CUB 23067

TRANSLATION

IN THE MATTER OF the Unemployment Insurance Act, 1971

- and -

IN THE MATTER OF a claim for benefit by
DANIELLE MAINVILLE

- and -

IN THE MATTER OF an appeal to an Umpire by the Canada
Employment and Immigration Commission from the decision of a
Board of Referees given at Longueuil, Quebec, on July 11, 1990

DECISION

BOURGEOIS, J., UMPIRE:

The claimant filed an initial claim for benefit, which became effective on March 4, 1990 (Exhibit 2). She produced two Records of Employment with her claim. The first indicates eight weeks of insurable employment and insurable earnings of $3,672 for the period from September 5 to October 27, 1989. This Record of Employment was not disputed in any way.

The second Record of Employment shows 15 weeks of insurable employment, and total insurable earnings of $6,416. These earnings were received during the period from November 6, 1989 to February 16, 1990. The type of pay period is given as "weekly, on an annual basis" (Exhibit 3). This Record of Employment is the basis for the present appeal.

The claimant was an advertising representative or salesperson for the magazine Le Dépanneur during the above-mentioned period. She received a base salary of $242 per week, to which were to be added commissions paid at irregular intervals.

On February 15, 1990, the claimant received an amount of $4,467.25 for sales of advertising pages made in November and December 1989, for the January/February 1990 issue of the magazine.

On March 1, 1990, the claimant received an amount of $2,815.85 for advertising sales made in January and February 1990, for the March/April 1990 issue of the above-mentioned magazine (Exhibits 4.3 and 4.4).

According to subsection 9(3) of the Unemployment Insurance (Collection of Premiums) Regulations, the two above-mentioned amounts would only have affected the insurable earnings paid in 1990. In the Commission's view, this subsection 9(3) must be applied in the case at bar. It reads as follows:

"(3) Notwithstanding subsections 4(1) and (2), where payments in respect of earnings are made to an insured person in respect of his employment on the basis of a regular pay period and that person receives payments by way of commissions in addition to such payments, all such payments shall, subject to subsections (5), (6) and (8), be deemed to be his insurable earnings paid on the basis of a yearly pay period and the premiums payable thereon shall be calculated in accordance with the rates of premium fixed pursuant to section 66 of the Act on his insurable earnings not exceeding in the aggregate the maximum yearly insurable earnings.

The weekly insurable earnings for each of the eight weeks of the period from November 6 to December 29, 1989 thus did not increase, but remained at $242. The insurable earnings for the following seven weeks, namely for the period from January 1, 1990 to February 16, 1990, were augmented by the commissions paid in 1990 and thereby increased from $242 to the maximum of $640 (Exhibits 3.1, 4.3 and 4.4). By reason of the above facts, total insurable earnings for the purposes of calculating the weekly benefit rate were established at $8,753 and the benefit rate was set at $263.

In her appeal before the Board of Referees, the claimant requested that the commissions paid for the eight weeks of work in 1989, which amounted to $3,467.25, be allocated to these weeks, rather than in 1990. The claimant based this request on sections 3.1 and 57.6 of the Regulations (Exhibits 7.3 and 7.4).

The Board of Referees accepted the claimant's position and allowed her appeal (Exhibit 12), in the following terms:

"Question at issue:

The benefit rate was set at $263 per week, since the claimant's insurable earnings were $8,753 and she had 50 weeks of insurable employment.

Having listened to the claimant and her representative, the members of the Board, by referring to section 3.1(1)(a) and section 6 of the Unemployment Insurance (Collection of Premiums) Regulations, were able to note that the amount of $3,467.25 should have been allocated to periods 8 to 15 inclusive (Exhibit 3.1).

The members of the Board also consider that this amount was earned and the services rendered in 1989.

We also note that the directions contained in the memorandum (produced and to be included in the record) on page 2, second paragraph, have not been followed in the present case.

Decision:

The claimant's appeal is allowed UNANIMOUSLY."

The Commission claims that the Board of Referees committed an error in law when it allowed the claimant's appeal. In the Commission's view, one should follow the provisions of subsections 13(1) and 13(2) of the Act, which read as follows:

"13(1) The rate of weekly benefit payable to a claimant for a week of unemployment that falls in his benefit period is an amount equal to sixty per cent of his average weekly insurable earnings in his qualifying weeks.

13(2) The qualifying weeks of a major attachment claimant are the last twenty weeks of insurable employment in his qualifying period.

Let us recall that in the case before us, the claimant's earnings consisted of a regular salary and commissions, which were paid to her at irregular intervals. This means that in the present case, there were two pay periods, one in 1989 and the other in 1990. Moreover, the memorandum filed as Exhibit 11.1 contains, in particular, the following provision:

"The employer must consider earnings as paid annually when these earnings

(a) consist of commissions paid at irregular intervals, or

(b) consist of a combination of advances or of regular compensation and commissions."

Further on, the memorandum states:

"In order to determine the amount to be recorded in each box of section number 20 of the Record of Employment, the employer must first establish a weekly average, taking into account the total insurable earnings received in the course of a calendar year and allocating them according to the number of weeks during which the employee was employed during that year."

Moreover, the relevant provisions of the Unemployment Insurance (Collection of Premiums) Regulations read as follows:

"Commissions

9.(1) Where earnings by way of commissions are paid to an insured person in respect of his insurable employment on the basis of a weekly, multiple of a week, semi-monthly or monthly pay period, his earnings shall be allocated and the employee's premiums payable thereon determined, in accordance with the rules set forth in section 7 for the appropriate pay period.

(2) Notwithstanding subsections 4(1) and (2), where payments by way of commissions are made on the basis of a pay period, other than a pay period described in subsection (a), to an insured person in respect of employment, such payments shall be deemed to be made on the basis of a yearly pay period and the premiums payable thereon shall be calculated, subject to subsections (5), (6) and (8), in accordance with the rates of premium fixed pursuant to section 66 of the Act on all such payments not exceeding in the aggregate the maximum yearly insurable earnings.

(3) Notwithstanding subsections 4(1) and (2), where payments in respect of earnings are made to an insured person in respect of his employment on the basis of a regular pay period and that person receives payments by way of commissions in addition to such payments, all such payments shall, subject to subsections (5), (6) and (8), be deemed to be his insurable earnings paid on the basis of a yearly pay period and the premiums payable thereon shall be calculated in accordance with the rates of premium fixed pursuant to section 66 of the Act on his insurable earnings not exceeding in the aggregate the maximum yearly insurable earnings.

(4) For the purposes of subsections (2) and (3), where the amount paid by an employer in the year to an insured person is less than the amount of the minimum insurable earnings for his period of insurable employment in the year, the insured person shall be deemed to have no insurable earnings for that period.

(5) Where insurable employment of a person by an employer begins after January 1st in any year, the aggregate amount of the maximum weekly insurable earnings for each week in the period in the year prior to the date of commencement of such employment (hereinafter referred to as "the excluded amount") shall be deducted from the maximum yearly insurable earnings and his insurable earnings for the remainder of the year shall not exceed the amount by which the maximum yearly insurable earnings exceed the excluded amount.

(6) Where insurable employment of a person by an employer terminates prior to the end of a year, the aggregate amount of the maximum weekly insurable earnings for each week in the period in the year after the date of termination of such employment (hereinafter referred to as "the aggregate amount") shall be deducted from the maximum yearly insurable earnings and his period of such employment in the year shall not exceed the amount by which the maximum yearly insurable earnings exceed the aggregate amount.

(7) Where an insured person is deemed by these Regulations to be paid on the basis of a yearly pay period, his earnings for the year or part thereof, subject to subsections (5), (6) and (8), shall be allocated equally to the weeks ending in the year or part thereof.

(8) Where an insured person is on leave of absence for a continuous period of one week or more and not in receipt of earnings from his employer in respect of the said period, the aggregate amount of the maximum weekly insurable earnings for each week in such period (hereinafter referred to as "the excluded amount") shall be deducted from the maximum yearly insurable earnings and his insurable earnings for his period of employment in a year shall not exceed the amount by which the maximum yearly insurable earnings exceed the excluded amount (1 november 1984)."

According to the claimant's representative, the claimant was entitled to receive a regular salary plus commissions during the two calendar years 1989 and 1990. To support this allegation, the claimant's representative cites the provisions of section 58(6) of the Regulations, which stipulate: "The earnings of a claimant... whose earnings are... on the basis of a commission, shall be allocated to the week in which the services that gave rise to those earnings are performed..."

Having carefully considered the matter, I believe that the claimant, as she has expressed her position through her representative, is right because the commissions for the January/February 1990 issue of the magazine Le Dépanneur, Volume 6, in the amount of $3,467.25, must be allocated to the eight weeks in 1989 in which the work was performed. In other words, even though these commissions were paid only in 1990, the claimant was entitled to them in 1989 because the work for them had been done in 1989. It follows that the commissions for the March/April 1990 issue, in the amount of $2,815.85, must be allocated to the seven weeks in 1990, for the work done during that period (see Exhibits 7.5, 7.6 and 7.7).

In the light of the above, I am of the opinion that the earnings received by the claimant cover two periods, one in 1989 and one in 1990, and that the commissions that were subsequently paid to her must be deemed to be her insurable earnings in each year, paid on the basis of her annual pay period in 1989 and in 1990.

The Minister of Revenue may decide whether the employment submitted to him or her is insurable or not, but may not decide what the insurable amount is. This distinction was made by the Federal Court of Appeal in Anderson (A-1496-84). The Federal Court of Appeal made a similar ruling in Michel Cloutier (A-592-92), where Hugessen J. stated, on page 7:

"The scheme of the unemployment insurance program, at least in principle, requires that there be as much consistency as possible between the payment of premiums and the receipt of benefit. But the fact that Revenue Canada has taken a view of the question does not relieve the Commission of its duty to make its own determination, and should never, as here, be presented to the claimant as a binding decision of the Minister of National Revenue."

On page 12, Hugessen J. adds:

"The Minister of National Revenue is given specific responsibility for administering Part III, which deals, as I noted earlier, with the collection of premiums. On the other hand, the Minister has no responsibility for administering Parts I and II, which deal with unemployment insurance benefits and premiums, respectively. This responsibility is given to the Canada Employment and Immigration Commission. Any question as to eligibility for benefit falls within the exclusive jurisdiction of the Commission.

It follows, in my opinion, that the Unemployment Insurance (Collection of Premiums) Regulations must, as the title clearly indicates, be limited to matters relating to the collection of premiums."

In Anderson, the Federal Court of Appeal clearly decided that the Minister of Revenue may only settle the question of whether an employment is insurable or not.

I believe it important to take into account the fact that the claimant's insurable earnings must include not only her regular salary, but also the commissions she earned both in 1989 and in 1990, which are contained in two annual pay periods, and that her premiums and benefit rate must be calculated accordingly.

Having thoroughly examined this whole matter and heard the arguments submitted by the representatives of the parties, I find that the Board of Referees' decision to allow the claimant's appeal is well-founded in law, and that the Commission's appeal before the undersigned cannot be allowed, given the evidence in the matter and the relevant provisions of the Act and Regulations to which we have referred above.

The Commission's appeal is therefore dismissed.

BOURGEOIS

UMPIRE

OTTAWA, Ontario
June 21, 1993