SYLVAIN,
respondent.
Hearing held in Québec on Wednesday, November 6, 1991.
REASONS FOR JUDGMENT
(Judgment rendered in Ottawa
on Friday, November 29, 1991)
PRATTE, J.:
This application pursuant to section 28 of the Federal Court Act is in opposition to a ruling by an umpire under the authority of the Unemployment Insurance Act. The only issue it raises concerns the apportionment of compensation received by the respondent.
The latter, having lost his job at Laval University, collected unemployment insurance benefits from May 1987 until the beginning of the following November. Some time afterwards, the Employment and Immigration Commission learned that the university had paid the respondent a salary for the period from August 31 to November 7, 1987. After confirming this fact, the Commission informed the respondent that he had to repay the Commission $850.00, the amount of the unemployment insurance benefits he had received without entitlement thereto during this period from August 31 to November 7, 1987. 1
The respondent appealed this decision to a board of referees. He acknowledged that on September 16, 1987 he had signed a contract under which Laval University hired him as an assistant to a professor of political science at a salary of $2,100 for the fifteen week period from August 31 to December 11, 1987; he also acknowledged that this contract, signed by the university authorities on September 17, 1987, stipulated that he should teach ten hours a week during the fifteen weeks for which he had been engaged. He stated, however, and no one challenged this, that he had performed no work for the university during the months of September and October 1987; at the request of a professor whom he was to assist, he had performed the whole of his duties as a teaching assistant during the months of November and December 1987. He concluded that the compensation he had received should be apportioned over the weeks during which he had done his work, rather than over the weeks for which it had been paid to him.
The board of referees dismissed the appeal, relying on the terms of the written contract the respondent had signed as well as the fact that the university had paid him for the entire period for which he was hired.
The respondent then appealed to an umpire, who ruled in his favour and overturned the decision of the board of referees on the ground that the respondent "[TRANSLATION] was not an 'employee' before the end of October 1987" and that, accordingly, the sums he had been paid by the university "[TRANSLATION] should have been apportioned only from that date." The umpire based this decision on two observations: that the respondent had received payment of his salary only from October 28, 1987 2 and, secondly, that the university authorities, in the letter tabled for the first time before the umpire, had acknowledged that while the teaching assistants were always hired for the duration of a term and their remuneration was paid to them through-out the term, it might nevertheless happen in some cases that an assistant's work was concentrated over a much shorter period.
This decision is, in my opinion, based on two errors.
The first error is the one that the umpire committed in determining that the respondent had not been employed by the university before the end of October 1987. The umpire could reverse the decision of the board of referees only on one of the grounds set out in section 80 of the Unemployment Insurance Act. Yet there was nothing in the record that had been submitted to the board suggesting that the respondent had not been employed prior to the end of October.
It is true that the university had been slow to pay the salary it owed the respondent for the first weeks of his engagement, but this in no way allowed the conclusion that the umpire drew from it, since it was obvious that this belatedly paid salary had been paid for the previous weeks.
As to the letter from the university, I would say, first, that the umpire should not have taken it into account since it did not establish that the board had committed one of the errors referred to in section 80 of the Act. 3 But, independently of this, the letter proved only that it was possible that a teaching assistant might not be required to provide services throughout the entire duration of his employment. Yet that is a situation that could be of no advantage to the respondent, since it is now certain 4 that, in order to apportion the remuneration paid under a contract of service in the course of which some services were not always rendered, it is necessary to have regard to the period for which the remuneration was payable rather than the dates on which the employee performed hid or her duties.
The umpire's second error is not nearly as obvious. He assumed that the remuneration paid under a contract of service could never be apportioned over a period prior to the date on which this contract had been entered into. It is important to know whether the umpire was right on this point since, if so, it would be necessary to conclude that the remuneration paid to the respondent could not be apportioned over the weeks prior to September 17, 1987, the date on which the contract under which the respondent was hired by the university intervened.
I must confess my sympathy for the umpire's position on this issue. The retroactivity stipulated in a contract is pure fiction, since a contract that does not exist can have no effect. It seems to me abnormal and illogical that a claimant who has received unemployment insurance benefits to which he was entitled at the time they were paid to him should then, because of provisions in a contract he subsequently entered into with a third party, be deemed to have received these benefits without entitlement. However, this is not the first time this issue has come before this Court. In Sepinwall 5 the Court clearly held that the remuneration payable under a contract of service entered into for a period commencing at a date prior to the signing of the contract should be apportioned over this entire period without regard to the fact that the contract had been signed only after the period in question had begun to run. I consider myself bound by that decision and, accordingly, I must say that the umpire was mistaken in considering that the remuneration owing under a contract of service can never be apportioned over a period prior to the date on which the contract was signed.
I would therefore grant the application, quash the impugned decision and return the matter to the umpire for him to determine on the assumption that the remuneration received by the respondent from Laval University under the terms of the contract of employment signed on September 16 and 17, 1987 should be apportioned over the entire duration stipulated in this contract, from August 31, 1987.
"Louis Pratte"
J.
"I agree.
Louis Marceau, J."
1 This decision was based on subsection 15(2) of the Unemployment Insurance Act:
15.(2) If a claimant has earnings in respect of any time that falls in a week of unemployment that is not in his waiting period, the amount of those earnings that is in excess of an amount equal to twenty-five per cent of the claimant's weekly benefit rate shall be deducted from the benefit payable to the claimant in that week.
2 On that day the respondent received a cheque from the university in the amount of $1,284.47 in payment of his salary for the nine-week period commencing on August 31 and ending on November 1, 1987. Subsequently, the respondent received his salary every two weeks.
3 In fact, this letter, assuming it had the implications attributed to it by the umpire, tended only to establish that the board could or should have decided otherwise if this evidence had been presented to it.
4 Attorney General of Canada v. Frenette, A-951-90, unreported decision of November 8, 1991.
5 Attorney General of Canada v. Sharyn Sepinwall, A-961-87, decision of April 11, 1988.
REASONS FOR JUDGMENT
DÉCARY, J.:
Like my colleague Pratte J., I agree that the application should be granted, but I do not share the reluctance he displays in following the Sepinwall judgment. 1
The contract signed by the respondent on September 16, 1987 stipulates that it covers the period from August 31, 1987 to December 11, 1987. The total remuneration provided in the contract is $2,100.00. The respondent undertakes to work ten hours per week for fifteen weeks (a total of one hundred and fifty hours, therefore) at an hourly rate of $14.00. It is common ground that the respondent did not provide his services until November, and that he began to be paid his salary, retroactive to August 31, 1987, on October 28, 1987. It is also common ground that the contract was performed in its entirety by the two contracting parties, notwithstanding the fact that, under its own terms, it could not take effect prior to the date of its signing by the office of the vice-rector for professors' and students' affairs, and that this signature was never affixed. It also seems, from the explanations provided by the respondent to the Employment and Immigration Commission (the Commission) that "[TRANSLATION] the contractual clauses determined between the titular authority and the student beneficiary of assistance (assistant's contract) do not necessarily reflect the parameters of the Laval University standard-form contract." 2 Laval University standard-form contract. Consequently, it seems to me, there is no need to take each of the various terms of the contract literally, and the contract does not reflect the actual obligations of each of the parties in all respects. There is more than a tinge of fiction and implied terms in this kind of contract.
However, there is no reason why, to my knowledge, this kind of fiction, when it is not intended to circumvent the application of a law, should be contrary to public order and morality, and why the parties, whose intention is sovereign, cannot by common agreement and in good faith give their reciprocal undertakings an existence prior to the date of the formal signing of the contract. There is no reason why, in this case, the contract should not be interpreted as if it had been signed on August 31, 1987.
The subject matter here is unemployment insurance, and in such matters Parliament has sometimes intended that the factors to be taken into consideration should not necessarily coincide with the traditional criteria. For example --witness the Frenette case 3 and the instant case -- the fact that in the case of a contract of service in return for remuneration, it is not the dates when the employee performed his or her obligations that must be looked at but the period in which the remuneration is payable. The remuneration, in this case, was payable, and was in fact paid, albeit retroactively, effective August 31, 1987.4 To find that this remuneration was not payable between August 31 and September 16, 1987, and thus that the compensation period began only on September 17, 1987, one would have to brush aside the terms of a contract the validity of which was not challenged, ignore the manner in which the parties, in full legality, performed the contract, and even dismiss a detailed summary prepared by the Commission from the employer's records. In my view, that would be creating a lot of "fictions" for the sole purpose of eliminating one.
I would also hesitate to give decisive weight to the date on which the contract was signed by the parties, for fear of imposing on institutions such as the university in question formal constraints with which they could not always comply, because of budgetary and administrative requirements. Nor should it be forgotten that this kind of practice, while it may in some respects be to the disadvantage of the assistants who are hired, is to their advantage in other respects; they may in effect begin to get their remuneration before the actual provision of their services and the number of weeks during which they "effectively" work, which will facilitate their eventual eligibility should they later seek to avail themselves of the unemployment insurance plan. There is a balance here that it seems to me should be preserved.
I am not saying, however, that the retroactive effect of the contract could be used against the claimant for the purposes of imposing on him the penalty provided for in subsection 33(1) of the Unemployment Insurance Act. Absent evidence of a prior agreement, the claimant cannot be said to have known, before he signed his contract, that he would be compensated retroactively. In this case, the Commission imposed this penalty on the claimant, but the Board of Referees correctly, it seems to me, rescinded this ruling and the Commission did not consider it appropriate to appeal on this point.
I would give the same disposition to this application as my colleague.
"Robert Décary"
J.
1 Attorney General of Canada v. Sharyn Sepinwall, April 11, 1988, A-961-87 (F.C.A.), unreported.
3 Attorney General of Canada v. Frenette, November 8, 1991, A-951-90 (F.C.A.), unreported. In that case, in which the issue of retroactivity had not been raised, one of the compensation periods that was accepted, extending from September 2, 1986 to December 19, 1986, was established in a contract that had been signed only on September 12, 1986.
4 Which enables us, for example, to distinguish this case from Morgan v. Canada (A.G.) (1988), 98 N.R. 92.
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