(Judgment rendered at Ottawa
on Friday, July 8, 1988)
JUDGMENT OF THE FEDERAL COURT OF APPEAL
Date:
July 8, 1988
Docket:
A-220-87
Umpire's Decision:
CUB 13443
CORAM:
PRATTE J.
MARCEAU J.
DESJARDINS J.
BETWEEN:
CANADIAN MARINE OFFICERS UNION
(RE: CLAIM OF HENRI FORTIN),
applicant,
- and -
BOARD OF REFEREES,
respondent,
- and -
THE HONOURABLE MR. JUSTICE ALLISON
WALSH,
Tribunal
(Umpire).
Heard at Montréal on Tuesday, May 24, 1988.
REASONS FOR JUDGMENT
(Judgment rendered at Ottawa
on Friday, July 8, 1988)
This section 28 application is directed against a decision of an umpire under the Unemployment Insurance Act, 1971 confirming in part a decision of a board of referees on an appeal brought by one Henri Fortin, a member of the applicant union.
From March 23, 1985, to February 19, 1986, Fortin was employed as a marine engineer on board the ship Industrial Transport. His conditions of work were governed by a collective agreement that contained the following clause:
14. ACCUMULATED LEAVE AND LEAVE PAY(a) Leave pay shall be earned and payable for each working hour in the working week for which leave entitlement is credited. In the case of employees engaged in continuous annual employment, payment may be deferred to the end of the month following their service anniversary dates with that Company. Subject to the conditions and exceptions stated in the section, each engineer officer shall be entitled to take leave from the vessel on which he works, the leave to be calculated as equivalent to two (2) days leave for each six (6) days worked of eight (8) hours per day. (.334 factor).
b) Each eligible engineer officer shall be credited with leave pay as follows:
each eligible engineer officer shall be entitled to .334 basic hourly rate for each hour worked.
(c) Accumulated leave will not be granted for periods of less than fourteen (14) days without mutual consent.
(d) When an engineer officer has accumulated fourteen (14) days or more of leave and provided he has made his request in writing fifteen (15) days in advance, he shall be granted a minimum of fourteen (14) days leave. However, all such leave shall be completed before the first day of December. On vessels operating twelve (12) months of the year, leave shall not be taken between December 1st, and the following January 15th, unless suitable arrangements can be made.
(e) An engineer officer shall not be compelled to take leave from his ship or be prevented from doing so.
f) Only one (1) engineer officer per vessel will be permitted to take leave at one time and leave shall be granted on the basis of rank for the vessel on which the engineer officer is employed, unless otherwise mutually agreed upon amongst the engineer officers involved.
(g) Leave pay shall be paid at the end of every month, but leave will continue to accrue.
(h) When an engineer officer who is on paid leave as provided by this article and is recalled to work prior to the expiration of such leave, he shall be paid at the overtime rate of pay for all work performed between the time of recall and the time his paid leave would normally have expired.
Fortin was laid off on February 19, 1986, when his ship was laid up. He then claimed unemployment insurance. It is common ground that, at the time of his lay-off, Fortin was entitled, under clause 14 of the collective agreement, to take a period of leave. The Canada Employment and Immigration Commission reckoned that he was entitled to a period of leave of 60 days and, as a consequence, determined that his benefit period, instead of beginning on February 20, 1986, had begun 60 days later, on April 20, 1986. That decision was based on subsection 37(3) of the Unemployment Insurance Regulations, a provision that reads as follows:
Sec. 37.(3) Where an insured person regularly works a greater number of hours, days or shifts than are normally worked in a calendar week by persons employed in full-time employment and for that reason is entitled under his contract of service to a period of one or more weeks off work, the insured person shall not be regarded as having had an interruption of earnings in respect of that period.
Fortin appealed from the Commission's decision to a board of referees. His appeal was dismissed. His union, the applicant in this Court, then appealed to an umpire. That appeal was allowed only in part. The umpire rejected the appellant's main submissions to the effect that subsection 37(3) of the Regulations is ultra vires and contravenes section 15 of the Canadian Charter of Rights and Freedoms; he found, however , that Fortin, at the time of his lay-off, was entitled to only 27 days of leave (rather than 60) and he modified the decision of the Commission accordingly. It is against that decision that this section 28 application is directed.
In support of the application, counsel for the applicant renewed the submissions that he had made earlier to the effect that subsection 37(3) of the Regulations exceeds the regulation-making power of the Commission and contravenes section 15 of the Charter. He prefaced his argument, however, with a new submission, namely, that the decision under attack is based on a wrong interpretation of subsection 37(3) which, if it is correctly interpreted, has no application in the present case.
I shall first consider that new submission.
Subsection 37(3) contemplates the situation where an employee is entitled, under his contract of service, to a period of leave. In that case, says the last part of the subsection, the employee "shall not be regarded as having had an interruption of earnings in respect of that period." According to the applicant, those words, "in respect of that period", really mean "during that leave" so that the section would only apply when the employee who is entitled to a period of leave actually takes advantage of that right. The only effect of the subsection, then, would be to make it clear that the employee does not have an interruption of earnings in respect of the period during which he is on leave. That interpretation, says counsel for the applicant, is perhaps not the only one that can be given to the English text of the subsection, but it is the only one that is compatible with the French text where the phrase "in respect of that period", at the end of the subsection, is rendered by the words "pendant ce congé" which can only refer to a time when the employee is actually on leave.
This argument has much force when subsection 37(3) is read in isolation. However, it must be read in its context. The general rule concerning interruption of earnings is found in subsection 37(1):
Sec. 37.(1) Subject to this section, an interruption of earnings occurs when, following a period of employment with an employer, an insured person has a lay-off or separation from that employment and has or will have a period of seven or more consecutive days during which no work is performed for that employer and in respect of which no earnings that arise from that employment, other than earnings described in subsection 58(12), are payable or allocated.
The subsections that follow subsection 37(1) are modifications of that general rule that are applicable in particular cases. They prescribe that in those cases the interruption of earnings will occur at a time different from the one specified in subsection 37(1). When subsection 37(3) is read in its context, therefore, it is apparent that its purpose is not merely to state the obvious, namely, that an employee who is on leave has not had an interruption of earnings but, rather, to state that, when an employee has a lay-off or separation from employment at a time when he is entitled to a period off work, the interruption of earnings will take place at a later time than specified in subsection 37(1).
I am therefore of opinion that the umpire correctly interpreted subsection 37(3) of the Regulations.
The applicant's second point was that subsection 37(3) is ultra vires. That subsection was made by the Commission pursuant to paragraph 58(r) of the Act which confers on the Commission the power to make, with the approval of the governor in council, regulations "defining and determining when an interruption of earnings occurs". In determining the limits of that regulation-making power, consideration must be given to the fact that Parliament has, in paragraph 2(1)(n) of the Act, defined the expression "interruption of earnings" in the following manner:
"interruption of earnings" means that interruption that occurs in the earnings of an insured person when after a period of employment with an employer the insured person has a lay-off or separation from that employment or a reduction in his hours of work for that employer resulting in a prescribed reduction in earnings;
The argument of the applicant is based on the proposition that the power conferred on the Commission by paragraph 58(r) of the Act does not include the power to modify the Act and, more particularly, to alter the definition of "interruption of earnings" found in paragraph 2(1)(n). subsection 37(3) of the Regulations, says the applicant, the Commission has done precisely that, since, under that subsection, an interruption of earnings which according to the definition found in paragraph 2(1)(n) of the Act has already occurred, is deemed not to have occurred until the expiry of the period of leave to which the employee was entitled.
It has already been decided 1 that paragraph 58(r) of the Act does not confer on the Commission the power to "make arbitrary changes in the statutory rules established by the Act itself to govern payment of benefits" and that it merely "authorizes a regulation laying down rules for determining the precise time when an interruption of earnings is to be taken to have occurred for the purpose of section 17(2) as long as those rules are designed to establish "when" the 'interruption of earnings' as defined by section 2(1)(n) did occur."
Did the Commission, in making subsection 37(3) of the Regulations, modify or ignore the definition contained in paragraph 2(1)(n)? - In my view, it did not. As I understand it, that subsection merely resolves a difficulty arising in the application of the definition. Normally, the interruption of earnings occurs at the time of the lay-off or separation from employment. As was mentioned in the Paulsen decision 2 a problem may arise in the application of that rule when arrears of salary are paid after the lay-off or separation from employment. A problem may also arise if an employee, before his lay-off, has been paid not only for the work that he has done and the days of rest that he has taken but, also, for days of rest to which he is entitled but has not yet taken. In such a situation, which is the situation contemplated by subsection 37(3), does the interruption of earnings occur at the time of the lay-off or at the expiry of the period of rest to which the employee is entitled? - That is, in my view, a real question and, in answering it as it does, subsection 37(3) cannot be said to arbitrarily change the rules established by the Act to govern payment of benefits.
In my opinion, therefore, subsection 37(3) is not ultra vires.
The applicant's last point was that subsection 37(3) contravenes section 15 of the Canadian Charter of Rights and Freedoms because it denies Fortin and other persons to whom subsection 37(3) applies the right to equality before and under the law and to equal benefit of the law. Subsection 37(3) is discriminatory, said counsel for the applicant, because it denies to those to which it applies a right that is given to everybody else, namely, that of receiving unemployment insurance benefits two weeks after the termination of employment.
Counsel for the respondent argued that the umpire did not have the jurisdiction to rule on the constitutional validity of subsection 37(3) and that, as a consequence, he could not be said to have erred in law in applying that provision. I do not consider it necessary, for the purposes of this case, to decide that question. Indeed, even if I assume for sake of discussion that the umpire had that jurisdiction, I cannot avoid the conclusion that he correctly decided that subsection 37(3) does not violate section 15 of the Charter. True, the applicant and others to whom the subsection applies are treated differently from those who, at the time of their lay-off, were not entitled to any time off work. But that difference of treatment does not appear to me to be unwarranted and, for that reason, I cannot accede to the applicant's argument that subsection 37(3) is discriminatory.
I would, for these reasons, dismiss the application.
"Louis Pratte"
J.F.C.C.
1 Attorney General of Canada v. Paulsen, [1973] F.C. 376 at 385.
2011-01-10