Mulvenna v. M.N.R.

Mulvenna v. M.N.R. Court (s) Database Tax Court of Canada Judgments Date 2003-06-16 Neutral citation 2003 TCC 390 File numbers 2002-2844(EI) Judges and Taxing Officers Campbell J. Miller Subjects Employment Insurance Act Decision Content Docket: 2002-2844(EI) BETWEEN: SHERRI-LYNN MULVENNA, Appellant, and THE MINISTER OF NATIONAL REVENUE, Respondent. ____________________________________________________________________ Appeal heard on April 29 and May 2, 2003, at Toronto, Ontario By: The Honourable Judge Campbell J. Miller Appearances: Agent for the Appellant: Michael Mulvenna Counsel for the Respondent: Nimanthika Kaneira ____________________________________________________________________ JUDGMENT The appeal pursuant to subsection 103(1) of the Employment Insurance Act is allowed and the decision of the Minister of National Revenue on the appeal made to him under section 91 of that Act is varied on the basis that the Appellant accumulated an additional 845 hours of insurable employment during the qualifying period over and above the 726 hours already allowed. Signed at Ottawa, Canada, this 16th day of June, 2003. "Campbell J. Miller" J.T.C.C. Citation: 2003TCC390 Date: 20030616 Docket: 2002-2844(EI) BETWEEN: SHERRI-LYNN MULVENNA, Appellant, and THE MINISTER OF NATIONAL REVENUE, Respondent. REASONS FOR JUDGMENT Miller J. [1] In 1997, upon the birth of her second child, Ms. Mulvenna took a pregnancy and parental leave from work, receiving employment insurance benefits plus a top-up from her employer to 75 per cent of her salary. Several months after returning to work, her husband was transferred to Toronto from Kingston, and she consequently left her employment seeking employment insurance benefits. She received 20 weeks of benefits based on hours of insurable employment which included no hours during the pregnancy/parental leave. Ms. Mulvenna claims her insurable hours should be increased to justify a greater benefit period than 20 weeks. Further, she maintains the denial of such is discriminatory against women pursuant to section 15 of the Canadian Charter of Rights and Freedoms ("the Charter"). [2] While the facts of this matter are not much more complicated than stated in the opening paragraph, the procedural morass through which Ms. Mulvenna has had to wander to reach this point is anything but simple. This arises due to the two streams of appeal an employee has under the employment insurance legislation, depending on the nature of the complaint: one avenue is via the Minister of National Revenue ("the Minister"); the other avenue is via the Canada Employment Insurance Commission. They share administrative responsibilities under the Employment Insurance Act ("the Act"). The procedure is further complicated as Ms. Mulvenna has also brought a constitutional challenge, which has its own procedural requirements. In an effort to untangle this procedural web and get at the crux of the matter, I will present the facts chronologically: January 1996: Ms. Mulvenna gives birth to her first child and leaves work to go on pregnancy/parental leave. January 1996 to July 1996: Ms. Mulvenna is on maternity leave followed by parental leave. For a number of years prior to January 1996 Ms. Mulvenna worked at St. Mary's of the Lake Hospital ("St. Mary's) in Kingston. She had worked full-time for 12 years prior to the birth of her first child. July 1996 to March 1997: Ms. Mulvenna works full-time at St. Mary's. March 1997 Ms. Mulvenna gives birth to her second child. Just prior to this she signed a St. Mary's form indicating she wished to continue employee benefits. March 1997 to September 1997: Ms. Mulvenna is on pregnancy and parental leave. She receives employment insurance benefits plus a top-up of $89 per pay period from St. Mary's, which brings her income to 75 per cent of her salary. The top-up is a requirement of the Collective Agreement with St. Mary's. Ms. Couldridge, an employee of St. Mary's payroll department, describes Ms. Mulvenna's leave as unpaid leave. August 1997: Mr. Mulvenna finds work in Toronto. September 1997 to March 1998: Ms. Mulvenna returns to work full-time at St. Mary's. She accumulates 726 hours of insurable employment. March 1998: Ms. Mulvenna leaves employment to join her husband in Toronto. There was some delay in moving to Toronto as the sale on the Kingston property did not proceed as quickly as planned. There was some interim accommodation for the Mulvennas in Whitby as they could not move into their new home in Markham until July. April 1998: Ms. Mulvenna applied for employment insurance and was advised her entitlement was 20 weeks based on 726 insurable hours. May - June 1998: Ms. Mulvenna looked for work in Toronto. The Kingston employment insurance office required her to look for work in Kingston, because she could not provide a permanent Toronto address as yet. She felt compelled to comply with the request, though certainly recognized the futility of such a search. August 1998: The Mulvennas move into their new home in Markham, Ontario. Employment insurance benefits run out. Sometime during this period of April to August 1998 Ms. Mulvenna appealed to the Board of Referees. January 1999: The Board of Referees dismiss Ms. Mulvenna's claim indicating her entitlement to 20 weeks benefit, based on 726 hours of insurable employment, was correct. The Board also confirmed that the top-up received by Ms. Mulvenna from March 1997 to September 1997 was not subject to employment insurance deductions. Ms. Mulvenna appeals the Referee's decision to the Umpire, also raising a constitutional challenge. October 2000: The Umpire adjourns the appeal so that Ms. Mulvenna can comply with section 57 of the Federal Court of Appeal Act requiring notification of a constitutional challenge to all Attorney Generals across the country. February 2001: The Umpire orders a Motion record, after the constitutional notice has been sent. April 2001: Ms. Mulvenna sends out the required constitutional notice. July 2001: The Umpire determines there can be no decision until the Tax Court of Canada ("TCC") makes a ruling on the correct number of insurable hours. Only then can the Umpire determine the number of weeks of benefit available to Ms. Mulvenna. August 2001: A request for insurability ruling is filed with Canada Customs and Revenue Agency ("CCRA") from Human Resources Development Canada ("HRDC"), citing the reason for such a request being an Order of the Court. The periods of insurability covered are March 1997 to September 1997 and September 1997 to March 1998. While there was no direct documentary evidence of the ruling, the following actions by Ms. Mulvenna indicate there must have been a ruling between August 2001 and December 2001. December 2001: Ms. Mulvenna appeals to the Chief of Appeals CCRA Ottawa, from Ruling CE200159789239, which letter of appeal is forwarded to the Chief of Appeals London. This appeal addresses the issue of whether she met the criteria for insurable employment during her pregnancy/parental leave. April 2002: CCRA advises Ms. Mulvenna, St. Mary's and HRDC of their ruling that "It has been decided that the monies received to increase the pregnancy and parental benefits paid during the above mentioned period are excluded from insurable earnings. Insurable hours are not attributable to these earnings". CCRA also advised Ms. Mulvenna that if she disagreed with that decision she could appeal to the TCC. May 2002: Ms. Mulvenna sends out a second set of constitutional notices to Attorneys General across the country. July 2002: Ms. Mulvenna appeals to the TCC. August 2002: CCRA advises the TCC of Ms. Mulvenna's appeal of December 2001, along with their decision of April 2002. October 2002: The Minister files a Reply to the Notice of Appeal in the TCC. While the Reply refers to the insurability of the top-up payments during the pregnancy/parental leave period in 1997, there is no reference to the Umpire's directions. April 2003: Ms. Mulvenna sends out her third set of constitutional notices. Three days prior to the hearing, the Respondent makes representations in the TCC to adjourn this matter as more time is required to prepare for the constitutional argument. Ms. Mulvenna wishes to proceed as scheduled. I denied the adjournment application. [3] In April 1998 Ms. Mulvenna advised the government she believed she was entitled to 40 weeks, not 20 weeks, of employment insurance benefits. Five years have passed. She has sent out constitutional notices on three separate occasions. She has dealt with the Minister, HRDC, Canada Employment Insurance Commission, Board of Referees, two Umpires, at least two employment insurance officers and at least two CCRA officers. She has appeared at the TCC on two occasions, once because the Respondent sought an adjournment. She has been advised by the government that she should look for work in Kingston, when they knew full well she was in the throes of moving to Toronto. I am not the least bit surprised that Ms. Mulvenna became somewhat emotional in describing her circumstances. How do we instil in the public a confidence in our administrative, quasi-judicial and judicial system when what appears to be a relatively simple question - you have short-changed me my employment insurance benefits - takes such a long and laborious course to answer? It is not my role to legislate, regulate or establish administrative practices; that is, to set the rules of the game. I do however see an Appellant's justifiable frustration where the rules and the administration of the rules become so burdensome that despair sets in. This is not healthy. The very fairness that presumably the rules are meant to ensure leave a lasting impression to the opposite effect. [4]The question for this Court is how many, if any, insurable hours of employment did Ms. Mulvenna accumulate during her leave from March 1997 to September 1997? The Respondent says none. The Respondent also argues that even if I find there were insurable hours, this will not help Ms. Mulvenna as those hours fall outside the "qualifying period". A qualifying period is the period in which Ms. Mulvenna must accumulate sufficient insurable hours to establish a claim. I wish to deal with this point first. I disagree with the Respondent's counsel's characterization of the qualifying period in this case. He indicated the qualifying period: ... will be the shorter of that 52 week period I mentioned, or in effect the time since the Appellant's last benefit period ended. So for the Appellant you would not go back - she made her claim in March of 1998 for EI benefits - you do not go back 52 weeks to March of 1997 to figure out whether the Appellant had enough hours of insurable employment. You go back to September of 1997 when her benefits had run out, her parental and pregnancy benefits had run out. So you are only counting the hours essentially from September - the only relevant hours, the hours from September to March - September of 1997 to March of 1998. (Transcript page 37, lines 11 to 24) .... ... even if you make a decision here that says the Appellant has whatever number of insurable hours during the period of her maternity and parental leave, that would really still not get her very far in terms of being eligible for benefits because those hours would not be part of her qualifying period. (Transcript page 40, lines 6 to 12) [5] But section 8 of the Act reads as follows: 8(1) Subject to subsections (2) to (7), the qualifying period of an insured person is the shorter of (a) the 52-week period immediately before the beginning of a benefit period under subsection 10(1), and (b) the period that begins on the first day of an immediately preceding benefit period and ends with the end of the week before the beginning of a benefit period under subsection 10(1). [6] This does not suggest to me that the qualifying period excludes a preceding benefit period, but explicitly includes a preceding benefit period by referring to a period that begins on the first day of an immediately preceding benefit period - not the last day of an immediately preceding benefit period. Ms. Mulvenna's benefit period of March 1997 to September 1997 appears on a plain reading of section 8 to be part of her qualifying period for the purposes of calculating insurable hours that accrue to the next benefit period. [7] Having found her benefit period from March to September 1997 can be considered as part of the qualifying period, for purposes of determining insurable hours, the calculation of such hours becomes the issue. For this determination, it is necessary to turn to Part I of the Employment Insurance Regulations, ("the Regulations") specifically section 10.1 which reads: 10.1(1) Where an insured person is remunerated by the employer for a period of paid leave, the person is deemed to have worked in insurable employment for the number of hours that the person would normally have worked and for which the person would normally have been remunerated during that period. (2) Where an insured person is remunerated by the employer for a period of leave in the form of a lump sum payment calculated without regard to the length of the period of leave, the person is deemed to have worked in insurable employment for the lesser of (a) the number of hours that the person would normally have worked and for which the person would normally have been remunerated during the period, and (b) the number of hours obtained by dividing the lump [8] If I find Ms. Mulvenna qualifies under section 10.1 as being on paid leave, she would have, according to this section, 32.5 hours of insurable employment each week during her leave, as that is the number of hours per week she normally worked. So, for 26 weeks, this would be 845 hours. [9] The Respondent argues that just because she received a top-up of $89 per pay period during this period, that is not sufficient to characterize Ms. Mulvenna's leave as "paid leave". The Respondent raises a number of arguments. First, if subsection 10.1(2) is considered, (that is the subsection dealing with a lump sum paid to an employee on leave) the number of hours is determined on the basis of the lesser of two items, one being the lump sum divided by the normal hourly rate. If such an approach was taken with Ms. Mulvenna's actual receipts, the hours would be dramatically lower. [10] Indeed, the Respondent suggested it was absurd that simply because of the method of payment - lump sum versus periodic - such drastic differences would result. The lump sum versus periodic distinction however is one in income tax laws which can indeed create a dramatic difference. I have not heard the Crown raise absurdity in such situations. If the Respondent believes an absurdity results, it is not for this Court to rewrite the legislation. The fact is Ms. Mulvenna did not receive a lump sum. I am not persuaded that a plain meaning of subsection 10.1(1) of the Regulations can be ignored. [11] Second, the Respondent referred to Alberta v. Alberta Union of Provincial Employees and MOLO,[1] a 1985 case of the Alberta Court of Appeal for some guidance on how "leave" is defined. The case suggests "leave" imports the idea of permission by the employer to the employee to be away from work. This case would appear to help Ms. Mulvenna, as certainly she was away from work and it was with the permission of her employer, albeit granted through the terms of the Collective Agreement. I find Ms. Mulvenna was on leave. [12] Third, the Respondent argues that if this type of absence is to be considered leave, it is not paid leave, notwithstanding she received the top-up from her employer. The Respondent compares Ms. Mulvenna to an employee on pregnancy/parental leave who does not receive a top-up. Surely, argues the Respondent, this person is not on paid leave. It would therefore be unfair and illogical to afford Ms. Mulvenna any benefit just because she got the top-up. The Respondent is asking me to apply some principle of fairness or logic to override what I read as very clear legislative wording. The Respondent has undoubtedly been on the beneficial end of many tax issues where the sense of unfairness and illogic have screamed out at the taxpayer. I am not at all swayed that in this case, firstly, there is an unfairness, or secondly, if it is an appropriate principle upon which to rule in favour of the government, when the government wrote the legislation. The Respondent's argument does not fly. The reason I am not even convinced there is an unfairness is because a union may introduce a top-up provision such as this to obtain the very benefit at issue for its members. The employee who is not a member of such a union is not treated unfairly because of the employment insurance legislation, but if at all, because of the vagaries of different employment contracts. [13] Fourth, the Respondent points to the testimony of the employer's payroll officer who said she did not consider Ms. Mulvenna to be on paid leave. With all due respect, I do not find Ms. Couldridge's testimony persuasive as far as the definition of paid leave for purposes of section 10.1 of the Regulations. She did not purport to have been involved in negotiations of the Collective Agreement to be able to shed any light on the Union's perception of the import of the top-up provision. There is no doubt these payments constituted pay. [14] The Respondent went through the Collective Agreement and noted that it does not refer to this leave in terms of paid leave. Yet, it neither refers to it as leave without pay, which is an expression found elsewhere in the Collective Agreement. I find the Collective Agreement does not support a position that Ms. Mulvenna's leave is not paid leave. It specifically covers the level of pay Ms. Mulvenna was to receive during this particular leave period. [15] Finally, I turn to the real crux of the Respondent's argument which is simply that to treat Ms. Mulvenna's leave as paid leave for purposes of section 10.1 of the Regulations just does not make sense in the context of the whole employment insurance scheme, as it means treating the time during which she received employment insurance benefits as time that qualifies her for more employment insurance benefits. The Respondent compares Ms. Mulvenna to the person actually working, who receives hours of insurable employment for hours actually worked. He suggests that Ms. Mulvenna gets better coverage, and that, again, is absurd. I can see that Ms. Mulvenna might get the same coverage but fail to see how the coverage is better. The point the Respondent is driving at is that Ms. Mulvenna was not working and should not be entitled to the benefit of any insurable hours. This reasoning flies in the very face of section 10.1 of the Regulations. The Act explicitly accepts that someone not working can still have insurable hours counted. The Respondent's approach also fails to recognize the very core of the issue Ms. Mulvenna is attempting to make; that is, that just as her seniority continues to accrue while on this type of leave, so too should her accrual of insurable hours. Being on leave for the purposes of giving birth should no more take away the status of an employee than being on a paid leave for any other purpose. [16] The Respondent's real concern is that the $89 per pay period from the employer is not sufficient to justify the benefit; that is, that paid leave should imply full-paid leave by the employer. The Respondent provided no precedent, no definition and no interpretation in tax laws or employment laws or labour laws to suggest that a top-up payment to get an employer's salary to 75 per cent of her full salary is not sufficient to constitute a "paid leave". Just as the legislation provided in subsection 10.1(2) for a calculation based on the amount actually paid, so too could subsection 10.1(1) have provided something similar. It does not. It simply relies upon the expression "paid leave". Ms. Mulvenna was certainly on leave and she was certainly paid. I find nothing absurd or unfair in the treatment of a woman, having worked full-time for 12 years, having her time for pregnancy/parental leave continue to count towards insurable hours for purposes of insuring against the risk of a subsequent unforeseen need for insurance - a husband's transfer for example. In that context I interpret subsection 10.1(1) of the Regulations as applying to Ms. Mulvenna. Given this finding it is unnecessary for me to address the constitutional issues raised. [17] I allow Ms. Mulvenna's appeal and refer the matter to the Umpire on the basis that Ms. Mulvenna accumulated an additional 845 hours of insurable employment during the qualifying period over and above the 726 hours already allowed. Signed at Ottawa, Canada, this 16th day of June, 2003. "Campbell J. Miller" J.T.C.C. CITATION: 2003TCC390 COURT FILE NO.: 2002-2844(EI) STYLE OF CAUSE: Sherri-Lynn Mulvenna and the Minister of National Revenue PLACE OF HEARING: Toronto, Ontario DATE OF HEARING: April 29 and May 2, 2003 REASONS FOR JUDGMENT BY: The Honourable Judge Campbell J. Miller DATE OF JUDGMENT: June 16, 2003 APPEARANCES: Agent for the Appellant: Michael Mulvenna Counsel for the Respondent: Nimanthika Kaneira COUNSEL OF RECORD: For the Appellant: Name: N/A Firm: For the Respondent: Morris Rosenberg Deputy Attorney General of Canada Ottawa, Canada [1] 65 A.R. 84.