A-261-86
Frank Vennari, Dino Moscone et al. (Applicants)
v.
Canada Employment and Immigration Commis
sion and Attorney General of Canada (Respon-
dents)
INDEXED AS: VENNARI V. CANADA (CANADA EMPLOYMENT
AND IMMIGRATION COMMISSION)
Court of Appeal, Thurlow C.J., Heald and Stone
JJ.—Toronto, January 28; Ottawa, March 4,
1987.
Unemployment insurance — Collective agreement providing
for Vacation Pay Trust Fund to which employer contributing
percentage of employee's wages — Amount paid out of Trust
Fund to applicant while unemployed — Appeal from Umpire's
decision payment "earnings" and allocated as such — Appeal
allowed — Amount "savings" when paid into Trust Fund —
Bryden v. Canada Employment and Immigration Commission,
119821 1 S.C.R. 443 applied — Payment within exemption
from earnings provided for in s. 57(3)(h) of Regulations —
Unemployment Insurance Act, 1971, S.C. 1970-71-72, c. 48,
ss. 26(2), 29(4), 30(5) (as am. by S.C. 1974-75-76, c. 66, s. 22),
58(q) — Unemployment Insurance Regulations, C.R.C., c.
1576, ss. 57(1),(2) (as am. by SOR/78-233, s. 1; SOR/84-32, s.
8), (3)(h) (rep. and sub. by SOR/85-288, s. 1), 58(1),(14) (as
am. by SOR/85-288, s. 2) — Federal Court Act, R.S.C. 1970
(2nd Supp.), c. 10, s. 28 — Canadian Charter of Rights and
Freedoms, being Part 1 of the Constitution Act, 1982, Schedule
B, Canada Act 1982, 1982, c. 11 (U.K.), s. 15.
The applicant's collective agreement provided for a Vacation
and Statutory Holiday Pay Trust Fund to which the employer
contributed a percentage of the employee's wages less income
tax and unemployment insurance premiums. The Fund paid out
accumulated vacation and statutory holiday pay twice a year
but could make payments at irregular intervals. The applicant
was laid off on November 9, 1984. While unemployed he
received a payment from the Trust Fund. The Commission
ruled that payment to be "earnings" and allocated it as such
pursuant to section 28 of the Regulations. The Board of
Referees and the Umpire upheld that decision. The Umpire
ruled that the payment fell outside the exemption from earn
ings provided for in paragraph 57(3)(h) of the Unemployment
Insurance Regulations on the ground that the money did not
become payable to the applicant pursuant to a collective agree
ment "in respect of his severance from employment" but
became payable pursuant to the date established under the
collective agreement. This is an application to set aside the
Umpire's decision.
Held, the application should be allowed.
Per Stone J.: The payment at issue was not received as
"earnings" but as savings. This view is supported by the
Supreme Court of Canada decision in Bryden v. Canada
Employment and Immigration Commission which dealt with
payments received by a claimant during an unemployment
period from a similar trust fund. "The trust monies so
accumulated in the hands of trustees", it was said, "represented
savings made by the appellant." The fact that the moneys are
paid by the employer to the trustees does not change their
character as savings when finally paid over by the trustees.
They are income and thus earnings when paid by the employer
to the trustees. From that moment on they are no longer
income or earnings but savings.
The application also succeeds on the ground that the pay
ment falls within the exemption from earnings under paragraph
57(3)(h) of the Regulations. The words "any moneys that
become payable to an employee pursuant to that agreement or
policy in respect of his severance from employment" which
appear in the said paragraph may be read as extending either to
moneys which become payable "to an employee pursuant to" a
labour-management agreement or, alternatively, to moneys
which become payable pursuant to an employer's written policy
"in respect of his severance from employment". In the present
case, the money became payable pursuant to the collective
agreement. The drafting of paragraph 57(3)(h) raised some
difficulty of interpretation which could be resolved, if neces
sary, by the application of the principle propounded by Wilson
J. in Abrahams v. Attorney General of Canada to the effect
that "any doubt arising from the difficulties of the language
should be resolved in favour of the claimant".
Per Thurlow C.J.: Regulation 57 defines the word "earnings"
by reference inter alia to the claimant's income arising out of
any employment. Under subsections 26(2), 29(4) and 30(5) of
the Act, earnings are to be deducted if they are earnings "for"
or "in respect of any time that falls in a week of unemploy
ment". Whatever "earnings" is taken to mean it is to be
qualified by those words. The question is whether the amount
received by the applicant was income or earnings for or in
respect of the week of unemployment in which he received it
from the trustee or was an accumulation of savings from
income or earnings for or in respect of the weeks of employ
ment when he earned it. The Supreme Court decision in Bryden
supports the view that the applicant's beneficial interest and
ultimate entitlement to the payment arose when it was earned
and paid to the trustee. In no relevant sense can this payment
be seen as income or earnings for or in respect of the week
when the applicant received it from the trustee.
CASES JUDICIALLY CONSIDERED
APPLIED:
Bryden v. Canada Employment and Immigration Com
mission, [1982] 1 S.C.R. 443; reversing [1981] 2 F.C. 91
(C.A.).
CONSIDERED:
Abrahams v. Attorney General of Canada, [1983] 1
S.C.R. 2.
COUNSEL:
Raymond Koskie, Q.C. and Murray Gold for
applicants.
Urszula Kaczmarczyk for respondents.
Harold F. Caley for John Douglas and Ernie
Desrosiers.
SOLICITORS:
Koskie & Minsky, Toronto, for applicants.
Deputy Attorney General of Canada for
respondents.
Caley & Wray, Toronto, for John Douglas
and Ernie Desrosiers.
The following are the reasons for judgment
rendered in English by
THURLOW C.J.: The material facts and the
relevant statutory provisions are set out in the
reasons for judgment prepared by Mr. Justice
Stone. I agree with his reasons and with his con
clusion. There is, however, in my view, an addi
tional or alternative route that leads to the same
conclusion.
Subsection 26(2) of the Act [Unemployment
Insurance Act, 1971, S.C. 1970-71-72, c. 48],
which requires a deduction to be made from ben
efits otherwise payable, applies "if a claimant has
earnings in respect of any time that falls in a week
of unemployment". Neither "earnings" nor what is
meant by "in respect of any time" are further
defined in the Act. But whatever "earnings" as a
word is to be taken to mean it is to be qualified by
the words "in respect of any time that falls in a
week of unemployment".
Paragraph 58(q) authorizes the Commission,
with the approval of the Governor in Council, to
make regulations "defining and determining earn
ings for benefit purposes, determining the amount
of such earnings" and "providing for the allocation
of such earnings to weeks". But that does not
appear to me to authorize a regulation defining the
qualification for deduction of "earnings" which is
imposed by the words "in respect of any time that
falls in a week of unemployment".
Similar and related provisions with respect to
particular deductions are found in subsections
29(4) and 30(5) of the Act. Subsection 29(4)
applies "if earnings are received by a claimant for
any period in a week of unemployment". Subsec
tion 30(5) [as am. by S.C. 1974-75-76, c. 66, s.
22] applies "if ... earnings are received by that
claimant for any period that falls in a week in the
period described in subsection (2)". Both of these
provisions, in referring to earnings "for" a period,
appear to me to be referring to the same thing as
subsection 26(2) refers to as earnings "in respect
of" a time that falls in a week of unemployment.
None of the three authorizes a "deduction in
respect of earnings" that are not "earnings for a
time in a week of unemployment".
The Regulations [Unemployment Insurance
Regulations, C.R.C., c. 1576], numbered 57 and
58, made pursuant to the authority of paragraph
58(q) of the Act, begin with a definition of
"income" and go on to define the "earnings to be
taken into account for the purpose of determining
... the amount to be deducted from benefits pay
able under section 26 or subsection 29(4), 30(5)"
[subsection 57(2) (as am. by SOR/84-32, s. 8)].
They do so by reference inter alia to the claimant's
income "arising out of any employment". In inter
preting these Regulations it is well to bear in mind
that it is "earnings" rather than "income" that
may be defined by regulation and that while Regu
lation 57(1) defines "income" by reference to its
scope the nature of what is therein referred to as
"income" is not defined. The word thus must be
given its ordinary meaning in a context dealing
with the receipts of a claimant from his
employment.
Under Regulation 57(2) the "earnings" to be
taken into account are:
(a) the entire income of a claimant arising out
of any employment;
(b) temporary partial workmen's compensation;
(c) payments under a sickness or disability
indemnity plan [SOR/84-32, s. 8];
(d) amounts a claimant is entitled to receive
from motor vehicle accident insurance in respect
of actual or presumed loss of income from
employment [SOR/78-233, s. 1].
In none of these paragraphs is there any men
tion of the time period "in respect of" which the
income or payments arise. But their deductibility
from benefits is nevertheless subject to the limita
tion to income or payments "for" or "in respect
of' "time that falls in a week of unemployment"
because any extension of the deduction beyond
that would expand it beyond the limitations con
tained in subsections 26(2), 29(4) and 30(5) of the
Act.
In relation to the facts of this case, the question
thus becomes whether the amount received by
each of the applicants from the trustee of the fund
was income of his "in respect of' the week of
unemployment in which he received it from the
trustee or was an accumulation of savings from
income "in respect of' the weeks of employment
when he earned it and when it was paid by his
employer to the trustee.
In my opinion in each case the amount was part
of the applicant's income and thus of his earnings
for or "in respect of' the weeks of employment
when he earned it. His beneficial interest and
ultimate entitlement to it arose when it was earned
and paid to the trustee. In no relevant sense was it
income for or "in respect of' the week or time
when he received it from the trustee. Nor was it
"earnings" for or "in respect of' that time.
Support for this view is, I think, to be drawn
from the judgment of the Supreme Court in
Bryden v. Canada Employment and Immigration
Commission' where Ritchie J., speaking for the
Court, said:
In my opinion, when the 9 percent of the employee's wages
was paid to the trustees by the employer, it gave rise to a
beneficial interest in the employee and this payment, having
been made after deduction of income tax and unemployment
insurance premiums, became subject to the terms of the trust
' [1982] 1 S.C.R. 443, at pp. 449-450.
requiring disbursement by the trustees on two fixed dates in the
year and also payment to the employee on an irregular basis if
he so demanded. In my opinion it is these circumstances which
disclose that the appellant had a beneficial interest in these
monies capable of being converted into a real interest. The trust
monies so accumulated in the hands of the trustees represented
savings made by the appellant.
While the issue determined in that case was the
much narrower one of whether a like amount was
savings or vacation pay, the portion of the judg
ment I have cited appears to me to apply equally
well to the issue whether the amount was income
"in respect or' the time when it was paid out by
the trustee or savings from income of the weeks
when it was earned.
I would dispose of the matter as proposed by
Mr. Justice Stone.
* * *
The following are the reasons for judgment
rendered in English by
STONE J.: On November 9, 1984 the applicant
Vennari (the "applicant") was laid off as a result
of work shortage at his place of employment. He is
a member of the Labourers' International Union
of North America, Local 1089. He filed an
application for unemployment benefits with the
Canada Employment and Immigration Commis
sion on January 6, 1985. This application is repre
sentative in nature in that it is brought by the
applicant on his own behalf and on behalf of the
other named applicants to review and set aside the
decision of an Umpire pursuant to section 28 of
the Federal Court Act [R.S.C. 1970 (2nd Supp.),
c. 10].
The applicant's employment was subject to the
terms and conditions of a collective agreement
binding upon Local 1089 and his former employer
and effective from May 1, 1984 to April 30, 1986.
That agreement provided for the administration of
certain trust funds including the Vacation Pay and
Statutory Holiday Pay Trust Fund (the "Trust
Fund"). It was established pursuant to a Vacations
with Pay Trust Fund Application entered into
between Local 1089 and the Sarnia Contractors
Association. That Application was approved by the
Director of Employment Standards for the Prov
ince of Ontario. Pursuant to these arrangements
each employer affected, including the applicant's
former employer, contributed 8% of wages (being
4% for vacation pay and 4% for statutory holiday
pay) less income tax and unemployment insurance
premiums to the Administrator of the Trust Fund.
These moneys were remitted in the month follow
ing the month in which the wages were earned.
The learned Umpire found as a fact that the
Trust Fund regularly paid out accumulated vaca
tion pay and statutory holiday pay twice yearly but
could make payments at irregular intervals in cer
tain circumstances. The applicant received a regu
lar payment by cheque dated May 15, 1985 for
$656.71 from the Trust Fund while he was unem
ployed. The Commission determined it to be
"earnings" and on May 30, 1985 allocated it as
such in respect of the following weeks: May 12,
1985—$618; May 19, 1985—$38.10. An appeal to
a Board of Referees was rejected by a majority
thereof which ruled the amount to be earnings
even while finding that it "was earned by the
appellant prior to November 9, 1984". The dis
senting member expressed the view that the pay
ment was for a period of employment and not for a
period of unemployment.
Subsection 26(2) of the Unemployment Insur
ance Act, 1971, S.C. 1970-71-72, c. 48, as amend
ed provides:
26....
(2) If a claimant has earnings in respect of any time that
falls in a week of unemployment, that is not in his waiting
period, the amount of such earnings that is in excess of an
amount equal to twenty-five per cent of the claimant's weekly
benefit rate shall be deducted from the benefit payable to the
claimant in that week.
The term "earnings" is not defined in the Act. By
paragraph 58(q) thereof the Commission, with the
approval of the Governor in Council, is empowered
to make regulations:
58. ...
(q) defining and determining earnings for benefit purposes,
determining the amount of such earnings, providing for the
allocation of such earnings to weeks and determining the
average weekly insurable earnings in the qualifying weeks of
claimants;
To this end, section 57 of the Unemployment
Insurance Regulations was adopted for the deter
mination of earnings while section 58 of those
Regulations was adopted for the purposes of their
allocation. The definition of "income" in subsec
tion 57(1) and certain provisions of subsections
57(2) and (3) come into play in this case. That
definition and the provisions of paragraph
57(2)(a) read:
57.(1) In this section,
"income" means any pecuniary or non-pecuniary income that is
or will be received by a claimant from an employer or any
other person;
(2) Subject to this section, the earnings to be taken into
account for the purpose of determining whether an interruption
of earnings has occurred and the amount to be deducted from
benefits payable under section 26 or subsection 29(4), 30(5) or
32(3) of the Act and for all other purposes related to the
payment of benefit under Part II of the Act are
(a) the entire income of a claimant arising out of any
employment;
Paragraph 57(3)(h) of the Regulations was
revoked effective March 31, 1985 [SOR/85-288,
s. 1] and the following was substituted therefor:
57....
(3) That portion of the income of a claimant that is derived
from any of the following sources is not earnings for the
purposes mentioned in subsection (2):
(h) subject to subsection (3.1), where
(i) the effective date of commencement of a formal
labour-management agreement made specifically in
respect of a plant closure or a workforce reduction or the
effective date of commencement of a collective agreement
is prior to December 31, 1984, or
(ii) the content of an employer's written policy respecting
moneys payable on severance of employment is established
by documents that show that such policy actually existed
prior to December 31, 1984,
any moneys that become payable to an employee pursuant to
that agreement or policy in respect of his severance from
employment, including severance pay, vacation pay, wages in
lieu of notice and moneys payable in respect of other
accumulated credits, during the period beginning on March
31, 1985 and ending on the earlier of March 26, 1988 and
the originally established expiry date of the agreement or
policy; ...
Subsection 58(1) has been a feature of the
Regulations for some years. It read:
58.(1) The earnings of a claimant as determined under
section 57 shall be allocated to weeks in the manner described
in this section and for the purposes mentioned in subsection
57(2) shall be the earnings of the claimant for those weeks.
Subsection 58(14) of the amended Regulations,
also effective March 31, 1985 [SOR/85-288, s. 2],
provides for the allocation of vacation pay in cer
tain circumstances. It reads:
58....
(14) Where vacation pay is paid into a trust, moneys paid or
payable to a claimant pursuant to that trust shall be allocated
to such number of consecutive weeks
(a) where the moneys are paid in respect of a specific period,
beginning with the first week and ending with the last week
of that period, and
(b) in any other case, beginning with the week in which the
moneys are paid or payable,
as will ensure that the claimant's earnings in each of those
weeks, except the last, are equal to the weekly rate of his
normal earnings from his employer.
In upholding the majority of the Board of
Referees, the Umpire stated at pages 5-7 of his
decision (Case, Vol. 6, at pages 634-636):
However, paragraph 57(3)(h) has a different approach, and is
not dependent on "a benefit period beginning prior to March
31, 1985". Where there is a labour-management agreement,
existing prior to December 31, 1984, and monies are paid out
as severance pay or vacation pay pursuant to that agreement, in
respect of one's severance from employment, and the severance
pay or vacation pay is paid during the period March 31, 1985
and ending on the earlier of March 26, 1988 and the originally
established expiry date of the agreement — then it is not
earnings.
Unhappily for the claimant here, the Regulation leaves little
room for doubt that the money paid to him from the trust fund
pursuant to the collective bargaining agreement is earnings.
The money (vacation pay) was paid out pursuant to a collective
agreement whose commencement date was prior to December
31, 1984. He filed his claim prior to March 31, 1985 but that
has no bearing here according to the Regulation. The monies
did not become payable to him pursuant to that agreement in
respect of his severance from employment, but became payable
to him pursuant to the date established under the collective
bargaining agreement. I believe that, had the claimant request
ed the money in November 1984 when he was laid off, it could
be fairly argued that the money becomes payable to him in
respect of his severance from employment. The claimant did
not exercise that option, but rather chose to wait until the date
provided for in the agreement. To me it seems unfair that he is
not entitled, given the fact that in every other instance the
governing phrase is "if benefit period is prior to March 31,
1985".
Having determined that Regulation 57(3)(h) defines the pay
ment as earnings, it is appropriate that they be allocated
pursuant to Regulation 58. Counsel for the claimant argued
that the wording leaves it open to a wider interpretation than I
am giving it here. He maintained that because the wording says
"became payable" and not just "payable", when the funds were
deposited in the trust fund they "became payable" in the event
of his severance from employment. The wording of the section
talks about any monies that became payable in respect of his
severance from employment which seems quite specific—
namely, monies must be payable "in respect of" and not "in the
event of".
It is further alleged by counsel for the claimant that "it is
incorrect to read section 57(3)(h) so narrowly as to exempt any
vacation pay paid directly by an employer on severance from
employment but not vacation pay paid out of a trust fund, as is
suggested by the Commission". It may very well "be" or
"seems" unfair but it is hardly "incorrect" because that's what
the Regulation says. In this way then, the Commission by
amending Regulation 57(3)(h) seems to have "defined and
determined" that monies paid into a trust fund are now earn
ings and not savings as determined by the Supreme Court of
Canada in the case of Robert Bryden v. Canada Employment
and Immigration Commission, (1982) 41 N.R. 480.
Regulation 57, in response to the above decision, has zeroed in
on the collective agreement and the net effect is to focus on the
payments pursuant to the collective agreement in respect of
severance from employment. Unless the payment fits that
mould it is earnings.
Regulation 58, on the other hand, which is really the section
dealing with allocation, purports in subsection 58(14) to define
and allocate vis-Ã -vis trust funds. It makes the assumption that
"where vacation pay is paid into a trust" it is earnings, because
there follows immediately how the monies are to be allocated.
It's a most confusing piece of drafting for a Regulation.
Examination of the headings over Regulations 57 and 58 read
respectively:
57 — "Determination of Earnings for Benefit Purposes"
58 — "Allocation of Earnings for Benefit Purposes"
and then Regulation 58(1) reads in part, "the earnings of a
claimant as determined under Section 57 shall be allocated..."
(underlining is mine).
And later, at pages 10-11 (Case, Vol. 6, at pages
639-640), he continued:
The Supreme Court of Canada having made this decision, the
Commission then moved to change the Regulations in the
expectation that the amendments would make these "savings"
earnings. Naturally enough, the Commission argues that the
Bryden case (supra) was decided before the recent amendments
and therefore is not applicable.
The claimant's position is:
No changes have been made to the Regulations which in any
way include payments of accumulated savings out of a
vacation pay trust fund to an employee as earnings under
Section 57 of the Regulations under the Act. Although
Regulation 58(14) has recently been amended to attempt to
allocate payments from a vacation pay trust fund to weeks of
unemployment, there can be no allocation under Section 58,
where monies do not qualify as earnings under Section 57.
(Underlining is mine)
It is quite correct that Regulation 57 determines what qualifies
as earnings, under the authority of subsection 58(q) of the Act.
As indicated earlier, Regulation 58 concerns itself solely with
allocation of earnings. Nothing could be clearer. However the
wording of Regulation 57(3)(h) does define earnings as money
paid pursuant to a collective bargaining agreement (unless paid
in respect of severance from employment). For that reason, as
stated earlier, the monies as earnings can be allocated pursuant
to Regulation 58(14).
The first point taken by the applicant is that the
learned Umpire erred in finding that the May
1985 payment is to be allocated as "earnings"
under section 58 of the amended Regulations. He
argues that only amounts determined to be "earn-
ings" pursuant to section 57 of the same Regula
tions may be so allocated and then only if included
under subsection 57(2) and not exempted under
paragraph 57(3)(h). He further argues that the
payment does not fall under section 57 in any
event because it represented savings of the appli
cant at the time of its receipt from the Trust Fund.
The decision of the Supreme Court of Canada
Bryden v. Canada Employment and Immigration
Commission, [1982] 1 S.C.R. 443 is cited by the
applicant in support of his position. It dealt with
payments received by a claimant in a week of
unemployment from a similar sort of trust fund to
which the employer, during periods of employ
ment, had contributed vacation pay after deduc
tion of income tax and unemployment insurance
premiums. The question was whether the pay
ments had to be allocated under the predecessor of
subsection 58(16) of the Regulations as "vacation
pay". The Supreme Court held the payments were
"savings" and as such were not to be so allocated.
Ritchie J., on behalf of the Court, stated at pages
449-450:
In my opinion, when the 9 percent of the employee's wages
was paid to the trustees by the employer, it gave rise to a
beneficial interest in the employee and this payment, having
been made after deduction of income tax and unemployment
insurance premiums, became subject to the terms of the trust
requiring disbursement by the trustees on two fixed dates in the
year and also payment to the employee on an irregular basis if
he so demanded. In my opinion it is these circumstances which
disclose that the appellant had a beneficial interest in these
monies capable of being converted into a real interest. The trust
monies so accumulated in the hands of the trustees represented
savings made by the appellant. In reaching the conclusion that
the fund was not made up of vacation pay, I am in agreement
with the reasons for the decision reached by the Board of
Referees to which I have already referred and I would adopt
that portion of those reasons where it is stated that: "... the 9%
designated as vacation pay was actually a direct savings by the
employees which was paid into a trust fund distributed to each
employee twice a year."
The respondent seeks to distinguish that case on
at least two grounds. First, it is said that the facts
there differed in that the case was not concerned
with the broad question of whether the payments
were "earnings" under the predecessor of section
57 of the Regulations but, rather, with whether
they had retained their character as "vacation
pay" so as to be allocated under the predecessor of
subsection 58(16) of those Regulations. Second, it
is argued that the case actually supports the
respondent's claim that the payment here in ques
tion is "earnings" because, at page 450 of the
report, the Supreme Court restored the decision of
the Board of Referees allocating the payments as
"earnings" under the predecessor of subsection
58(18). In any event, the respondent argues that
the payment falls within the definition of
"income" found in subsection 57(1) and thus is
"earnings" within paragraph 57(2)(a). According
ly, it contends the payment was properly allocated
pursuant to subsection 58(14) thereof, not being
exempt under paragraph 57(3)(h).
Subsections 57(1) and (2) are couched in broad
language. That is especially the case with respect
to the definition of "income" and its application to
"the entire income of a claimant arising out of any
employment". At the same time, I have difficulty
in seeing how the payment, though received in a
week of unemployment, may properly be regarded
as "income" and, therefore, "earnings" under sec
tion 57. Had it retained its character as "income"
throughout, it would have been received by the
applicant as "earnings" and, unless exempted,
would be properly allocated. I do not think that is
the case.
I am not persuaded that the point in issue has
been settled by the Supreme Court of Canada in
the Bryden case. The question whether the pay
ments were "earnings" appears not to have square
ly arisen. I say this despite the fact that the
predecessor of paragraph 57(2)(a) was recited and
that in disposing of the appeal the Supreme Court
restored the decision of the Board of Referees. The
Court seems merely to have accepted allocation of
the payments under the predecessor of subsection
58(18) and to have done so without actually decid
ing that they were "earnings" under the predeces
sor of paragraph 57(2)(a). An explanation may lie
in the fact that, as was noted by Ryan J. in the
judgment there under appeal, the claimant's
"benefits would not have been reduced" by alloca
tion under that subsection (Bryden v. Canada
Employment and Immigration Commission,
[1981] 2 F.C. 91, at page 92). In the present case,
however, the applicability of paragraph 57(2)(a) is
directly raised.
In my opinion, the recited reasoning of the
Supreme Court of Canada in the Bryden case
supports the view that the employer's contributions
lost their character as "income" under paragraph
57(2)(a) upon being paid into the Trust Fund and,
accordingly, that the payment of May 15, 1985
was not received as "earnings" or as "income" but
as savings. I offer the following examples to illus
trate the logic of this view. Suppose the applicant
had drawn the same sum of money from a bank
account consisting entirely of moneys earned while
employed. Would he have received "income"? I
think not. He would have drawn upon his savings.
Take another example. Suppose, instead, the appli
cant had put the moneys into a term deposit and
received the capital proceeds during a week of
unemployment. Would he have received
"income"? Surely not. He would have received
savings. That the moneys are paid by an employer
to the trustees for an employee rather than to the
employee himself, would not alter their true char
acter as savings when finally paid over by the
trustees. They were income and thus earnings
when paid by the employer to the trustees. From
that moment on they were no longer income or
earnings but savings. With respect, I think the
learned Umpire erred in finding that the payment
of May 15, 1985 is to be allocated as "earnings"
under subsection 58(14) of the amended Regula
tions. That could only be done if the payment had
been determined to be «earnings» under section 57
and that did not occur. I cannot see how the
exempting language of paragraph 57(3)(h) can be
interpreted so as to bring the payment into "earn-
ings". Express language of inclusion would be
required and such language is absent in this case.
If I am not correct in the above analysis and the
payment is to be regarded as "earnings" within
subsection 57(2), I think the application should
still succeed. I say so because, in my view, the
payment is exempt from earnings under paragraph
57(3)(h) and, hence, cannot be allocated under
section 58 of the amended Regulations. With
respect, I cannot accept the construction placed
upon the relevant exempting words of that para
graph by the learned Umpire. He was of the view
that the exemption was not available because the
paragraph required that, to be exempt, the moneys
become payable pursuant to a labour-management
agreement "in respect of his severance from
employment". Such a requirement could not be
satisfied. Having regard to the two categories
established by subparagraphs 57(3)(h)(i) and (ii)
and the overall arrangement of the subsection, I
think the words
... any moneys that become payable to an employee pursuant
to that agreement or policy in respect of his severance from
employment...
may reasonably be read as extending either to
moneys which become payable "to an employee
pursuant to" a labour-management agreement or,
alternatively, to moneys which become payable
pursuant to an employer's written policy "in
respect of his severance from employment". In this
case, as the May 15, 1985 payment did become
payable to the applicant pursuant to the collective
agreement whose effective date of commencement
is prior to December 31, 1984, it falls within the
exemption.
I agree that the drafting style employed in
paragraph 57(3)(h) leaves some difficulty of inter
pretation and, consequently, lends some force to
the respondent's argument that the words "in
respect of his severance from employment" are to
be read as referable either to moneys paid pursu
ant to a labour-management agreement or to an
employer's written policy. If it were necessary to
do so, I should apply the principle of interpretation
of the Act propounded by Wilson J. in Abrahams
v. Attorney General of Canada, [1983] 1 S.C.R. 2,
at page 10 where, speaking for the Court, she said:
Since the overall purpose of the Act is to make benefits
available to the unemployed, I would favour a liberal interpre
tation of the re-entitlement provisions. I think any doubt arising
from the difficulties of the language should be resolved in
favour of the claimant.
In view of the interpretation I place on para
graph 57(3)(h) of the Regulations, it is not neces
sary to deal with the applicant's alternative argu
ment that that paragraph should have no force or
effect because it violates the equality rights en
shrined in section 15 of the Canadian Charter of
Rights and Freedoms [being Part I of the Consti
tution Act, 1982, Schedule B, Canada Act 1982,
1982, c. 11 (U.K.)].
In the result, I would allow this application, set
aside the decision of the Umpire and refer the
matter back to him for reconsideration and rede-
termination on the basis that the payments in issue
received by the applicants from the Labourers'
Local 1089 Vacation Pay and Statutory Holiday
Pay Trust Fund in 1985 are not to be allocated as
"earnings" under section 58 of the Unemployment
Insurance Regulations.
HEALD J.: I agree.
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.