Neutral Citation: 1994 ONICDRG 9
File No. A-003840
ONTARIO INSURANCE COMMISSION
BETWEEN:
RAJINDER SHARMA
Applicant
and
CO-OPERATORS GENERAL INSURANCE COMPANY
Insurer
DECISION
The Applicant, Rajinder Sharma, was injured in a motor vehicle accident on August 26, 1991. He applied for and received statutory accident benefits from the Insurer, payable under Ontario Regulation 6721. Weekly income benefits were terminated by the Insurer on August 23, 1993. The parties were unable to resolve their disputes through mediation and the Applicant applied for arbitration under the Insurance Act.
The issue in this hearing is:
Is Mr. Sharma eligible for benefits under section 12 of the Schedule as a person "on a temporary lay-off’
The Applicant also claims interest on any outstanding amounts owing and his expenses incurred in the hearing. Other outstanding issues are in dispute between these parties; if necessary, a further hearing will be held to determine those issues.
Result:
Mr. Sharma was "on a temporary lay-off’ at the time of the accident.
Hearing:
The hearing was held in North York on January 10, 1994, before me, K. Julaine Palmer, arbitrator.
Present at the Hearing:
Applicant:
Rajinder Sharma
Applicant's
Representative:
Alfred Kwinter
Barrister and Solicitor
Insurer's
Representative:
Stephen Malach
Barrister and Solicitor
Insurer's Officer:
Judi Slauson
Witnesses: Rajinder Sharma, Luis Russo
The parties filed three exhibits at the hearing.
Evidence:
Rajinder Sharma, now aged 45, was injured in a motor vehicle accident on August 26, 1991. Mr. Sharma is skilled in spray painting and furniture finishing. From 1983 until 1987 or 1988, he was employed by a company known as Retail Environment; he then worked one year for Trogate Interiors. On November 6, 1989, he began work at Luiggi's Furniture. He worked there until November 2, 1990, when he was laid off.
When he was laid off, Mr. Sharma received a "Record of Employment" from his employer. This document showed the reason for issuing the document as Code "A", meaning shortage of work. The form also stated that Mr. Sharma was expected to be recalled to work on January 5, 1991. In the "Comments", section the employer noted "SHORTAGE OF WORK".
Mr. Sharma testified that he kept in touch with his employer regularly after the lay-off. By July 1991, he was still hoping he would be recalled to work. He was receiving Unemployment Insurance benefits and stated once those finished, then he would go to work.
Luis Russo testified at the hearing. He has worked at furniture refinishing since the age of 14. Luiggi's Furniture is a small business run by Mr. Russo and his wife. Luiggi's employed Mr. Sharma between November 6, 1989 and November 2, 1990. Mr. Russo had known Mr. Sharma when they both worked at Retail Environment. In fact, Mr. Sharma had been hired there, on Mr. Russo's recommendation, after a day's trial period. Mr. Sharma became Mr. Russo's helper and was trained by him. Mr. Russo offered Mr. Sharma a raise in pay to attract him to leave his then employer and work for Luiggi's in November 1989. Mr. Russo testified that he laid Mr. Sharma off because customers began cancelling contracts. He expected to be able to call him back to work soon. However, the recession has lasted a long time and, to this day, Mr. Russo has not had enough work to recall Mr. Sharma.
Just prior to the accident in August 1991, Mr. Russo testified he was excited because he was quoting on a job to produce one million sets of coasters. He talked to Mr. Sharma about this prospect and would have hired him to work on this project. However, after two to three months preparing the quotation, the contract fell through.
Mr. Russo testified about a letter he wrote to Mr. Sharma, stating that he would be rehiring him February 4, 1992. This letter was dated August 22, 1991, however Mr. Russo testified that it was not written until after he had received a letter from a claims representative of the Insurer dated November 11, 1991. Mr. Russo acknowledged that when he wrote the letter, he knew he had lost the bid on the coaster contract, and he was not able to say when he could call Mr. Sharma back to work.
Submissions:
The Applicant's counsel submitted that the words "temporary layoff” are not defined in this legislation. He submitted that it would have been easy for the legislature to incorporate into the Insurance Act the definition of "temporary layoff" found in the Employment Standards Act. The Applicant's counsel submitted that one could be temporarily laid off for quite some time, provided neither the employer nor the employee acted in a manner to repudiate the employer/employee relationship. In this case, both parties say that Mr. Sharma was temporarily laid off; in addition, the Applicant has a document substantiating that fact -- a document produced well before the accident. More work at Luiggi's Furniture has never materialized; but, counsel submitted, one cannot look at what transpired subsequent to the accident to decide if the layoff was temporary or not. If the Applicant had been entitled to start work within one year under a contract of employment, he would be treated as a section 12 case, from the date of that employment. It is the intention at the time of the layoff that should govern the question of "temporariness".
The Insurer's counsel submitted that at the time of the accident, the Applicant had been laid off for 92 months from a job at which he had worked only 12 months. He questioned how much longer Mr. Sharma would have thought he was on temporary layoff; according to Mr. Russo, he would still hire Mr. Sharma today, if he had the work and if Mr. Sharma were capable of doing it. The Insurer's counsel submitted that the definition of "temporary lay-off" of the Employment Standards Actshould govern. Section 57 of that Act states:
If an employee is temporarily laid off, as defined in the regulations, and the lay-off equals or exceeds thirty-five weeks in any period of fifty-two consecutive weeks, the employee shall be deemed no longer to be temporarily laid off and, if the employee has not been given notice of termination in accordance with this section, the employee is entitled to termination pay.
Findings:
Section 12(2) and (3) of the Schedule sets out the qualifications for eligibility for "Weekly Benefits - Income Benefits":
(2) The following qualifications apply to an insured person who claims a weekly benefit under subsection (1):
- He or she must have been at the time of the accident,
i. employed or self-employed,
ii. on a temporary lay-off, or
iii. entitled to start work within one year under a legitimate offer of employment made before the accident and evidenced in writing.
- He or she as a result of and within two years of the accident must have suffered a substantial inability to perform the essential tasks of his or her occupation or employment.
(3) A person who was unemployed and who was not self-employed at the time of the accident is qualified to receive a weekly benefit under subsection (1) if he or she was employed or self-employed for any 180 days in the twelve-month period before the accident, and if he or she as a result of and within two years of the accident has suffered a substantial inability to perform the essential tasks of the occupation or employment in which he or she spent the most time during the twelve-month period before the accident.
There is no evidence here that Mr. Sharma was self-employed. The evidence is that he was employed at Luiggi's Furniture until November 2, 1990 when he was laid off. He was initially expected to be recalled in January 1991. He was not recalled; he collected unemployment insurance benefits; the accident intervened on August 26, 1991.
The Lieutenant Governor in Council has not incorporated by reference in the Schedule any definitions from other acts of the legislature. Only in section 18 of the Schedule, pertaining to accidents in Quebec, is reference made to definitions in the Automobile Insurance Act of Quebec and the regulations made under that Act. Had it wished to do so, the Lieutenant Governor in Council could have easily provided a definition of "temporary lay-off" in the Schedule. Accordingly, I find the definitions and provisions of the Employment Standards Act, R.S.O. 1990, c.E.14 inapplicable to the issue before me.
I agree that the intention in the minds of the parties at the time of the "temporary lay-off" and their good faith is important. A lay-off by an employer who has no intention of recalling the employee is tantamount to dismissal. Similarly, a laid-off employee who immediately seeks other permanent employment may have no intention of treating the separation as "temporary". The actions of the parties with respect to their employer/employee relationship up to the date of the accident are important. However, I do not believe that the intention of the parties should govern the question of temporality of the lay-off; an objective, reasoned interpretation of the individual circumstances is called for.
In interpreting the words "on a temporary lay-off", then, the trier of fact has the task of determining whether the particular circumstances of the insured person in question are encompassed within that term. The word "temporary", according to Black's Law Dictionary, suggests "that which is to last for a limited time only, as distinguished from that which is perpetual, or indefinite in its duration. Opposite of permanent."
In Mr. Sharma's case, the intention of both parties to the employment contract was that the lay-off would last for only a limited time. Mr. Russo's optimism for their future employment relationship was reflected in the expected recall date, initially forecast as January 5, 1991 on the Record of Employment, rather than simply ticking the box marked "unknown". However, in my view, nothing turns on the date of January 5, 1991 passing prior to the accident. As Mr. Russo stated at the hearing, he cannot foretell the future. However, as time passed in 1991, it perhaps grew less and less reasonable, to an objective observer, to expect that the lay-off had maintained the status of temporary.
As has happened, Mr. Sharma would not have been recalled to work by Mr. Russo, by the date of the hearing, even had the accident not intervened. However, in my view this is not relevant to the question of whether or not the lay-off was temporary "at the time of the accident".
In all of the circumstances of this case, I find that the Applicant, Rajinder Sharma, maintained a still reasonable, if somewhat diminished, expectation of recall to his previous employment with Luiggi's Furniture at the time of the accident. I base my findings on the Applicant's good relationship with his employer and the nature of that small business enterprise, including the uncertainty of attaining the coaster contract. Accordingly, I am satisfied that at the time of the accident Rajinder Sharma was "on a temporary lay-off" from his employment at Luiggi's Furniture and is therefore eligible for benefits under section 12(1) of the Schedule.
Expenses:
The Applicant seeks an award of the expenses he has incurred in this arbitration. An award for expenses may be made under section 282(11) of the Insurance Act, which provides as follows:
The arbitrator may award to the insured person such expenses incurred in respect of an arbitration proceeding as may be prescribed in the regulations to the maximum set out in the regulations.
The prescribed expenses and amounts are set out in Schedule 1 of the Dispute Resolution Practice Code and in Ontario Regulation 664, R.R.O. 1990, Dispute Resolution Expenses.
In the Ralph McCormick v. Economical Mutual Insurance Company case (O.I.C. File No. A-000139), Arbitrator Susan Naylor made the following comments about expenses, with which I agree:
The discretion to award expenses should be exercised, having regard to the intent and purpose of the legislative scheme. The arbitration process has been established under the Insurance Act, as amended, in order to facilitate applicants' access to relatively inexpensive, speedy and informal adjudication of disputes regarding no-fault benefits. The discretion to award expenses should be exercised in accordance with this objective, having regard to the individual circumstances of each case.
Accordingly, it is appropriate to award an applicant his or her expenses, unless, in the circumstances of the particular case, it is determined that the application for appointment of an arbitrator was manifestly frivolous or vexatious, or that the applicant's conduct unreasonably prolonged the proceedings.
The Director of Arbitrations approved this statement of the principles guiding an award of expenses in the appeal decision in Vito Luigi Calogero v. The Co-Operators General Insurance Company (O.I.C. File No. P-000251, issued February 13, 1992).
The Applicant is entitled to his expenses as set out in Schedule 1 of the Dispute Resolution Practice Code. In the event that the parties cannot agree as to the total amount of expenses, I remain seized of this matter and a party may apply for assessment of the expenses before me after the conclusion of any hearing on the remaining issues in dispute between them.
Order:
Mr. Sharma was "on a temporary lay-off" at the time of the accident.
The Applicant is entitled to his expenses incurred in respect to the arbitration.
February 7, 1994
K. Julaine Palmer
Arbitrator
Date