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 determined to be employment, the general rules will be applied based on whether the hours of work were controlled by the claimant or by someone else. If it is determined not to be employment, the next question to consider is whether the hours devoted to the services provided renders the claimant unavailable for other work (FCA A-105-98, CUB 39928; Digest 10.14.0).

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 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 (FCA A-427-99, CUB 44889; A-274-95; CUB 27230). It is unusual for a person to work a full working week for a profit-making business, without any remuneration of any type.

The amount of remuneration is a matter entirely between the employer and the employee, which should not concern the Commission. The remuneration that should or should not be paid for services provided is governed by provincial or federal labour legislation. For EI benefit purposes, the claimant's decision to work a full working week for only a few dollars, for a commission to be paid several months later, or for non-monetary considerations such as room and board, is irrelevant (FCA A-477-00, CUB 45675; Jurisprudence Index/week of unemployment/benevolent work/). Even in cases where no remuneration is paid, one may be considered as working, if there is a relationship that may be likened to or regarded in the same way as a contract of service, between the person performing the work, and the person benefiting from it (FCA A-105-98, CUB 39928; FCA A-245-97; CUB 36921).

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 (Jurisprudence Index/availability for work/various activities/volunteer work/).

4.5.2 Training period

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

Where full-time attendance in 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 (FCA A-531-01; CUB 51844). This is so regardless of the working terms, the amount of remuneration provided during the training phase, or the absence of any remuneration (Jurisprudence Index/week of unemployment/work without earnings/). 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 consider will be the claimant's availability for work while attending the course (Digest 10.12.0).

It must be borne in mind that, in order to be eligible for EI benefits, trainees have the onus of proving both conditions in any situation. Evidence must be provided to show that they are unemployed and available for work in any week for which a claim is made, during the training period (Jurisprudence Index/availability for work/courses/no choice/).

4.5.3 Bankruptcy

A person who works a full working week becomes automatically ineligible for unemployment benefits (EIA 9; EIA 11(1)). This is true even in cases where, due to bankruptcy, the employee is not paid for some or any of the services provided (Digest 1.9.9).

The primary reason for unemployment benefits is to compensate insured persons for the loss of earnings resulting from unemployment. The test to qualify for benefits does not depend on an employer's ability or inability to pay wages owing to an employee (Jurisprudence Index/availability for work/applicability/bankruptcy/). The program was not 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 as gaps in relevant legislation. Attempts to recover a loss due to bankruptcy must be pursued under the appropriate legislation dealing with such matters.

4.5.4 For a relative or friend

In the case of claimants who receive no remuneration for services provided to their parents or other family members, the question to examine is whether the services are performed out of a sense of duty, or whether they are the result of an employer-employee relationship under which some non-monetary advantages are given (FCA A-771-88; CUB 15420; CUB 45444; Digest 4.6.9). 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 amount to employment (Jurisprudence Index/week of unemployment/friends or relatives/; FCA A-986-88; CUB 15699). The following questions may help to clarify the facts in a particular case:

• Do the claimant's parents/family member operate a business or a farm?
• Are the services that are provided 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 monetary or non-monetary gain, other than that received before rendering the services? Do the services performed and the gains 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 verify the accuracy 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, regardless of the situation. 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, 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 (Digest 4.5.1). If it is determined 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 EI benefits payable.

In a case where the claimant, in return for a monetary consideration, looked after a neighbour's baby at home, along with her own children, it was held that this was not employment (Digest 4.1.3).

It must be kept in mind that the claimant has the onus of proving that any week for which benefits are being claimed is a week of unemployment (Digest 4.2.0). In addition, the claimant's availability for work must be proven with respect to each working day of that week (Digest 10.2.0). 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 evidence that their availability may be in question (Digest 10.14.0). A claimant may be able to prove they are unemployed within the meaning of the Act, however they must also prove their availability for work (Jurisprudence Index/week of unemployment/work without earnings/).

4.5.5 For a spouse

When determining whether working for a spouse is considered employment, a distinction should be made between two scenarios: the first in which the spouse has entered into a contractual relationship with a third party, and the second in which the spouse operates a business (Digest 4.6.7.4; Digest 4.6.9).

With respect to the first scenario, a claimant may have agreed to perform part of the work for which the spouse is responsible under a contract. A typical scenario would be helping one's spouse in cleaning buildings at night or doing janitorial/superintendent 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. Consequently, all earnings arising out of the contract are considered to belong to the claimant's spouse, and the question to consider is the availability of the claimant. Of course, if the claimant's spouse who is responsible for fulfilling the contract has also made a claim for benefits, the general rules would apply based on whether the claimant's spouse controls their own working hours. The two spouses will be considered employed only if the contractual relationship applies to both of them (FCA A-464-90; CUB 17990).

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 (FCA A-904-96; CUB 35351). In these cases, it is considered that any earnings from the contract that are paid to the claimant for their assistance, are expenses incurred by the spouse with the contract. These expenses are for the direct purpose of earning the income (EIR 35(10)), and such expenses will constitute earnings 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 their 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. Should the amount disclosed as being the claimant's wages appear unrealistic, the Commission will make an assessment, based on what would be reasonable under the circumstances (EIR 35(12)).

As for the second scenario, consideration will be given to the nature of the duties and responsibilities carried out by each one in the operation of the business (Digest 4.6.7.4; Digest 4.6.9). A determination will then be made regarding the employment status, earnings, and availability for other work, for each claimant.

4.5.6 Benevolent work

Benevolent (volunteer) work is generally understood to be work performed on behalf of a charitable organization without any expectation of monetary consideration. 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 involved 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 (Jurisprudence Index/week of unemployment/benevolent work/). The real question to examine under the circumstances is the claimant's availability for other work (Digest 10.14.1).

Providing work to a business or employer without remuneration does not necessarily mean an individual is performing benevolent work. In some cases, if the work is being done in anticipation of benefiting from it at a later date, such as creating future employment for the worker, there is a strong presumption that the worker is not unemployed (FCA A-427-99; CUB 44889). In one case, 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 (FCA A-771-88, CUB 15420; Digest 4.6.7.4; Digest 4.6.9).

[March 2021]