Judgments

Decision Information

Decision Content

A-267-77
In re the Unemployment Insurance Act, 1971 and in re Judith S. Dick (Applicant)
Court of Appeal, Pratte and Heald JJ. and Smith D.J.—Winnipeg, October 18; Ottawa, November 21, 1977.
Judicial review — Unemployment insurance — Eligibility for benefits — Teacher on leave of absence for maternity reasons — Lump sum received pursuant to contract formula — Declared ineligible for July benefits — Contract deemed continuing and lump sum deemed salary paid for July, under Regulation 173(4) — Whether or not Umpire erred in holding contract not terminated — Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, s. 28 — Unemployment Insurance Act, 1971, S.C. 1970-71-72, c. 48, s. 21(2) — Unemployment Insurance Regulations, SOR/71-324, s. 173(4).
This section 28 application seeks to set aside an Umpire's decision that dismissed applicant's appeal from a Board of Referees and held her disentitled to benefits. The applicant, a teacher who took a leave of absence for maternity reasons in March 1976, received a lump sum adjustment to her final pay pursuant to a formula in her employment contract, and began to receive unemployment benefits shortly after. She was informed, however, that she was not entitled to benefits for July. It was argued that the contract was of a continuing nature and that the lump sum represented salary for July, pursuant to Regulation 173(4). The crucial question before the Umpire was whether or not the contract had terminated.
Held, the application is allowed and the matter is referred back for decision based on the facts. The Umpire's decision, that applicant's contract of employment had not been terminat ed, was based on the assumption that other umpires had established the principle. This assumption is wrong in law. Whether or not a "leave of absence" may or may not imply a termination of contract, and whether or not a teacher's employ ment contract is terminated on her taking maternity leave must be determined in light of all the circumstances of each case.
APPLICATION for judicial review. COUNSEL:
D. A. Booth for applicant.
S. M. Lyman for respondent.
SOLICITORS:
Gallagher & Co., Winnipeg, for applicant.
Deputy Attorney General of Canada for respondent.
The following are the reasons for judgment rendered in English by
PRATTE J.: This is a section 28 application to set aside a decision of an Umpire under Part V of the Unemployment Insurance Act, 1971'. By that decision, the Umpire dismissed the applicant's appeal from a decision of a Board of Referees and held that she was not entitled to the maternity benefits she had claimed for the month of July, 1976.
The facts which gave rise to the decision of the Board of Referees are summarized as follows in the Umpire's decision:
The claimant was employed as a teacher under contract with the Winnipeg School Division No. 1. Under the agreement dated May 5, 1970, she was to be paid a salary "at the rate of the schedule contained in the Winnipeg Division Association's Collective Agreement ... in twelve equal monthly pay ments ...." The agreement included the following proviso:
Provided that in the event of the Teacher withdrawing from the service of the Division during his year of service and
before completing such year, the final payment shall be so adjusted that the Teacher shall receive for the part of the year taught such fraction of the salary of the whole year as the number of days taught is to 200 days (which said 200 days is the total number of teaching days in a normal school year). In reckoning the days taught all legitimate sick leave shall be included.
On March 26, 1976, she filed a claim for benefit giving her reason for separation as pregnancy, stating that she was on "leave of absence" for maternity purposes, and that she intend ed to return to her employment in September 1977. She received from her employer a lump sum payment of $1,878.07 as an adjustment under the above reported proviso. Her salary was yearly $15,952.04, monthly $1,329.33 and weekly $306.77.
Her application for maternity benefits was duly received and processed and after the usual two week waiting period her benefit payment commenced April 11, 1976, and under subsec tion 30(2) of the Act would have run for fifteen weeks, or to July 24, 1976.
She was, however, informed on July 15, 1976, by the insur ance officer of the Commission that she was disentitled under subsection 21(2) of the Act in that "you have not proved that you were unemployed in that you received your usual remuner ation for the full working week and your contract of service continues". A Board of Referees was unanimous in maintaining the decision of the officer.
' S.C. 1970-71-72, c. 48.
Section 21(2) of the Unemployment Insurance Act, 1971 reads as follows:
21. ...
(2) A week during which a claimant's contract of service continues and in respect of which he receives or will receive his usual remuneration for a full working week, is not a week of unemployment, notwithstanding that the claimant may be excused from the performance of his normal duties or does not in fact have any duties to perform at that time.
The position of the Commission was that the applicant's contract of employment had not been terminated when she left her work on March 26, 1976, and that the sum of $1,878.07 that she had then received represented, in effect, her salary for the months of July and August. That was the view which was also adopted by the Board of Referees and by the Umpire who, after stating that the applicant's contract of employment had not been terminated, invoked Regulation 173(4) to justify the allocation of the $1,878.07 to the months of July and August, 1976. Regulation 173(4) reads as follows:
173. ...
(4) Wages or salary payable to a claimant under a contract of employment without the performance of services and monies payable in consideration of a claimant returning to or com mencing work with an employer shall be allocated to the period for which such wages, salary or monies, as the case may be, are payable.
The crucial question that the Umpire had to answer was whether or not the applicant's employ ment contract had come to an end on March 26, 1976. 2 If that question was resolved in the affirma tive, it followed that the $1,878.07 had been paid to the applicant "for the part of the year taught", pursuant to the provision of the contract of employment quoted by the Umpire in his decision, and could not have been allocated as if it had been paid as salary for the months of July and August. On the other hand, if the question was answered in the negative, it necessarily followed that the pay ment of the $1,878.07 would have been a payment in advance of salary for the summer months.
'Contrary to what certain passages of the Umpire's decision may seem to imply, that question must not be confused with the question whether the applicant had been separated from her employment so as to have had an "interruption of earnings" within the meaning of section 2(n). In my view, a separation from employment does not necessarily imply a termination of the contract of employment.
The Umpire, as I already said, stated that the applicant's contract of employment had not been terminated. As I read his decision, he made that statement because he assumed it to be established by decisions of other umpires that the teacher who takes a maternity leave does not, thereby, termi nate her contract of employment. This, in my view, is an assumption which is wrong in law. Whether or not a teacher's contract of employment is ter minated when she takes a maternity leave must be decided in the light of all the circumstances of each specific case. What is called a "leave of absence" may or may not imply a termination of the contract of employment. One cannot determine this question without having regard to all the circumstances, inter alia,
(a) the conditions of the contract of employ ment, including any relevant provisions of an applicable collective agreement;
(b) the length of the leave of absence in relation to the term of the employment contract;
(c) the conditions on which the leave of absence is granted to the employee. (Will the employee continue to derive benefits frqm the employment contract during the leave of absence? Has the employee the assurance of being reinstated at the end of the leave?)
I am therefore of the view that the decision of the Umpire should be set aside and that the matter should be referred back to him for decision on the basis that the question whether the applicant's contract of employment was terminated must be decided in the light of all the circumstances of this case as disclosed by the evidence already adduced as well as by any further evidence that, in the Umpire's discretion, might be adduced.
* * *
HEALD J.: I concur.
* * *
SMITH D.J.: I concur.
 You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.