Supreme Court of Canada

Dick et al. v. Deputy Attorney General of Canada, [1980] 2 S.C.R. 243

Date: 1980-06-27

Judith S. Dick and The Manitoba Teachers’ Society

and

Judith Silver and The Manitoba Teachers’ Society

and

Afra Kavanagh, Anita Riffel, Brenda Kersell, Linda Johansson, Elaine Hansen, Sharon Hallstead, Elizabeth Spencer, Catherine Keyzer and Bernice Poworoznyk and The Manitoba Teachers’ Society Appellants;

and

Deputy Attorney General of Canada on behalf of the Unemployment Insurance Commission Respondent.

1980: March 26; 1980: June 27.

Present: Laskin C.J. and Ritchie, Dickson, Beetz, Estey, Mclntyre and Chouinard JJ.

ON APPEAL FROM THE FEDERAL COURT OF APPEAL

Unemployment insurance—Teacher taking leave of absence for maternity reasons—Whether pregnancy benefits payable in July and August—Calculation of adjustment paid at date of separation of employment—Unemployment Insurance Act, 1971, 1970-71-72 (Can.), c. 48, ss. 2(n), 17, 30—Unemployment Insurance Regulations, Reg. 173(4).

The appellants, all school teachers who had ceased working during the school year, claim pregnancy benefits under s. 30 of the Unemployment Insurance Act extending in the months of July and August following their cessation of work. They would not, even if their employment had continued, have been liable to perform any services for their employers during July and August. The case of the appellant Dick is chosen as typical of the group. The appellant Dick sought a leave of absence and ceased working on March 26, 1976. On ceasing work, she was paid a lump sum as salary adjustment under Article 2 of the collective agreement covering her employment. She eventually resigned in November with effect from December 31, 1976. Her application for pregnancy benefits was approved by the Unemployment Insurance Commission and after the usual two-week waiting period her benefit payments commenced on April 11, 1976. Under s. 30(2) of the Unemployment Insurance Act, they would ordinarily have continued for

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a period of fifteen weeks, i.e., until July 24, 1976. However, the Commission denied her any benefits under the Act as from July 4: It was considered that the contract of employment continued to exist, that the lump sum final payment received by the appellant when she left her employment was made to cover sums which would otherwise have been received by her in July and August when no performance of services was required, and that in view of s. 30(5) of the Act and of Regulation 173(4) the benefits had to be reduced by the amount of earnings attributed to the weeks in July covered by the period of entitlement. The Commission’s decision was maintained by the Umpire and by the Federal Court of Appeal.

Held: The appeals should be allowed.

While the contract of employment was not brought to an end when the appellant left her work, she having sought only a leave of absence, there was a separation from employment and the lump sum payment made to her pursuant to Article 2 of the contract was a payment in full for services rendered up to the date of her withdrawal from service and did not constitute a payment in respect of July and August. The fact that the teacher’s salary was an annual salary, paid in twelve equal installments, was merely a device whereby teachers who earned their annual salary by the performance of services in the other ten months of the year would receive payments in July and August for convenience in their personal budgeting, and the application of the adjustment provisions of the employment contract will do no more than pay the teacher in full for the period taught, whether the salary for a full year’s services is paid in ten or twelve installments and whether the contract of employment is abrogated or preserved in existence for future years. Since the adjustment payment received on termination of services merely paid the appellant for services performed to March 26, 1976, no part thereof is attributable to July and August. Accordingly, the appellant was properly entitled to payments during the month of July.

Gladys Pelts and The Alberta Teachers Association v. Umpire Constituted Under Section 92 of the Unemployment Insurance Act, 1971, [1974] 2 F.C. 225, distinguished; In re the Unemployment Insurance Act, 1971 and in re Judith S. Dick, [1978] 2 F.C. 336, referred to.

APPEALS from judgments of the Federal Court of Appeal dismissing appeals from the decision of an Umpire. Appeals allowed.

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Derek Booth, for the appellants.

E.R. Sojonky and M. Zazulak, for the respondent.

The judgment of the Court was delivered by

MCINTYRE J.—This appeal raises the question of the entitlement of the various appellants, all school teachers who had ceased working for their respective school boards during the school year, to pregnancy benefits under s. 30 of the Unemployment Insurance Act for the months of July and August following their cessation of work. The appellants would not, even if their employment had continued, have been liable to perform any services for their employers during July and August. The case of the appellant Dick is chosen as typical of the group and detailed reference will be made to it. However, since the same principles are applicable to all the other appellants, the disposition of her case will be dispositive of the others.

The appellant Dick was first employed by Winnipeg School Division No. 1 on September 3, 1970. She signed an employment agreement dated May 5, 1970, with her employer which provided in paragraph 2:

The Division convenants and