Employment Insurance (EI)

Reasons and decision

Decision

[1] The appeal is dismissed.

Introduction

[2] On May 27, 2017, the General Division of the Social Security Tribunal determined that the Appellant was disentitled from Employment Insurance benefits because she was not unemployed pursuant to sections 9 and 10 of the Employment Insurance Act (Act) and section 30 of the Employment Insurance Regulations (Regulations).

[3] The Appellant is deemed to have requested leave to appeal to the Appeal Division on June 28, 2017, after receiving the General Division decision on May 29, 2017. Leave to appeal was granted on August 30, 2017.

Type of hearing

[4] The Tribunal held a teleconference hearing for the following reasons:

• The complexity of the issue under appeal;
• The fact that the credibility of the parties is not anticipated being a prevailing issue;
• The information in the file, including the need for additional information;
• The requirement under the Social Security Tribunal Regulations to proceed as informally and quickly as circumstances, fairness, and natural justice permit.

[5] The Appellant attended the hearing and was represented by Counsel Joseph Lanni. The Respondent was represented by Rachel Paquette.

The law

[6]Subsection 58(1) of the Department of Employment and Social Development Act (DESD Act) states that the only grounds of appeal are the following:

1. a) the General Division failed to observe a principle of natural justice or otherwise acted beyond or refused to exercise its jurisdiction;
2. b) the General Division erred in law in making its decision, whether or not the error appears on the face of the record; or
3. c) the General Division based its decision on an erroneous finding of fact that it made in a perverse or capricious manner or without regard for the material before it.

Issue

[7] The Tribunal must decide whether the General Division erred when it concluded that the Appellant should be disentitled from Employment Insurance benefits starting January 14, 2013, because she was not unemployed pursuant to sections 9 and 10 of the Act and section 30 of the Regulations.

Standard of review

[8] The Federal Court of Appeal has determined that the Appeal Division’s mandate is conferred to it by sections 55 to 69 of the DESD Act. The Appeal Division does not exercise a superintending power similar to that exercised by a higher court—Canada (Attorney General) v. Jean, 2015 FCA 242; Maunder v. Canada (Attorney General), 2015 FCA 274.

[9] Therefore, unless the General Division failed to observe a principle of natural justice, erred in law, based its decision on an erroneous finding of fact that it made in a perverse or capricious manner or without regard for the material before it, the Tribunal must dismiss the appeal.

Analysis

[10] At the Appellant’s request, the Tribunal wrote the present decision in English to ensure coherence and uniformity with the General Division decision.

[11] The Appellant essentially argues in appeal that when she was interviewed by the Respondent’s agent on November 20, 2011, she felt intimidated and was not provided the opportunity to bring a witness in support of her version of events. She also argues that, during the interview, she was talking in the present tense and not in the past tense. Therefore, her statement did not represent accurately the facts applicable to the relevant period.

[12] As concluded by the General Division, the Appellant had other opportunities to provide the version of the witness, including in writing and at the hearing. She decided not to do so. Furthermore, the evidence before the General Division, notwithstanding the interview by the Respondent, did not demonstrate that she was not involved in the operation of her business for the period from January 14, 2013, to July 2013.

[13] The test requires an objective consideration of whether the level of such self- employment or engagement, viewed in light of the factors set forth in subsection 30(3), would be sufficient to enable a person to normally rely upon that level of self-employment or engagement as a principal means of livelihood.

[14] The case law has established that no one factor is decisive and that each case must be considered on its own merits—Martens v. Canada (Attorney General), 2008 FCA 240; Canada (Attorney General) v. Goulet, 2012 FCA 62; Inkell v. Canada (Attorney General), 2012 FCA 290.

[15] The Tribunal is of the view that the text of the legislation must be considered in its totality considering that a person could spend a limited amount of time at an employment or business activity but still follow it as a principal means of livelihood. Furthermore, the failure to generate sufficient income does not in itself make a claimant unemployed.

[16] Subsection 30(3) of the Regulations specifies that six factors have to be taken into account in determining whether a claimant’s self-employment is of a minor extent. The circumstances to be considered in determining whether the claimant's employment or engagement in the operation of a business is of the minor extent described in subsection (2) are as follows:

1. (a) the time spent;
2. (b) the nature and amount of the capital and resources invested;
3. (c) the financial success or failure of the employment or business;
4. (d) the continuity of the employment or business;
5. (e) the nature of the employment or business; and
6. (f) the claimant's intention and willingness to seek and immediately accept alternate employment.

[17] The General Division considered all six factors in determining whether the Appellant was self-employed to a minor extent.

[18] The General Division was not convinced that the Appellant did not spend a significant amount of time in the business for the period from January 14, 2013, to July 2013.

[19] The General Division concluded that the Appellant was present on a daily basis in order to ensure the success of the business of her friend and business partner who was working elsewhere during the day. The General Division determined that the fact that she was in training or actually working, remunerated or not, did not change the fact that she spent a significant amount of time in the business.

[20] The General Division noted that the Appellant had entered into a business partnership agreement in July 2012. The business was acquired on January 16, 2013, and was registered on February 14, 2013. The Appellant was registered as the president and held 49 percent of the shares of the business.

[21] The fact that the Appellant was declaring that her full-time involvement coincided almost precisely with the end of her benefits period raised doubt with the General Division as to the credibility of the story that the Appellant put forth at the hearing.

[22] The General Division found that the Appellant’s contribution, although not financial, was in the form of her knowledge and expertise in management and sales, as stated by the partnership agreement signed by the Appellant on July 8, 2012, prior to her benefit period.

[23] It considered that the business was not very successful and not likely to continue its operations in view of its poor financial results.

[24] The General Division considered that the Appellant contributed by offering her presence and her knowledge in management and sales to the business on a daily basis.

[25] Finally, the General Division determined that the Appellant had not made job searching enough of a priority, that her job search was too restrictive and that she did not demonstrate a sufficient intention or will to obtain alternative employment.

[26] After considering all six factors, the General Division came to the following conclusion:

[54] Although the Tribunal has empathy for the efforts the Appellant did to start her own restaurant with her friend in order to create some revenue to support her family, the relevant test must be applied. In Marlowe v. Canada (PG), 2009 FCA 102, the Federal court of Appeal confirmed the umpire’s decision in CUB 69121 reiterating that the applicable legal dispositions are based on the principle that in order to be eligible to benefits, a claimant must be free of all commitment, all work or of all interest that could limit or reduce their chances or their desire to reintegrate the labour market. Following the analysis of the totality of the factors provided at paragraph 30(2), the Tribunal finds that the opening of a restaurant, whether she was being paid or not, involved the Appellant’s time and focus, reducing significantly her chances and desire to go back to work for another employer. Consequently, she does not meet the eligibility requirements to receive benefits. The Tribunal finds that the Appellant was self-employed from January 14, 2013, she was regarded as working a full working week pursuant to subsection 30(1) because she did not meet the exception pursuant to subsection 30(2) of the Regulations. Benefits are not payable to the Appellant from January 14, 2013.

[27] While the time engaged in an activity is a valuable element for determining "minor in extent," it is not the sole one, nor does the Tribunal think one can say that it is always the overriding one. Based upon the evidence, the application of the objective test contained in subsection 30(2) to the Appellant’s circumstances, determined in accordance with subsection 30(3), revealed that at least four of the relevant factors point to the conclusion that the Appellant’s engagement in her business during the benefit period was not minor in extent.

[28] The Tribunal may have decided the present matter differently but it does not have the authority to retry a case or to substitute its discretion for that of the General Division. The Tribunal's jurisdiction is limited by subsection 58(1) of the DESD Act. Unless the General Division failed to observe a principle of natural justice, erred in law, based its decision on an erroneous finding of fact that it made in a perverse or capricious manner or without regard for the material before it, the Tribunal must dismiss the appeal.

[29] For the above reasons, the Tribunal finds that the General Division decision is consistent with the evidence before it and that it complies with the law and the decided cases. The Tribunal further finds that no rules of natural justice were breached in the present matter.

Conclusion

[30] The appeal is dismissed.