CUB 24884
IN THE MATTER OF THE UNEMPLOYMENT INSURANCE ACT, 1971
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IN THE MATTER OF A CLAIM BY RORY FATT,
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IN THE MATTER OF an appeal to the Umpire by the
Claimant from a decision by the Board of Referees at
Vancouver, British Columbia, on February 18, 1993.
DECISION
THE HONOURABLE A.H. HOLLINGWORTH, Q.C.:
This is an appeal by the claimant from a unanimous decision of a Board of Referees and the principal decision to be determined is whether the claimant was self-employed or engaged in the operation of a business on his own account or in partnership or a co-adventure and if so, whether or not the employment was so minor in extent that a person would not normally follow it as a principal means of livelihood.
Therefore I set out, in seriatim, the relevant subsections of the regulations. Section 43(l), reads as follows:
"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...he shall be regarded as working a full working week. Secondly, where a claimant is employed as described in subsection (1) and the employment is so minor in extent and the person would not normally follow it as a principal means of livelihood, he shall, in respect of that employment, not be regarding as working a full working week."
In short this means that even though he is deemed to be working a full working week, he is still entitled to Unemployment Insurance benefits, if he has sufficient insurable weeks, if the employment is so minor in extent that a person would not normally follow it as a principal means of livelihood.
In Exhibit 1, the Commission wrote to the claimant that he could not receive benefits because he had not proven that he was unemployed. As a result he is considered to be working a full working week and payment of benefits was suspended from April 6, 1992. The Commission also wrote that he had knowingly made 14 false or misleading statements and in addition to the overpayment by the Commission in the amount of $14,861.00, being payments which the Commission has alleged that were not due to the claimant, a penalty was also levied of $5,712.00.
In its decision, the Board of Referees agreed with the Commission that he was not unemployed but allowed the appeal insofar as the penalty was concerned and expunged the penalty but, of course, the overpayment is, according to the Board of Referees, still due and payable and indeed nothing has been paid on that sum.
I now proceed to consider whether or not the claimant was unemployed.
The law is voluminous on this section of the Unemployment Insurance Act and the seminal decision is CUB 5454, Schwenk, a decision of Dubé, J. He identified the factors which should be considered in determining whether the self-employment in question was "so minor in extent that a person would not follow it as a principal means of livelihood" and thus whether the provisions of Section 43(2) have been satisfied. They are the following: a) the time spent; b) the capital and resources used; c) the financial success or failure of their enterprise; d) the continuity of the enterprise; e) the nature of the employment, is it the type of business that would normally occupy the claimant; and f) the willingness of the claimant to accept or seek other employment. As has been pointed out, "No one factor is conclusive, rather all the factors should be read together". See Simpson, J., Brent Hanson, CUB 24253.
However, as Strayer, J. writes in Sabiston #1 CUB 21531, not all those criteria have to be applied in any given case, if they are not particularly useful or relevant .
Both Ms. Prohl for the Commission and Mr. Fatt in person made submissions in extenso.
In dealing with the fact as cited by Dube, J. concerning the time spent, (a) the claimant indicated that he only spent three hours a day, mostly in the evenings and spent a great deal of his time trying to find other work; Mr. Prohl pointed out that from the Exhibits alone that he must have spent much more time than three hours a day in his business.
(b), the capital and resources used. The claimant apparently made a personal loan to the company of $10,000.00 and Exhibit 9-2 shows that his total investment was $11,850.00. The claimant's mother, father and uncle had invested a total of $10,682.50.
Ms. Prohl also pointed out that his investment in terms of summary of expenses, summary of sales, found in Exhibit 13 and Exhibit 14 showed that the company was by no means one in which the "minor in extent" label could be used. The extensive cheques shown in Exhibit 12-1 through 12-82 shows a substantial amount of commercial activity. In reply the claimant indicated that most of his sales went to friends and relatives.
(c), the financial success or failure of the enterprise, There is no doubt the enterprise was not a success but it is still limping along and has not gone into bankruptcy as yet.
(d), the continuity of the enterprise.See (c).
(e), the nature of the employment, is it the type of business that would normally occupy the claimant? The claimant advised the hearing that he graduated from the University of British Columbia with a degree in Commerce. Apparently he was employed prior to being laid off by Monsanto and was developing a new product for use in reforestation. I have the impression he is thoroughly knowledgeable of the marketing business and consequently this is the kind of enterprise that he would presumably be interested in. So, therefore, the answer to the question is "yes"; this is the kind of business that would normally occupy the claimant.
Finally, the willingness of the claimant to accept or seek other employment; the claimant points out that in Exhibit 15-1 he indicated that he was prepared to accept other employment as of the 3rd of November, 1992 and that he was still planning to apply for work elsewhere. He was asked the question "Would you keep the company going if you found work elsewhere?" to which he replied. "If it paid well enough I don't think I would have to." And finally he was asked the question, "Could you keep the company going and work elsewhere?" and he answered, "If it was a nine-to-five job, I could." which indicated once again that- lie looked upon this company as a part-time or evening venture.
The Board in its judgment made the following conclusion at Exhibit 31-2:
"The Board found that the amount of investment and preponderance of the mileage on his vehicle to be considerable given his claim of being unemployed."
It has been found in jurisprudence that if, generally, the factors in CUB 5454 were not considered, this constitutes error of fact amounting to an error in law. In the circumstances of this case the Board says:
"After due consideration of the Act and the CUBs put forth by both the Unemployment Insurance Commission and the claimant it finds, that although the business has not been profitable, it is, given all the factors, not so minor in extent as to render Mr. Fatt unemployed within the meaning of the Unemployment Insurance Act."
The claimant appealed under all heads of Section 80 but he particularly brought to my attention his complaint that he had not received natural justice and he set it forth in Exhibit 33-3 as well as orally before me. He complained that a person who was sympathetic to him at the Commission office was not allowed to be a witness in his case, and secondly he said that he wanted the opportunity to cross-examine him. And secondly he said that he was not given enough time by the Board of Referees.
I pointed out to him that the hearing before the Board was not as a Court of Law and that he was not entitled to call a witness and cross-examine him and secondly, that although his hearing before the Board was briefer than he wanted, due to the constrictions of time placed on all Boards of Referees, nevertheless he did have a lengthy hearing before me at this date at which he was able to expound his views in considerable detail and I feel that he is satisfied that the latter denial has been remedied.
I find that although he was working a full week according to Regulation 43, subsection (1)(a) that it was necessary, as I have indicated, to consider whether or not Regulation 43(2) governed and I find that there was sufficient evidence placed before the Board in all the circumstances of this case, that the Board properly came to the determination that this employment by him was not "so minor in extent that a person would not normally follow it as a principal means of livelihood".
As in so many cases which appear before Umpires, this is simply a case in which a claimant endeavours to obtain benefits from the Unemployment Insurance Commission in order to use such benefits as working capital to build up his business. I am certainly not saying that this was an ingenious stratagem concocted by the claimant so to do, but certainly this is what happened and unfortunately he finds himself saddled with a substantial overpayment as a result of his receiving these benefits improperly.
I have considerable sympathy for this personable, articulate young man but regrettably the law, the regulations and the jurisprudence inhibits him from receiving these benefits as he was not unemployed and his business was not so minor in extent that he would not, to use the words of the Act, "would not normally follow it as a principal means of livelihood."
In the result therefore the appeal is dismissed.
VANCOUVER, B.C.
May 27, 1994