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    IN THE MATTER of a claim for benefits

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    IN THE MATTER of an appeal to an Umpire by the claimant from the decision of a Board of Referees given on March 27, 2008, at Alma, Quebec.


    GUY GOULARD, Umpire

    The claimant filed a benefit claim, which was established effective January 15, 2006. The Commission subsequently determined that the claimant was not unemployed because he spent his time on his business and his goal was to make the business his principal means of livelihood. A disentitlement was imposed from January 16, 2006, under section 30(1) of the Employment Insurance Regulations. That decision resulted in an overpayment in the amount of $11,143.00.

    The claimant appealed from the Commission's decision to a Board of Referees, and the Board dismissed the appeal. The claimant appealed from the Board's decision to an Umpire. That appeal was heard at Dolbeau, Quebec, on May 4, 2009. The claimant was present and represented by counsel. That appeal was heard jointly with an appeal regarding a benefit period established October 24, 2004.

    After analysing the appeal docket, reading the transcript of the hearing before the Board of Referees, and hearing representations from counsel for the claimant and the Commission, I find that this case must be referred to another Board of Referees for a new decision. That decision is based on the fact that the Board failed to take into consideration the six criteria stipulated in section 30(3) of the Employment Insurance Regulations to determine whether the extent of the claimant's involvement in his business disentitled him from receiving Employment Insurance benefits.

    Sections 30(1), 30(2), and 30(3) of the Regulations state as follows:

    30(1) Subject to subsections (2) and (4), where during any week a claimant is self-employed or engaged in the operation of a business on the claimant's own account or in a partnership or co-adventure, or is employed in any other employment in which the claimant controls their working hours, the claimant is considered to have worked a full working week during that week.

    (2) Where a claimant is employed or engaged in the operation of a business as described in subsection (1) to such a minor extent that a person would not normally rely on that employment or engagement as a principal means of livelihood, the claimant is, in respect of that employment or engagement, not regarded as working a full working week.

    (3) The circumstances to be considered in determining whether the claimant's employment or engagement in the operation of a business is of the minor extent described in subsection (2) are

    (a) the time spent;
    (b) the nature and amount of the capital and resources invested;
    (c) the financial success or failure of the employment or business;
    (d) the continuity of the employment or business;
    (e) the nature of the employment or business; and
    (f) the claimant's intention and willingness to seek and immediately accept alternate employment.

    The case law has established that, to determine the extent of a claimant's involvement in a business, a Board of Referees must review and analyse all the claimant's circumstances with respect to each of the six criteria stipulated in section 30(3). In CUB 23822, Cullen J. states:

    Thus, once the claimant has been found to be working pursuant to subsection (1), the next step is to determine if that employment is so minor in extent so as to constitute an exception to the general rule of disentitlement. In assessing whether employment is minor in extent, there are six factors to be considered. They are the time spent on the enterprise, the capital and resources invested, the financial success or failure of the enterprise, the continuity of the business, the nature of the business, and the willingness of the claimant to seek other employment (originally set out by Dubé, J. as Umpire in CUB 5454).

    It is an error of law for the Board not to consider the exception in s. 43(2) and the six factors outlined above in assessing whether a claimant is unemployed (CUBs 19015, 19013, 13687).

    This principle is confirmed by the Federal Court of Appeal in the decisions in Miller (A-772-00) and Charbonneau (A-699-02), in which the Court indicates that not analysing the six criteria with respect to a claimant's circumstances constitutes a crucial error by the Board. In Charbonneau (supra), Décary J. points out that the most important factors are the time spent by a claimant on his business and his willingness to look for other employment.

    In its analysis of the issue under appeal, the Board restricted itself to the claimant's comments in a statement to the Commission and ignored the claimant's explanations and additional comments at the hearing. Among the things the claimant said was that he had very little work during the period before July 2005, although he did not start receiving benefits until October 2004 and the disentitlement was imposed from January 3, 2005. The claimant also indicated that he worked for another employer from October 2005 to January 2006. That employment should be taken into consideration with regard to the claimant's comment in his statement that his business was his principal means of livelihood. The Board also failed to consider four of the six factors stipulated in section 30(3) of the Regulations.

    I also point out that the decisions of the Board of Referees in the two appeal dockets are identical, in particular with respect to the business income for the two periods at issue, although the facts are different for the two periods. It is up to the Board to consider all the claimant's circumstances with respect to each of the periods at issue, while taking into account the six factors stipulated in section 30(3) of the Regulations.

    Although the decision of the Board of Referees is silent on the matter, one of the Board members appears to have made an error of law with respect to the consequences of holding a majority of the shares of a company. The member indicated on page 25 of the transcript: "[Translation] You cannot hold more than 40% of the company. If you hold more than 40% of the company, you are not entitled to benefits." That is not the meaning of section 30 of the Regulations.

    I therefore find that the Board of Referees erred in fact and in law in failing to take into consideration all of the claimant's circumstances and representations and all of the evidence submitted by the claimant in determining the issues under appeal in the claimant's two appeals. The Board's decisions shall therefore be rescinded.

    An analysis of the issue of whether the claimant's situation allows him to benefit from the exception provided in section 30(2) of the Regulations involves a finding of fact. In accordance with the Employment Insurance Act, findings of fact are the responsibility of the Board of Referees. These cases must therefore be referred to a new Board.

    The decisions of the Board of Referees are rescinded. The matter will be referred to a differently constituted Board for a new decision. The Board's decisions dated March 27, 2008, shall be removed from the appeal dockets.

    Guy Goulard


    OTTAWA, Ontario
    July 17, 2009