Date: 19990521
Docket: 98-609-UI,
98-610-UI,
98-611-UI
BETWEEN:
ALAIN LEBEL,
ANDRÉ LANDRY,
MICHEL DION,
Appellants,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Reasonsfor Judgment
Tardif, J.T.C.C.
[1] These three appeals were heard together on common evidence.
[2] The question at issue is whether the amounts paid to the appellants outside the time periods indicated on the various records of employment constituted insurable earnings.
[3] The respondent argued that the amounts were wages received in the course of the same employment as that which was characterized as insurable, the dates of which are shown on the various records of employment.
[4] The appellants, for their part, argued that the amounts were primarily reimbursements for expenses incurred in the course of customer recruiting activities; they admitted that part of the amounts may have been wages.
[5] Initially, the work for the time periods indicated on the records of employment was determined to be insurable. The respondent assumed that the work performed outside those periods was insurable as well.
[6] For employment to be insurable, however, it must be held under a genuine contract of service, failing which it is not insurable employment.
[7] The Court is in no way bound by whatever characterization the respondent may give to particular employment for a specified period. Nor can the Court assume that amounts paid by the payer outside the periods characterized as insurable are also insurable earnings.
[8] To be characterized as insurable, employment must satisfy certain basic criteria that cannot be presumed to have been met but must be proved on a preponderance of evidence.
[9] After determining that the employment for which the periods are specified on the records of employment was insurable, the respondent concluded that the amounts of the cheques issued by the payer in the appellants' names for periods not covered by their records of employment provided a sufficient basis for concluding that the fact that cheques were issued indicated that there was employment and, much more, that this alleged employment was insurable.
[10] Insurability may not be presumed; there are essential conditions that must be met, including, inter alia, the performance of work and the payment of remuneration based on the quality and quantity of the work performed. In addition, the person receiving the remuneration must be subject to the authority and supervisory power of the payer or its representative.
[11] In the case at bar, there was no evidence that the alleged work met the conditions required for it to be characterized as insurable.
[12] Were the amounts shown on the various cheques issued to the appellants and cashed by them for weeks that were not covered by the records of employment insurable earnings? To answer this question in the affirmative would imply that all the essential conditions for insurability had been met. However, there was no evidence that the alleged work performed by the appellants met the requirements for it to be determined to be insurable. Moreover, there was no evidence or allegation that the work determined to be insurable was exactly the same for the periods at issue.
[13] The respondent initially determined that the work performed by the appellants for the periods described on the records of employment was insurable. Subsequently, the fact that the payer business operated throughout the year and that cheques had been issued appears to have been sufficient for the respondent to conclude that the employment outside the periods indicated was insurable as well.
[14] The Court is not bound by the respondent's intuitive determinations.
[15] In support of his decision, the respondent alleged the following:
Alain Lebel, 98-609(UI)
[TRANSLATION]
(a) the payer was incorporated in 1983 under the name of Construction Rémi Landry et Fils;
(b) in August 1985, the company changed its name to Protection Garvex Inc.;
(c) the shareholders of the payer were
Alain Landry 29% of the shares
Rémi Landry 17% of the shares
Gaston Landry 29% of the shares
Michel Landry 17% of the shares
Colette Landry 5% of the shares
André Landry 3% of the shares
(d) the payer specialized in the installation and maintenance of fire and theft security systems, restaurant equipment and propane gas equipment;
(e) the payer's business operated throughout the year;
(f) the payer provided no explanation to the appeals officer concerning payments of money to the appellant;
(g) the appellant was a technician employed by the payer;
(h) on November 6, 1991, the payer issued to the appellant a record of employment for the period from February 18, 1991, to September 20, 1991, indicating 16 weeks of employment and total earnings of $6,400.00;
(i) on June 15, 1992, the payer issued to the appellant a record of employment for the period from March 16, 1992, to June 12, 1992, indicating 11 weeks of employment and total earnings of $4,520.00;
(j) on December 18, 1992, the payer issued to the appellant a record of employment for the period from July 20, 1992, to December 4, 1992, indicating 8 weeks of employment and total earnings of $3,478.00;
(k) the appellant received amounts of money from the payer both before and after his alleged periods of employment;
(l) the number of weeks worked and remuneration paid shown on the appellant's records of employment are false;
(m) in 1991, the appellant was employed by the payer for 34 weeks and received insurable earnings of $10,447.11;
(n) in 1992, the appellant was employed by the payer for 32 weeks and received insurable earnings of $11,597.40.
André Landry, 98-610(UI)
[TRANSLATION]
(a) the payer was incorporated in 1983 under the name of Construction Rémi Landry et Fils;
(b) in August 1985, the company changed its name to Protection Garvex Inc.;
(c) the shareholders of the payer were
Alain Landry 29% of the shares
Rémi Landry 17% of the shares
Gaston Landry 29% of the shares
Michel Landry 17% of the shares
Colette Landry 5% of the shares
André Landry 3% of the shares
(d) the payer specialized in the installation and maintenance of fire and theft security systems, restaurant equipment and propane gas equipment;
(e) the payer's business operated throughout the year;
(f) the payer provided no explanations to the appeals officer concerning payments of money to the appellant;
(g) the appellant was a technician employed by the payer;
(h) on November 27, 1991, the payer issued to the appellant a record of employment for the period from January 7, 1991, to October 18, 1991, indicating 15 weeks of employment and total earnings of $6,750.00;
(i) on December 14, 1992, the payer issued to the appellant a record of employment for the period from January 13, 1992, to December 11, 1992, indicating 16 weeks of employment and total earnings of $7,344.00;
(j) on December 30, 1993, the payer issued to the appellant a record of employment for the period from April 19, 1993, to December 17, 1993, indicating 20 weeks of employment and total earnings of $9,000.00;
(k) the appellant received amounts of money from the payer both before and after his alleged periods of employment;
(l) the number of weeks worked and remuneration paid shown on the appellant's records of employment are false;
(m) in 1991, the appellant was employed by the payer for 16 weeks and received insurable earnings of $6,019.87;
(n) in 1992, the appellant was employed by the payer for 35 weeks and received insurable earnings of $12,925.04;
(o) in 1993, the appellant was employed by the payer for 38 weeks and received insurable earnings of $14,786.38.
Michel Dion, 98-611(UI)
[TRANSLATION]
(a) the payer was incorporated in 1983 under the name of Construction Rémi Landry et Fils;
(b) in August 1985, the company changed its name to Protection Garvex Inc.;
(c) the shareholders of the payer were
Alain Landry 29% of the shares
Rémi Landry 17% of the shares
Gaston Landry 29% of the shares
Michel Landry 17% of the shares
Colette Landry 5% of the shares
André Landry 3% of the shares
(d) the payer specialized in the installation and maintenance of fire and theft security systems, restaurant equipment and propane gas equipment;
(e) the payer's business operated throughout the year;
(f) the payer provided no explanations to the appeals officer concerning the photocopies of cheques relating to the worker;
(g) the appellant was a technician employed by the payer;
(h) on April 25, 1991, the payer issued to the appellant a record of employment for the period from August 20, 1990, to September 14, 1990, indicating 4 weeks of employment and total earnings of $2 000.00;
(i) on July 10, 1992, the payer issued to the appellant a record of employment for the period from August 26, 1991, to June 19, 1992, indicating 16 weeks of employment and total earnings of $7,200.00;
(j) the appellant received amounts of money from the payer both before and after his alleged periods of employment;
(k) the worker's record of employment of July 10, 1992, is false;
(l) in 1991, the appellant was employed by the payer for 32 weeks and received insurable earnings of $9,423.02;
(m) on June 19, 1992, the appellant did not stop working for the payer;
(n) in 1992, the appellant was employed by the payer for 44 weeks and received insurable earnings of $13,776. 69.
[16] There was no evidence or allegation that the work supposedly performed during the periods at issue was done under a genuine contract of service. The evidence, moreover, did not establish that the work performed for the periods referred to on the various records of employment was insurable.
[17] The respondent assumed that the Court would concur in his determination regarding the insurability of the employment for the periods indicated on the appellants' records of employment. However, that determination is not part of the instant cases and, accordingly, is not relevant to the disposition of these appeals.
[18] Furthermore, it cannot be assumed that determining work to be insurable for a specific period makes work performed outside that period insurable as well. The Court finds that it has not been shown by a preponderance of evidence that genuine contracts of service were involved here.
[19] Accordingly, the Court does not have to decide whether the amounts paid by cheque should be characterized as real wages, disguised wages, a reimbursement of expenses, a percentage of sales or anything else.
[20] The parties had a multitude of means at their disposal to provide the Court with evidence that could have brought to light all the facts and circumstances relating to the alleged employment. Likely fearing to take any action that might have effects contrary to those they were looking for, the parties preferred to withhold such evidence from the Court no doubt in the belief that the Court possessed a divine power to discover the whole truth all by itself, without any evidence, and to guess the facts that were unavailable from the evidence.
[21] The appellants argued that the amounts they received were essentially reimbursements of expenses. In this regard, it would be somewhat surprising that the outlays required for travel throughout huge territories should prove to have been exactly the same from one week to the next. Instead, I think a formula was involved that allowed the employer to have employees the cost of whom was met in part through unemployment insurance benefits. If this was so, there was never any genuine contract of service, since the agreement would have had features that were incompatible with the existence of a genuine contract of service.
[22] I do not believe I have jurisdiction to rule on periods that are not the subject of any dispute, namely, the periods acknowledged and determined by the respondent to be insurable. And if I appropriated such jurisdiction to myself, there would be nothing for me to determine, since there was no evidence relating to those periods that would enable me to make a determination.
[23] I must render my decision essentially with respect to the periods at issue and on the basis of the evidence adduced by the parties. In this regard, not only did the respondent do a poor job of preparing the cases, the investigation that led him to make the determination he did was incomplete and slapdash. The determination was thus basically intuitive; it certainly does not meet the requirements for concluding that the employment in question was insurable.
[24] The appellants, for their part, were involved in a process that they made no effort to correct, since that could have run counter to the goal they were seeking. Although the burden of proof rested upon each appellant's shoulders and although the allegations in each Reply to the Notice of Appeal were presumed to be true until the contrary was proved, it was not in the appellants' interest to explain anything or, by offering explanations, to correct the assumptions relied on by the respondent.
[25] The allegations supporting the determination were incomplete and in no way justified the conclusions on which was based the characterization of the amounts received as remuneration paid under a contract of service.
[26] The weight of the evidence essentially established that the appellants had done work for Protection Garvex Inc. in return for which they had received cheques. The work they performed seems to have extended well beyond the periods shown on the records of employment. This in itself could lead one to believe that the appellants and Protection Garvex Inc. had entered into a sort of arrangement allowing the company to receive the benefit of the appellants' work without having to pay them a full salary, since unemployment insurance benefits made up the difference.
[27] One thing is certain, the evidence before the Court does not support a conclusion that there was a genuine contract of service within the meaning of the Unemployment Insurance Act, and consequently the amounts on the cheques could not be determined to be insurable earnings.
[28] For these reasons, the Court allows the appeals since it was not shown that the appellants had performed work under a genuine contract of service during the period at issue.
Signed at Ottawa, Canada, this 21st day of May 1999.
"Alain Tardif"
J.T.C.C.
Translation certified true on this 15th day of January 2002.
[OFFICIAL ENGLISH TRANSLATION]
Erich Klein, Revisor
[OFFICIAL ENGLISH TRANSLATION]
98-609(UI)
BETWEEN:
ALAIN LEBEL,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard on common evidence with the appeals of André Landry (98-610(UI)) and Michel Dion (98-611(UI)), on April 29, 1999, at Rimouski, Quebec, by
the Honourable Judge Alain Tardif
Appearances
Counsel for the Appellant: Valère M. Gagné
Counsel for the Respondent: Suzanne Morin
JUDGMENT
The appeal is allowed and the decision of the Minister of National Revenue is vacated in accordance with the attached Reasons for Judgment.
Signed at Ottawa, Canada, this 21st day of May 1999.
"Alain Tardif"
J.T.C.C.
Translation certified true
on this 15th day of January 2002.
Erich Klein, Revisor
[OFFICIAL ENGLISH TRANSLATION]
98-610(UI)
BETWEEN:
ANDRÉ LANDRY,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard on common evidence with the appeals of Alain Lebel (98-609(UI)) and Michel Dion (98-611(UI)), on April 29, 1999, at Rimouski, Quebec, by
the Honourable Judge Alain Tardif
Appearances
Counsel for the Appellant: Valère M. Gagné
Counsel for the Respondent: Suzanne Morin
JUDGMENT
The appeal is allowed and the decision of the Minister of National Revenue is vacated in accordance with the attached Reasons for Judgment.
Signed at Ottawa, Canada, this 21st day of May 1999.
"Alain Tardif"
J.T.C.C.
Translation certified true
on this 15th day of January 2002.
Erich Klein, Revisor
[OFFICIAL ENGLISH TRANSLATION]
98-611(UI)
BETWEEN:
MICHEL DION,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard on common evidence with the appeals of Alain Lebel (98-609(UI)) and André Landry (98-610(UI)), on April 29, 1999, at Rimouski, Quebec, by
The Honourable Judge Alain Tardif
Appearances
Counsel for the Appellant: Valère M. Gagné
Counsel for the Respondent: Suzanne Morin
JUDGMENT
The appeal is allowed and the decision of the Minister of National Revenue is vacated in accordance with the attached Reasons for Judgment.
Signed at Ottawa, Canada, this 21st day of May 1999.
"Alain Tardif"
J.C.C.I.
Translation certified true
on this 15th day of January 2002.
Erich Klein, Revisor