[1996] 2 F.C. 593
A-415-95
Her Majesty the Queen (Applicant)
v.
Bronislawa Cymerman (Respondent)
Indexed as: Canada v. Cymerman (C.A.)
Court of Appeal, Isaac C.J., Hugessen and Robertson JJ.A.—Edmonton, February 22; Ottawa, March 28, 1996.
Unemployment insurance — Claimant holding insurable employment during allocation period of termination benefits from previous employment — No earnings during second employment period — Claimant cannot choose employment in respect of which to make claim as Act, s. 13(2) clearly referring to last 20 weeks of insurable employment.
The respondent’s first employment was terminated in June 1991 with termination benefits the allocation of which resulted in the postponement of any possible unemployment insurance benefit period to September 1992. During that allocation period, the respondent obtained a second insurable employment as a real estate agent for 32 weeks, from November 1991 to June 1992. She did not earn any commission during that time and hence had no insurable earnings. The Unemployment Insurance Commission ruled that the respondent’s benefit rate was nil because of her earnings from her last 20 weeks of insurable employment. The ruling was upheld by the Board of Referees but reversed by the Umpire.
This was an application for judicial review of the Umpire’s decision.
Held (Robertson J.A. dissenting), the application should be allowed.
Per Hugessen J.A.: The issue turned on the proper interpretation to be given to subsection 13(2) of the Unemployment Insurance Act which provided that the qualifying weeks of a claimant were the last twenty weeks of insurable employment in the claimant’s qualifying period. The “qualifying period” was defined in section 7 of the Act, which was, however, of only marginal assistance in resolving the issue herein. The qualifying period was relevant to the question of whether or not benefits could be claimed. The “qualifying weeks” on the other hand were used solely to calculate the amount of the benefits: they had no necessary correlation to the weeks of insurable employment required to qualify for benefits.
As there was no ambiguity in the wording of subsection 13(2), there was nothing to be gained by a discussion of the various theories of statutory interpretation. The “last twenty weeks of insurable employment” could only refer to the twenty weeks of insurable employment which occurred last in time in the qualifying period, in this case, the last twenty weeks of employment with the realty company. That no remuneration was earned was unfortunate but completely irrelevant.
The subsection could not be read as referring to the “last twenty weeks of insurable employment for which the claim is made”. Claims are not made in respect of particular employments but rather in respect of a loss of employment and a corresponding interruption of earnings. A claimant could not pick and choose which employment or employments in respect of which he or she wished to make a claim. Nothing in section 13 supported such a view and it could not be implied from a supposedly purposive reading of section 7 which deals only with the qualifying period and its possible extension. Though the result in this case may be thought hard for the claimant — because she earned no remuneration in her last twenty weeks of employment ", in other circumstances subsection 13(2) would work in her favour. Even if section 7 were to apply, her benefit rate would nonetheless be based on her last twenty weeks of insurable employment.
The allocation of termination benefits had the effect of postponing the benefit period but it did not prolong the previous employment which, by definition, had been lost. The calculation of the claimant’s benefits therefore could not be based on her employment with the first employer.
Per Robertson J.A. (dissenting): The application should be dismissed. The law required a contextual approach to interpretation. In applying that approach, the initial error of the Commission lay in the failure to acknowledge the existence of subsections 7(3) and (6) of the Act, and to determine whether the respondent was eligible to receive benefits based on the first employment before turning to the task of calculating the proper benefit rate.
There were two basic questions to be addressed when assessing the unemployment insurance claim: was the claimant eligible to receive benefits, and, if so, what was the weekly benefit rate? Two corollary questions also arose: what was the effect of the claimant obtaining insurable employment during the allocation period and was the benefit rate to be calculated by reference to the first or the second employment?
The claimant has established the two conditions precedent for entitlement to benefits: she had the requisite number of weeks of insurable employment in the qualifying period (20) and had suffered an interruption of earnings. The 52-week qualifying period is extended when there is an allocation of severance pay.
The purpose of subsection 7(3) of the Unemployment Insurance Act is to place a claimant in the same position he would have been in were it not for the receipt of severance pay and the deemed non-interruption of earnings. In other words, a claim for benefits made at the expiry of the allocation period is to be treated as though it were made on the day after the claimant lost his employment and as though the claimant was never in receipt of severance pay.
The claimant could establish twenty weeks of insurable employment with her first employer within this period of time. The question then was whether the benefit rate should be calculated with respect to the “last twenty weeks of insurable employment” with the first employer, or with respect to the the “last twenty weeks of insurable employment” from any and all employment.
There is an apparent confusion regarding the ordinary meaning, plain meaning and literal rules of construction and the contextual, pragmatic and purposive approaches to construction. In this case, if subsection 13(2) is construed in isolation, without examining how it works in the scheme of the Act, then its meaning is plain and unambiguous and the claim should be disallowed. However, the simple solution herein was illogical when consideration is given to the broader context.
In applying the contextual approach to the construction of subsection 13(2), it became clear that the meaning of the provision was ambiguous when examined in its full context, especially with regard to its relation to section 7. The ambiguity lay in whether the last twenty weeks of insurable employment in the qualifying period related to the first employment held for which the claim was being made, or to the second employment which was not the subject of the claim. In a case involving severance pay, section 13 must be interpreted in light of the purpose and effect of section 7. Where a claimant takes a full or part-time second employment with less pay, he should be permitted to file a claim based on the first and more lucrative employment. The purpose of section 7 being to put the claimant in the position he would have been in but for the allocation of severance pay, the claimant is entitled to make a claim for benefits based on the first employment. To find otherwise is to ignore this objective and effectively to jettison subsections 7(3) and (6), amounting to a redrafting of the Act. The explicit inclusion of section 7 provisions defining the impact of a second employment on a claimant’s qualifying period reflected Parliament’s intent that the second employment would have no other effect on a claim. The benefit period, the qualifying period and the allocation period are all fixed according to the first employment. It would simply make no sense to calculate the benefit rate on the basis of the second employment when the claim, and every other element of it, relates to the first.
It was fundamental to the development of case law in this area that the contextual approach to statutory construction be applied. What must be examined is the purpose and object of the particular provision in issue, its related provisions, and how they function together within the scheme of the Act. In the present case, the Court was not dealing solely with a question of benefit rate, but with the effect of the allocation of severance pay with respect to a particular claim.
STATUTES AND REGULATIONS JUDICIALLY CONSIDERED
Canadian Charter of Rights and Freedoms, being Part I of the Constitution Act, 1982, Schedule B, Canada Act 1982, 1982, c. 11 (U.K.) [R.S.C., 1985, Appendix II, No. 44].
Unemployment Insurance Act, R.S.C., 1985, c. U-1, ss. 6(1) (as am. by S.C. 1990, c. 40, s. 5), (2) (as am. idem), 7(1) (as am. by R.S.C., 1985 (3rd Supp.), c. 14, s. 1), (3) (as am. idem), (6) (as enacted idem), (7) (as enacted idem), 9(1), 13, 14 (as am. by S.C. 1990, c. 40, s. 10), 17 (as am. idem, s. 11), 24 (as am. idem, s. 17).
Unemployment Insurance (Collection of Premiums) Regulations, C.R.C., c. 1575, s. 3.1(1)(b) (as am. by SOR/88-584, s. 1).
Unemployment Insurance Regulations, C.R.C., c. 1576, ss. 37 (as am. by SOR/82-778, s. 1; 90-756, s. 8; 92-164, s. 10), 57(2) (as am. by SOR/86-58, s. 1; 89-160, s. 2; 90-756, s. 17; 92-164, s. 15), 58(9) (as am. by SOR/89-550, s. 1).
CASES JUDICIALLY CONSIDERED
DISTINGUISHED:
Canada (Attorney-General) v. Fortin (1989), 67 D.L.R. (4th) 564; 30 C.C.E.L. 117; 90 CLLC 14,004; 109 N.R. 385 (F.C.A.); Canada (Attorney General) v. Sears, [1995] 1 F.C. 393 (1994), 118 D.L.R. (4th) 690; 6 C.C.E.L. (2d) 1; 94 CLLC 14,040; 174 N.R. 67 (C.A.).
CONSIDERED:
ECG Canada Ltd. v. Canada, [1987] 2 F.C. 415 (1987), 13 C.E.R. 281; [1987] 1 C.T.C. 205; 87 DTC 5133; 9 F.T.R. 1 (T.D.); Hills v. Canada (Attorney General), [1988] 1 S.C.R. 513; (1988), 48 D.L.R. (4th) 193; 88 CLLC 14,011; 84 N.R. 86; Lor-Wes Contracting Ltd. v. The Queen, [1986] 1 F.C. 346 [1985] CTC 79; (1985), 85 DTC 5310; 60 N.R. 321 (C.A.); Canada (Attorney General) v. Tucker, [1986] 2 F.C. 329 (1986), 11 C.C.E.L. 129; 66 N.R. 1 (C.A.); Bourne (Inspector of Taxes) v. Norwich Crematorium, Ltd., [1967] 2 All E.R. 576 (Ch. D.).
REFERRED TO:
Canada (Attorney General) v. Rose (1993), 164 N.R. 204 (F.C.A.); Thomson v. Canada (Deputy Minister of Agriculture), [1992] 1 S.C.R. 385; (1992), 89 D.L.R. (4th) 218; 3 Admin. L.R. (2d) 242; 133 N.R. 345; Petts v. The Umpire (Unemployment Insurance), [1974] 2 F.C. 225 (1974), 53 D.L.R. (3d) 126; 6 N.R. 346 (C.A.).
AUTHORS CITED
Côté, Pierre-André. Interpretation of Legislation in Canada, 2nd ed. Cowansville, Que.: Yvon Blais, 1991.
Fulcher, J. E. “The Income Tax Act: The Rules of Interpretation and Tax Avoidance. Purpose vs. Plain Meaning: Which, When and Why?” (1995), 74 Can. Bar Rev. 563.
Sullivan, Ruth. Driedger on the Construction of Statutes, 3rd ed. Toronto: Butterworths, 1994.
APPLICATION for judicial review of the Umpire’s decision allowing an appeal by the claimant from a decision of the Board of Referees which had dismissed the claimant’s appeal from a ruling by the Unemployment Insurance Commission. Application allowed.
COUNSEL:
Ted Fulcher for applicant.
APPEARANCE:
Bronislawa Cymerman on her own behalf.
SOLICITORS:
Deputy Attorney General of Canada for applicant.
The following are the reasons for judgment rendered in English by
Hugessen J.A.: This application for judicial review is taken against a decision of the Umpire which allowed an appeal by the respondent (claimant) from a decision of the Board of Referees which had dismissed her appeal from a ruling by the Commission. While the facts are complex, it is enough that I simply summarize the key points which give rise to the question before us:
1) The claimant’s employment with the University of Alberta terminated in June 1991;
2) She received severance pay and other benefits on termination in an amount of some $49,000;
3) The allocation of the severance pay and benefits resulted in the postponement of any possible benefit period for the claimant for some fifteen months to September 1992;
4) During that allocation period the claimant obtained insurable employment as a commissioned salesperson with Royal LePage from mid-November 1991 to mid-June 1992, a period of thirty-two weeks;
5) Although the claimant’s employment with Royal LePage was insurable she did not in fact earn any commissions and hence had no insurable earnings;
6) The Commission ruled that the claimant’s benefit rate was nil because her earnings from her last twenty weeks of insurable employment, i.e. with Royal LePage, were also nil.
7) That ruling was upheld by the Board of Referees but reversed by the Umpire.
The issue before the Court turns on the proper interpretation to be given to section 13 of the Unemployment Insurance Act[1] and in particular subsection (2) thereof. At the relevant time, section 13 read as follows:
13. (1) The rate of weekly benefit payable to a claimant for a week of unemployment that falls in his benefit period is an amount equal to sixty per cent of his average weekly insurable earnings in his qualifying weeks.
(2) The qualifying weeks of a major attachment claimant are the last twenty weeks of insurable employment in his qualifying period.
(3) The qualifying weeks of a minor attachment claimant are the weeks of insurable employment in his qualifying period.
Section 13 is the only provision of the Act dealing with the rate of weekly benefit and how it is to be calculated. As can be seen, for a major attachment claimant, like the respondent, the critical calculation is of the average weekly insurable earnings during the claimant’s “qualifying weeks” which are defined as the last twenty weeks of insurable employment in her “qualifying period”.
The qualifying period, in its turn, is defined in section 7. Of particular relevance for our purposes are subsections 7(1) [as am. by R.S.C., 1985 (3rd Supp.), c. 14, s. 1], (3) [as am. idem], (6) [as enacted idem] and (7) [as enacted idem]:
7. (1) Subject to subsections (2) to (7), the qualifying period of an insured person is the shorter of
(a) the period of fifty-two weeks that immediately precedes the commencement of a benefit period under subsection 9(1), and
(b) the period that begins on the commencement date of an immediately preceding benefit period and ends with the end of the week preceding the commencement of a benefit period under subsection 9(1).
…
(3) Where a person proves in such manner as the Commission may direct that for any week during any qualifying period mentioned in paragraph (1)(a) that person was prevented from establishing an interruption of earnings by virtue of the allocation, pursuant to regulations made under section 44, of earnings paid to that person by reason of the complete severance of the relationship between that person and his former employer, the qualifying period shall, for the purposes of this section, be extended by the aggregate of those weeks.
…
(6) For the purposes of subsection (3) and paragraph 4(b), a week during which a person referred to in that subsection or paragraph was employed in insurable employment shall not be counted.
(7) No extension shall be made pursuant to any of subsections (2) to (4) to a qualifying period of a person that would provide in respect of that person a qualifying period greater than one hundred and four weeks.
Applying these provisions to the present claimant’s case, her qualifying period is the fifty-two weeks preceding the start of her benefit period in September 1992 (subsection (1)), extended by the number of weeks of allocation of her severance pay, i.e. from June 1991 to September 1992, (subsection (3)) and reduced by the number of weeks of insurable employment during that time, i.e. her thirty-two weeks with Royal LePage (subsection (6)). Her qualifying period could not in any event exceed one hundred and four weeks (subsection (7)).
While, I have no doubt that section 7 is relevant to an understanding of section 13, it is of only marginal assistance in resolving the issue before us. Section 7 deals with the qualifying period, section 13 with qualifying weeks. The two are not the same. The qualifying period is relevant to the question of whether or not benefits may be claimed: a claimant must have the requisite number (not necessarily the same as the number of qualifying weeks) of weeks of insurable employment in the qualifying period. The qualifying weeks on the other hand are used solely to calculate the amount of the benefit: they have no necessary correlation to the weeks of insurable employment required to qualify for benefits.
With respect, I do not think that there is anything to be gained in this case by a discussion of the various theories of statutory interpretation. I do not understand the Commission to be suggesting that we should adopt a strict or literal construction of subsection 13(2) or that we should interpret it in isolation. That would indeed be a vain attempt. It is well-settled law that the words of a statute must be read in their total context and with proper regard to the purpose and intent of Parliament as expressed in the statute. It is only in cases of ambiguity, however, that a court needs to look beyond the ordinary meaning and normal construction of the words used by Parliament.
In my view, and I say this with respect for those who seek to avoid what they see as a harsh result, there is no ambiguity in the wording of subsection 13(2). The reference is to “the last twenty weeks of insurable employment—[underlining added]. Insurable employment is itself a defined term. An employment may be insurable whether or not remuneration is in fact earned or premiums paid. In its ordinary grammatical sense in the English language, subsection 13(2) can only refer to the twenty weeks of insurable employment which occurred last in time in the qualifying period. The French text is equally unambiguous: “les vingt dernières semaines d’emploi assurable de sa période de référence” cannot refer to anything but the most recent weeks of insurable employment in the qualifying period.
The suggestion that there is ambiguity in subsection 13(2) because the provision might be interpreted as referring to “the last twenty weeks of insurable employment for which the claim is made” is entirely without foundation anywhere in the statute. Claimants do not make claims in respect of particular employments but rather in respect of a loss of employment and a corresponding interruption of earnings. A claimant cannot pick and choose which employment or employments in respect of which he or she wishes to make a claim. That is simply not the law and never has been. One need only think of the case of multiple successive employments (not uncommon in such industries as construction) to see what difficulties would result if it were otherwise. Nothing in section 13 supports such a view and it cannot be implied from a supposedly purposive reading of section 7 which, be it remarked, deals only with the qualifying period and its possible extension. That the qualifying period is extended by the number of weeks in which termination benefits are allocated, reduced by any such weeks in which insurable employment was held, and with an outside maximum of one hundred and four weeks, does not suggest to me that Parliament intended to remove the effect of the allocation or to entitle claimants to make claims for benefit based on earlier and more profitable employment.
The claimant’s difficulty in this case arises from the fact that her employment with Royal LePage was determined to be insurable even though it was not in fact remunerated. That determination might have been contested but was not. I would point out, however, that it is in the nature of commission work that remuneration may vary widely and it is not uncommon to have periods with low earnings or none at all. If the claimant had earned hefty commissions from her real estate work so as to give rise to a rate of benefit even higher than that from the earlier employment, she would receive such higher rate not because she had selected the second employment as the basis for calculating her benefits but because subsection 13(2) requires it: her last twenty weeks of insurable employment in her qualifying period were in real estate and that is what determines the benefit rate. Thus, though the result in this case may be thought hard for the claimant, in other circumstances subsection 13(2) would work in her favour. Hard cases should not be allowed to make bad law.
Even if there were ambiguity in subsection 13(2), and, in my view, there is not, its resolution would not be aided by a search for the purpose of some of the detailed provisions of section 7 since that section deals with an entirely different subject. The extension of her qualifying period makes the claimant eligible where she would not otherwise have been so; her benefit rate is nonetheless based on her last twenty weeks of insurable employment.
This brings me at last to the decision of the Umpire here under review. The core of that decision, whose result was to base the calculation of the claimant’s benefits on her employment with the University of Alberta, is found in the following passage:
The allocation of severance payments continued well beyond the date she terminated her employment with Royal LePage. It is my opinion that throughout the period of the allocation she is in effect, because of the allocation, treated by the Commission as an employee of the University. On that basis she became eligible for benefits in September 1992 when the allocation came to an end. That employment became the lost employment …. [Application Record, at p. 61.]
With respect, this reasoning cannot be supported. The allocation of termination benefits has the effect of postponing the benefit period but it does not prolong the previous employment which, by definition, has been lost. The Umpire’s decision was purportedly based on this Court’s decisions in Canada (Attorney General) v. Fortin[2] and Canada (Attorney General) v. Sears.[3]
In my view, Fortin, in which I participated, cannot be considered as authority for any proposition other than the result at which it arrived. The two judges in the majority, Marceau J.A. and myself, differed fundamentally from one another and although we arrived at the same conclusion, our paths did not intersect at any point. My own views, which would have supported the Umpire’s finding in this case, were, as the report makes clear, based on the applicable text of the Regulations [Unemployment Insurance Regulations, C.R.C., c. 1576] which had, by the time the matter reached us, already been amended. Pratte J.A., who dissented, disagreed specifically with both of us. To put the matter simply, each of the reasons for judgment given by the two members of the majority was disagreed with by the other two members of the panel, being a majority of the Court. The absence of authority of the case was recognized by another panel of this Court in Canada (Attorney General) v. Rose.[4]
In Sears, at page 404, the reasons of Marceau J.A. in Fortin were interpreted and adopted as follows:
Throughout the appeal and review process, the respondent in this case has advanced two principal arguments in support of his position. The first hinges on the acceptance of the reasoning of Marceau J.A. in Fortin. From those reasons I am able to extract two rules or principles of general application: (1) two employments held concurrently by a claimant should be dealt with separately; and (2) only the employment lost by the claimant should be considered in calculating benefits. Only the latter is of relevance to this application.
Manifestly, it was the Court’s agreement with and endorsement of the second of the two stated principles which lay at the heart of its decision in Sears. At the very conclusion of the reasons we find, at page 406:
… I am driven to the inescapable conclusion, as was Marceau J.A., that it is simply prima facie illogical that unemployment benefits be based on employment which has never been lost.
This case, of course, differs significantly from both Sears and Fortin, in that here the claimant did not hold her two employments concurrently and did lose her second employment as well as the first. Neither of the “two principles of general application” identified in Sears is of any relevance to us. Thus, we are not called upon in this case to decide if Sears was properly decided, for it is clearly distinguishable and can have no application. In my view, however, Sears should be restricted to the particular fact situation with which it dealt and to its particular ratio decidendi. It should not be extended to cases where successive employments have been lost by a claimant. There is simply no warrant in the statute for doing so.
Here, the claimant worked with Royal LePage in insurable employment for more than twenty weeks in her qualifying period. That was her last insurable employment in that period. She lost it prior to the beginning of her benefit period. Her benefits could only be calculated on her insurable earnings in the last twenty weeks of that employment. Since those earnings were nil, the benefit is also nil.
For these reasons, I would allow the application, set aside the decision of the Umpire and remit the matter to an umpire to be designated by the Chief Umpire for a new disposition on the basis that the claimant’s appeal from the decision of the Board of Referees should be dismissed.
Isaac C.J.: I agree.
* * *
The following are the reasons for judgment rendered in English by
Robertson J.A. (dissenting)
I—INTRODUCTION
This application is brought by the Attorney General on behalf of the Unemployment Insurance Commission (the Commission) to review and set aside the decision of the Umpire dated January 16, 1995. The Umpire concluded that the respondent (the claimant) was entitled to unemployment insurance benefits based on her insurable earnings with the University of Alberta. The skeletal facts leading up to that decision can be traced to the Commission’s initial decision to reject the claimant’s application for benefits because she was in receipt of severance pay at the time of her lay-off from that institution and, therefore, ineligible. Under the Unemployment Insurance Act, R.S.C., 1985, c. U-1 (the Act) the receipt of such monies has the effect of deferring a claimant’s eligibility for benefits until such time as the severance pay is deemed to be exhausted. In the interim, the claimant found part-time insurable employment as a commissioned real estate salesperson with Royal LePage, which employment she relinquished shortly before re-applying for benefits. During the claimant’s tenure with that realtor she received no remuneration whatsoever.
While the claimant sought to establish a claim and benefits based on her employment with the University (the first employment), the Commission calculated her benefit rate as though it were based on her employment with Royal LePage (the second employment). The Commission’s decision hinged on subsection 13(2) of the Act, which provides that a benefit rate is to be calculated by reference to the last twenty weeks of insurable employment held during a claimant’s qualifying period. Since the claimant’s last twenty weeks of insurable employment were with Royal LePage and since she had no insurable earnings from that employment, the Commission calculated her benefit rate to be nil. The claimant’s appeal to the Board of Referees (the Board) was dismissed. Her appeal to the Umpire was allowed, largely on the basis of the reasoning of this Court in Canada (Attorney General) v. Sears, [1995] 1 F.C. 393(C.A.).
The Commission advances two principal arguments. First, it maintains that we must go no further than the “plain meaning” rule of statutory construction in order to reach the correct legal and, therefore, just result. Above all we are asked to reject the “purposive” approach as a means for achieving an equitable result. Second, with respect to the persuasive or binding effect of Sears, the Commission seeks to distinguish that case on two grounds.
In my respectful opinion the learned Umpire reached the right result and, therefore, this application must be dismissed. With respect to the Commission’s first argument I am of the view that, in fact, it is advocating the application of the literal rule of interpretation to the exclusion of other methods of interpretation. This is too simple a solution to a very complex problem, one as complex as the Act itself. The law requires a contextual approach. In applying that approach, it is my opinion that the initial error of the Commission lies in the failure to acknowledge the existence of subsections 7(3) and 7(6) of the Act, and to determine whether the respondent was eligible to receive benefits based on the first employment before turning to the task of calculating the proper benefit rate. As will be explained below, the Act makes express provision for the possibility of insurable employment being held during the period a claimant remains ineligible to receive benefits because he or she is in receipt of severance pay. The question of whether the benefit rate is to be calculated by reference to the earnings from the claimant’s first employment or second employment does not arise until the eligibility issue is resolved. Then, and only then, can one focus on the proper interpretation of subsection 13(2) of the Act.
My analysis begins with the facts and the decisions below. I address the facts in somewhat painstaking detail to show that the Commission treated the claimant as though she was not entitled to apply for benefits with respect to her first employment. Rather, the Commission processed her claim as though it related to the second employment only.
II—FACTS AND DECISIONS BELOW
The claimant had been employed by the University of Alberta as a dental technician with the Faculty of Dentistry for fourteen years when her employment was terminated on June 28, 1991. Her application for unemployment insurance benefits was, however, rightly denied because she was in receipt of severance pay in the amount of $48,892. To qualify for benefits a person must suffer an interruption of earnings as required by paragraph 6(2)(b) [as am. by S.C. 1990, c. 40, s. 5] of the Act. Under the Act and the Regulations, the receipt of severance pay has the effect of deferring the date on which it can be said that a claimant has suffered an interruption of earnings. To determine the date of eligibility it is necessary to divide the amount of the severance by the claimant’s normal weekly wage (section 37 [as am. by SOR/82-778, s. 1; 90-756, s. 8; 92-164, s. 10] and subsections 57(2) [as am. by SOR/86-58, s. 1; 89-160, s. 2; 90-756, s. 17; 92-164, s. 15] and 58(9) [as am. by SOR/89-550, s. 1] of the Regulations). This establishes the duration of the “allocation period”, in this case, June 30, 1991 to September 26, 1992 inclusive (Application Record, at page 39).
During the period in which the severance pay was allocated, the claimant obtained part-time employment with Royal LePage Realty as a commissioned salesperson. She worked for that realtor one or two days a week from November 14, 1991 to June 16, 1992 (Application Record, at pages 28 and 29), attending meetings and answering telephones for a total of approximately 10 hours a week. During this period the claimant earned no commissions and, therefore, no premiums were payable.
The claimant reapplied for benefits on June 15, 1992 in the hope that she would receive benefits based on her first employment. References to the claimant’s employment with the University found in the Application for Benefits were, however, crossed out and replaced by references to the work with Royal LePage (Application Record, at page 14). The Commission informed the claimant by letter dated July 20, 1992 that she could not establish a claim as she did not have an interruption of earnings (Application Record, at page 20). Before the Board the Commission admitted that the letter was in error and that the claimant did experience an interruption of earnings when she left her second employment (Application Record, at pages 39-40).
The Application Record (at page 35) reveals that on June 18, 1992 the claimant sought an extension of the qualifying period, as provided for under subsection 7(3) of the Act, with respect to her first employment as a result of the severance pay. In fact, an extension was granted for the period from November 10, 1991 to June 13, 1992. This corresponds to the weeks during which the claimant held her second employment. I pause here to note that no explanation is given for why an extension would be granted for this time frame. The Commission seems to fail to appreciate that the insurable employment held by the claimant during the allocation period serves to reduce the extension period, not enlarge upon it (see discussion infra). In any event, the extension was granted on November 20, 1992, nearly three weeks after the claimant was informed that she was not entitled to benefits and two days after she filed an appeal with the Board (Application Record, at pages 29 and 32).
On September 15, 1992, the claimant made her final application for benefits based on her first employment. In an effort to secure such, the claimant pursued two courses of action. First, she sought to persuade the Commission that her claim should be antedated to June 28, 1991, the day she lost her employment with the University. That request was denied, and rightly so in my opinion; as of that date the claimant had not suffered an interruption of earnings. The Commission, however, did on its own initiative antedate the claim to the week of June 14, 1992 when the claimant suffered an interruption of earnings from her second employment. Consequently, the Commission concluded that the benefit period commenced the week of June 14, 1992. Second, the claimant also sought a ruling with respect to whether her second employment constituted “insurable employment”. The Commission had ruled earlier that the claimant had 29 weeks of insurable employment with that employer (Application Record, at pages 28 and 29). The matter was referred to the Minister of National Revenue who ruled that the claimant had 32 weeks of insurable employment (Application Record, at page 29). The claimant did not appeal that ruling to the Tax Court of Canada.
Finally, by letter dated November 2, 1992, the Commission advised the claimant that she was not entitled to benefits (Application Record, at page 29). The Commission referred to sections 17 [as am. by S.C. 1990, c. 40, s. 11] and 24 [as am. idem, s. 17] of the Act and wrote that while the claimant was able to establish a claim based on the 32 weeks of insurable employment with Royal LePage, her insurable earnings were nil. The claimant appealed that decision to the Board.
Before the Board the Commission framed the issue in terms of “whether the claimant [had] an interruption of earnings as required by section 6 of the Unemployment Insurance Act and, if so, at what point does the interruption of earnings occur” (Application Record, at page 37). With respect to the reasons offered by the Commission in its letter of November 2, 1992, informing the claimant that her application was rejected, the Commission noted that it had quoted “irrelevant sections of the Act” (Appeal Book, at page 40). In its written submission before the Board, the Commission did not refer to section 7 of the Act.
In its reasons for decision the Board offers a summary of the facts and comes to the conclusion that the Commission had not erred in calculating the benefit rate. In response, the claimant appealed that decision to the Umpire.
Relying principally on the reasoning of this Court in Sears, the Umpire allowed the appeal and directed the Commission to establish a benefit period for the claimant commencing with the end of the allocation period, and to calculate her benefits based on her first insurable employment. In reaching this conclusion, the Umpire stated that during the allocation period the claimant is, in effect, to be treated by the Commission as an employee of the University.
III—ISSUES
At the outset it must be conceded that the learned Umpire erred in concluding that throughout the allocation period the claimant is to be considered as an employee of the University. Severance pay cannot be treated as though a claimant were in receipt of a weekly salary for which unemployment premiums are being paid. Severance pay is, rather, deemed to be received in the pay period in which it was paid: see paragraph 3.1(1)(b) of the Unemployment Insurance (Collection of Premiums) Regulations, C.R.C., c. 1575, as amended by S0R/88-584, s. 1, and Fortin, supra, per Hugessen J.A. at pages 571-575, which is discussed in Sears, at page 400 et seq. It is only for the purpose of deferring a claimant’s eligibility for benefits that severance pay is allocated over a period of time, reflecting the claimant’s normal weekly earnings.
The Commission also disputes the Umpire’s finding that the benefit period commenced with the end of the allocation period (September 26, 1992). Rather the proper date is the week following the claimant’s loss of her second employment, beginning the week of June 14, 1992. If one were to assume, as did the Commission, that the claim for benefits was related to the second employment, then the Commission’s argument would be valid. The fact of the matter is that the claim relates to the first employment, and the Commission was under an obligation to process it in accordance with the provisions of the Act. I will turn to that matter shortly.
In the alternative, the Commission argues, for the first time, that irrespective of whether the claim is based on the first or second employment the result is the same. In calculating the benefit rate one must look to the last twenty weeks of insurable employment, which is the second employment. Subsection 13(2) is unambiguous and admits of only one interpretation. Specifically, as noted, the Commission argues that we must go no further than the “plain meaning rule” of statutory construction in order to reach the correct result and that we must reject what the Commission calls the purposive approach as a means for achieving an equitable result. Finally, with respect to the persuasive or binding effect of Sears, the Commission seeks to distinguish that case on several grounds. The claimant, being unrepresented by legal counsel, was unable to respond to the Commission’s arguments. She merely affirmed her faith in the correctness of the decision a quo.
I cannot accede to the Commission’s argument that this case can be decided solely by reference to subsection 13(2) of the Act. In my opinion, the Commission argues not for the application of the plain meaning rule of statutory construction, but rather the “literal rule”. I propose to pursue a “contextual approach” to the issue which is firmly cemented in the jurisprudence. I begin with the understanding that there are two basic questions to be addressed when assessing an unemployment insurance claim: Is the claimant eligible to receive benefits, and if so, what is the weekly benefit rate? In the circumstances of this case we must pursue two corollary questions. First, what is the effect of a claimant obtaining insurable employment during the allocation period? Second, is the benefit rate to be calculated by reference to the first employment or, as is argued by the Commission, the second employment? It follows, however, that if the claimant is ineligible to receive benefits under the first employment, then her only claim to benefits would be with respect to the second. If that were the case then the Commission’s decision regarding the benefit rate is unassailable. I turn first to the question of eligibility with respect to the claimant’s first employment.
1) Eligibility
A claimant must meet two conditions precedent to establish entitlement. First, the claimant must establish that he or she has the requisite number of weeks of insurable employment in the qualifying period. In the present case that number is twenty. Second, the claimant must establish that he or she has suffered an interruption of earnings. These conditions precedent are set out in section 6 [as am. by S.C. 1990, c. 40, s. 5] of the Act which reads as follows:
6. (1) Unemployment insurance benefits are payable as provided in this Part to an insured person who qualifies to receive those benefits.
(2) An insured person, other than a new entrant or re-entrant to the labour force, qualifies to receive benefit under this Act if the person
(a) has, during the person’s qualifying period, had at least the number of weeks of insurable employment set out in Table 1 of the schedule in relation to the regional rate of unemployment that applies to the person; and
(b) has had an interruption of earnings from employment.
In the typical case, that is where there is an interruption in earnings at the time of the lay-off, the claimant must establish twenty weeks of insurable employment in the qualifying period. In turn, subsection 7(1) of the Act defines the qualifying period as the 52 weeks preceding the commencement of the benefit period which, pursuant to subsection 9(1), is the week in which the lay-off occurred, or the week in which the claim is filed, whichever is later. Subsection 7(1) reads as follows:
7. (1) Subject to subsections (2) to (7), the qualifying period of an insured person is the shorter of
(a) the period of fifty-two weeks that immediately precedes the commencement of a benefit period under subsection 9(1), and
(b) the period that begins on the commencement date of an immediately preceding benefit period and ends with the end of the week preceding the commencement of a benefit period under subsection 9(1).
In cases where there is no interruption of earnings because the claimant is in receipt of severance pay subsection 7(3) of the Act extends the 52-week qualifying period by the number of weeks that a person was prevented from establishing that he or she had suffered an interruption of earnings because of the allocation of severance pay. That section reads as follows:
7. …
(3) Where a person proves in such manner as the Commission may direct that for any week during any qualifying period mentioned in paragraph (1)(a) that person was prevented from establishing an interruption of earnings by virtue of the allocation, pursuant to regulations made under section 44, of earnings paid to that person by reason of the complete severance of the relationship between that person and his former employer, the qualifying period shall, for the purposes of this section, be extended by the aggregate of those weeks.
The Commission determined that the claimant was ineligible to receive benefits beginning the week of June 30, 1991 and ending the week of September 20, 1992 inclusive, which is a period of 65 weeks (Application Record, at page 20). The duration of the allocation period is determined by dividing the amount of the severance pay received by the claimant ($48,892) by the claimant’s “normal” weekly wage from the first employment, which in this case equals 64.63 weeks. Under subsection 58(9) of the Regulations this results in an allocation period of 65 weeks, which corresponds to the Commission’s determination that the claimant was ineligible to receive benefits from June 30, 1991 to September 26, 1992 (Application Record, at page 39).
To me it seems obvious that the purpose of subsection 7(3) of the Act is to place a claimant in the same position he or she would have been in were it not for the receipt of severance pay and the deemed non-interruption of earnings. In other words, a claim for benefits made at the expiry of the allocation period is to be treated as though it were made on the day after the claimant lost his or her employment and as though the claimant was never in receipt of severance pay. Had Parliament failed to provide for an extension to the qualifying period, then anyone whose allocation period exceeded 52 weeks would be ineligible to receive benefits because he or she would be unable to establish twenty weeks of insurable employment within that fixed period. I am assuming of course that such a claimant would not have obtained other insurable employment during the allocation period. Parliament, however, anticipated such a possibility.
Subsection 7(3) is not the only provision relevant to the matter of extending the number of weeks in a qualifying period. Subsection 7(6) of the Act dictates that the weeks of the extension provided under subsection 7(3) shall be reduced by the number of weeks the claimant held insurable employment during the allocation period. That provision reads as follows:
7. …
(6) For the purposes of subsection (3) and paragraph (4)(b), a week during which a person referred to in that subsection or paragraph was employed in insurable employment shall not be counted.
In applying subsection 7(6) to the facts of the case, the extension period of 65 weeks must be reduced by the 32 weeks of insurable employment with Royal LePage, thus leaving the claimant with an extension period of 33 weeks. Accordingly, the claimant’s qualifying period consists of 52 weeks as extended by the 33 allowed under the foregoing provisions for a total of 85 weeks. (Pursuant to subsection 7(7), no qualifying period can exceed 104 weeks.)
The obvious question is whether the claimant can establish twenty weeks of insurable employment with the University within this period of time. Subtracting the 65 weeks of the allocation period in which she held no such insurable employment from the 85 weeks of the extended qualifying period, the claimant is able to satisfy paragraph 6(2)(a) of the Act, albeit barely so. She has twenty weeks of insurable employment with the University. In conclusion, I am of the view that as of September 26, 1992, the claimant was eligible to receive unemployment insurance benefits with respect to her first employment. It is to the more difficult question that I now turn.
2) Calculation of Benefit Rate
In a typical case, to calculate the benefit rate one need look no further than section 13. At the relevant time the applicable provisions read as follows:
13. (1) The rate of weekly benefit payable to a claimant for a week of unemployment that falls in his benefit period is an amount equal to sixty per cent of his average weekly insurable earnings in his qualifying weeks.
(2) The qualifying weeks of a major attachment claimant are the last twenty weeks of insurable employment in his qualifying period. [Emphasis added.]
In the case at bar, however, by virtue of the allocation of the severance pay and the claimant having secured insurable employment during the allocation period, we must determine whether the benefit rate should be calculated with respect to the “last twenty weeks of insurable employment” with the first employer, or with respect to the “last twenty weeks of insurable employment” from any and all employment.
During oral argument, counsel addressed the plain meaning rule and the purposive approach of statutory interpretation, but made no reference to the contextual approach. This is an issue that cannot and should not be side-stepped. There is an apparent confusion regarding the ordinary meaning, plain meaning and literal rules of construction and the contextual, pragmatic and purposive approaches: see generally R. Sullivan, Driedger on the Construction of Statutes, 3rd ed., (Toronto: Butterworths, 1994) (hereinafter Sullivan) and P.-A. Côté, Interpretation of Legislation in Canada, 2nd ed. (Cowansville, Que.: Les Éditions Yvon Blais, 1991).
The purposive approach is the more controversial of the available interpretive tools. Some view it simply as a means of permitting judicial biases to become legal and constitutional doctrine. Its use today is, however, particularly apt in Charter [Canadian Charter of Rights and Freedoms, being Part I of the Constitution Act, 1982, Schedule B, Canada Act 1982, 1982, c. 11 (U.K.) [R.S.C., 1985, Appendix II, No. 44]] jurisprudence because the judiciary can draw little assistance from the plain meaning of the words used. As is evident, the language of the Charter is intentionally broad, and the interpretation of that language must be pursued in light of the purpose of the right or freedom in question, the purpose of other associated Charter rights, and the purpose of the Charter itself (see Sullivan, at page 43). The Commission probably looks on this approach as a means of achieving, in the instant case, an equitable result in what can aptly be described as the most sympathetic of cases. One could reason, for example, that the purpose of the Act is to provide people with benefits with respect to lost employment for which unemployment premiums have been paid. As a result, the claimant having lost her first employment, for which she had paid premiums, should receive benefits based on that employment. Obviously, such legal reasoning is too simplistic and unacceptable.
My understanding of counsel’s argument is that we cannot ignore the plain meaning of the statute simply because the result in this case is harsh. I agree. It is always necessary to be on guard against adopting an interpretation that alleviates a harsh result, but does so by doing violence to the words or intent of the provision. One must not create an illogicality or absurdity to avoid one, or in simpler terms, two wrongs do not make a right. However, as noted by Mr. Fulcher in his article “The Income Tax Act: The Rules of Interpretation and Tax Avoidance. Purpose vs. Plain Meaning: Which, When and Why?” (1995), 74 Can. Bar Rev. 563, at page 584, in interpreting statutes one should embrace “empiricism not dogmatism, imagination rather than literalness.”
The history of the plain meaning rule is canvassed by Sullivan (at pages 1-6). Originally, the phrases plain meaning rule, ordinary meaning rule and literal construction rule were essentially interchangeable. The process of interpretation invoked by these rules was, first, to determine the literal meaning of the words used, and then, only if ambiguity remained, resolve the ambiguity by reference to elements such as the mischief the provision was intended to address. This two-pronged approach has gone by the wayside as it is formalistic, technical and narrow. This conclusion is addressed by Sullivan, at page 4, who quotes one of our own judges, Rouleau J. in ECG Canada Ltd. v. Canada, [1987] 2 F.C. 415(T.D.), at page 423:
There is no question that the literal approach is a well established one in statutory interpretation. Nevertheless, it is always open to the Court to look to the object or purpose of a statute, not for the purpose of changing what was said by Parliament, but in order to understand and determine what was said. The object of a statute and its factual setting are always relevant considerations and are not to be taken into account only in cases of doubt.
The “ordinary meaning” rule, as defined by Sullivan, simply suggests that the ordinary meaning of words as generally understood provides the best evidence of what meaning Parliament intended to convey. The ordinary meaning is that gleaned on first impression from the words in their immediate context, that is in the context of the provision in which they appear. Under this approach, if there is no reason to reject it the ordinary meaning will be applied. However, the purpose and scheme of the Act, the consequences of the proposed meaning, and any other source that may point to the legislators’ intent must be examined. This examination may lead the court to modify or reject the ordinary meaning if an alternative plausible interpretation exists. Where there is no reason to reject the ordinary meaning, or where there is no plausible alternative meaning, the court must apply the ordinary meaning: Sullivan, at pages 26-28, referring to the reasons of Cory J. in Thomson v. Canada (Deputy Minister of Agriculture), [1992] 1 S.C.R. 385.
The above conclusion is reflected in the jurisprudence of the Supreme Court and of this Court. In Hills v. Canada (Attorney General), [1988] 1 S.C.R. 513, an unemployment insurance case, Madam Justice L’Heureux-Dubé speaking for the majority endorsed the contextual approach. At page 549 [quoting Driedger, E. A. Construction of Statutes, 2nd ed., at page 87] she stated:
Today there is only one principle or approach, namely, the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.
MacGuigan J.A. addressed the proper approach to statutory interpretation in the context of taxation in Lor-Wes Contracting Ltd. v. The Queen, [1986] 1 F.C. 346 and determined in the oft-quoted passage, at page 352 that “[t]he only principle of interpretation now recognized is a words-in-total-context approach with a view to determining the object and spirit of the taxing provisions.” In an unemployment insurance decision rendered shortly after Lor-Wes , Canada (Attorney General) v. Tucker, [1986] 2 F.C. 329(C.A.), at page 340, MacGuigan J.A. writing for the majority adopted the reasoning in Bourne (Inspector of Taxes) v. Norwich Crematorium, Ltd., [1967] 2 All E.R. 576 (Ch. D.), at page 578:
English words derive colour from those words which surround them. Sentences are not mere collections of words to be taken out of the sentence, defined separately by reference to the dictionary or decided cases, and then put back again into the sentence with the meaning which you have assigned to them as separate words, so as to give the sentence or phrase a meaning which as a sentence or phrase it cannot bear without distortion of the English language.
So, too, you cannot take a section out of the Act, interpret it in isolation from its context and then put it back into the Act with the meaning assigned.
Given this discussion of the purposive approach and the plain meaning (literal) and ordinary meaning rules of statutory construction, the method of interpretation we are to follow is, in my view, self-evident. In the context of this case, the supposed “plain meaning” approach advocated by the Commission in the interpretation of subsection 13(2) really amounts to the application of the literal approach. The Commission suggests that the subsection must be construed in isolation, without examining how it works within the scheme of the Act. I agree that if that subsection is interpreted in that fashion, its meaning is plain and unambiguous. It is the last twenty weeks of insurable employment that is relevant, regardless of whether those weeks relate to the first or second employment. Adopting the literal approach would certainly simplify the interpretation of this Act. However, Parliament did not pick the simple solution when it drafted the Act, which is commonly viewed as one of the most complex: see Petts v. The Umpire (Unemployment Insurance), [1974] 2 F.C. 225(C.A.), at page 233 per Jackett C.J. In this case, as will be demonstrated, the “simple” solution is illogical when consideration is given to the broader context.
In applying the contextual approach to the construction of subsection 13(2), it becomes clear that the meaning of the provision is ambiguous when examined in its full context, in particular with regard to its relation to section 7. In light of the interaction between these provisions, there are two plausible interpretations of subsection 13(2). In effect, the Commission argues for the following interpretation: the qualifying weeks of a major attachment claimant are the last twenty weeks of any insurable employment in his or her qualifying period. On the other hand, the claimant recasts the subsection in the following terms: the qualifying weeks of a major attachment claimant are the last twenty weeks of insurable employment for which the claim is made in his or her qualifying period.
Thus, the ambiguity in the interpretation of subsection 13(2) lies in whether the last twenty weeks of insurable employment in the qualifying period relate to the first employment held for which the claim is being made, or to the second employment which is not the subject of the claim. In my opinion it must be the former. The immediate problem with the Commission’s argument is that it sidesteps completely the issue of whether the claimant is entitled to establish a claim based on her first employment. Section 13 is a general provision, while subsections 7(3) and 7(6) of the Act which, as discussed above, deal with the specific impact of severance pay on a claim and the corollary effect of employment being held during the allocation period which Parliament has imposed. As a result, in a case involving severance pay, it makes sense that section 13 be interpreted in light of the purpose and effect of section 7. As the factual background outlined earlier clearly reveals, the Commission assumed that the only claim that could be made was with respect to the second employment. In effect, the Commission is arguing that in every case where a claimant has twenty weeks of insurable employment in the allocation period, he or she is unable to make a claim based on the earlier employment. It must be noted, and counsel for the Commission conceded, there is no legal obligation on a claimant even to seek employment of any kind during the allocation period: section 14 [as am. by S.C. 1990, c. 40, s. 10] of the Act applies only to those who are in receipt of benefits.
Admittedly, in cases where a claimant has twenty weeks of insurable employment where the pay is equal or greater than that of the first employment, then he or she will prefer to make a claim based on the second employment. The interpretation advocated by the Commission would allow this. However, where the claimant takes either full or part-time employment with less pay, then he or she will obviously prefer to file a claim based on the first and more lucrative, employment. The question, of course, is should this be permitted. In my view, the answer, and the result intended by Parliament, is clearly yes. To repeat myself, the purpose of section 7 is to put the claimant in the position he or she would have been in but for the allocation of severance pay. That is to say the claimant is entitled to make a claim for benefits based on the first employment. To accept the Commission’s interpretation is to ignore this objective. If any insurable employment counts for the purpose of subsection 13(2), whether it is the employment for which the claim was filed or not, then any time a claimant happens to work twenty insurable weeks with a second employer while in receipt of severance pay subsections 7(3) and 7(6) are effectively jettisoned. Their object, placing the claimant in the same position he or she would have been in but for the allocation of severance, is clearly obviated. The claim will effectively be based on the second employment, and not the first. This amounts to a redrafting of the Act. In effect, the Commission is asking us to amend section 7 by adding a further subsection to the effect that subsections 7(3) and 7(6) do not apply when a claimant has accumulated twenty weeks of insurable employment during the allocation period. The explicit inclusion of the section 7 provisions defining the impact of a second employment on a claimant’s qualifying period reflects Parliament’s intent that the second employment would have no other effect on a claim. Had Parliament intended that the second employment be used in calculating the benefit rate with respect to the first employment, it would have said so.
In addition, once you find that a claimant is eligible to receive benefits with respect to one employment which has been lost and for which premiums were paid, why would you calculate the benefit rate for that claim by reference to a second employment. The benefit period, the qualifying period, and the allocation period are all fixed according to the first employment. Why are we being asked to calculate the benefit rate on the basis of the second employment when the claim, and every other element of it, relates to the first? It simply makes no sense to do so. The Commission has proffered no rationale that would justify the interpretation being advanced. Nor has it shown that the interpretation advanced herein will in any way undermine Parliament’s intent. As expressed in Sears, at page 405:
The underlying purpose of the Act is to provide a claimant with financial support until such time has he or she is able to find comparable employment. It is my understanding that it is not the purpose of the Act to discourage claimants from seeking part-time [or other] employment which is precisely the case before us. As Hugessen J.A. adroitly noted in Fortin, at page 573, the Commission’s interpretation “would only seem to encourage laziness.”
It is fundamental to the development of jurisprudence in this area that the contextual approach to statutory construction be applied. It is no longer acceptable simply to argue that the matter is determined by the meaning of one provision read in isolation. When we talk of “purpose", what must be examined is the purpose and object of the particular provision in issue, its related provisions, and how they function together and interact within the scheme of the Act. In the present case, we are not dealing solely with a question of benefit rate, but with the effect of the allocation of severance pay with respect to a particular claim.
In conclusion, I am of the view that the Commission’s interpretation of subsection 13(2) cannot be accepted. The last twenty weeks of insurable employment within the qualifying period, as contemplated by that section, must be deemed to refer to the first employment. It is with respect to that employment that premiums were paid and benefits are sought. It is illogical to calculate the benefit rate for a claim based on the insurable earnings from employment that is not the subject of the claim.
In view of the foregoing conclusion, it is unnecessary to address the applicability of the reasoning advanced in Sears, nor whether that reasoning can be extended to the case at bar. It follows that I need not address the grounds of distinction advanced by the Commission.
IV—CONCLUSION
The application must be dismissed.