CUB 46122
TRANSLATION
IN THE MATTER OF THE EMPLOYMENT INSURANCE ACT
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IN THE MATTER of a claim for benefits by
VIEL, Jocelyne
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IN THE MATTER of an appeal to an Umpire by the
claimant from a decision by the Board of Referees given
on January 15, 1999 in Rimouski, Quebec
CORRESPONDING FEDERAL COURT DECISION: A-725-99
DECISION
DUBÉ, UMPIRE
The claimant is appealing a majority decision by the Board of Referees on January 15, 1999, which upheld the Commission's decision to the effect that the claimant is considered self-employed and must, as a result, report any earnings she has received or will receive.
The claimant is part owner of a farm company and has a 20% interest therein. Her spouse and their son have 60% and 20% respectively. Every year since 1994, the claimant was hired by the company during peak periods on the farm and laid off at the beginning of the off season.
The claimant's employment was deemed insurable in 1994, and she received benefits at the time. In 1995, the Commission decided she could not collect benefits, as it felt that the claimant's shares in the farming company were bringing her continuous income. It was thus determined that there had been no interruption of earnings.
The claimant won her case before the Board and before umpire Denault who both ruled that there had been an interruption of earnings. The following paragraph from the decision of the learned judge describes the crux of this debate:
In short, I believe that, for the purposes of determining whether there had been an interruption of earnings, the income from the company in which the claimant had shares could not be taken into account 1. On the other hand, the Commission is justified in assigning to the claimant, if necessary, the percentage of gross income she is deriving from the operation from this dairy farm in proportion to the shares she has in this company as a self-employed worker in the farming sector to reduce or even cancel the benefits which would otherwise be payable to her.
[TRANSLATION]
As a result of this decision, the Commission concluded that the claimant had to report the earnings she received in order for her gross income to be allocated. Counsel for the claimant appealed the obiter dictum of Denault J. regarding the obligation to report her income as a self-employed worker after the interruption of earnings. The Federal Court of Appeal rejected the appeal, on the ground that an obiter dictum cannot constitute grounds for an appeal.
The main issue we must address here is whether the majority finding of the Board of Referees to the effect the claimant was an associate or had part interest in the business, pursuant to section 57(6)(b) of the Unemployment Insurance Regulations and section 35(10)(b) of the Employment Insurance Regulations. In cases where a claimant is self-employed in the farming sector, the income to be considered is 15% of the gross income. Section 35(10)(b) of the Employment Insurance Regulations reads as follows:
35.(10) For the purposes of paragraph (2), "income" includes
[...]
(b) in the case of a claimant who is self-employed in farming, 15 per cent of the claimant's gross income from ...
At the hearing of this case in Quebec on Friday, August 6, 1999, counsel for the claimant maintained that she could not be considered self-employed as defined in the aforementioned section. In support of his claims, counsel presented a comprehensive analysis of the Act, Regulations and jurisprudence in the matter.
In Denise Caron Bernier, A-136-96, Justice Marceau of the Federal Court of Appeal reviewed the situation of a claimant who, after losing her employment, was self-employed and no longer considered unemployed. From the outset, she will not be entitled to any benefits as per section 43(1) of the Regulations. When the claimant is self-employed or engaged in partnership or a co-adventure, she is considered to be working a full working week. In section 57(1), employment is any self-employment whether on the claimant's own account or in partnership or co-adventure. Section 57(6) states that, in the case of a claimant who is self-employed in farming, only 15 per cent of that farmer's gross income. The judge cited the following in his decision:
Over time, as the result of certain "constants" that have emerged from the decisions of umpires, the application of these provisions has become more consistent and less uncertain. First, the legal status of the operation or business in which the self-employed person works is irrelevant. Second, the relative amount of time spent on the operation or business is irrelevant. Third, actually receiving income from the operation or business is unnecessary, as the mere right to receive such income is sufficient. These constants were of course influenced by this Court's only decision (as far as I know) on the subject, Laforest v. C.E.I.C. et al, file No. A-296-86, rendered on February 2, 1988 (CUB 12019), but I believe that they came to the fore primarily due to what was perceived as Parliament's intention to include all income directly or indirectly related to work, as opposed to pure investment income. The umpires undoubtedly thought, which is understandable, that any work, however slight, for the business, whether incorporated or not, remained at root, at least in part, income arising out of it.
Marceau J. applied his analysis of the jurisprudence in the case of claimant Denise Caron Bernier who had submitted a claim for benefits shortly after becoming unemployed. She submitted two claims for benefit, one of which came from La Ferme Duregard Inc., in which she had 40% interest (her husband had the other 60%). She lived on the farm and continued to provide services to the business. Shortly afterward, the Commission informed her, under sections 57 and 58 of the Unemployment Insurance Regulations, that the income of La Ferme Duregard Inc. constituted earnings for benefits purposes and consequently had to be declared. Based on the principles which had already been established, the judge ruled in favour of the Commission.
Counsel for the claimant presented a brilliant and eloquent plea and invited me indirectly not to follow this Federal Court of Appeal decision, or at least pronounce an obiter dictum strong to the point that it would illuminate the Court of Appeal and would break new ground. Though this invitation was compelling, I cannot accept it for two reasons. First of all, my obiter dictum would have the same fate as the one pronounced by Denault J. in this case. Secondly, I completely agree with the Federal Court of Appeal and I have even handed down a judgment to this effect three years earlier, to wit, in 1994, in Raymonde Lepage (CUB 25111).
Consequently, I must deny this appeal.
J.E. DUBÉ
UMPIRE
OTTAWA, Ontario
September 13, 1999