Tax court of Canada | Public Law | Social programs | Employment insurance
Worker’s husband was sole shareholder of appellant employer, who hired worker as sales manager and paid her minimum wage. Worker claimed employment insurance (EI) benefits after loss of employment. Following investigation, it was determined that worker’s employment was not insurable because worker and employer were not dealing at arm’s length with each other and terms of employment were not substantially similar to those if worker was dealing at arm’s length with employer. Minister of National Revenue dismissed employer’s appeal because worker’s wage was much less than median wage paid to sales managers and worker continued to provide services for free while receiving EI benefits. Employer appealed. Appeal dismissed. It was reasonable for Minister to decide that worker and employer would not have entered into substantially similar contract of employment had they been dealing at arm’s length. Worker was underpaid for services she provided to employer. Worker often delayed cashing her pay checks when employer had insufficient funds to meet payroll obligations, which was not something that unrelated employee would agree to. Worker provided some services for free, which was not typical of arm’s length relationship.
6338372 Canada Inc. v. M.N.R. (2018), 2018 CarswellNat 383, 2018 CarswellNat 45, 2018 TCC 10, 2018 CCI 10, Robert J. Hogan J. (T.C.C. [Employment Insurance]).
