[2002] 2 F.C. 205
A-551-00
2001 FCA 315
The Attorney General of Canada (Applicant)
v.
Victoria Sveinson (Respondent)
Indexed as: Canada (Attorney General) v. Sveinson (C.A.)
Court of Appeal, Linden, Sexton and Evans JJ.A.— Ottawa, October 16 and 19, 2001.
Employment insurance — Judicial review of Umpire’s decision retroactive pay award attributable to pay period to which related, not to time of receipt — Employment Insurance Regulations, s. 23(1)(a) providing “remuneration, including statutory holiday pay, other than the remuneration referred to in paragraph (b) paid in respect of a pay period … shall be allocated to that pay period” — S. 23(1)(b) providing “retroactive pay increases … and any other remuneration including vacation pay not paid in respect of a pay period …, shall be allocated proportionately over the pay period in which they are paid” — Umpire holding retroactive pay raise in respect of pay period used to calculate insurable earnings, s. 23(1)(a) applied — Erred in law — Umpire’s interpretation proceeded on premise key distinction made by s. 23(1)(a), (b) between remuneration paid in respect of specific pay period and remuneration that is not — Words in s. 23(1)(b), “not paid in respect of a pay period”, qualify “vacation pay” and possibly, “other remuneration”, but not preceding list of payments, including “retroactive pay increases”.
Construction of statutes — Employment Insurance Regulations, s. 23(1)(a) providing “remuneration, including statutory holiday pay, other than the remuneration referred to in paragraph (b) paid in respect of a pay period … shall be allocated to that pay period” — S. 23(1)(b) providing “retroactive pay increases … and any other remuneration including vacation pay not paid in respect of a pay period …, shall be allocated proportionately over the pay period in which they are paid” — Text, history, punctuation, French version, policy rationale of s. 23(1)(a), (b) examined — Words in s. 23(1)(b), “not paid in respect of a pay period”, qualify “vacation pay” and possibly, “other remuneration”, but not preceding list of payments, including “retroactive pay increases”.
Administrative Law — Judicial review — Certiorari — Standard of review of determinations by umpires of questions of law, jurisdiction that of correctness — That decisions of umpires under E.I. Act subject to judicial review (versus statutory appeal), and Commission, employees interested in inexpensive, expeditious decision-making insufficient reasons to tip balance of factors considered in pragmatic or functional approach in favour of deferential standard of review — Application of correctness standard supported by fact F.C.A. having same expertise, perspective as other decision-makers; umpires not having unique expertise as some F.C.A. judges, when on F.C.T.D., tried E.I. cases, judges assigned to sit or umpires on ad hoc basis.
This was an application for judicial review of an Umpire’s decision that a retroactive pay award was attributable to the pay period to which it related and not to the time of its receipt. The respondent was employed from April to October, 1998. She established a claim for employment insurance benefits in January 1999. As a result of a new collective agreement, she received a retroactive pay increase in April 1999, after she had obtained other employment. She applied for an adjustment to the employment insurance benefits that she had received on the ground that the raise had increased her insurable earnings.
Employment Insurance Regulations, paragraph 23(1)(a) provides that “remuneration, including statutory holiday pay, other than the remuneration referred to in paragraph (b) paid in respect of a pay period … shall be allocated to that pay period”. Paragraph 23(1)(b) provides that “retroactive pay increases … and any other remuneration including vacation pay not paid in respect of a pay period …, shall be allocated proportionately over the pay period in which they are paid”. Paragraphs 23(1)(a) and (b) were enacted by SOR/96-332, and amended twice thereafter in a period of just over a year by SOR/97-31 and SOR/97-310. In the first version of paragraph 23(1)(b), commas were placed around the phrase “including vacation pay not paid in respect of a pay period”, clearly indicating that the words “not paid in respect of a pay period” modified “vacation pay” and not the other items in the preceding list. In SOR/97-31, the comma between “remuneration” and “including” disappeared making it less clear that the words “not paid in respect of a pay period” modify only “vacation pay”. In SOR/97-310, there is no longer a comma after “period” either, but there is a comma at the end of the added phrase, “or that remains unpaid for the reasons described in subsection 2(2) of the Insurable Earnings and Collection of Premiums Regulations”.
The Commission and the Board of Referees refused her application, but the Umpire allowed it. He held that since the retroactive pay was in respect of a pay period used to calculate insurable earnings, paragraph 23(1)(a) applied.
The issue was whether the retroactive pay increase should be attributed to the pay period in respect of which it was paid, or to the earnings period when it was actually received.
Held, the application should be allowed.
The standard of review applicable to determinations by an umpire of questions of law and jurisdiction is that of correctness. That umpires’ decisions reach this Court by way of judicial review, not by way of appeal, and that the Commission, as well as employees, have an obvious interest in inexpensive and expeditious decision-making are insufficient reasons to tip the balance of the factors considered in the pragmatic or functional approach in favour of a deferential standard of review to legal determinations by Umpires. The following considerations support the application of a correctness standard. The decision-makers, judges of the Federal Court, Trial Division or other courts, do not bring to the task of interpreting the legislation an expertise superior to, or a perspective different from, that of the Federal Court of Appeal. They are performing an adjudicative function: determining the legal rights of the parties on the basis of umpires’ interpretation of detailed and complex legislation and its application to the facts of individual cases. Judicial deference to umpires’ decisions could not be justified on the ground of their unique expertise, since some members of the Court of Appeal may have become familiar with employment insurance legislation as members of the Trial Division, and since judges may sit as Umpires in employment insurance cases either on an ad hoc basis or as part of their regular judicial duties.
The Umpire erred in law. The text and history of paragraphs 23(1)(a) and (b) are incompatible with the Umpire’s interpretation, which proceeded on the premise that the key distinction made by paragraphs 23(1)(a) and (b) is between remuneration paid in respect of a specific pay period and remuneration that is not. The words in paragraph 23(1)(b), “not paid in respect of a pay period”, qualify “vacation pay” and possibly, “other remuneration”, but not the preceding list of payments, including “retroactive pay increases” for the following reasons. (1) The punctuation of the predecessors of the version of paragraph 23(1)(b) relevant to this appeal indicates that the words, “not paid in respect of a pay period”, modify only “vacation pay”. Moreover, the French version of paragraph 23(1)(b) has always retained the comma preceding the critical phrase thus indicating that the words “qui n’est pas versée à légard d’une période de paie” modify only “la paie de vacances”. Also, the use of the third person singular and the feminine gender indicates that the pronoun “qui” refers to “la paie de vacances”. A similar inference may be drawn from the word “remains” in the English text. (2) The only function performed by the words in paragraph 23(1)(a), “other than the remuneration referred to in paragraph (b)” is to remove from the scope of paragraph (a) items of remuneration that would otherwise have fallen within it. Since paragraph (a) deals only with remuneration “paid in respect of a pay period”, there would be nothing to remove unless some of the items of remuneration listed in paragraph (b) were similarly “paid in respect of a pay period”. (3) Paragraph (a) speaks merely of “remuneration, including statutory holiday pay”, while paragraph (b) lists a number of non-regular payments and “other remuneration”. This is a highly implausible way of expressing a legislative intention that the paragraphs deal with the same items of remuneration, except that paragraph (a) covers all items of remuneration paid in respect of a pay period, while (b) covers the same items when not paid in respect of a pay period. (4) There is a cogent policy rationale for this interpretation. The common thread linking the items listed in paragraph 23(1)(b) is that they may or may not have been paid in respect of a particular pay period. For the Commission to have to determine if they were, and to which pay period, if any, they should be attributed, would require officials to go behind the pay record presented by the claimant and investigate the employer’s pay practices. In order to avoid this kind of administrative cost and inconvenience, the Regulation prescribed that all the listed non-regular items of remuneration are to be attributed to the time of their receipt, whether or not they were in fact paid in respect of a specific pay period. Regular remuneration and statutory holiday pay, on the other hand, are always readily attributable to a period, hence their inclusion in paragraph 23(1)(a).
STATUTES AND REGULATIONS JUDICIALLY CONSIDERED
Employment Insurance Act, S.C. 1996, c. 23.
Employment Insurance Regulations, SOR/96-332, s. 23 (as am. by SOR/97-31, s. 12; 97-310, s. 6).
Federal Court Act, R.S.C., 1985, c. F-7, ss. 18.1(4) (as enacted by S.C. 1990, c. 8, s. 5), 28(1)(m) (as am. idem, s. 8).
Insurable Earnings and Collection of Premiums Regulations, SOR/97-33.
Unemployment Insurance (Collection of Premiums) Regulations, C.R.C., c. 1575, s. 3.1 (as am. by SOR/88-584, s. 1).
Loi sur l’assurance-emploi, L.C. 1996, ch. 23.
Règlement sur la rémunération assurable et la perception des cotisations, DORS/97-33.
Règlement sur l’assurance-chômage (perception des cotisations), C.R.C., ch. 1575, art. 3.1 (mod. par DORS/88-584, art. 1; 89-329, art. 1).
Règlement sur l’assurance-emploi, DORS/96-332, art. 23 (mod. par DORS/97-31, art. 12; 97-310, art. 6).
CASES JUDICIALLY CONSIDERED
applied:
Canada (Attorney General) v. Haberman (2000), 258 N.R. 150 (F.C.A.); Black v. Canada (Employment Insurance Commission), [2002] 1 F.C. 468 (2001), 275 N.R. 371 (C.A.).
APPLICATION for judicial review of the Umpire’s decision (In re Sveinson (2000), CUB 48893) that a retroactive pay award was attributable to the pay period to which it related pursuant to Employment Insurance Regulations, paragraph 23(1)(b) and not to the time of its receipt, thus increasing the respondent’s insurable earnings that formed the basis of her benefits. Application allowed.
APPEARANCES:
Julia Parker for applicant.
Andrew J. Raven for respondent.
SOLICITORS OF RECORD:
Deputy Attorney General of Canada for applicant.
Raven, Allen, Cameron & Ballantyne, Ottawa, for respondent.
The following are the reasons for judgment rendered in English by
[1] Evans J.A.: If this were a detective novel it might have been called, The Mystery of the Missing Comma. As it is, it is an application for judicial review to set aside a decision of an umpire who, according to counsel for the applicant, the Attorney General, misinterpreted a provision of the Employment Insurance Regulations, SOR/96-332, as a result of the omission of a comma from the English text.
[2] In 1998, Ms. Sveinson was employed on a term basis at the Revenue Tax Centre in Winnipeg from April to October. She established a claim for employment insurance benefits in January 1999. As a result of a new collective agreement, she received a retroactive pay increase in April 1999, part of which was paid in respect of the period of her employment at the Tax Centre relevant for calculating her benefits. She received the payment after obtaining other employment.
[3] Ms. Sveinson applied for an adjustment to the employment insurance benefits that she had received, on the ground that her retroactive pay raise had increased her insurable earnings while at the Tax Centre. The Commission refused the application.
[4] The issue in dispute is the earning period to which the retroactive pay increase should be attributable under the Regulations. Ms. Sveinson submits that it should be attributed to the pay period in respect of which it was paid, thus increasing her insurable earnings at the Tax Centre that formed the basis for calculating the amount of her benefits. The Attorney General submits that, since the pay increase should be attributable to the earnings period when it was actually received, it did not affect the amount of benefits that she had received from January. Reversing the decision of the Board of Referees, the Umpire found in favour of Ms. Sveinson: In re Sveinson (2000), CUB 48893.
[5] The application for judicial review brought by the Attorney General against this decision was heard together with another application for judicial review of a decision by the same Umpire raising exactly the same issue on materially identical facts. The reasons given in Ms. Sveinson’s application are applicable to that other application (A-488-00) and a copy will be inserted in the file.
[6] The relevant provisions of the version of the Regulations governing this case read as follows:
Employment Insurance Regulations, SOR/96-332,
s. 23 [as am. by SOR/97-31, s. 12;
art. 23 [mod. par DORS/97-31, art. 12;
97-310, art. 6]
23. (1) Pour l’application de l’article 14 de la Loi, la rémunération assurable est répartie de la façon suivante:
a) la rétribution, y compris la paie des jours fériés, autre que la rétribution visée à l’alinéa b), qui est versée pour une période de paie ou qui n’est pas versée pour les raisons visées au paragraphe 2(2) du Règlement sur la rémunération assurable et la perception des cotisations, est attribuée à cette période de paie;
b) la paie d’heures supplémentaires, les primes de quart de travail, les rajustements de salaire, les augmentations de salaire rétroactives, les primes, les gratifications, les crédits de congés de maladie non utilisés, les primes de rendement, l’indemnité de vie chère, l’indemnité de fin d’emploi, l’indemnité de préavis et toute autre rétribution, y compris la paie de vacances qui n’est pas versée à l’égard d’une période de paie ou qui n’est pas versée pour les raisons visées au paragraphe 2(2) du Règlement sur la rémunération assurable et la perception des cotisations, sont répartis proportionnellement sur la période de paie au cours de laquelle ils sont versés. [Soulignements ajoutés.]
[7] This provision replaced the following version enacted in December 1996:
Employment Insurance Regulations, SOR/96-332, s. 23 [as am. By SOR/97-31]
23. (1) For the purposes of section 14 of the Act, insurable earnings shall be allocated in the following manner:
(a) remuneration, including statutory holiday pay, other than the remuneration referred to in paragraph (b), paid in respect of a pay period shall be allocated to that pay period; and
(b) overtime pay, shift premiums, pay adjustments, retroactive pay increases, bonuses, gratuities, accumulated sick leave credits, incentive payments, cost of living allowances, separation payments, wages in lieu of notice and any other remuneration including vacation pay not paid in respect of a pay period, shall be allocated proportionately over the pay period in which they are paid. [Underlining added.]
[8] This version, in turn, had replaced Regulations enacted six months earlier:
Employment Insurance Regulations, SOR/96-332
23. (1) For the purposes of section 14 of the Act, insurable earnings shall be allocated to a rate calculation period in the following manner:
(a) remuneration, including statutory holiday pay, other than the remuneration referred to in paragraph (b), paid in respect of a pay period shall be allocated to that pay period;
(b) overtime pay, shift premiums, pay adjustments, retroactive pay increases, bonuses, gratuities, accumulated sick leave credits, incentive payments, cost of living allowances, separation payments, wages in lieu of notice and any other remuneration, including vacation pay not paid in respect of a pay period, shall be allocated to the pay period in which they are paid. [Underlining added.]
[9] Paragraphs 23(1)(a) and (b) were fine tuned twice in a period of just over a year. As they became more elaborate, they suffered a corresponding loss of clarity, a fate not uncommon with complex legislation. The substantive amendments appear to have been the addition by SOR/97-31 of the phrase “proportionately over” to the last line of paragraph 23(1)(b), and the addition to both paragraphs by SOR/97-310 of the words “or that remains unpaid for the reasons described in subsection 2(2) of the Insurable Earnings and Collection of Premiums Regulations” [SOR/97-33].
[10] In addition, commas have disappeared from the English version of paragraph (b), thereby further muddying its meaning. Thus, in the first version, SOR/96-332, commas were placed around the phrase “including vacation pay not paid in respect of a pay period”. This punctuation would seem clearly to indicate that, within this phrase, the words “not paid in respect of a pay period” modified “vacation pay”, and not the other items in the preceding list. However, when SOR/97-31 amended paragraph 23(1)(b), the comma between “remuneration” and “including” disappeared and, as a result, it has become less clear that the words “not paid in respect of a pay period” modify only “vacation pay”.
[11] In the version of paragraph 23(1)(b) relevant to the case at bar, SOR/97-310, there is no longer a comma after “period” either. Nonetheless, since there is a comma at the end of the phrase added by that amendment, “or that remains unpaid for the reasons described in subsection 2(2) of the Insurable Earnings and Collection of Premiums Regulations”, the removal of the comma after the word “period” is of no consequence.
[12] Before addressing the interpretative issue, I should deal with the submission by counsel for the respondent that the Court should apply a standard of patent unreasonableness when reviewing decisions of umpires challenged on the ground that they are based on a misinterpretation of the Employment Insurance Act [S.C. 1996, c. 23] and Regulations.
[13] Counsel were able to refer us to only one case in which this issue has been addressed by the Court, namely, Canada (Attorney General) v. Haberman (2000), 258 N.R. 150 (F.C.A.). In a dissenting judgment, Isaac J.A stated, at paragraph 52, that correctness is the standard of review applicable to determinations by an umpire of questions of law and jurisdiction. It is equally clear from paragraphs 53 and 57 that Isaac J.A. did not consider the issue before him to be one of jurisdiction.
[14] As I indicated when writing for the Court in Black v. Canada (Employment Insurance Commission), [2002] 1 F.C. 468 (C.A.), at paragraph 27, I agree with this view of the standard of review applicable to umpires’ interpretation of the employment insurance legislation. It is, of course, true that umpires’ decisions reach this Court by way of judicial review, and not by way of appeal, an d that the Commission and employees have an obvious interest in inexpensive and expeditious decision-making. Nonetheless, these considerations are insufficient to tip the balance of the factors considered in the pragmatic or functional approach in favour of a deferential standard of review to legal determinations by umpires.
[15] The differences between an appeal and an application for judicial review unfettered by a preclusive clause are of much less practical significance than once they were. Hence, the fact that, in the absence of a right of appeal, decisions of umpires are reviewable under paragraph 28(1)(m) of the Federal Court Act, R.S.C., 1985, c. F-7 [as am. by S.C. 1990, c. 8, s. 8], on the generous grounds of review set out in subsection 18.1(4) [as enacted idem, s. 5], is a very weak indicator of a legislative intention that the Court should apply a deferential standard of review to umpires’ legal determinations. Despite the undoubted advantages of expeditious and inexpensive decision -making, these factors are nearly always one of the reasons for empowering administrative tribunals to make decisions. However, in my opinion these factors do not loom so unusually large in this scheme as to trump all others, even though employment insurance claimants are often of modest means.
[16] The following considerations, in particular, support the application of a correctness standard. First, the decision-makers, judges of either the Trial Division of this Court, or other courts, do not bring to the task of interpreting the legislation an expertise superior to, or a perspective different from that of this Court. They are performing an adjudicative function no different in nature from that of this or of any other court: determining the legal rights of the parties on the basis of umpires’ interpretation of detailed and complex legislation and its application to the facts of individual cases.
[17] True, umpires may render more decisions on the legislation than members of this Court, but that is an insufficient basis for deference, especially since some members of this Court, when members of the Trial Division, may well have become familiar with employment insurance legislation. Further, judges are assigned ad hoc to sit as umpires in employment insurance cases, and, if they are serving judges, these assignments are simply part of their regular judicial duties. Hence, judicial deference to umpires’ decisions cannot be justified on the ground of their unique expertise.
[18] Turning to the substantive issue in this appeal, I am persuaded that the Umpire erred in law when he adopted the interpretation of paragraphs 23(1)(a) and (b) advanced on behalf of the claimant. He held that, since the retroactive pay received by Ms. Sveinson after the termination of her employment was in respect of a pay period used to calculate her insurable earnings, and hence was relevant to the amount of benefits to which she was entitled, paragraph 23(1)(a) was applicable. Accordingly, the retroactive pay award was attributable to the pay period to which it related, and not to the time of its receipt.
[19] In my respectful opinion, the text and history of the paragraphs of the Regulation in dispute here are incompatible with this reading, which proceeds on the premise that the key distinction made by paragraphs 23(1)(a) and (b) is between remuneration paid in respect of a specific pay period and remuneration that is not. Despite the interpretative difficulties undoubtedly raised by the wording of these provisions, it is clear to me that the applicant’s interpretation provides a better fit with their text, history and structure. For the following reasons, I am of the view that the words in paragraph 23(1)(b), “not paid in respect o f a pay period”, qualify “vacation pay” and, possibly, “other remuneration”, but not the preceding list of payments, including “retroactive pay increases”.
[20] First, the punctuation of the predecessors of the version of paragraph 23(1)(b) relevant to this appeal, and particularly of SOR/96-332, indicates that the words, “not paid in respect of a pay period”, modify only “vacation pay”. Indeed, in an even earlier iteration, section 3.1 of the Unemployment Insurance (Collection of Premiums) Regulations, C.R.C., c. 1575 [as am. by SOR/88-584, s. 1], the matter was even clearer. Moreover, the French version of the text of paragraph 23(1)(b) has always retained the comma preceding the critical phrase, thus indicating that the words, “qui n’est pas verseé à l’égard d’une période de paie”, modify only “la paie de vacances”. In addition, the use of the third person singular and the feminine gender in the subordinate clause, “qui n’est pas verseé”, indicates that the pronoun “qui” refers to “la paie de vacances”. A similar inference may also be drawn from the word “remains” in the English text. In light of this, it is very difficult to argue that the omission of the comma i n the English text evidences a legislative intention to change its meaning.
[21] Second, the only function performed by the words in paragraph 23(1)(a), “other than the remuneration referred to in paragraph (b)”, is to remove from the scope of paragraph (a) items of remuneration that would otherwise have fallen within it. Since paragraph (a) only deals with remuneration “paid in respect of a pay period”, there would be nothing to remove unless some of the items of remuneration listed in paragraph (b) were similarly “paid in respect of a pay period”. This is another indication that the Umpire’s interpretation of paragraph (b) as applying only to remuneration not paid in respect of a pay period is not correct.
[22] Third, it is difficult to reconcile the structure of paragraphs (a) and (b) with the meaning ascribed to them by the Umpire. Paragraph (a) speaks merely of “remuneration, including statutory holiday pay” while paragraph (b) lists a number of non-regular payments and “other remuneration”. This is a highly implausible way of expressing a legislative intention that the paragraphs deal with the same items of remuneration, except that paragraph (a) covers all items of remuneration paid in respect of a pay period, while paragraph (b) covers the same items when not paid in respect of a pay period.
[23] Fourth, there would be some obvious policy attractions to a scheme that attributed all forms of remuneration to the period for which they were paid and, if there was no such period, allocating them to the period when they were received. However, counsel for the Attorney General provided a cogent policy rationale to support the interpretation of paragraphs 23(1)(a) and (b) for which she contended. She submitted that the common thread linking the items listed in paragraph 23(1)(b) is that they may or may not have been paid in respect of a particular pay period. For the Commission to have to determine if they were, and to which pay period, if any, they should be attributed, would require officials to go behind the pay record presented by the claimant and investigate the employer’s pay practices.
[24] In order to avoid this kind of administrative cost and inconvenience, the Regulation prescribed that all the listed non-regular items of remuneration are to be attributed to the time of their receipt, whether or not they were in fact paid in respect of a specific pay period. Regular remuneration and statutory holiday pay, on the other hand are always readily attributable to a period, hence their inclusion in paragraph 23(1)(a).
[25] I should note that, although this interpretation is not to the advantage of Ms. Sveinson on the facts of this case, it does not follow that in other circumstances claimants would be unable to be credited with the retroactive pay increase. Thus, for example, if Ms. Sveinson had become eligible for employment insurance benefits after receiving the retroactive pay increase, her insurable earnings calculation would have included that amount and, as a result, her benefits would be higher, provided, of course, that the week in which she received it was a relevant week for calculating her insurable earnings. In addition, if she were unemployed at the time that she received the payment, the retroactive pay increase would be allocated proportionately over the last pay period for which she received regular pay: paragraph 23(1.1) [as am. by SOR/97-31, s. 12].
[26] For these reasons, I would grant the application for judicial review, set aside the decision of the Umpire and remit the matter to him to dispose of in accordance with these reasons. Since counsel for the Attorney General withdrew her request for costs, I would award none.
Linden J.A.: I agree.
Sexton J.A.: I agree.