CUB 28124
TRANSLATION
IN THE MATTER OF the Unemployment Insurance Act
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IN THE MATTER OF a claim for benefit by
RÉJEAN BLANCHETTE
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IN THE MATTER OF an appeal to an Umpire by the
Commission from a decision of a Board of Referees
rendered on May 11, 1992 at Quebec City, Quebec.
DECISION
ROBERGE, J.:
The Commission is appealing the decision of a Board of Referees handed down on May 11, 1992, by which the Board unanimously rescinded the Commission's decision and allowed the appeal.
On March 5, 1992, the Commission decided that the claimant was not entitled to benefit because he had not proven that he was unemployed. The Commission wrote:
We are therefore of the opinion that you are working full working weeks and are not unemployed.
The facts on which the decision of the Board of Referees is based are essentially the same as those submitted to the Commission.
The claimant, who was employed in Levis by Lévis Subaru Enrg. as after-sales service manager, saw his employment terminated on January 17, 1992 because of an administrative restructuring.
In 1987, the claimant and his wife bought a convenience store. He worked in the store approximately 40 hours per week after finishing his work with Subaru, where he worked from 7:30 a.m. to 5:30 p.m., or about 60 hours per week.
As soon as he was laid off, the claimant took serious steps to find work in the automotive field. In addition, he started working longer hours at the convenience store, in which he continued to invest and in which he had to make a new investment at that time.
The claimant states that he was available for and capable of accepting full-time work because he could not make his convenience store into his sole source of livelihood.
The Commission received an application for review, and in a letter dated March 18, 1992, it notified the claimant that it was maintaining its decision of March 5.
In its decision, the Board of Referees writes as follows:
The question at issue is the following:
Did the claimant prove that he was unemployed as of January 27, 1992, in accordance with sections 8 and 10 of the Act and section 43(1) of the Regulations?
We have read the file and heard the claimant.
The claimant has been the owner of a convenience store since 1987. His wife and daughter work with him in the business.
Mr. Blanchette worked during 1991 and this did not prevent him from continuing to operate his store, because he had members of his family to replace him during the hours he worked elsewhere.
If we refer to Exhibits 7.2 and 7.3, we see that Mr. Blanchette conducted job searches, and that nothing prevents him from working.
The Board of Referees UNANIMOUSLY rescinds the Commission's decision and allows the appeal, since the claimant proved to us that he was unemployed because he met the requirements of the Commission concerning his availability and his willingness to work and to be ready to work at all times.
The Commission is asking the Umpire to set aside this decision of the Board of Referees and to reestablish the Commission's decision, because in its view the Board erred in law. The Commission refers to paragraphs 80(b) and (c) of the Act, which read as follows:
An appeal lies of right to an umpire in the manner prescribed from any decision or order of a board of referees at the instance of the Commission, a claimant, an employer or an association of which the claimant or employer is a member, on the grounds that
(a) the board of referees failed to observe a principle of natural justice or otherwise acted beyond or refused to exercise its jurisdiction;
(b) the board of referees erred in law in making its decision or order, whether or not the error appears on the face of the record; or
(c) the board of referees based its decision or order on an erroneous finding of fact that it made in a perverse or capricious manner or without regard for the material before it.
The Commission argues that the Board of Referees erred in confusing two very different concepts, namely unemployed status and availability. This is indeed what seems to emerge from the last part of the sentence beginning with "The Board of Referees UNANIMOUSLY..." The Board in fact wrote:
The claimant proved to us that he was unemployed because he met the requirements of the Commission concerning his availability and his willingness to work and to be ready to work at all times.
According to the generally uniform case law on the matter, one must first determine whether the claimant is indeed unemployed, as this status is defined in subsections 43(1) and (2) of the Regulations, which read as follows:
43.
(1) Subject to subsections (2) and (3), where a claimant is
(a) self-employed or engaged in the operation of a business on his own account or in partnership or a co-adventure, or
(b) employed in any employment other than that described in paragraph (a) in which he controls his working hours,
he shall be regarded as working a full working week.
(2) Where a claimant is employed as described in subsection (1) and the employment is so minor in extent that a person would not normally follow it as a principal means of livelihood, he shall, in respect of that employment, not be regarded as working a full working week.
I refer to the decision rendered by Mr. Justice Dubé on May 25, 1988 (CUB 15433). On page 2, he refers to the decision in Schwenk (CUB 5454), which he himself had handed down previously. In the Schwenk decision, he wrote:
I have had occasion to establish six criteria to help in determining whether, under subsection 43(2) of the Regulations, a claimant has an employment so minor in extent that he would not normally follow it as a principal means of livelihood:
1. Time spent on the business.
2. Capital and resources invested.
3. The financial success or failure of the enterprise.
4. The continuity of the business.
5. The nature of the employment. Is it the kind of business that would normally interest the claimant?
6. The willingness of the claimant to accept or seek other employment.
In Attorney General of Canada and Alfred J. Jouan (A-366-94), the Honourable Justices Marceau, Stone and McDonald referred approvingly to this decision in Schwenk. On pages 5 and 6, the learned Justice Marceau, writing the decision, states:
It is my conviction, however, that the most important, most relevant and only basic factor to be taken into account has to be, in all cases, the time spent.
Farther on in the same paragraph, he writes:
In the case of a claimant who spends, on a regular basis, 50 hours per week to the affairs of his own business, there is no way that he can invoke the exception of subsection 43(2). This claimant must necessarily be considered as falling under the general presumption of subsection 43(1) and be regarded as working a full working week.
A new paragraph follows, which deserves to be reproduced here:
The respondent's efforts to create new employment for himself by starting his own business are, of course, highly commendable. Unfortunately, however, they have taken him outside the purview of the unemployment insurance scheme. The Act is designed to provide temporary benefits to those who are unemployed and actively seeking other work. It cannot be used to subsidize entrepreneurs who are starting their own business. The policy behind the scheme may be questionable, nevertheless it remains the law and it must be enforced to how it is written.
In the case that concerns us, the claimant was working 60 hours a week with Subaru and 40 hours a week at his convenience store. When he was laid off, he worked full time at his convenience store, but the fact is that he looked for work.
In his decision quoted above, Dubé J. wrote in the conclusion to his decision:
It is true that the claimant conducted some job searches. However, a distinction must be made between "unemployed status" and "availability" (CUB 12905). Unemployed status ends when a claimant creates a new employment for himself, and this was the case of the claimant when he joined the company Haut Bois Inc. Job searching is of course a factor to be considered, but it is not the fundamental factor.
I therefore come to the conclusion that the Board of Referees incorrectly applied the Act, and in so doing erred in law.
The claimant was in fact unable to establish that his employment was so minor in extent, as provided for in subsection 43(2) of the Regulations.
In the circumstances, the Court, despite all the sympathy it might have for the claimant, who was devoted to earning a living and certainly did not commit any abuses in the direction of the Unemployment Insurance Commission, finds that the claimant was not unemployed and cannot be entitled to benefits. As we have already seen, the availability factor is not the most important factor. One must first establish unemployed status.
Consequently, I am of the opinion that the decision of the Board of Referees of May 11, 1992 must be rescinded, and the Commission's decision of March 3, 1992, confirmed by the decision of March 18, 1992, must be reestablished.
The Commission's appeal is allowed.
ROBERGE
UMPIRE
QUEBEC CITY, QUEBEC
April 5, 1995.