Date: 991006
Docket: 1999-875-EI
BETWEEN:
WALTER H. WRONSKI,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Reasons for Judgment
Bonner, J.T.C.C.
[1] This is an appeal under section 103 of the Employment Insurance Act from a decision on appeal to the Minister under section 91 of that Act. The decision under appeal was that there was no employer/employee relationship and therefore no contract of service between the Appellant and Foster Wheeler Limited during the period from June 5, 1997 to July 8, 1998.
[2] The Appellant was continuously employed by Foster Wheeler for 22 years prior to the period in question. The Appellant testified that his employer's business was shut down as a result of a decision made by its parent company. As a further result the Appellant's employment was terminated on November 6, 1996. In the letter dismissing the Appellant the employer offered a severance package to the Appellant to assist him in obtaining alternate employment. The offer, (Exhibit R-1), was accepted by the Appellant who signed a written form of release on March 10, 1997.
[3] The severance package provided:
(a) Upon termination the Company shall pay you a lump sum in the amount of $25,242.55 inclusive of 8 weeks termination pay ($6686.77), and 22 weeks 1 day severance pay ($18,555.78) pursuant to the provisions of sections 57 and 58 of the Employment Standards Act.
(b) In the event that you have not secured full-time, alternate employment by June 5, 1997, the Company shall on that date recommence paying your salary in bi-weekly installments for a further period of up to 57 weeks until July 8, 1998 or until such time as you secure full-time employment, whichever first occurs. ...
[4] The Appellant did not in fact find full-time alternate employment at any time before July 8, 1998 and the payments called for in both paragraphs (a) and the portion of paragraph (b) set out above were made to the Appellant. The issue in this appeal is whether the arrangement giving rise to the payments made to the Appellant during the June 5, 1997 to July 8, 1998 period constituted insurable employment within the meaning of the statute.
[5] The term "insurable employment" has the meaning assigned to it by section 5 of the Employment Insurance Act. For present purposes the portion of section 5 which is relevant is:
... insurable employment is
(a) employment in Canada by one or more employers, under any express or implied contract of service ... written or oral, ...
The word "employment" is defined in subsection 2(1) of the Employment Insurance Act to be the state of being employed. That state is not brought to an end simply because the employee does not have any duties to perform. In Canada v. Verreault, an unreported decision of the Federal Court of Appeal dated October 20, 1986, Pratte J. noted:
... it seems quite certain that the parties to a contract of employment can legally agree to extend the contract for a period in which the employee will not be required to do any work.
This view is supported by subsection 11(2) of the Act which provides:
(2) A week during which a claimant's contract of service continues and in respect of which the claimant receives or will receive their usual remuneration for a full working week is not a week of unemployment, even though the claimant may be excused from performing their normal duties or does not have any duties to perform at that time.
Nevertheless, in my view, the employment of the Appellant was brought to an end in this case by the act of Foster Wheeler in dismissing the Appellant on November 6, 1996. The chain of events leading up to the period in question in this appeal was launched by the letter from Foster Wheeler to the Appellant dated November 6, 1996 commenced with the following unequivocal words:
Further to our meeting of November 6, 1996 we regret to inform you that it shall be necessary to terminate your employment with Foster Wheeler Limited effective November 6, 1996.
That version of the events of November 6, 1996 is confirmed by the formal release by the Appellant of Foster Wheeler Limited from all claims related to (inter alia) the termination of the employment of the Appellant by Foster Wheeler. That release was signed by the Appellant on March 10, 1997. The letter from Foster Wheeler to the Appellant of November 6, 1996 and the release cannot be construed as embodying an arrangement for the continued employment of the Appellant after November 6, 1996. The documents were clearly prepared to define the duties and obligations of the Appellant and his former employer arising from the termination of the employment relationship on November 6, 1996. Nothing in the terms of the November 6, 1996 letter with regard to the continuation of group insurance benefits, pension and RRSP contributions for the period after November 6, 1996 supports a suggestion that the employment continued after November 6.
[6] Judgment will therefore issue dismissing the appeal and confirming the decision under appeal.
Signed at Ottawa, Canada, this 6th day of October 1999.
"Michael J. Bonner"
J.T.C.C.