IN THE MATTER of the EMPLOYMENT INSURANCE ACT
and
In the matter of a claim for benefits by
John BAILEY
and
IN THE MATTER of an appeal by the Commission from the decision of a Board of Referees given on June 16, 2003 at Longueuil, Quebec
DECISION
GUY GOULARD, Umpire
The claimant established an initial claim for benefits effective March 21, 2002. On February 17, 2003, the claimant received the sum of $8,000.00 in settlement of three complaints he had filed against his employer. The Commission determined that the amount received constituted earnings pursuant to subsection 35(2) of the Employment Insurance Regulations and allocated the amount from the termination of employment on March 10, 2002. This resulted in an overpayment of $1,540.00 which the employer was directed to deduct from the amount to be paid to the claimant.
The claimant appealed the Commission's decision to the Board of Referees which, in a unanimous decision, allowed the appeal. The Commission appealed the Board's decision. This appeal was heard in Montreal, Quebec on April 7, 2004. The claimant did not attend but he was represented by Mr. Michael Cohen.
This appeal was heard together with the appeal in the Andrzej Trzebski matter as the facts and issues in these two cases are identical.
THE FACTS
The facts in this case are that, following his dismissal from his employment, the claimant filed three complaints pursuant to article 15 of the Quebec Labour Code contesting the measures taken by the employer against him.
By agreement dated February 17, 2003, the claimant and the employer arrived at an agreement regarding the complaints filed. The following terms of the agreement are relevant to the issue under appeal:
THE ISSUE UNDER APPEAL
The issue under appeal is whether the sum of $8,000.00 received by the claimant under the above terms of settlement constitutes earnings pursuant to subsection 35(2) of the Employment Insurance Regulations which had to be allocated pursuant to subsection 36(10) of the Regulations.
THE CLAIMANT'S POSITION
The claimant took the position that, as the moneys had been paid specifically for his agreement to relinquish his right to be reinstated in his employment, the moneys received did not constitute earnings from employment as established by the Federal Court of Appeal in Plasse (A-693-99) and Meechan (A-140-03).
THE COMMISSION'S POSITION
The Commission took the position that the moneys paid pursuant to the above agreement were paid to compensate the claimant for his loss of employment and therefore constituted earnings resulting from an interruption of earnings and had to allocated.
THE BOARD'S DECISION
The Board's decision reads, in part, as follows:
"The Board of Referees analysis [sic] the appeal docket and the testimonies at the hearing, and concluded that the settlement received by the claimant does not constitute insurable earnings and does not affect his employment insurance claim. Even though, the Board of Referees understands that the settlement was to compensate two points: 1) his decision to relinquish his right to be reinstated in his job and 2) his decision to relinquish his right regarding any other complaints, there is no evidence which amount of the settlement was for each point of the agreement. Considering those facts, the Board of Referees decided to give the claimant the benefit of the doubt.
Decision:
The Board of Referees unanimously considers that the amount of $8,000.00 received by the claimant as settlement agreement does not affect his Employment Insurance claim. In the circumstances, the Board grants the claimant's appeal and rejects the decision of the Commission."
COMMISSION'S SUBMISSIONS ON APPEAL TO THE UMPIRE
On appeal, the Commission argued that the Board erred in its interpretation of the relevant jurisprudence, in particular the Federal Court of Appeal's decision in Plasse (A-693-99) which, the Commission submitted, was based on a finding that the claimant had established a distinct right to be reinstated in his employment. The Commission argued that, in the case under appeal, there was no evidence that the claimant had a right to be reinstated and that he could not therefore have relinquished such a right in exchange of compensation. The Commission further argued that the terms of the agreement between the claimant and his employer stated that the amount paid was also for the claimant's agreement to relinquish his rights regarding other complaints against his employer. The Commission further submitted that the terms of the agreement, in particular paragraphs 4 and 5, indicated that the claimant and the employer recognized that the amount of $8,000.00 paid pursuant to the agreement may well constitute earnings which had to be allocated. The Commission submitted that the claimant had not met the onus of proof, as established in Tetreault (A-527-85), Harnett (A-34-91) and Wilson (A-232-94), to demonstrate that the moneys received were not for compensation for loss of employment.
CLAIMANT'S SUBMISSIONS ON APPEAL TO THE UMPIRE
Counsel for the claimant submitted that the agreement clearly recognized, by its explicit terms, that the parties acknowledged that there was a right to reinstatement, which the claimant had agreed to relinquish in exchange for the payment of $8,000.00. Counsel referred to the similarity between the facts in this case and those in the Federal Court of Appeal decision in Meechan (A-140-03) where the Board had relied on the terms of the agreement between the claimant and the employer as well as on the claimant's oral evidence to conclude that the amount paid was in compensation for the claimant's agreement to relinquish his right to reinstatement. There had been no separate finding that a right to reinstatement existed. In that case the Court reversed the Umpire's decision which had allowed the Commission's appeal. Counsel therefore submitted that the Board's decision was well founded on the evidence and on the jurisprudence.
ANALYSIS AND DECISION
In reversing the Umpire's decision in Meechan (supra) the Court stated:
"We recognize that the Board of Referees was not bound in any way by the decision of the Arbitrators and we also acknowledge that the fact that the parties have attached a particular label to a given damage settlement is not conclusive. However, it appears oral evidence was given before the Board and we are unable to conclude that it was unreasonable for the Board to accept the evidence by the Applicant to the effect that the damages represented compensation for the relinquishment of the right to reinstatement. Indeed, there seems to have been little evidence, if any, that the award could represent anything else. In particular, there does not seem to be evidence before the Board of Referees to the effect that the damages represented loss of earnings.
This Court in Canada v. Plasse [2000] F.C.J. 1671 at paragraph 18, decided that a payment received for renunciation of a right to reinstatement does not constitute earnings under the Employment Insurance Regulations. The Board referred to this most recent relevant law and applied it correctly. We would observe that the Umpire did not refer to this law."
In its decision the Board referred to and accepted the allegation of counsel for the claimant that "the amount of $8,000.00 paid to (the claimant) was exclusively related to his decision to relinquish his right to be reinstated...".
In Le Centre de valorisation des produits marins de Tourelle Inc. (A-547-01) Justice Létourneau stated that the role of an Umpire is limited to deciding if the Board of Referees' appreciation of facts is reasonably compatible with the evidence before the Board.
In the present case, the Board reviewed the evidence, including the terms of the agreement, and accepted the claimant's arguments based on counsel's statements that the moneys paid were to compensate the claimant for his decision to relinquish his right to reinstatement. It may well be that the Board could have requested additional evidence but the Board concluded that there was sufficient evidence on which to arrive at its decision.
I find that the Board's decision is, to say the least, reasonably compatible with the evidence before the Board.
Accordingly, the appeal is dismissed.
Guy Goulard
UMPIRE
OTTAWA, Ontario
April 27, 2004