Mahil v. M.N.R.

Mahil v. M.N.R. Court (s) Database Tax Court of Canada Judgments Date 2003-10-23 Neutral citation 2003 TCC 746 File numbers 2003-1183(EI) Judges and Taxing Officers Dwayne W. Rowe Subjects Employment Insurance Act Decision Content Docket: 2003-1183(EI) BETWEEN: AMARJIT KAUR MAHIL, Appellant, and THE MINISTER OF NATIONAL REVENUE, Respondent. ____________________________________________________________________ Appeal heard on July 3, 2003 at Vancouver, British Columbia Before: The Honourable D.W. Rowe, Deputy Judge Appearances: Agent for the Appellant: Gurcharan Dhillon Counsel for the Respondent: Bruce Senkpiel ____________________________________________________________________ JUDGMENT The appeal is allowed and the decision of the Minister is varied in accordance with the attached Reasons for Judgment. Signed at Sidney, British Columbia, this 23rd day of October 2003. "D.W. Rowe" Rowe, D.J. Citation: 2003TCC746 Date: 20031023 Docket: 2003-1183(EI) BETWEEN: AMARJIT KAUR MAHIL, Appellant, and THE MINISTER OF NATIONAL REVENUE, Respondent. REASONS FOR JUDGMENT Rowe, D.J. [1] The appellant - Amarjit Kaur Mahil - appeals from a decision dated March 10, 2003, issued by the Minister of National Revenue (the "Minister"), wherein the Minister decided her employment with Shamsher Mahil and Meena Mahil - doing business as Mahil Farms - (Farms) during the periods from July 8 to August 24, 2002, June 5 to August 25, 2000, and May 3 to June 26, 1999, was not insurable employment because the parties were related and the Minister was not satisfied the contracts of employment would have been substantially similar if the employer and employee had been dealing with each other at arm's length. The Minister's decision was issued under subsection 93 (3) of the Employment Insurance Act (the "Act") and is based on paragraph 5(2)(i) of said Act. [2] Amarjit Kaur Mahil (Amarjit Mahil) testified by utilizing the services of Sarb Sandhu, a Punjabi-English, English-Punjabi interpreter. Amarjit Mahil was represented by an agent, Ms. Gurcharan Dhillon, who advised the Court she was not related to an anticipated witness with the same family name. Amarjit Mahil stated she resided in Clearbrook, British Columbia and was a nursery worker. She had been adopted by Shamsher Mahil and Meena Mahil and, even though she worked at their farm during the relevant periods, had resided in town and not on the Mahil farm property which is located near the City of Abbotsford. While working at the farm, she applied sawdust and fertilizer, planted new blueberry plants, checked the rows and performed all other necessary tasks under the direction of her parents and in accordance with their instructions. She began working on the farm in the summer of 1999 and also worked there in 2000 and 2002. However, she did not work there during 2001 because she was able to obtain more work than usual at a nursery. At Farms, there were no fixed hours and the workday began at 6:00 a.m. and ended at 9:00 p.m. - usually 6 days per week - but sometimes it was necessary to work 7 days. In 1999, Amarjit Mahil worked at Farms and also at a cannery in addition to attending English Language Services for Adults (ELSA) classes (commonly referred to as English as a Second Language or ESL instruction). In the event she worked for two employers on the same day, she did not attend her evening ESL class. Between February 15 and March 22, 1999, the ESL classes were held between 9:00 a.m. and noon. On March 23, 1999, she began attending ESL night classes and started working at Farms on May 3. Amarjit Mahil identified a letter - Exhibit A-1 - issued by the ELSA Coordinator on March 3, 2003, to the Appeals Division of the Vancouver office of Canada Customs and Revenue Agency (CCRA) concerning the appellant's attendance at the classes during various periods between February 15, 1999 and January 31, 2001. The ELSA program was closed from June 11 to September 19, 1999. The appellant stated she did not attend ESL classes in 2002. She stated there were other non-related workers at Farms who were also paid by cheque and a bundle of photocopies of cancelled cheques - issued by Shamsher Mahil and Meena K. Mahil - were filed as Exhibit A-2. Shamsher Mahil maintained business records - including pay sheets - Exhibit A-3 - which were used to record hours of work performed by various workers. The appellant did not keep any separate record of her working hours but is satisfied the records of Farms were accurate. The appellant stated that even though some of the cheques were issued to Mahil Amarjit Kaur - rather than to Amarjit Kaur Mahil - she is the person to whom those cheques were issued, in payment of services rendered. The appellant stated she arrived in Canada - in 1998 - and was not able to deal with financial institutions due to her inadequate knowledge of English. As a result, she opened a joint account with her mother, Meena K. Mahil - and her brother opened an account with Shamsher Mahil. In addition, her schedule was such that - often - the bank would be closed by the time she finished work and since she did not own a motor vehicle, was dependent on obtaining transportation from others. She deposited all her cheques into the joint account whether they related to work done at the cannery, the nursery or at Farms. The appellant stated she was paid the minimum hourly wage (established by provincial law) and received her wages only at the end of the season. In 2002, her last day of work was on August 24 and she was paid two or three weeks later with two or three separate cheques. In 2002, she also worked at the nursery. [3] Prior to commencing cross-examination of Amarjit Mahil, counsel for the respondent - with the consent of the appellant's agent - filed a Book of Documents - Exhibit R-1 - tabbed 1-26, inclusive. Counsel advised the Book may contain some documents which were filed as Exhibits during the appellant's evidence-in-chief (Reference to a tab number - without more - will indicate the document(s) is/are located within Exhibit R-1). [4] Amarjit Mahil described Farms as a property which produced strawberries, raspberries and blueberries. During times when her mother and father were absent due to their own respective employment, the appellant was in charge of the farm. Her father's sister had three children who worked on the farm and her brother performed certain tasks from time to time but may not have been included on the regular payroll. The appellant identified the Questionnaire - Tab 1 - she had completed and confirmed her answers therein were correct. At Tab 3, the appellant identified the Record of Employment (ROE) as having been issued to her by Yarrow Nursery Ltd. (Nursery) in respect of her employment - in 2002 - during which she worked 444 insurable hours and earned a total of $4,541.40. She was paid by cheque, issued bi-weekly. Farms issued the appellant an ROE - Tab 4 - in relation to her employment between July 8 and August 24, 2002, certifying she had worked 370 insurable hours and had been paid the sum of $3,078.40. Her Application For Unemployment Benefits - tab 5 - (generally referred to as employment insurance or EI benefits) was dated September 11, 2002. The appellant agreed Farms had issued four cheques - tab 6 - to her during 2002, as follows: #0292 - July 13/02 in the sum of $339.40; #0293 - July 27/02 in the sum of $889.36; #0294 - August 10/02 in the sum of $850.63 and #0295 - August 24/02 - in the sum of $811.90. Amarjit Mahil agreed that - despite the dates thereon the - cheques had not been issued to her - by Farms - until after her employment had ended on August 24, 2002. A copy of her bank statement - tab 9 - disclosed a deposit - on September 19, 2002 - in the sum of $2,891.29, an amount equal to the total of those 4 cheques within tab 6. The appellant agreed she had not deposited her pay cheques for 25 days following the end of her employment and had applied for EI benefits on September 11, 2002. She stated this method of receiving payment was not unusual in that she had worked - in 2000 - for non-related employers at a cannery but had not received her wages until 2001. With respect to her delayed payment from Farms - in 2002 - the appellant agreed she had informed the Rulings Officer that her father - Shamsher Mahil - had been too busy to write the cheques and that she had not been concerned since she was accustomed to waiting for final payment of wages. In the interim, whether working at Farms or at the cannery, she had adequate funds to pay for her costs of living. In 2002, she had a term deposit - tab 10 - in the sum of $10,000 - held jointly with her mother - Meena Mahil - which had been purchased with money transferred from their joint bank account. The appellant stated she did not work for her parents - at Farms - in 2001, because her work at the cannery continued and her parents hired other workers. In 2002, she worked enough insurable hours at the cannery to qualify for EI benefits but stated she prefers to be employed as much as possible in each year. Two ROEs - tabs 13 and 14 - were issued to the appellant by Universal Packers Inc. (Packers) with respect to her employment during two separate periods in 2000. She worked from June 15 to September 1 and from September 5 to September 28. Another ROE - tab 15 - was issued to the appellant - by Farms - for the period June 5 to August 25, 2000. The appellant completed an application - tab 16 - for EI benefits on September 14, 2000. At tab 17, the appellant identified photocopies of 6 cheques - issued to her by Farms - bearing several dates during 2000 and acknowledged that the first 4 cheques in sequence had been deposited by her on August 28, 2000 and the last two cheques - dated August 12, 2000 and August 26, 2000, respectively - had not been deposited until September 15, 2000. In 1999, the appellant had worked at Packers from June 17 to September 16, and received an ROE - tab 19 - with respect to that employment indicating she had worked 679 insurable hours and had earned the sum of $5,248.41. She was issued another ROE - tab 20 - by Farms, covering her employment between May 3 and June 26, 1999, during which period she worked 377 insurable hours and was paid the sum of $2,803.40. The appellant's application for EI benefits - tab 21 - was dated September 29, 1999. The cheques - tab 22 - issued to her - by Farms - in the summer of 1999 were dated May 18, May 29, and June 12. The May cheques were deposited by the appellant on June 21, 1999 and the June 12 cheque was not deposited until July 24. In response to the question why she had not deposited all of the cheques if she had received them at the same time, the appellant replied she might have misplaced one cheque or merely forgot about it. She stated she had informed an official at CCRA that Packers had not paid her until 2001 - for services provided in 2000 - and that she had not been worried or concerned about this delay in payment. With respect to her attendance at ESL classes - as outlined at tab 25 - (a duplicate of Exhibit A-1) the appellant stated that if classes ended at noon she would work at the farm on the same day. A summary of ROEs and ESL classes was located at tab 26 and indicated - by use of an asterisk (*) - certain overlapping periods. [5] In re-examination, Amarjit Mahil stated that, although her father was ultimately in charge at the farm, she had to supervise other workers and instruct them on the proper method of picking berries. She had the responsibility to ensure the casual workers - usually students - were following proper picking procedures and, in the event someone attended at the farm to purchase a small amount of berries, handled the transaction but was not involved in shipping product to canneries or other commercial enterprises. [6] Meena Mahil testified by utilizing the services of Sarb Sandhu, interpreter. She lives in Abbotsford, works in a nursery and is the adoptive mother of the appellant who came from India - in 1998 - to live on the 10-acre farm operated in partnership by Meena Mahil and her husband, Shamsher Mahil. In 1999, 2000 and 2002, Amarjit Mahil worked for Farms and was paid the applicable minimum hourly wage. Shamsher Mahil maintained the time records and the appellant was paid her wages at the end of the growing season. The cheques issued to Amarjit Mahil were prepared by the Farms' accountant or their son because neither she nor her husband could write in English. However, all cheques were signed by Shamsher Mahil. Meena Mahil stated the pay cheques issued to the appellant were dated every two weeks even though they had been written on the same day. The dates inserted on the cheques were based on the payroll sheets and time sheets for the preceding period. The practice of paying the appellant her entire wages at the end of the season was followed because her husband was too busy to attend to that matter earlier. Meena Mahil stated all their workers are paid minimum wage and receive payment only at the end of the season with the exception of casual workers - usually pickers - who work for a short period - perhaps one or two days - and are paid in cash upon quitting. The workers who are placed on the payroll are steadily employed and remain until the end of the season. During 1999, 2000 and 2002, Meena Mahil stated Farms employed some non-related workers as well as the daughters of Shamsher Mahil's sister. A non-related worker - Darsham Sandhu (Sandhu) - worked for Farms in 1999 and did not receive his wages until after the season had finished even though cheques were prepared with dates inserted as though they had been issued on a bi-weekly basis in order to conform with the ordinary business practice of paying workers regularly for a particular preceding period (Photocopies of said cheques are included within Exhibit A-2). The cheques issued to Sandhu were deposited in his account on September 17, 1999. Meena Mahil acknowledged no non-related workers were on the Farms' payroll during 2000 and/or 2002, even though some worked for short periods of time and received payment in cash. Other non-related workers performed services for Farms at various times during the season in those years but were paid by cheque and were not listed on the Farms' payroll. [7] Bagga Singh Dhillon testified he lives in Abbotsford and owns a farm on which he employs several workers whom he supervises on a regular basis. During 2000 and 2002, Dhillon stated he visited Farms two or three times a week and sometimes purchased small quantities of blueberries from Amarjit Mahil. Over the course of the 2002 season, Dhillon estimated he purchased 200 pounds of blueberries from Farms and often saw the appellant working in the fields. In his long experience as a farmer in the Abbotsford area, Dhillon stated that, while the season for growing most blueberries is finished at the end of August, there are different varieties grown on some other farms in the area that have a late September maturity date. In 2002, the ordinary blueberry picking season was finished near the end of August and the type of blueberries he had purchased from the appellant at Farms belonged to that normal variety. Dhillon stated he employs 12 workers on his farm and makes advance payments to workers - if requested - but the usual business practice is to prepare documents and issue cheques in final settlement of outstanding wages only after the end of the farming season. Dhillon stated he has farmed for 25 years and is accustomed to working long hours, commencing at 6:00 a.m. and finishing as late as 10:00 p.m., and has also experienced difficulty in attending at his bank in a timely fashion which - on occasion - resulted in some cheques issued to him by certain cannery companies being dishonoured -when presented at a later date - because those businesses had failed in the interim. [8] In cross-examination, Bagga Singh Bhillon stated it is usual practice within the farming community to prepare all necessary documentation and to reconcile wages earned - and advance payments paid to workers - only at the end of the season and, thereafter, to issue final cheques in full settlement of outstanding wages. [9] Ms. Dhillon - agent for Amarjit Mahil - submitted the evidence disclosed the appellant had been paid all her wages - based on the applicable minimum hourly rate - at the end of the season. Subsequently, Ms. Dhillon submitted it was the appellant's right to do as she wished with her money, including depositing all cheques - including those issued by other employers - into a joint account she operated with her mother, Meena Mahil. Ms. Dhillon submitted there was no basis upon which to conclude the appellant was able to accumulate sufficient insurable hours in a particular year only by including her employment at Farms. [10] Counsel for the respondent agreed the assumption of the Minister - contained at subparagraph 8(g) of the Reply to the Notice of Appeal (Reply) - with respect to the harvest season for certain berries had been rebutted by the evidence adduced by the appellant. Counsel questioned why the appellant was paid only the minimum wage - like other workers - when the evidence disclosed she had exercised a supervisory function at Farms. Counsel referred to the evidence pertaining to the appellant's employment at Farms in 1999 - commencing on May 3 and continuing until June 26 - even though she had started working at Universal Packers on June 17, 1999. In 2000, the appellant worked at Universal Packers between June 15 and September 1, 2000, while also working at Farms from June 5 to August 25, 2000, indicating there was a significant period during which she worked at two jobs in addition to attending ESL classes during one of those periods. [11] Pursuant to paragraph 251(6)(c) of the Income Tax Act (the "ITA") the definition of "related persons" within subsection 251(2) of the ITA includes a person who "has been adopted, either legally or in fact, as the child of the other or as the child of a person who is so connected by blood relationship ... to the other". As a result, the adoption of the appellant by Shamsher Mahil and Meena Mahil - whether legally, as recognized by Canadian law, or in fact - according to Indian custom - still places her in the category of a related person according to the provisions of the ITA which are adopted by the Employment Insurance Act for purposes of determining whether persons are not dealing with each other at arm's length. [12] The issue in the within appeal is whether the appellant was employed in excluded, non-insurable employment with Farms during the relevant periods. [13] The relevant provision of the Act is paragraph 5(3)(b) which reads as follows: (3) For the purpose of paragraph (2)(i), ... (b) if the employer is, within the meaning of that Act, related to the employee, they are deemed to deal with each other at arm's length if the Minister of National Revenue is satisfied that, having regard to all the circumstances of the employment, including the remuneration paid, the terms and conditions, the duration and the nature and importance of the work performed, it is reasonable to conclude that they would have entered into a substantially similar contract of employment if they had been dealing with each other at arm's length. [14] In Légaré v. Canada (Minister of National Revenue), [1999] F.C.J. No. 878 - a decision of the Federal Court of Appeal - Marceau, J.A. speaking for the Court stated at page 2 of the judgment: In this matter, the Court has before it two applications for judicial review against two judgments by a judge of the Tax Court of Canada in related cases heard on the basis of common evidence which raise yet again the problems of interpretation and application of the saving provision, subparagraph 3(2)(c)(ii). I say yet again because since its passage in 1990, several decisions of the Tax Court of Canada and several judgments of this Court have already considered what workable meaning could be given to subparagraph 3(2)(c)(ii). In reading the text, the problems it poses beyond its deficient wording are immediately obvious, problems which essentially involve the nature of the role conferred on the Minister, the scope of the Minister's determination and, by extension, the extent of the Tax Court of Canada's general power of review in the context of an appeal under section 70 et seq. of the Act. While the applicable principles for resolving these problems have frequently been discussed, judging by the number of disputes raised and opinions expressed, the statement of these principles has apparently not always been completely understood. For the purposes of the applications before us, we wish to restate the guidelines which can be drawn from this long line of authority, in terms which may perhaps make our findings more meaningful. The Act requires the Minister to make a determination based on his own conviction drawn from a review of the file. The wording used introduces a form of subjective element, and while this has been called a discretionary power of the Minister, this characterization should not obscure the fact that the exercise of this power must clearly be completely and exclusively based on an objective appreciation of known or inferred facts. And the Minister's determination is subject to review. In fact, the Act confers the power of review on the Tax Court of Canada on the basis of what is discovered in an inquiry carried out in the presence of all interested parties. The Court is not mandated to make the same kind of determination as the Minister and thus cannot purely and simply substitute its assessment for that of the Minister: that falls under the Minister's so-called discretionary power. However, the Court must verify whether the facts inferred or relied on by the Minister are real and were correctly assessed having regard to the context in which they occurred, and after doing so, it must decide whether the conclusion with which the Minister was "satisfied" still seems reasonable. [15] The Minister relied on certain assumptions intended to apply to the entire relevant periods as well as other assumptions relating - specifically - to a growing season in 1999, 2000 or 2002. The assumptions set out in subparagraphs 8(a) to 8(f) of the Reply are as follows: a) Mahil Farms is a partnership operated by Shamsher and Meena Mahil; b) the Appellant is related to Shamsher and Meena Mahil as she is their adopted daughter; c) the Appellant lived on the farm property during the Periods; d) the Appellant's duties during the Periods included picking berries, fertilizing, supervising other workers and, in 2002 when the Appellant obtained her driver's license, occasionally driving other workers home; e) Mahil Farms produced strawberries, raspberries and blueberries; f) Mahil Farm's biggest crop was blueberries; [16] At subparagraph 8(g) of the Reply, the Minister assumed certain beginning and end harvest dates for various berry crops were in accordance with the information set forth in the form of a table. [17] The assumptions contained in subparagraphs 8(h) to 8(m), inclusive, are as follows: h) Mahil Farms has both related and unrelated employees; i) Mahil Farms employed the services of Shamsher and Meena Mahil, their son, the Appellant, three children of Shamsher's sister and 3 or 4 other workers; j) the Appellant was the only worker on the payroll of Mahil Farms during the Periods; k) the Appellant was put on payroll during the Periods based on her non-arm's length relationship with Mahil Farms; l) the Appellant was issued her paycheques after her employment ended in each of the Periods and the cheques were backdated to match the payroll records; m) in June 2002 the Appellant withdrew $10,000.00 from her personal bank account and deposited that amount into a term deposit set up in the Appellant and her mother's name; [18] Those assumptions - specific to the 2002 year - are set forth in subparagraphs 8(n) to 8(q) as follows: n) in 2002 the Appellant required 630 hours of insurable employment to qualify for employment insurance benefits; o) in 2002 the Appellant was issued a record of employment from Yarrow Nursery Ltd. covering a period of employment from March 25th to June 14th with 444 insurable hours; p) in 2002 the Appellant received a record of employment from Mahil Farms alleging a period of employment from July 8, to August 24, 2002 with 370 insurable hours; q) in 2002 the Appellant was laid off on August 24, 2002; [19] The assumptions relevant to the 2000 year are contained in subparagraphs 8(r) to 8(u) of the Reply: r) in 2000 the Appellant was issued a record of employment from Universal Packers Inc. covering a period of employment from June 15 to September 1, with 324 insurable hours and September 5, 2000 to September 28 with 84.75 insurable hours; s) in 2000 the Appellant received a record of employment from Mahil Farms alleging a period of employment from June 5 to August 25, 2000 with 466.50 insurable hours; t) the Appellant was laid off from Mahil Farms on August 25, 2000; u) the Appellant attended ESL classes from Monday to Friday from 9:00 to 12:00 from September 20, 1999 to June 16, 2000; [20] The assumptions pertaining to the 1999 year - at subparagraphs 8(v) to 8(z) - are: v) in 1999 the Appellant was issued a record of employment from Universal Packers Inc. covering a period of employment from June 17 to September 16 with 679 insurable hours and September 5, 2000 to September 28 with 84.75 insurable hours; w) in 1999 the Appellant received a record of employment from Mahil Farms alleging a period of employment from May 3 to June 26, 1999 with 377 insurable hours; x) the Appellant was laid off from Mahil Farms on June 26, 1999; y) in all Periods the Appellant did not work the hours shown on the records of employment issued by Mahil Farms; z) the Appellant and Mahil Farms entered into an arrangement to qualify the Appellant for employment insurance benefits to which she would otherwise not be entitled; [21] Dealing first with those assumptions of fact intended to apply to all the relevant periods, the evidence disclosed the appellant did not live on the Mahil family farm property, as assumed by the Minister at subparagraph 8(c) of the Reply. The appellant did exercise supervision over other workers - particularly casual pickers who worked only a few hours or days - and was in charge of the farm while her parents were working at their own employment. The end harvest dates for blueberries - the major crop grown by Farms - was assumed - at subparagraph 8(g) of the Reply to be September 20 in 2002, October 10 in 2000 and September 27 in 1999. Counsel for the respondent conceded the evidence adduced by the appellant had rebutted this assumption since the evidence established the blueberries grown by Farms were not a late-bearing variety and would have been totally harvested by the end of August. The Minister's assumption - at subparagraph 8(k) - that the appellant was placed on the payroll based on her non-arm's length relationship with Farms is a conclusion not supported by the evidence. The other assumptions in this group - subparagraphs 8(a) to 8(m) - remained intact. Re: 2002 [22] The thrust of the assumptions of fact contained in subparagraphs 8(n) to 8(q) of the Reply are clearly intended to support the proposition that the appellant needed to be placed on the payroll of Farms in order to acquire enough insurable hours in order to qualify for EI benefits. However, the appellant acquired a total of 814 insurable hours that year - 444 hours from her employment with Nursery between March 25 and June 14 - and 370 hours at Farms. The appellant did not work for Farms in 2001 because her work at Nursery was extended further into the season. The reason for the appellant's layoff - by Farms - on August 24, 2002, was that the blueberry season had ended and did not extend to September 20, as assumed by the Minister. Re: 2000 [23] In this year, the appellant was laid off by Farms on August 25, 2000, which coincided with the end of blueberry season. The appellant also worked at Packers from June 15 to September 1 - and again from September 5 to September 28 - thereby acquiring 324 and 84.75 insurable hours, respectively. She also worked 466.50 hours - at Farms - for a total of 875.25 insurable hours, an amount I infer was more than sufficient to qualify for EI benefits following loss of her employment at Universal Packers on September 28, 2000 (Only 630 hours of insurable employment were required in 2002 to qualify for EI benefits). The Minister drew the conclusion that the appellant could not have worked at Farms and also at Packers during that overlapping period from June 15 to August 25, 2000. In addition, the Minister relied on the fact the appellant attended morning ESL classes from September 20, 1999 to June 16, 2000. There would have been a scheduling conflict only during that period from June 5 to June 15 when the appellant was working at Farms and from September 5 to September 20 when she was working at Packers. However, from September 5 to September 28, 2000, the appellant only worked 84.75 hours at Packers. In her testimony, the appellant stated that when she worked at two jobs on the same day, she attended an ESL class during the evening instead of the usual one between 9:00 a.m. and noon. RE: 1999 [24] In 1999, according to the assumptions of fact relied on by the Minister, the appellant worked a total of 763.75 insurable hours - during two separate periods - at Packers. One period was - from June 17 to September 16, a total of 679 insurable hours. However, that second period - from September 5 to September 28 - amounting to 84.75 insurable hours was applicable to the year 2000, as previously mentioned, and not 1999. In addition, the appellant worked 377 insurable hours at Farms for a total of 1,056. In the 1999 year, the Minister assumed - at subparagraph 8(y) - that the appellant did not work the hours shown on the records of Farms. Obviously, the position of the Minister is set out in the subsequent assumption - 8(z) - where it is assumed that Amarjit Mahil and her parents - doing business as Mahil Farms - entered into an arrangement to qualify the appellant for EI benefits to which she would otherwise not be entitled. However, that conspiracy theory suffers a crippling blow when one takes into account that Amarjit Mahil only worked at Farms from May 3 to June 26, 1999 - a total of 377 insurable hours - and then left to work exclusively thereafter for Packers. During the period from June 17 to June 26, the appellant worked at two jobs but, after leaving Farms on June 26, 1999, did not return to work there during the rest of 1999. The theory of the Minister is that the sole purpose behind Farms employing the appellant was to permit her to acquire enough insurable hours to qualify for EI benefits at the end of the season and - moreover - that the purported hours of work are false in that the appellant did not provide services to Farms, as set forth in the relevant ROEs. If that is so, then why would the appellant leave that cushy setup in order to work more than 679 hours at Packers during the next three months? Each employment obtained by the appellant during the periods relevant to the within appeal was seasonal in nature whether on a farm, a nursery or at a cannery. There are bound to be specific seasons for picking or canning within an overall growing season. If one intended to enter into a phony arrangement to "top up" the overall amount of insurable hours so as to become entitled to EI benefits, then one would suspect that stratagem to be utilized at the end of a season when the amount of the shortfall would be a known quantity, rather than during the early part of said season. I point out - again - that Amarjit Mahil did not work for Farms during 2001 because the work at Nursery extended throughout the season and she had no need to undertake other work. [25] The evidence of Amarjit Mahil, Meena Mahil and Bagga Singh Dhillon satisfies me that the work was done at Farms during the particular periods in issue. It is apparent from an examination of all the evidence that the Minister relied on irrelevant facts - such as the supposed major conflict in her schedule arising from her attendance at ESL classes - and drew faulty conclusions as to the purpose of the appellant's employment with Farms which was assumed to have been undertaken only to permit her to qualify for EI benefits to which she would not otherwise have been entitled. In the case of Adolfo Elia v. M.N.R., [1998] F.C.J. No. 316, a decision of the Federal Court of Appeal dated March 3, 1998, at page 2 of the certified translation Pratte, J.A. stated: ...Contrary to what the judge thought, it is not necessary, in order for the judge to be able to exercise that power, for it to be established that the Minister's decision was unreasonable or made in bad faith having regard to the evidence before the Minister. What is necessary is that the evidence presented to the judge establish that the Minister acted in bad faith, or capriciously or unlawfully, or based his decision on irrelevant facts or did not have regard to relevant facts. The judge may then substitute his decision for that of the Minister. [26] The Minister assumed - incorrectly - that the appellant lived at the same residence as her parents during the periods at issue. Ordinarily, that would not be particularly significant but it does advance the theory of the Minister that the working relationship was unduly governed by close family ties instead of conforming to those indicia of employment common to an unrelated employer and employee. The Minister drew the wrong conclusion from the harvest dates of blueberries grown at Farms in that the inference was drawn that the appellant was laid off - in 2000 and 2002 - while there was still harvesting work to be done because she had already accumulated enough insurable hours to qualify for EI benefits. [27] For the reasons expressed in the preceding paragraphs, I conclude the decision of the Minister cannot be permitted to stand and I must intervene. As a result, I must analyze the evidence in order to decide whether the appellant was engaged in insurable employment during the relevant periods or whether her employment constituted excluded employment. It is worthwhile at this juncture to restate the relevant provision of the Act - paragraph 5(3)(b) - which reads: (3) For the purpose of paragraph (2)(i), ... (b) if the employer is, within the meaning of that Act, related to the employee, they are deemed to deal with each other at arm's length if the Minister of National Revenue is satisfied that, having regard to all the circumstances of the employment, including the remuneration paid, the terms and conditions, the duration and the nature and importance of the work performed, it is reasonable to conclude that they would have entered into a substantially similar contract of employment if they had been dealing with each other at arm's length. Remuneration: [28] The evidence of Meena Mahil was that all workers were paid the applicable minimum wage. According to a response provided by the appellant at Question 19 of the Questionnaire - tab 1 - the minimum wage changed (I take judicial notice it was increased) between 1999 and 2002. The appellant - like other workers for Farms - and like many other workers within the berry-farming industry in the Abbotsford area, received her pay at the end of the season. The evidence of a long-time farmer - Bagga Singh Dhillon - established it is not unusual for workers to be paid at the end of the season in accordance with a final settling of accounts, taking into consideration any advances that may have been paid - on request - during the season. The appellant performed some supervisory functions with respect to other workers but the main component of the business - selling to canneries and other commercial enterprises - was conducted by Shamsher Mahil and Meena Mahil. In 2002, after obtaining her driver's licence, the appellant "occasionally" provided rides to other workers. She supervised other pickers during the respective harvest seasons of various berry crops. Within that particular industry, it is fair to conclude that the wage commonly paid to farm workers is the current minimum wage set in accordance with provincial labour standards legislation. The supervisory function carried out by the appellant during her various, relatively short, periods of employment with Farms was not sufficiently different - either in time spent or degree of difficulty - from work performed by other workers to call for any significantly higher wage. The appellant and Farms were free to strike their own bargain in this regard. Obviously, the supervisory work performed by the appellant was easier - from a physical standpoint - than working continuously in the fields. Terms and Conditions: [29] The hours of work were reasonable considering the nature of the industry and the duration of the growing season. There are seasons within seasons and - during a hiatus - the appellant obtained employment with other business entities. The appellant's working hours were recorded by her father - Shamsher Mahil - and she was satisfied with that arrangement. From time to time, there was some juggling required in order for the appellant to meet the demands of her busy schedule which sometimes involved working at two places and attending ESL classes, either in accordance with the usual schedule or at another more convenient time. The time sheets - Exhibit A-3 - used to record her hours during the 1999 season, indicate she worked a maximum of 10 hours on a few days - with the usual range being 7.5 to 9 hours - and at the other end of the scale, a minimum of 3 - 6 hours on other days. Usually, the appellant worked 6 days per week and - once or twice - worked 7 consecutive days. There is nothing in the evidence to suggest her work pattern constituted a departure from the norm either at Farms or within the local industry. Duration: [30] As discussed earlier in these reasons, the appellant was laid off - in 2000 and 2002 - at the end of the blueberry season. In 1999, she worked at Farms from May 3 until June 26, but had begun working at Packers on June 17 where she remained until September 16. In 2002, she worked at Nursery until June 14 and then worked for Farms between July 8 and August 24, the end of the berry season. I do not find anything untoward with respect to the duration of work taking into account the nature of the business operated by Farms. The other employers of Amarjit Mahil during 1999-2002, inclusive, were also engaged in seasonal businesses and her work at those enterprises was dependent on a need for workers at various times within the overall season. Nature and importance of the work performed: [31] It is apparent the work purported to have been done by the appellant was done. Bagga Singh Dhillon stated he saw her on the farm on numerous occasions and bought berries from her. I have no reason to reject the evidence of the appellant and/or her mother - Meena Mahil - regarding the nature of the work and/or how it was performed. The work had to be done and it is better to have an experienced person available to work during certain peak periods than having to hire itinerant pickers who are interested in working only long enough to earn what Meena Mahil characterized in her testimony as "pocket money". [32] The evidence pertaining to the working relationship between the business partnership of Sharmsher Mahil and Meena Mahil and the appellant - and other workers - revealed certain discrepancies, anomalies and probable breaches of provincial labour standards regulations particularly in recording hours of work and dating cheques to make it appear as though workers were being paid on a regular bi-weekly basis when they were not paid their full wages until after the end of the season. However, that method of payment to workers appears to be normal within the industry, at least in the Abbotsford area. If the workers are content to wait until the berry crop has been sold by the farmer, then that may have other consequences but it does not - without more - taint the employer/employee relationship to the point where the worker is relegated to the category of excluded, non-insurable employment. At first glance, it is somewhat unusual to see a worker deposit a pay cheque into a joint account with the employer. However, the explanation is reasonable in that Amarjit Mahil arrived in Canada - in 1998 - and was not able to speak and write English well enough to handle her own banking and, thereafter, her work schedule was such that it was often difficult for her to attend at her bank. The Guaranteed Investment Certificate (GIC) - tab 10 - was registered in the joint names of Amarjit Mahil and Meena Mahil with a right of survivorship. [33] In the case of Barbara Docherty v. M.N.R. - 2000-1466(EI), dated October 6, 2000 I commented as follows: The template to be utilized in making a comparison with arm's length working relationships does not require a perfect match. That is recognized within the language of the legislation because it refers to a "substantially similar contract of employment". Any time the parties are related to each other within the meaning of the relevant legislation, there will be idiosyncrasies arising from the working relationship, especially if the spouse is the sole employee or perhaps a member of a small staff. However, the object is not to disqualify these people from participating in the national employment insurance scheme provided certain conditions have been met. To do so without valid reasons is inequitable and contrary to the intent of the legislation. [34] In my view, many employers are causing themselves - and, more significantly, their employees - unnecessary grief by not maintaining proper records and otherwise failing to comply with applicable labour standards by refusing to pay workers - promptly - in accordance with those requirements. That breach is then compounded when documentation is prepared later to make it appear as though everything was done properly during the period of employment. Farm workers are at the other end of the economic scale. It is not surprising they would accept most business practices that are - basically - thrust upon them by their employers. In effect, the employers within this industry are using their pool of workers as a bank. Without the burden imposed by a line of credit or an overdraft on a business account, these employers do not have to pay interest and can avoid those dreaded calls from nervous loan account managers. However, these deficiencies in labour standards within the farming industry are not my concern for purposes of these reasons. Having said that, any time there is evidence of a departure from what the Minister regards as the norm in terms of remuneration, working conditions and frequency of pay, there will be questions asked. Then, during that subsequent process, if some assumptions are made that are not soundly based in fact and erroneous conclusions are drawn therefrom, it takes time-consuming litigation to sort out the situation. I have been persuaded by the evidence adduced by the appellant that her employment - in each instance - was genuine and that she was fully paid for her services. She is a hardworking individual who was able to earn a living by putting in a lot of hours during the typical growing and canning season. Even at minimum wage, that sort of effort can produce a reasonable income during the course of five or six months. [35] I have considered the various factors - as required by the relevant provision of the Act - and conclude the appellant and Farms would have entered into substantially similar contracts of employment if they had been dealing with each other at arm's length. [36] The appeal is allowed and the decision of the Minister is varied, to find: - that the appellant was employed in insurable employment with Shamsher Mahil and Meena Mahil, doing business as Mahil Farms, during the following periods: a) July 8 to August 24, 2002 b) June 5 to August 25, 2000 c) May 3 to June 26, 1999 Signed at Sidney, British Columbia, this 23rd day of October 2003. "D.W. Rowe" Rowe, D.J. CITATION: 2003TCC746 COURT FILE NO.: 2003-1183(EI) STYLE OF CAUSE: Amarjit Kaur Mahil and M.N.R. PLACE OF HEARING: Vancouver, British Columbia DATE OF HEARING: July 30, 2003 REASONS FOR JUDGMENT BY: The Honourable D.W. Rowe, Deputy Judge DATE OF JUDGMENT: October 23, 2003 APPEARANCES: Agent for the Appellant: Gurcharan Dhillon Counsel for the Respondent: Bruce Senkpiel COUNSEL OF RECORD: For the Appellant: Name: Firm: For the Respondent: Morris Rosenberg Deputy Attorney General of Canada Ottawa, Canada