CUB 56646

Heard at Edmonton, Alberta, on January 16, 2003.

THE HONOURABLE MR. JUSTICE W.J. HADDAD, Q.C., UMPIRE:

The issue in this appeal, filed by the claimant, involves the question of voluntarily leaving employment without just cause.

The claimant was employed by Shertek Software Inc. of St. Albert, Alberta, as an application programmer until he resigned on November 26, 2001 for the immediate reason that his pay cheque was rejected for insufficient funds.

The claimant was employed on an hourly basis. At the end of October "Leah" who represented claimant's employer told him that she was unable to pay him in full his earnings of $1,800.00 for that month. He was given a cheque for $1,200.00 in partial payment. That cheque was deposited by the claimant in his bank account on November 9, 2001 and on November 20, 2001 it was rejected by the bank for insufficient funds. On November 21, 2001 a replacement cheque for the full amount of claimant's October earnings was delivered to his house. On the following day the claimant and Leah spoke together by telephone. Leah asked him to return to work but claimant informed her that he had to be assured that he would be paid for his services. Leah responded by informing him that she will be able to pay him for his November services, provided he returns to work immediately. Leah explained that one of her other employees has agreed to forego her pay for the time being to ensure he is fully compensated for his work for the month of November. The claimant rejected that offer as he considered depriving another employee of her pay to be improper. The proposition put to the claimant points up the employer's inability to meet its payroll for that month.

On Friday, November 23, 2001, Leah sent the claimant an e-mail in which she made an urgent request that claimant return to work. Portions of that letter confirms, in general terms, the evidence to which I have alluded. She said:

"Tracy is being paid today, with the money that I offered you yesterday, because she had generously delayed her last month and a half of salary, on the hope that she could close sales of PARCS 6. I hope you get what it really means to be part of a team, and the sacrifices that this team has made this year, but also the potential that with the completion of PARCS 6, we will all benefit. Yes it is risky to be in small business but with teammates like this who would want anything else...

Unfortunately, we are unable to offer you a more permanent form of secured payments, because we are a small company, and we don't have a huge surplus of cheese waiting and growing moldy. And if we don't complete PARCS 6 then our clients will move on to someone who can deliver them what they need. Which is why we need either you or someone else to complete PARCS 6 for us. I don't mean to be harsh, but I do want you to know that this is what we need to do to survive."

Moreover, Leah's remarks, in effect conveys the message that the employer is not financially stable. In the course of a telephone interview with an officer of the Commission on January 9, 2002, Leah admitted that she was experiencing problems but she said she had always been able to meet the payroll. That statement was surely made without regard for the employer's inability to meet its payroll as recent as the end of both the months of October and November, 2001.

The claimant submitted his resignation on November 26, 2001.

Leah contends that the cheque she gave to the claimant for $1,200.00, bounced because of a clerical error and due to the fact she was out of the country on business she was unable to make rectification until she returned during the second week in November. As it transpires, according to the claimant, Leah was not out of the country. The two of them attended a trade show in Niagara Falls and they returned on November 20, 2001. Claimant therefore did not quit the day before her return as she contended during her telephone interview.

The relevant legislation is the Employment Insurance Act, section 29(c), which provides:

(c) just cause for voluntarily leaving an employment or taking leave from an employment exists if the claimant had no reasonable alternative to leaving or taking leave, having regard to all the circumstances, including any of the following...

The Board of Referees dismissed claimant's appeal from the ruling of the Employment Insurance Commission based on this reasoning:

"The Board, after reviewing the information presented, feels that the claimant acted prematurely by quitting when he did. There are strong indications that the company that the claimant was working for were experiencing financial difficulties, however there is no evidence to show that if the claimant had kept on working that he would not have been paid for his efforts. Also if the claimant was so unhappy with his employment, he should have sought other work elsewhere rather than decide to become unemployed. By quitting he chose to have a third party pay him benefits while he is looking for work.

The claimant therefore is deemed to have voluntarily left his employment without just cause pursuant to Sections 29 and 30 of the Employment Insurance Act."

The Board's reasoning is not supported by the evidence. The Board on the one hand acknowledged that the employer experienced financial difficulties and in the same sentence it said that there is no evidence the claimant would not have been paid had he kept on working. The first finding is inconsistent with the second. Throughout its decision the Board failed to consider the evidence of the employer's inability to meet its payroll for the months of November and October - and to consider, as well, Leah's admission that the employer was unable to "offer a more permanent form of secured payments". The Board's findings are erroneous and are perverse. Moreover, it erred in law in failing to address the test according to section 29(c).

The claimant was indeed insecure in view of the employer's struggle to meet its payroll. He has satisfied the statutory test - he had no alternative to leaving his employment. I, therefore, set aside the decision of the Board of Referees and allow the appeal.

Appeal allowed.

"W.J. Haddad"

W.J. Haddad, Q.C. - Umpire

Dated at Edmonton, Alberta,
March 13, 2003.