Digest of Benefit Entitlement Principles Chapter 2 - Section 4

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2.4.0 No work while under contract

A number of difficulties have surfaced when determining whether there is an interruption of earnings when the person does not perform any services during a given period, or when the person completely ceases to work but still remains under contract with the employer. It is the wording of the agreement binding the parties that will govern the situation; unless there is a suspicion that the sole purpose of the agreement is to elude the application of the legislation in a manner contrary to public order and morals Footnote 1 .

2.4.1 Terms of the contract

Any decision on an allocation or an interruption of earnings is governed by the contractual agreement. The items of particular interest would be the effective date and the duration of the contract, as well as the period for which the earnings at issue are payable.

As well, in the case of a contract of employment covering a period where the performance of services is not always required or rendered, the Federal Court of Appeal enounced the following principle Footnote 2 :

  1. the allocation of earnings paid under such a contract must be made over the period for which the earnings were payable rather than to the time the employee performed the services or obligations. The fact that services were not performed during certain periods is irrelevant;

  2. the allocation of earnings must be so allocated even if the contract is concluded at a date later than the period for which it was payable. The allocation, then, covers a retroactive period that is earlier than the date the contract was concluded;

  3. the fact that the employer delayed in paying the earnings which were to have been regularly paid during the period for which it was payable cannot lead to a conclusion that the contract began only when the earnings were paid.

Such situations could occur in the teaching field where employment contracts are concluded at dates which do not coincide with their effective date and where there was no uniform performance of services during the period covered by the contract or for which the earnings were payable. However, different rules apply in the case of teachers as defined in the regulations Footnote 3 as those who teach in a pre-elementary, an elementary or a secondary school, including a technical or vocational school.

Leaving employment or being fired may terminate the contractual obligations before expiry and lead to an interruption of earnings. Also where employees regularly work more hours, days or periods than normally worked in a week by those who are employed full-time elsewhere and whose contract of employment provides for a period of leave, it is irrelevant to consider whether the period of leave is remunerated Footnote 4 .

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