Self-Employment

From Riverview Legal Group


Caselaw.Ninja, Riverview Group Publishing 2021 ©
Date Retrieved: 2024-02-21
CLNP Page ID: 2039
Page Categories: Employment Insurance
Citation: Self-Employment, CLNP 2039, <https://rvt.link/2f>, retrieved on 2024-02-21
Editor: MKent
Last Updated: 2022/12/31


Employment Insurance Regulations (SOR/96-332)[1]

Self-employed Person Working a Full Working Week

30 (1) Subject to subsections (2) and (4), where during any week a claimant is self-employed or engaged in the operation of a business on the claimant's own account or in a partnership or co-adventure, or is employed in any other employment in which the claimant controls their working hours, the claimant is considered to have worked a full working week during that week.

(2) Where a claimant is employed or engaged in the operation of a business as described in subsection (1) to such a minor extent that a person would not normally rely on that employment or engagement as a principal means of livelihood, the claimant is, in respect of that employment or engagement, not regarded as working a full working week.

(3) The circumstances to be considered in determining whether the claimant's employment or engagement in the operation of a business is of the minor extent described in subsection (2) are

(a) the time spent;
(b) the nature and amount of the capital and resources invested;
(c) the financial success or failure of the employment or business;
(d) the continuity of the employment or business;
(e) the nature of the employment or business; and
(f) the claimant's intention and willingness to seek and immediately accept alternate employment.

(4) Where a claimant is employed in farming and subsection (2) does not apply to that employment, the claimant shall not be considered to have worked a full working week at any time during the period that begins with the week in which October 1st falls and ends with the week in which the following March 31 falls, if the claimant proves that during that period

(a) the claimant did not work; or
(b) the claimant was employed to such a minor extent that it would not have prevented the claimant from accepting full-time employment.

(5) For the purposes of this section, self-employed person means an individual who

(a) is or was engaged in a business; or
(b) is employed but does not have insurable employment by reason of paragraph 5(2)(b) of the Act.

Week of Unemployment — Self-employed Person

30.1 For the purposes of Part VII.1 of the Act, a week of unemployment for a self-employed person is, despite section 30, a week in which the person reduces the time devoted to their business activities by more than 40% of the normal level.

30.2 For the purposes of subsection 152.03(4) of the Act, a self-employed person is deemed to be not working if they are not engaged in

(a) the normal activities of their business; and
(b) the normal activities for the continuation of their business.

Marlowe v. Canada (Attorney General), 2009 FCA 102 (CanLII)[2]

[3] If a claimant is self-employed or engaged in the operation of a business on his or her own account (“self-employment”) during any week in a benefit period, subsection 30(1) of the Regulations deems that claimant to have worked a full working week during that week. As a result, that week will not be considered to be a week of unemployment for the purposes of section 9 of the Act. Subsection 30(2) of the Regulations provides an exception to the deeming rule in subsection 30(1) of the Regulations where the self-employment is minor in extent. The issue in this application is whether that exception applies to Mr. Marlowe.

Martens v. Canada (Attorney General), 2008 FCA 240 (CanLII) [3]

[26] Subsection 30(2) will negate the application of subsection 30(1) where a claimant is self-employed or engaged in the operation of a business to a minor extent. The test for minor self-employment or engagement in business operations requires a determination of whether the extent of such employment or engagement, when viewed objectively, is so minor that the claimant would not normally rely on that level of engagement as a principal means of livelihood. Subsection 30(3) requires six factors to be considered in determining whether the claimant’s self-employment or engagement in the operation of the particular business is minor in extent. These factors represent a codification of the six factors outlined in Re Schwenk (CUB 5454).

(...)

[28] In interpreting these provisions, it is important to consider that their objective is the determination of the extent of the self-employment or engagement in a business by a claimant in any given week in a benefit period that has been established pursuant to section 9 of the Act. If such self-employment or engagement is minor in extent, then the claimant will have overcome the presumption contained in subsection 30(1) and will not be regarded as having worked a full working week during that week.

Paragraph 30(3)(a) – Time Spent

(...)

[40] It is noted that the record does not contain an abundance of evidence that demonstrates what Mr. Martens actually did with his time during the Benefit Period. There is no dispute that he spent time looking for employment. However, the record also indicates that Mr. Martens built a seed cleaner on his farm and that, as of April 2005, he became engaged in a free-standing seed cleaning business. In Canada (Attorney General) v. Jouan (1995), 1995 CanLII 11053 (FCA), 179 N.R. 127 (F.C.A.),[4] and Charbonneau v. Canada (Attorney General), 2004 FCA 61,[5] this Court denied benefits to claimants who spent considerable time during their benefit periods in the establishment of new businesses. In this case, the Crown focused on Mr. Martens’ engagement in his farming business, which had been in existence since 1972, and did not argue that any weight should be given to the establishment of the new seed cleaning business in the Benefit Period. In these circumstances, no further consideration of the seed cleaning business is warranted.

Paragraph 30(3)(c) – Financial Success or Failure of the Business

(...)

[45] In my view, the relatively modest average net income generated by Mr. Martens’ farm in the years referred to in the record, indicates that reliance by Mr. Martens on the engagement in the farming operations in the Benefit Period as a principal means of livelihood in those years would not have been normal or reasonable.

Paragraph 30(3)(e) – Nature of the Business

(...)

[47] This factor considers whether there is any connection between the employment that has been lost and the business in which the claimant is engaged. If the employment that has been lost is similar to the activity undertaken in the business, it may indicate that the employment is a stepping stone into the business.

[48] The record indicates that the Plant operated in the food processing business which, in my view, is not similar to the farming business. Accordingly, this factor, objectively considered, does not tend to indicate that Mr. Martens would normally have relied on his engagement in the farming business in the Benefit Period as his principal means of livelihood.

(...)

[50] Based upon the record, the application of the objective test contained in subsection 30(2) to the circumstances of Mr. Martens, determined in accordance with subsection 30(3), reveals that at least four of the relevant factors point to the conclusion that Mr. Martens’ engagement in his farming business during the Benefit Period was minor in extent. When all six factors are viewed objectively, the only reasonable conclusion is that it would not have been normal or reasonable for Mr. Martens to have relied on that level of engagement as his principal means of livelihood. It follows that the exception in subsection 30(2) should have been found to apply in respect of Mr. Martens’ engagement in his farming business during the Benefit Period.

BF v Canada Employment Insurance Commission, 2022 SST 493 (CanLII)[6]

[15] I find that the time spent on the business by the Appellant was not commensurate with that of a person who would normally rely on that level of self-employment as their principal means of livelihood. The Appellant is an adult who was working full-time in her field and supporting herself from her employment prior to being laid off due to the pandemic. Spending less than 15 hours per week is not a level of time spent on self-employment that is commensurate with a principal means of livelihood.

References

[1] [2] [3] [4] [5] [6]

  1. 1.0 1.1 Employment Insurance Regulations (SOR/96-332), <https://laws-lois.justice.gc.ca/eng/regulations/SOR-96-332/index.html>, retired on 2022-12-31
  2. 2.0 2.1 Marlowe v. Canada (Attorney General), 2009 FCA 102 (CanLII), <https://canlii.ca/t/233l8>, retrieved on 2022-12-31
  3. 3.0 3.1 Martens v. Canada (Attorney General), 2008 FCA 240 (CanLII), <https://canlii.ca/t/1zlh6>, retrieved on 2022-12-31
  4. 4.0 4.1 Canada (Attorney-General) v. Jouan, 1995 CanLII 11053 (FCA), <https://canlii.ca/t/gcgs6>, retrieved on 2022-12-31
  5. 5.0 5.1 Charbonneau v. Canada (Attorney General), 2004 FCA 61 (CanLII), <https://canlii.ca/t/1hck0>, retrieved on 2022-12-31
  6. 6.0 6.1 BF v Canada Employment Insurance Commission, 2022 SST 493 (CanLII), <https://canlii.ca/t/jsbx2>, retrieved on 2022-12-31