A-384-78
Attorney General of Canada (Applicant)
v.
Gilles Giguere , (Respondent)
Court of Appeal, Jackett C.J., Pratte J. and Hyde
D.J.—Montreal, December 12, 1978.
Judicial review — Unemployment insurance — Reduction in
working hours, and therefore, in wages — Umpire deciding
reduction an interruption of earnings — Application to set
aside Umpire's decision — Federal Court Act, R.S.C. 1970
(2nd Supp.), c. 10, s. 28 — Unemployment Insurance Act,
1971, S.C. 1970-71-72, c. 48, ss. 2(1)(n), 17(2)(6), 58(r) —
Employment and Immigration Reorganization Act, S.C. 1976-
77, c. 54, s. 26(7) amending s. 2(1)(n) — Unemployment
Insurance Regulations, SOR/72-114, s. 148(1).
The Attorney General of Canada is challenging the decision
of an Umpire who held, affirming the Board of Referees, that
the respondent was entitled to the unemployment insurance
benefits he was claiming. Respondent ceased to work full time
for his employer on November 2, 1977, but continued to work
for him on a part-time basis after that time. His wages were
reduced from $125 to $25 a week. Arguing that this reduction
in working hours and wages constituted an interruption of
earnings, respondent claimed unemployment insurance benefits.
The Commission disallowed his claim, though it was allowed by
the Board of Referees and the Umpire. The Umpire's decision
is the subject of review.
Held, the application is allowed. By amending section
2(1)(n) as it did, Parliament indicated its intention that not all
reductions in working hours should be considered as constitut
ing an "interruption in earnings", only those which resulted in a
reduction in wages as prescribed by the Regulations of the
Commission. It is clear that the effect of the new definition was
subordinated by Parliament itself to the adoption of the appro
priate regulations. In the absence of such regulations, the
definition is devoid of any effect. It cannot be said that the
amendment to section 2(1)(n) had the effect of making section
148(1) of the Regulations ultra vires. Even if that were the
case, that would be of no help to respondent because it would
still be true that the Regulations do not specify the reduction
that must result from a reduction in working hours for the
latter to be regarded as constituting an interruption of earnings.
APPLICATION for judicial review.
COUNSEL:
J. M. Aubry for applicant.
A. Collard for respondent.
SOLICITORS:
Deputy Attorney General of Canada for
applicant.
Gauthier, Bergeron & Collard, Magog, for
respondent.
The following is the English version of the
reasons for judgment delivered orally by
PRATTE J.: The Attorney General of Canada is
challenging the decision of an Umpire who held,
affirming the Board of Referees, that respondent
was entitled to the benefits he was claiming under
the Unemployment Insurance Act, 1971, S.C.
1970-71-72, c. 48.
By virtue of paragraph 17(2)(b) of the Act, an
insured person is only entitled to receive unem
ployment insurance benefits if he has had "an
interruption of earnings from employment". On
November 2, 1977 respondent ceased working for
his employer full time, but he continued working
for him on a part-time basis after that time, about
two hours a day. His wages were reduced accord
ingly, from $125 to $25 a week. Arguing that this
reduction in his working hours and his wages
constituted an interruption of earnings, respondent
claimed unemployment insurance benefits. The
Commission dismissed his claim, though it was
allowed by the Board of Referees and by the
Umpire. It is this decision of the Umpire which is
the subject of the appeal.
It is established that respondent could not have
claimed, before the Act was amended on Septem-
ber 11, 1977, that he had had an interruption of
earnings. At that time paragraph 2(1)(n) defined
the expression "interruption of earnings" as
follows:
2. (1) In this Act,
(n) "interruption of earnings" means that interruption that
occurs in the earnings of an insured person when after a
period of employment with an employer the insured person
has a lay-off or separation from that employment;
Added to this definition, which itself indicated
clearly that there could not be an interruption of
an insured person's earnings unless he ceased to be
in the employ of his employer, there was subsec
tion 148 (1) of the Unemployment Insurance
Regulations, SOR/72-114, 1 which read in part as
follows:
148. (1) ... an interruption of earnings occurs when, follow
ing a period of employment with an employer, an insured
person has a separation from that employment and has or will
have a period of seven or more consecutive days during which
no work is performed for that employer and in respect of which
no earnings that arise from the employment ... are payable or
allocated.
The reason the Umpire, and the Board of
Referees before him, held that the reduction in
respondent's working hours amounted to an inter
ruption of earnings is that the Employment and
Immigration Reorganization Act, S.C. 1976-77, c.
54, s. 26(7), amended section 2(1)(n) of the
Unemployment Insurance Act, 1971. Since this
amendment, which became effective on September
11, 1977, section 2(1) (n) reads as follows:
2. (1) In this Act,
(n) "interruption of earnings" means that interruption that
occurs in the earnings of an insured person when after a
period of employment with an employer the insured person
has a lay-off or separation from that employment or a
reduction in his hours of work for that employer resulting in
a prescribed reduction in earnings;
Under this provision it is no longer necessary, in
order for there to have been an interruption of
earnings, that the employee ceases to be in the
employ of his employer; it is sufficient for his
working hours to have been reduced, provided
however that such a reduction entails a reduction
in earnings as "prescribed" by regulation. 2 No
regulations having been adopted by the Commis
sion to give effect to the amendment, the regula
tions contain no provision stating what the reduc
tion in earnings resulting from a reduction in
working hours should be in order for such a reduc
tion to constitute an interruption in earnings. The
Umpire nonetheless concluded that there had been
an interruption in earnings in the case at bar, for
reasons which he stated as follows in his decision:
I Under section 58(r) of the Act,
58. The Commission may, with the approval of the Gover
nor in Council, make regulations
(r) defining and determining when an interruption of
earnings occurs;
2 Section 2(1)(u) provides that
2. (1) In this Act,
(u) "prescribed" means prescribed by regulation.
Section 58(r) of the Act allows the Commission to make
regulations "defining and determining when an interruption of
earnings occurs". The Commission did not amend section
148(1) of the Regulations to conform with the change in
section 2(1)(n) of the Act.
Hence there is an anomaly, in that the Act now states that a
"prescribed" reduction in earnings means an interruption of
earnings, whereas the reduction in question is not prescribed in
the Regulations.
If the legislator saw fit to change the definition of interrup
tion of earnings, it was his intention that it be put into effect.
The new definition clearly takes a more liberal approach and
allows claimants to work part-time without automatic dis
qualification. The Commission should therefore amend the
Regulations accordingly. Now that section 2(1)(n) of the Act
has been amended, section 148(1) of the Regulations is ultra
vires inasmuch as it conflicts with the new definition.
I regret that I cannot concur in the opinion of
the. Umpire.
By amending paragraph 2(1)(n) as it did, Par
liament indicated its intention that not all reduc
tions in working hours should be considered as
constituting an "interruption in earnings", only
those which resulted in a reduction in wages as
prescribed by the Regulations of the Commission.
This being the case, I feel it is clear that the effect
of the new definition was subordinated by Parlia
ment itself to the adoption of appropriate regula
tions. In the absence of such regulations, I consider
that the definition is devoid of any effect.
In the circumstances, I do not see how it can be
said that the amendment to paragraph 2(1)(n) had
the effect of making subsection 148 (1) of the
Regulations "ultra vires". However, even if that
were the case, that would be of no help to respond
ent, in my opinion, because it would still be true
that the Regulations do not specify the reduction
that must result from a reduction in working hours
for the latter to be regarded as constituting an
interruption in earnings.
For these reasons, I would allow the application,
quash the decision of the Umpire and refer the
case back for decision on the assumption that, in
the circumstances, there was no interruption of
earnings from the employment of respondent.
* * *
JACKETT C.J. concurred.
* * *
HYDE D.J. concurred.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.