IN THE MATTER OF THE UNEMPLOYMENT INSURANCE ACT
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in the matter of a claim for benefit by
KATHERINE KLASSEN
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IN THE MATTER of an appeal by the claimant
from a decision of a Board of Referees given at
Burnaby, B.C., on the 11th day of April, 2001.
DECISION
Hon. David G. Riche
The issues before the Board is whether or not the claimant, who was a shareholder and director of a company known as Pacific Coast Cedar Products, was unemployed during the time she received benefits in 1993 and 1996, and whether or not she had proved that she was available for work as required by s. 14 of the Act.
The Board of Referees found that this claimant was in fact engaged in her former employment in a business partly owned by her and had not established a job search as required by s. 14 of the Act.
Ms. Klassen was the daughter of the president of the company and her mother was the major shareholder. She held one-quarter of the shares in a company which owned half of the shares in Pacific Coast Cedar Products Limited. This would make her a 12.5% shareholder in the enterprise. She was employed in the business as Office Manager, accountant, sales, bookkeeper as set forth in Exhibit 2-1.
The claimant told the Board that she would occasionally drop into the office a couple of times a week and spent time with other laid off shareholders because she liked these guys and because it was a place to go where she could have meetings with her fellow shareholders and read want ads. She told the Board that she occasionally helped out with office work and did so for a maximum of one hour per week.
The Board, after reviewing the law, found that the claimant was not a credible witness. They stated that her oral evidence was not reliable or substantiated and was sometimes contradicted. They did not believe her evidence. They did not accept her evidence that she attended the office in order to look through want ads and to commiserate. The Board found that she was protecting her investment. That was the purpose of her visits. The Board found that while she was on claim she was engaged in the operation of the family business on her own account. The Board also found that her one hour per week admission of working during the claim was a falsehood because it was contradictory with the evidence of other shareholders. The Board found that she did not satisfy the majority of the Board that her involvement in Pacific Coast Products while on claim was minor in extent as set forth in s. 43(2) of the Regulations. They found she spent considerable and significant amounts of time in the activities of the enterprise protecting her significant investment and resources and it was her main means of livelihood. Further they found that she did not demonstrate a willingness to seek other employment despite her oral evidence.
I have considered the evidence with respect to this claimant and find that the decision of the majority of the Board is not really in conformity with the evidence. Although I realize that it is not for an umpire to substitute his finding of the facts for that found by a Board of Referees. In order for an umpire to set aside a decision on credibility or facts made by a Board of Referees it must be shown that that decision was erroneous and not supported by the evidence which they had before them. In this particular case I have perused the transcript of the evidence and the evidence on file and I am of the view that this is one of the cases where an umpire should interfere with the decision based on the facts as found by the Board of Referees. It is my view that the Board of Referees, after hearing seven similar cases involving the shareholders of this company who claimed unemployment insurance following a layoff which was arranged by them, have concluded that they are all pretty well similar in nature and as a result came to similar conclusions on all of them. I say that with the exception of the error they made in respect of Allen Hampton.
In analyzing the claim of Katherine Klassen, the first significant piece of evidence is the fact that she was the only one who did not sign the statement obtained from her father, George Klassen. Therefore the Board should not have found that she accepted what he said as did the others. Further the evidence from the transcript shows that this person only attended at these offices where she had worked now and then. Further when she was laid off she was replaced by another employee by the name of Barbara Urquhart. During her layoff in 1996 she was on regular benefits for a short time and then she went on maternity benefits.
At page 53 she mentions various banks that she went to apply for work. She also sought work from a company known as Stave Lake Cedar and mentioned several other places where she sought employment. Then at p. 55 she describes her job search effort. This shows a reasonably constant search for employment.
At page 60 she describes that she occasionally would drop off coffee, cream, etc., to the Pacific Coast Cedar Products and she would occasionally attend a meeting once a week to find out what was going on. She did that most of the time with her father who was the president of the company. She would ask him what was going on and it was a ten minute conversation or maybe up to a half an hour, sometimes five minutes. She also went down there to talk about her children with her father. At p. 93 of the transcript Katherine Klassen, in answers to questions from the chairman, said she occasionally did a little bit of work, maybe an hour, maybe two hours, every two weeks, sometimes it was 15 minutes and not a lot of work. There is no evidence that she was attending this business on a daily basis as were some of the others. The evidence shows that he was replaced by another employee and that she provided three documents showing her job search as well as reasonably clear evidence of places she went and how frequently she went there seeking employment.
It is my view that the Board of Referees should have given the benefit of the doubt to this claimant and not lumped her in with the others. It is clear that during her time of layoff she was not spending a considerable amount of time at the business and although she had a substantial investment and she was interested in the success or failure of the business, which would normally be her main employment, she did not spent substantial time during her time of layoff at the company as the others did. It is clear from the jurisprudence that of the six factors to be considered in determining whether or not a person is self-employed to more than a minor extent as set forth in s. 43(1) of the Unemployment Insurance Regulations, time is the most important of these six factors. In this case the evidence does not point to this claimant spending considerable time at her business and it also shows that she made a reasonable job search during the time of layoff.
It is my view that the Board of Referees in this case were in error when they included this claimant with the others in dismissing her appeal. Giving her the benefit of the doubt considering the evidence of all the witnesses and the fact that she had a replacement for her employment when she was laid off, is sufficient in my view to require me to set aside the Board of Referees decision as being erroneous and not supported by the evidence which they had before them.
For these reasons I am satisfied that the appeal of this claimant should be allowed.
David G. Riche
Umpire
December 4, 2002
St. John's, NF