A-267-77
In re the Unemployment Insurance Act, 1971 and
in re Judith S. Dick (Applicant)
Court of Appeal, Pratte and Heald JJ. and Smith
D.J.—Winnipeg, October 18; Ottawa, November
21, 1977.
Judicial review — Unemployment insurance — Eligibility
for benefits — Teacher on leave of absence for maternity
reasons — Lump sum received pursuant to contract formula
— Declared ineligible for July benefits — Contract deemed
continuing and lump sum deemed salary paid for July, under
Regulation 173(4) — Whether or not Umpire erred in holding
contract not terminated — Federal Court Act, R.S.C. 1970
(2nd Supp.), c. 10, s. 28 — Unemployment Insurance Act,
1971, S.C. 1970-71-72, c. 48, s. 21(2) — Unemployment
Insurance Regulations, SOR/71-324, s. 173(4).
This section 28 application seeks to set aside an Umpire's
decision that dismissed applicant's appeal from a Board of
Referees and held her disentitled to benefits. The applicant, a
teacher who took a leave of absence for maternity reasons in
March 1976, received a lump sum adjustment to her final pay
pursuant to a formula in her employment contract, and began
to receive unemployment benefits shortly after. She was
informed, however, that she was not entitled to benefits for
July. It was argued that the contract was of a continuing nature
and that the lump sum represented salary for July, pursuant to
Regulation 173(4). The crucial question before the Umpire was
whether or not the contract had terminated.
Held, the application is allowed and the matter is referred
back for decision based on the facts. The Umpire's decision,
that applicant's contract of employment had not been terminat
ed, was based on the assumption that other umpires had
established the principle. This assumption is wrong in law.
Whether or not a "leave of absence" may or may not imply a
termination of contract, and whether or not a teacher's employ
ment contract is terminated on her taking maternity leave must
be determined in light of all the circumstances of each case.
APPLICATION for judicial review.
COUNSEL:
D. A. Booth for applicant.
S. M. Lyman for respondent.
SOLICITORS:
Gallagher & Co., Winnipeg, for applicant.
Deputy Attorney General of Canada for
respondent.
The following are the reasons for judgment
rendered in English by
PRATTE J.: This is a section 28 application to set
aside a decision of an Umpire under Part V of the
Unemployment Insurance Act, 1971'. By that
decision, the Umpire dismissed the applicant's
appeal from a decision of a Board of Referees and
held that she was not entitled to the maternity
benefits she had claimed for the month of July,
1976.
The facts which gave rise to the decision of the
Board of Referees are summarized as follows in
the Umpire's decision:
The claimant was employed as a teacher under contract with
the Winnipeg School Division No. 1. Under the agreement
dated May 5, 1970, she was to be paid a salary "at the rate of
the schedule contained in the Winnipeg Division Association's
Collective Agreement ... in twelve equal monthly pay
ments ...." The agreement included the following proviso:
Provided that in the event of the Teacher withdrawing from
the service of the Division during his year of service and
before completing such year, the final payment shall be so
adjusted that the Teacher shall receive for the part of the
year taught such fraction of the salary of the whole year as
the number of days taught is to 200 days (which said 200
days is the total number of teaching days in a normal school
year). In reckoning the days taught all legitimate sick leave
shall be included.
On March 26, 1976, she filed a claim for benefit giving her
reason for separation as pregnancy, stating that she was on
"leave of absence" for maternity purposes, and that she intend
ed to return to her employment in September 1977. She
received from her employer a lump sum payment of $1,878.07
as an adjustment under the above reported proviso. Her salary
was yearly $15,952.04, monthly $1,329.33 and weekly $306.77.
Her application for maternity benefits was duly received and
processed and after the usual two week waiting period her
benefit payment commenced April 11, 1976, and under subsec
tion 30(2) of the Act would have run for fifteen weeks, or to
July 24, 1976.
She was, however, informed on July 15, 1976, by the insur
ance officer of the Commission that she was disentitled under
subsection 21(2) of the Act in that "you have not proved that
you were unemployed in that you received your usual remuner
ation for the full working week and your contract of service
continues". A Board of Referees was unanimous in maintaining
the decision of the officer.
' S.C. 1970-71-72, c. 48.
Section 21(2) of the Unemployment Insurance
Act, 1971 reads as follows:
21. ...
(2) A week during which a claimant's contract of service
continues and in respect of which he receives or will receive his
usual remuneration for a full working week, is not a week of
unemployment, notwithstanding that the claimant may be
excused from the performance of his normal duties or does not
in fact have any duties to perform at that time.
The position of the Commission was that the
applicant's contract of employment had not been
terminated when she left her work on March 26,
1976, and that the sum of $1,878.07 that she had
then received represented, in effect, her salary for
the months of July and August. That was the view
which was also adopted by the Board of Referees
and by the Umpire who, after stating that the
applicant's contract of employment had not been
terminated, invoked Regulation 173(4) to justify
the allocation of the $1,878.07 to the months of
July and August, 1976. Regulation 173(4) reads
as follows:
173. ...
(4) Wages or salary payable to a claimant under a contract
of employment without the performance of services and monies
payable in consideration of a claimant returning to or com
mencing work with an employer shall be allocated to the period
for which such wages, salary or monies, as the case may be, are
payable.
The crucial question that the Umpire had to
answer was whether or not the applicant's employ
ment contract had come to an end on March 26,
1976. 2 If that question was resolved in the affirma
tive, it followed that the $1,878.07 had been paid
to the applicant "for the part of the year taught",
pursuant to the provision of the contract of
employment quoted by the Umpire in his decision,
and could not have been allocated as if it had been
paid as salary for the months of July and August.
On the other hand, if the question was answered in
the negative, it necessarily followed that the pay
ment of the $1,878.07 would have been a payment
in advance of salary for the summer months.
'Contrary to what certain passages of the Umpire's decision
may seem to imply, that question must not be confused with the
question whether the applicant had been separated from her
employment so as to have had an "interruption of earnings"
within the meaning of section 2(n). In my view, a separation
from employment does not necessarily imply a termination of
the contract of employment.
The Umpire, as I already said, stated that the
applicant's contract of employment had not been
terminated. As I read his decision, he made that
statement because he assumed it to be established
by decisions of other umpires that the teacher who
takes a maternity leave does not, thereby, termi
nate her contract of employment. This, in my view,
is an assumption which is wrong in law. Whether
or not a teacher's contract of employment is ter
minated when she takes a maternity leave must be
decided in the light of all the circumstances of
each specific case. What is called a "leave of
absence" may or may not imply a termination of
the contract of employment. One cannot determine
this question without having regard to all the
circumstances, inter alia,
(a) the conditions of the contract of employ
ment, including any relevant provisions of an
applicable collective agreement;
(b) the length of the leave of absence in relation
to the term of the employment contract;
(c) the conditions on which the leave of absence
is granted to the employee. (Will the employee
continue to derive benefits frqm the employment
contract during the leave of absence? Has the
employee the assurance of being reinstated at
the end of the leave?)
I am therefore of the view that the decision of
the Umpire should be set aside and that the matter
should be referred back to him for decision on the
basis that the question whether the applicant's
contract of employment was terminated must be
decided in the light of all the circumstances of this
case as disclosed by the evidence already adduced
as well as by any further evidence that, in the
Umpire's discretion, might be adduced.
* * *
HEALD J.: I concur.
* * *
SMITH D.J.: I concur.
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