Digest of Benefit Entitlement Principles Chapter 4 - Section 5

4.5.0 Work without remuneration

To determine if a week is a week of unemployment, any work performed by the claimant during the week must be taken into account, even services provided without remuneration. Consideration should then be given to whether or not the work performed or the services provided were in the nature of employment.

If it is found to be employment, the general rules will be applied based on whether the hours of work were controlled by the claimant. If it is found not to be employment, the next question to determine is whether the hours devoted to the activities under consideration rendered the claimant unavailable for other work ^{Footnote 1} .

4.5.1 For an employer

For the purpose of the following discussion, employer is understood to be someone who operates a business with a view to profit and who is not related to the claimant.

Where the services provided by the claimant are in the nature of those generally performed for remuneration, a strong presumption will arise that a contract of service exists between the claimant and the person for whom services are provided. This presumption is not overcome merely by statements from both parties that no remuneration in any form is being paid in return for the services ^{Footnote 2} . It is most unusual for a person to work a full working week for a profit-making business without any remuneration of any type, and even the legality of such a practice might be questioned.

The question of the amount of remuneration is a matter entirely between the employer and the employee, and should not concern the Commission. The remuneration to be paid for services provided in a case is at the very least governed by provincial or federal labour legislation. For unemployment benefit purposes, the claimant's decision to work a full working week for only a few dollars ^{Footnote 3} , for a commission to be paid several months later or for non-monetary considerations such as room and board is irrelevant ^{Footnote 4} . Even in cases where no remuneration is paid, one may be considered as working if there is, between the person performing the work and the person benefiting from it, a relationship that may be likened to or regarded in the same way as a contract of service ^{Footnote 5} .

As an exception to the above, in a case where the claimant offered services to an employer at no charge with a view to proving competence and obtaining employment, it was held that such efforts were more in the nature of a job search than employment itself ^{Footnote 6} .

4.5.2 Training period

In some cases, the claimant has to undergo a training period without remuneration just prior to starting a new employment. The crucial point in these cases is whether the course precedes the engagement or is a condition and part of the employment.

Where full-time attendance to the course is required and the course is more or less similar to on-the-job training, the claimant is considered working a full working week and not unemployed ^{Footnote 7} . This is so regardless of the working terms, the amount of remuneration provided during the training phase or the absence of any remuneration ^{Footnote 8} . On the other hand, if the claimant is not under a contract of service during the training period, the weeks comprised in this period will be weeks of unemployment. However, the next question to examine will be the claimant's availability for work while attending the course ^{Footnote 9} .

It must be borne in mind that, in order to become eligible for benefits, trainees have the onus of proving both conditions in any situation. Evidence must be adduced to show that they are unemployed and available for work in any week in the training period for which a claim is made ^{Footnote 10} .

4.5.3 Bankruptcy

A person who works a full working week becomes automatically ineligible for unemployment benefits ^{Footnote 11} . This is true even in cases where, due to bankruptcy, the employee is not paid for some or any of the services provided ^{Footnote 12} .

It must be remembered that the primary reason for unemployment benefits is to compensate insured persons for the loss of earnings arising out of unemployment. The test to qualify for benefit does not depend on an employer's ability or inability to pay wages owing to an employee ^{Footnote 13} , since the program has not been designed to compensate for unpaid salary due to an employer's financial difficulties. Therefore, the program should not be used as a remedy to offset what may be regarded, rightly or wrongly, as holes in relevant legislation. Any attempt to recover a loss due to bankruptcy must be pursued under the legislation meant to deal with such matter.

4.5.4 For a relative or friend

In the case of claimants who receive no remuneration for services given to their parents, the question to examine is whether the services are performed out of a sense of filial duty which is normal under the circumstances or whether they are the consequence of an employer-employee relationship under which some non-monetary advantages are accorded ^{Footnote 14} . The absence of remuneration of any type whatsoever generally indicates that there is no contract of service, in which case the services given to a member of the family may not be equated to employment ^{Footnote 15} . The following questions may help to clarify the facts in a particular case:

• Do the claimant's parents operate a business or a farm?
  
• Are the services given by the claimant connected with the operation of the business or the farm? If no business or farm is involved, has the claimant undertaken substantial work that could normally have been performed only by qualified people?
  
• Does the claimant receive any consideration other than those received before rendering the services? Do the services performed and the considerations received exceed those that are commonly shared among members of the same family? Was the claimant previously given room and board free of charge? Who did the work at that time?
  
• Are the services given in the nature of those generally provided to a business for remuneration? Are they carried out during the normal hours of work, in the evening, during weekends or in the claimant's leisure time? Would the parents have to hire someone to do the work should the claimant quit or otherwise decide not to continue?
  
• Does the claimant devote more time to this activity than to seeking employment elsewhere? Is the claimant kept busy during the hours that are most favourable for a job search? Could this activity be continued while accepting full-time employment elsewhere? If not, is the claimant willing to quit?
  

The above questions are used to test the truthfulness of the information provided by the interested parties. If it is established that there is no remuneration of any type paid to the claimant, cash or otherwise, it will be concluded that the services are not performed under a contract of service and that the claimant is unemployed no matter what situation exists. The availability for work will be the only question that has to be examined.

With slight modifications these questions can be adapted to other similar circumstances, for example in reverse situations where the claimant is a parent who has undertaken some work on behalf of a daughter or son ^{Footnote 16} , or the claimant helps a friend engaged in substantial activities.

Once it has been determined that the services performed are in the nature of employment, the next question to consider is whether the claimant works a full working week. To this end, reference should be made to the general rules applicable depending on whether the claimant's hours of work are controlled by the employer ^{Footnote 17} . If it is found that the claimant does not work a full working week, an assessment of the non-monetary considerations will be made which will result in the applicable deduction from the weekly benefit payable ^{Footnote 18} .

In a case where the claimant, in return for a monetary consideration, looked after the neighbour's baby at home along with her own children, it was held that this was not employment ^{Footnote 19} .

It must be kept in mind that the claimant has the onus of proving that any week for which benefit is being claimed is a week of unemployment ^{Footnote 20} , and in addition the claimant's availability for work must be proven with respect to each working day of that week ^{Footnote 21} . Whether or not the activity being considered constitutes employment, where the actions of a claimant show more concern for the activity than for seeking employment, this is certainly not evidence of availability ^{Footnote 22} . In one case the claimant succeeded in proving that he was unemployed, which then required his availability for work to be examined ^{Footnote 23} .

4.5.5 For a spouse

First, a distinction should be made between two groups of cases: those in which the spouse has entered into a contractual relationship with a third party, and those in which the spouse operates a business ^{Footnote 24} .

With respect to the first group of cases, a claimant may have agreed to perform part of the work for which the spouse is responsible under the contract. The typical case is helping one's spouse in cleaning buildings at night or doing janitorial work where both spouses live. No matter what the arrangement and how many hours each spouse devotes to the fulfillment of the contract, it is considered that the only one employed is the individual bound under the contract. As a consequence, all earnings arising out of the contract are considered to belong to the claimant's spouse and availability for other work is the question left to examine in the claimant's case. Of course, if the claimant's spouse has also made a claim for benefit, the general rules would then be applied based on whether the claimant's spouse controls his or her own working hours. The two spouses will be considered employed only if the contractual relationship applies to both of them ^{Footnote 25} .

As an exception to the above, where it is clearly shown that, for some reason, the spouse is unable to perform all the tasks required under the contract, the claimant may be considered as employed and in receipt of part of the earnings arising out of the contract. For example, this may be by reason of a spouse's temporary incapacity, prolonged absence from home, physical limitations or because the tasks require the services of more than one person ^{Footnote 26} . In these cases, it is considered that the spouse with the contract incurs expenses for the direct purpose of earning the income ^{Footnote 27} , and such expenses will constitute the amount of wages earned by the claimant in return for the assistance given. When the time comes to determine whether the claimant works a full working week, the general rules as to whether a person controls his or her own working hours will be applied. For any week found to be a week of unemployment, the claimant's earnings in cash or in kind must be taken into account. To this end, should the amount disclosed as being the claimant's wages appear unrealistic, an assessment may be made by the Commission based on what would be reasonable under the circumstances ^{Footnote 28} .

As for the second group of cases, consideration will be given to the nature of the duties and responsibilities carried out by each one in the operation of the business ^{Footnote 29} .

4.5.6 Benevolent work

Benevolent work is generally understood to be work performed on behalf of a charitable organization without any expectation of monetary consideration. Clearly a person engaged in such volunteer work is in no way bound under a contract of service. The absence of such contract is a decisive factor as far as entitlement to unemployment benefits is concerned.

Therefore, in the absence of a contract of service, a claimant who provides services as a benevolent gesture is considered not to be in employment. This is true even if, in some instances, the services may be provided on a full-time basis or the claimant may receive certain benefits such as room and board by living on the premises ^{Footnote 30} . The real question to examine under the circumstances is the claimant's availability for other work ^{Footnote 31} .

Also, a claimant who devoted considerable time to the two businesses that his wife operated from the basement of the family home was held to be not unemployed. He did not prove that he would not derive any economic benefit from this activity whereas, to be authentic, volunteered work implies such a non-interest ^{Footnote 32} .