A-327-86
Marc-Andre Belanger (Appellant)
v.
Minister of National Revenue (Respondent)
and
Jean-Hugues Bélanger (Intervenor)
INDEXED As: BELANGER V. M.N.R.
Court of Appeal, Pratte, Marceau and Hugessen
JJ.—Québec, March 18; Ottawa, March 26, 1987.
Unemployment insurance — Insurable employment —
Meaning of "excepted employment" in s. 3(2)(b) of Act —
Application to set aside Tax Court decision holding appli
cant's employment excepted under s. 3(2)(b) — Applicant
farmer periodically employed as lumberjack by agronomist
brother — Application allowed — Tax Court erred in holding
"employment of casual nature" referring to employer's work
— Employment must meet two conditions in s. 3(2)(b) —
Nature of employment not determined by reference to either
employer or employee but by meaning both contracting parties
give to contractual relationship — Necessary to consider all
surrounding circumstances — Unemployment Insurance Act,
1971, S.C. 1970-71-72, c. 48, ss. 2 (as am. by S.C. 1976-77, c.
54, s. 26), 3(2)(b) — Federal Court Act, R.S.C. 1970 (2nd
Supp.), c. 10, s. 28.
This is an applicatioh to set aside a decision of the Tax Court
of Canada, holding that the applicant's employment was
excepted from insurable employment under paragraph 3(2)(b)
of the Act. The applicant is a farmer, but also an experienced
lumberjack. His brother, an agronomist, owns a woodlot, which
he bought for eventual resale. The applicant was employed by
his brother, two years in succession from March to October and
from August to October, to clean and cut wood. The Tax Court
held that "employment of a casual nature" refers to the
employer's, and not the employee's, work. Since the employer
was an agronomist by trade, the applicant's employment was
held to be of a casual nature other than for the purpose of the
employer's trade.
Held, the application should be allowed.
Paragraph 3(2)(b) has two parts. To be excepted, the
employment must be "casual" and be "other than for the
purpose of the employer's trade or business." The exception is
stated first, followed by the qualification to the exception. It is
the employment which must meet the two conditions stated.
The definition of employment does not refer to the occupation
or trade or the purpose of the work. Casual employment within
the meaning of paragraph 3(2)(b) can only be employment
which exhibits no continuity, regularity or periodic recurrence,
and that employment may be casual even though the services
rendered are connected with the employee's trade (it is not the
occupation which is in question), and may not be casual even
though it is unconnected with the employer's professional activ
ity or business (the two conditions stand independently of each
other).
What is involved is employment, which results from a con
tractual relationship between two parties. The nature of the
employment should not be determined by reference to one of
the two parties only, but by the meaning which the two
contracting parties give to their contractual relationship. All
the circumstances surrounding the establishment, continuation
and termination of the contractual relationship must be con
sidered. In the event of a misunderstanding, the employee's
impression should prevail, provided it is based on objective
evidence. The most telling evidence will be from the employer
and his present and future needs, since it is the employer who
created the employment and only he can define it.
CASES JUDICIALLY CONSIDERED
CONSIDERED:
Aspirot et al. v. Minister of National Revenue, U.I. 25
A-H (NR 324) (P.A.B.); Minister of National Revenue
v. Gagné, U.I. 35 F (NR 356) (P.A.B.).
REFERRED TO:
Minister of National Revenue v. Poirier et al., U.I. 27-29
(NR 352) (P.A.B.); Gauthier v. Minister of National
Revenue, U.I. 31 (NR 378) (P.A.B.); Minister of Na
tional Revenue v. Safer et al., U.I. 39-40 (NR 462)
(P.A.B.); Minister of National Revenue v. Ouellet, U.I.
45C (NR 496) (P.A.B.).
COUNSEL:
Louis Robillard for appellant.
Pierre Cossette for respondent.
SOLICITORS:
Lebel, Pelletier, Rioux, Bossé & Associés,
Rivière -du-Loup, for appellant.
Deputy Attorney General of Canada for
respondent.
The following is the English version of the
reasons for judgment rendered by
MARCEAU J.: The decision challenged by this
application to set aside under section 28 of the
Federal Court Act [R.S.C. 1970 (2nd Supp.), c.
10] was made by a Deputy Judge of the Tax Court
of Canada pursuant to the Unemployment Insu
rance Act, 1971 [S.C. 1970-71-72, c. 48]. By that
decision, which affirmed an earlier opinion of the
respondent Minister, the Judge found that the
employment held by the applicant for a time was
excepted from insurable employment under para
graph 3(2)(b) of the Act, which reads as follows:
3....
(2) Excepted employment is
(b) employment of a casual nature other than for the purpose
of the employer's trade or business;
It can quickly be seen from consulting the case
reports dealing with unemployment insurance that
this provision of paragraph 3(2)(b) of the Act has
been and is still being discussed in many decisions
not only of umpires about also of the Pension
Appeals Board, the tribunal which until recently
exercised final appellate jurisdiction in cases
involving the determination of whether employ
ment was insurable. This is not unduly surprising,
as the exception provided by the provision could
not fail to be regularly sought. However, it is a
little harder to understand why the rule is still
frequently misunderstood and at times clearly mis
construed, after so many attempts at clarification
have been made in applying it to all kinds of
practical situations. Reading the decisions and the
leading cases certainly does not provide a full
answer as to the meaning to be given to the word
"casual", and in particular, it leaves the impres
sion of a conflict and uncertainty between the idea
that whether employment is casual is to be deter
mined in reference to the employer and its profes
sional activity (see Minister of National Revenue
v. Poirier et al., U.I. 27-29 [NR 352] (P.A.B.);
Minister of National Revenue v. Gagné, U.I. 35F
[NR 356] (P.A.B.); Gauthier v. Minister of Na
tional Revenue, U.I. 31 [NR 378] (P.A.B.); Aspi-
rot et al. v. Minister of National Revenue, U.I. 25
A-H [NR 324] (P.A.B.); Minister of National
Revenue v. Sater et al., U.I. 39-40 [NR 462]
(P.A.B.)) and the idea that, on the contrary, it is
to be determined by reference to the employee and
his trade or usual occupation (the leading case in
this regard is the decision of the Pension Appeals
Board in 1982 in Minister of National Revenue v.
Ouellet, U.I. 45C [NR 496] (P.A.B.)). This is the
first time that this Court, which did not become
the appellate tribunal in this area until 1983, has
been called upon to take a position on the meaning
and scope of the exception contained in the provi
sion, and it is perhaps desirable for it to attempt in
this regard to dispel certain ambiguities which can
be seen to underly most of the cases. In any event,
I will attempt so far as I can to explain my
approach as clearly as possible.
As always in a matter involving interpretation,
everything will depend on a careful analysis of the
provision itself from the standpoint of logic and
grammar. Three conclusions emerge from such an
analysis. First, it can be seen that though the
proposition in which the exception is defined is
stated as a single characteristic, it breaks down
into two parts, each involving a condition: to be
excepted, the employment must first be "casual"
and second, be "other than for the purpose of the
employer's trade or business." It can be seen, then,
that while these two conditions are to be applied
together, they must nonetheless be checked sepa
rately and to some extent independently of each
other, contrary to what might be indicated by a
provision reading, for example, "of a casual nature
because it is other than for the purposes of the
employer's trade or business"; what is stated first
here is an exception, casual employment, and then
a qualification to the exception, casual employ
ment other than for the purposes of the employer's
trade or business. Finally, it should be borne clear
ly in mind that it is the employment which must
meet the two conditions stated, a word which
according to the definition in section 2 [as am. by
1976-77, c. 54, s. 26] of the Act, "means the act of
employing or the state of being employed": no
mention is made of the occupation or trade or the
purpose of the work. Bearing in mind these basic
conclusions from a simple analysis of the provision,
and remembering the purpose of the exceptions in
subsection 3(2) of the Act, which is manifestly to
prevent misuse of the system by shifting it away
from its primary concern of protecting the
employee against the loss of his livelihood, it can
readily be concluded that casual employment
within the meaning of this provision can only be
employment which exhibits no continuity, regulari
ty or periodic recurrence, and that employment
may be casual even though the services rendered
are connected with the employee's trade (it is not
the occupation which is in question), and may not
be casual even though it is unconnected with the
employer's professional activity or business (the
two conditions stand independently of each other).
The reason the ambiguities to which I have
referred have always persisted is undoubtedly
because in dealing with specific cases tribunals
have moved away from the fundamental analysis
of the provision. In fact, however, it should be
noted that these ambiguities originate in the very
first decisions of the Pension Appeals Board, two
decisions which were rendered on the same day
and which are constantly referred to, those of
Aspirot et al. and Gagné, supra. Both cases con
cerned carpenters who had worked on the building
of single-family homes for different individuals in
various occupations, and while one of the two
umpires hearing an initial group of cases regarded
the employments as casual, the other who heard
another group of cases thought that this was not
true for persons who were carpenters by trade. The
Board upheld the position of the first umpire, but
in rejecting the view of the second it observed that
what should be considered was not the employee
but the employer's occupation and profession. The
notion that whether employment was casual should
be determined by reference to either the employer
or the employee persisted, probably because it
appeared to offer a readily applicable rule; as we
have seen, however, it distorts the legislation.
What is involved is the employment, and
employment results from a contractual relation
ship between two parties: there is no reason to
think that the nature of an employment should be
determined by reference to one of the two parties
only, the employer or the employee. It is the
meaning which the two contracting parties give to
their contractual relationship which makes the
employment something stable, which can continue
to exist or at least be renewed at regular intervals,
and on which the employee can rely, or on the
other hand something ephemeral, transitory,
merely casual. It is only by considering all the
circumstances surrounding the establishment, con
tinuation and termination of the contractual rela
tionship that it will be possible to decide on the
meaning which the parties give to their relation
ship. Some constants may exist. Thus, I think that
in the event of a misunderstanding between the
parties as to the nature of their relationship, it is
the employee's impression which should prevail,
provided it is based on objective evidence, as in
that case he was really relying on the employment
and to this extent merits the protection which the
system can offer. It is also clear that the most
telling objective evidence will be from the employ
er and its present and future needs, for it is the
employer who created the employment and only he
could define it. Apart from these few constants,
however, everything depends on weighing the cir
cumstances and on the conclusions drawn from the
evidence. The process may at times be very cum
bersome, but it must be gone through in all cases,
and I know of no formula which can simplify it.
That is my view of the matter.
Naturally, I must rule on the validity of the
decision rendered in the case at bar in terms of
what appears to me to be the scope of this excep
tion created by paragraph 3(2)(b) of the Act. The
situation disclosed by the evidence is straightfor
ward and typical. The applicant is a farmer, who
raises beef cattle, but also an experienced lumber
jack. His brother, an agronomist, owns a woodlot
which he bought for eventual resale. The applicant
was employed by his brother, two years in succes
sion, from March 14 to October 21, 1983 and from
August 13 to October 26, 1984, to clean and cut
wood affected by a budworm infestation on the
woodlot. The gist of the Judge's decision reads as
follows:
According to the decision in Aspirot and MNR and Robert
Gagné and MNR and others cited, employment of a casual
nature refers to the employer's and not the employee's
work....
... Jean-Hugues Bélanger, an agronomist by trade ... worked
the woodlot on occasion and in exceptional circumstances, such
as a budworm infestation.
Thus, the appellant's employment was of a casual nature other
than for the purpose of Jean-Hugues Bélanger's trade. In fact,
as mentioned earlier, the employer was an agronomist by trade,
who was employed by the federal government. That was his
trade and he had no business. This employment, which consist
ed mainly in logging and clearing the land, was quite different
from that of an agronomist, which was the employer's
trade....
For all these reasons, the appellant's employment with his
employer, Jean-Hugues Bélanger, was employment excepted
from insurable employment since it was employment of a
casual nature other than for the purpose of the employer's
trade, within the meaning of section 3(2)(b) of the Unemploy
ment Insurance Act, 1971.
It is clear that the approach taken by the Judge
in weighing the facts does not correspond to the
views I stated above. In my opinion it indicates a
misunderstanding of what casual employment is
within the meaning of paragraph 3(2)(b) of the
Act. It is undoubtedly quite possible that the
employment here is in fact casual in the proper
sense, but it is not the function of this Court to
weigh the facts at first instance, at least when a
difficulty of this kind exists: that is for the judge of
fact to do.
I would accordingly allow the application, set
aside the subject decision and refer the matter
back to the Tax Court of Canada to be again
decided by it, considering whether on the basis of
the evidence in the record or any other evidence
which may be provided if it is thought proper to
reopen the hearing, the exception in paragraph
3(2)(b) as above interpreted should be applied.
PRATTE J.: I concur.
HUGESSEN 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.