Hills v. Canada (Attorney General)

Hills v. Canada (Attorney General)
Collection
Supreme Court Judgments
Date
1988-03-24
Report
[1988] 1 SCR 513
Case number
19094
Judges
Dickson, Robert George Brian; Beetz, Jean; McIntyre, William Rogers; Lamer, Antonio; Wilson, Bertha; La Forest, Gérard V.; L'Heureux-Dubé, Claire
On appeal from
Federal Court of Appeal
Subjects
Insurance
Notes
SCC Case Information: 19094
Decision Content
hills v. canada (a.g.), [1988] 1 S.C.R. 513
Dennis Hills et al. Appellants
v.
The Attorney General of Canada Respondent
indexed as: hills v. canada (attorney general)
File No.: 19094.
1987: October 7; 1988: March 24.
Present: Dickson C.J. and Beetz, McIntyre, Lamer, Wilson, La Forest and L'Heureux‑Dubé JJ.
on appeal from the federal court of appeal
Unemployment insurance ‑‑ Labour disputes ‑‑ Unemployment due to a work stoppage ‑‑ Claimant not a member of the striking local but a member of another local of the same union ‑‑ Portion of claimant's mandatory union dues deducted prior to the strike diverted by the union to International Union's strike fund ‑‑ Fund used to pay strikers at claimant's place of work ‑‑ Whether claimant was financing the labour dispute ‑‑ Whether claimant entitled to unemployment insurance benefits ‑‑ Meaning of the word "financing" in s. 44(2)(a) of the Unemployment Insurance Act, 1971, S.C. 1970‑71‑72, c. 48.
Appellant, a member of Local 7484 of the United Steelworkers, was laid‑off as a result of a strike by employees of the same company represented by Local 6399 of the same union. Local 7484 and its members were not involved in the labour dispute and had no direct interest in it. Under the collective agreement between his employer and his local, appellant was required to pay union dues, part of which were remitted by the local union to the International Union and placed by the latter in its strike fund. During the work stoppage, the International Union paid strike pay to the Local 6399 strikers. While out of work, appellant applied for unemployment insurance benefits. Under section 44(2)(a) of the Unemployment Insurance Act, 1971, an employee who has lost his employment by reason of a stoppage of work attributable to a labour dispute is entitled to unemployment insurance benefits if he proves that "he is not participating in or financing or directly interested in the labour dispute that caused the stoppage of work". The Unemployment Insurance Commission denied appellant's application and the Board of Referees dismissed his appeal holding that the appellant was unable to establish that he was not "financing" the labour dispute. In its decision, the Board relied solely on the fact that union dues which had been remitted prior to the strike by the appellant formed part of a common fund out of which strike pay was issued. Both the Umpire and the Federal Court of Appeal affirmed the Board's decision. This appeal is to determine whether the mandatory payment by an employee of union dues, part of which were diverted to a strike fund handled by the International Union, constitutes "financing...the labour dispute that caused the stoppage of work", and accordingly disentitles such employee of the benefits provided for in the Act during his unemployment due to a strike by another local of the same union.
Held (Beetz, McIntyre and Lamer JJ. dissenting): The appeal should be allowed.
Per Dickson C.J. and Wilson, La Forest and L'Heureux‑Dubé JJ.: Section 44(2)(a) of the Unemployment Insurance Act, 1971 was not designed to deprive innocent victims of a labour dispute of the benefits of the Act but only the claimants who took an active role in the labour dispute at the place of employment or contributed to it freely and voluntarily. Indeed, the word "financing" used in s. 44(2)(a) implies a meaningful connection between the payment and the dispute and requires an active and voluntary involvement by the claimant. In the circumstances of this case, the claimant was not "financing" the labour dispute at his place of employment within the meaning of s. 44(2)(a). The claimant had no choice but to pay his dues and had no voice in the decision of the International Union to finance the strike. The strike fund, handled by the International Union, was established by the union, not the claimant, and the union was neither the agent nor the mandatary of the employees. The claimant did not pay his union dues in order to finance the strike of the employees represented by another local but rather to insure membership in good standing in his local, continued service from local executives, and strike payments if his local were to decide to go on a lawful strike. The claimant would have been entitled to unemployment insurance benefits had the strike fund been administered by the local union or a financial institution rather than the International Union. The legislature cannot have intended disentitlement to be dependent upon such a trivial fact.
The interpretation of the word "financing", according to its natural meaning, as requiring a voluntary contribution on the part of the union member is substantiated by the historical context. The original "financing" provision, enacted in 1935 and re‑enacted in 1940, was drafted at a time when very different social conditions prevailed, particularly in the area of labour relations. At the time, labour unions were purely voluntary organizations. Individuals would join unions on a voluntary basis and would make their financial contributions in the same manner. They were therefore presumed to be intentionally financing the union's activities within the meaning of the disentitlement provision. While this interpretation today may appear to deprive the term of much of its application, this is merely a historical contingency which does not entail a conclusion that such an interpretation is unwarranted.
Apart from the ordinary meaning of the words, the focus of s. 44(2)(a) is on the individual claimant, not the union, and the meaning of "financing" flows from the context of which the statute's purpose is an integral element. While section 44 may be open to a broad interpretation of "financing", the purpose of the section (to disentitle strikers from benefits) as well as the purpose of the Act as a whole (to provide benefits to involuntarily unemployed persons) dictate that a narrow interpretation be given to the disentitlement provisions of that section. Any doubt should be resolved in favour of the claimant. Finally, an interpretation consistent with the values embodied in the Charter‑‑namely, freedom of association‑‑must be given preference to an interpretation which would run contrary to those values. A claimant should not be penalized for belonging to an international union.
Per Beetz, McIntyre and Lamer JJ. (dissenting): By contributing to the strike fund, appellant financed the labour dispute within the meaning of s. 44(2)(a) of the Unemployment Insurance Act, 1971. The verb "finance" is clear and in no sense confusing. It means "obtaining the capital necessary to operate" or "paying, providing money". Under section 44(2)(a), a person who finances a labour dispute is a person who provides money to assist in starting and sustaining a work stoppage. It does not matter whether this monetary contribution is made to "finance" a particular labour dispute or in anticipation of a possible strike. It is also irrelevant whether the contributions are paid into a common strike fund. In all cases, the ordinary meaning of the verb "finance" must prevail. Moreover, the choice of language used in s. 44(2)(a) reinforces this conclusion. While the verb "participate" inevitably implies an active and personal role in the ongoing labour dispute and the adverb "directly", which qualifies the nature of the claimant's interest, establishes an actual link between him and the dispute, it is impossible to find in the word "finance" used by itself a requirement of active and personal participation or a direct link between the claimant's contribution and the immediate labour dispute.
The use of the verb "finance" in the present tense in s. 44(2)(a) does not necessarily imply an actual link between the financing and the strike. The use of the present is recommended in the drafting of legislation. This drafting technique does not lead to the conclusion that an employee is financing a labour dispute solely where he makes a financial contribution while the strike is in progress.
Finally, although Parliament has frequently amended the unemployment insurance legislation to take account of the ongoing evolution in the field of labour relations, the wording of s. 44(2)(a) has received little or no alteration since the adoption of The Unemployment Insurance Act, 1940. Contributions to strike funds were probably voluntary at the time but that does not mean that the scope of the word "finance" is limited to this particular situation. The fact that, despite the changes that have occurred in the working world, Parliament has not limited the application of a word with a general meaning indicates that it intended to cover all situations that the word might apply to. The fact that there has been no legislative intervention since the judgment in McKinnon, [1977] 2 F.C. 569 (C.A.), as to the meaning of the word "finance", is very significant in this respect.
Cases Cited
By L'Heureux‑Dubé J.
Overturned: McKinnon v. The Honourable Mr. Justice Dubé, [1977] 2 F.C. 569; considered: General Motors Corp. v. Bowling, 426 N.E.2d 1210 (1981); referred to: Outboard, Marine & Mfg. Co. v. Gordon, 87 N.E.2d 610 (1949); Watt v. Lord Advocate, [1979] S.C. 120; Reference re The Employment and Social Insurance Act, [1936] S.C.R. 427, aff'd [1937] A.C. 355; Abrahams v. Attorney General of Canada, [1983] 1 S.C.R. 2; Canadian Pacific Ltd. v. Attorney General of Canada, [1986] 1 S.C.R. 678; In re McKay (1946), 53 Man. R. 364; Salomon v. Salomon & Co., [1897] A.C. 22; Pfizer Co. v. Deputy Minister of National Revenue, [1977] 1 S.C.R. 456; Grey v. Pearson (1857), 6 H.L. Cas. 60; Syndicat catholique des employés de magasins de Québec Inc. v. Compagnie Paquet Ltée, [1959] S.C.R. 206; McGavin Toastmaster Ltd. v. Ains­cough, [1976] 1 S.C.R. 718; RWDSU v. Dolphin Delivery Ltd., [1986] 2 S.C.R. 573; Manitoba (Attorney General) v. Metropolitan Stores Ltd., [1987] 1 S.C.R. 110; International Longshoremen's Association, Local 273 v. Maritime Employers' Association, [1979] 1 S.C.R. 120; Re Patterson & Nanaimo Dry Cleaning & Laundry Workers Union, Local No. 1, [1947] 4 D.L.R. 159.
By Lamer J. (dissenting)
McKinnon v. The Honourable Mr. Justice Dubé, [1977] 2 F.C. 569; Abrahams v. Attorney General of Canada, [1983] 1 S.C.R. 2.
Statutes and Regulations Cited
Act to amend The Unemployment Insurance Act, 1940, S.C. 1946, c. 68, s. 7.
Canadian Charter of Rights and Freedoms, s. 2 (d).
Constitution Act, 1867, s. 91.2A .
Employment and Social Insurance Act, S.C. 1935, c. 38.
Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, s. 28.
Labour Relations Act, R.S.O. 1980, c. 228.
National Employment Commission Act, 1936, S.C. 1936, c. 7, preamble.
National Insurance Act, 1911 (U.K.), 1 & 2 Geo. 5, c. 55, ss. 87, 107.
Rights of Labour Act, R.S.O. 1970, c. 416, s. 3(2).
Unemployment Insurance Act, S.C. 1955, c. 50, ss. 2(j), 63.
Unemployment Insurance Act, 1920 (U.K.), 10 & 11 Geo. 5, c. 30, s. 8.
Unemployment Insurance Act, 1927 (U.K.), 17 & 18 Geo. 5, c. 30, s. 6.
Unemployment Insurance Act, 1935 (U.K.), 25 Geo. 5, c. 8, s. 26.
Unemployment Insurance Act, 1940, S.C. 1940, c. 44, s. 43.
Unemployment Insurance Act, 1971, S.C. 1970‑71‑72, c. 48, s. 44.
Unemployment Insurance (No. 2) Act, 1924 (U.K.), 14 & 15 Geo. 5, c. 30, s. 4.
Wagner Act, 49 Stat. 449.
Wartime Labour Relations Regulations, P.C. 1003, February 17, 1944.
Authors
Abella, Irving. The Canadian Labour Movement, 1902‑1960. Ottawa: Canadian Historical Association, 1975.
Adams, George W. Canadian Labour Law. Aurora, Ont.: Canada Law Book, 1985.
Arthurs, Harry W., Donald D. Carter and Harry J. Glasbeek. Labour Law and Industrial Relations in Canada, 2nd ed. Toronto: Butterworths, 1984.
Carrothers, A. W. R., E. E. Palmer and W. B. Rayner. Collective Bargaining Law in Canada, 2nd ed. Toronto: Butterworths, 1986.
Côté, Pierre‑André. The Interpretation of Legislation in Canada. Translated by Katherine Lippel, John Philpot and Bill Schabas. Cowansville, Que.: Yvon Blais Inc., 1984.
Driedger, Elmer A. Construction of Statutes, 2nd ed. Toronto: Butterworths, 1983.
Ephron, Susan H. "Redefining Neutrality: Alternative Interpretations of the Labor Dispute Disqualification in Unemployment Compensation" (1986), 8 Comp. Lab. L. 89.
Grand Larousse de la langue française, "financer". Paris: Librairie Larousse, 1973.
Haggard, Thomas R. Compulsory Unionism, the NLRB, and the Courts: A Legal Analysis of Union Security Agreements. Philadelphia: University of Pennsylvania, 1977.
Hickling, M. A. Labour Disputes and Unemployment Insurance Benefits in Canada and England. Don Mills, Ont.: CCH, 1975.
Jamieson, Stuart. Industrial Relations in Canada. Toronto: MacMillan of Canada, 1957.
Lesser, Leonard. "Labor Disputes and Unemployment Compensation" (1945), 55 Yale L.J. 167.
Logan, H. A. Trade Unions in Canada. Toronto: MacMillan of Canada, 1948.
McCormick, Thomas P. "Unemployment Compensation‑‑An Examination of Wisconsin's "Active Progress" Labor Dispute Disqualification Provision," [1982] Wis. L. Rev. 907.
Norris, Terry. "Dissociating from a Trade Dispute, and Claiming Unemployment Benefit" (1985), 135 New L.J. 967.
Note. "Eligibility for Unemployment Benefits of Persons Involuntarily Unemployed Because of Labor Disputes" (1949), 49 Colum. L. Rev. 550.
Petit Robert 1, "financer". Paris: Le Robert, 1986.
Shadur, Milton I. "Unemployment Benefits and the "Labor Dispute" Disqualification" (1950), 17 U. Chi. L. Rev. 294.
Williams, Jerre S. "The Labor Dispute Disqualification‑‑A Primer and Some Problems" (1955), 8 Vand. L. Rev. 338.
APPEAL from a judgment of the Federal Court of Appeal1, dismissing appellants' application under s. 28 of the Federal Court Act to review and set aside the decision of an Umpire, CUB 8764, under the Unemployment Insurance Act, 1971. Appeal allowed, Beetz, McIntyre and Lamer JJ. dissenting.
1 F.C.A., No. A‑175‑84, September 21, 1984.
Brian Shell, for the appellants.
J. E. Thompson, for the respondent.
The judgment of Dickson C.J. and Wilson, La Forest and L'Heureux‑Dubé JJ. was delivered by
1. L'Heureux‑Dubé J.‑‑The single issue in this appeal is the interpretation of s. 44 of the Unemployment Insurance Act, 1971, S.C. 1970‑71‑72, c. 48 ("the Act"), which reads:
44. (1) A claimant who has lost his employment by reason of a stoppage of work attributable to a labour dispute at the factory, workshop or other premises at which he was employed is not entitled to receive benefit until
(a) the termination of the stoppage of work,
(b) he becomes bona fide employed elsewhere in the occupation that he usually follows, or
(c) he has become regularly engaged in some other occupation,
whichever event first occurs.
(2) Subsection (1) is not applicable if a claimant proves that
(a) he is not participating in or financing or directly interested in the labour dispute that caused the stoppage of work; and
(b) he does not belong to a grade or class of workers that, immediately before the commencement of the stoppage, included members who were employed at the premises at which the stoppage is taking place and are participating in, financing or directly interested in the dispute.
(3) Where separate branches of work that are commonly carried on as separate businesses in separate premises are carried on in separate departments on the same premises, each department shall, for the purpose of this section, be deemed to be a separate factory or workshop.
(4) In this Act, "labour dispute" means any dispute between employers and employees, or between employees and employees, that is connected with the employment or non‑employment, or the terms or conditions of employment, of any persons.
2. More particularly, the dispute centers on s. 44(2)(a) of the Act and the interpretation of the word "financing" therein. A crucial feature is the mandatory payment by an employee of union dues, part of which were diverted to a strike fund handled by the International Union. This was found to constitute "financing...the labour dispute that caused the stoppage of work" and accordingly to disentitle such employee from receiving the benefits provided for in the Act during his unemployment due to a strike by another local of the same union.
Facts
3. The facts are not contested and are stated in the appellant's factum as follows:
The Applicant Dennis Hills (hereinafter referred to as the "Applicant") was employed by C.E. Tyler Company of Canada Limited (hereinafter referred to as the "Employer"), as a shipping clerk in its office. Office employees employed by C.E. Tyler are represented by Local 7484 of the United Steelworkers of America, who [sic] pursuant to the laws of the Province of Ontario were [sic] recognized as the exclusive bargaining agent of all employees in the office unit. Local 7484 is an affiliated body chartered by the United Steelworkers of America (hereinafter referred to as "Local 7484").
As a result of the collective agreement entered into between the Employer and Local 7484, all employees including the Applicant in the office bargaining unit were required to have union dues deducted from their gross wages. Part of the union dues are remitted by the local union in accordance with the International Union's constitution are placed in a Strike and Defence Fund (the "Fund"). Pursuant to the constitution, money may be paid to employees on strike where the President of the International Union so approves.
C.E. Tyler Company of Canada at all material times also had a collective bargaining relationship with Local 6399, another chartered local of the United Steelworkers of America, with respect to all employees in the plant in their production operations.
On or about February 14, 1983, the plant employees represented by Local 6397 [sic] commenced a lawful strike. There is no relationship between Local 6397 [sic] and 7484, other than affiliation with the same international union. The decision to go on strike was taken solely by the membership of Local 6397 [sic]. Members of Local 7484 were not entitled to participate in any way in the collective bargaining process of the other local.
Pursuant to the Union's constitution the President of the international union authorized strike pay be paid to employees of Local 6397 [sic] participating in the strike.
On or about February 14th, the employees in the office unit, whose collective agreement continued until March 31, 1983, were laid‑off pursuant to the terms of the collective agreement, as a result of the halt in production caused by the strike.
(The appellant's factum referred to local 6397 whereas local 6399 is the local in question here. Also, I have underlined those facts which bear crucially on the issue of the appeal. Finally, although appellant Hills appealed on behalf of himself and other members of his local, appellants are herein referred to as "the appellant".)
Judgments
4. On February 14, 1983, the appellant applied for unemployment insurance benefits pursuant to the provision of the Act. The appellant was denied benefits by Notice of Refusal dated March 8, 1983. The Unemployment Insurance Commission refused payment of benefits on the ground that the appellant lost his employment by reason of a stoppage of work attributed to a labour dispute, pursuant to s. 44(1) of the Act.
5. On March 15, 1983, the appellant appealed his disentitlement on the basis that s. 44(1) was not applicable to him by virtue of s. 44(2)(a), since he was "not participating in or financing or directly interested in the labour dispute . . . ."
6. On May 9, 1983, the Board of Referees held that the appellant was unable to establish that he was not "financing" the labour dispute which caused the stoppage of work and as a result was lawfully disentitled.
7. In holding that the appellant was "financing" the strike, the Board of Referees relied solely on the fact that union dues which had been remitted prior to the strike by the appellant formed part of a common fund out of which strike pay was issued. In this connection, the Board stated:
The Board is of the opinion that each office, clerical and technical employee of C. E. Tyler who are members [sic] of Local 7484 (USWA) has contributed to the international strike fund through their union dues, from which "strike pay" has been issued from 07 March, 1983 . . . .
8. On July 6, 1983, the appellant appealed the decision to the Umpire on the basis that the interpretation of the Act, which would deprive employees of unemployment insurance benefits by virtue of belonging to the same international union and paying dues to it, infringed their freedom of association, contrary to the provisions of s. 2 (d) of the Canadian Charter of Rights and Freedoms .
9. In his reasons dated December 6, 1983, dismissing this ground of appeal, CUB 8764, the Umpire held that the fact that benefits may be lessened as a result of the exercise of one's freedom of association does not affect freedom of association itself. On this point, the Umpire wrote:
In my view, a provision in the Act determining the conditions by which a benefit should or should not be paid does not constitute an infringement upon the freedom of association. It may and indeed does in this particular instance work to effect a lessening of benefits to the persons involved because their local is in association with a similar local that is involved in the work dispute but the mere limiting of a benefit does not, in my opinion, affect the freedom of association.
10. Pursuant to s. 28 of the Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, the appellant applied to review and set aside the decision of the Umpire on the grounds that:
(1) The Umpire erred in law in the interpretation of s. 44(2)(a) and particularly by interpreting the word "financing" found therein to include past and indirect financing.
(2) The Umpire erred in law by failing to hold that s. 44(2) as interpreted by the Board of Referees offends s. 2 (d) of the Charter .
11. The Federal Court of Appeal dismissed the appeal from the Umpire's decision relying on its previous ruling in McKinnon v. The Honourable Mr. Justice Dubé, [1977] 2 F.C. 569.
12. The present appeal, on leave from this Court, is from the judgment of the Federal Court of Appeal.
Arguments
13. The appellant advanced the following arguments:
1. The term "financing" as used in s. 44(2)(a) of the Act denotes an act of present, personal, active involvement by the claimant concerned in the particular labour dispute. An individual cannot be said to be financing a labour dispute within the meaning of s. 44(2)(a) solely as a result of the fact that the union to which he belongs pays strike pay out of a common strike fund made up of union dues remitted by all union members. Payment is not made by the individual concerned, but rather by the union which represents him. The individual concerned has no control over whether or not such payments are made; rather, such decision is at the discretion of the President of the union in accordance with the provisions of the union's constitution. Moreover, the payment of union dues constitutes a term and condition of employment, and the trade union in negotiating such dues is not in law an agent of the employee, but rather acts as an independent entity. The fact that union dues were paid in the past and are not paid during the currency of the strike indicates that there is no active personal involvement in the financing of the strike. The payment of union dues was not made in order to finance the particular strike in question but rather to ensure membership in good standing in the union, to ensure continued service from the union, and to ensure strike payments to the applicant should his local engage in strike actions.
2. The purpose of the Act when read in its entirety is to make benefits available to those who are unemployed. As a result, a liberal interpretation of the re‑entitlement provision should be given and any doubt arising from the difficulties of the language should be resolved in favour of the claimant.
3. Disentitling a claimant in the present instance is absurd for a number of reasons: First, employees are disentitled by the mere coincidence that they belong to the same international union and are required to bear the cost of their unemployment even though they have no connection with the particular labour dispute. Second, this interpretation favours unlawful disputes, which result in consequential lay‑offs where no strike pay is paid, over lawful and authorized disputes where strike pay is paid. Third, an employee may or may not be entitled to unemployment insurance benefits depending whether the trade union has a strike fund, whether an official determines to pay strike benefits, or whether the governing collective agreement contains a dues deduction clause.
4. An interpretation of s. 44(2)(a) which would penalize employees wishing to select the bargaining agent of their choice should be avoided, since such an interpretation would be inconsistent with the freedoms guaranteed by the Charter , and in particular, the freedom of association guaranteed by s. 2 (d).
14. On this last point, at the hearing, counsel for the appellant did not particularly address the Charter issue which was raised in his factum, but rather expressed the view that a construction promoting constitutional values is to be preferred, i.e., in this case, freedom of work and freedom of association.
15. The respondent's arguments can be summarized as follows:
1. The manifest purpose of the legislation is to ensure that the state remains neutral and does not participate in the labour dispute by conferring benefits upon one side or the other. Providing public funds through unemployment insurance benefits to a group of employees who are financing the strike of another group of employees against their common employer would upset the natural balance of power that exists in the market‑place and would result in the state's losing the neutrality it is attempting to maintain by this legislation.
2. Whether there is a sufficient connection between the financial contribution made by an individual and the labour dispute that this contribution may have financed is a question of fact that must be resolved in the light of the circumstances of each case. Contributions by union members to a common strike fund have historically, both in Canada and England, been found to be a sufficient connection.
3. Section 44(2)(a) of the Act expresses in clear and unambiguous language that a claimant is not entitled to benefits under the Act if he fails to prove that he is not financing the labour dispute that caused the stoppage of work. Financing is an activity which includes drawing from pre‑existing funds established for the very purpose for which they are being used.
4. The right to freedom of association, as embodied in s. 2 (d) of the Charter , entitles everyone to join a trade union and to pursue with other members the collective interests of the membership. It neither protects the objects or purposes of the association nor the means of attaining those objects or purposes. The Charter does not give, and was never intended to give, constitutional protection to all the acts of an individual which are essential to his or her personal goals or objectives. If Charter protection is given to an association for its lawful acts and objects, then the Charter ‑protected rights of the association would exceed those of the individual merely by virtue of the fact of association.
5. The appellant's disentitlement to benefits arose, not because of his membership in a trade union, but rather because one of the objects of the International Union, to which his local was affiliated, was the allocation of union dues for the financing of the labour dispute at the appellant's place of work through the payment of strike pay from a common fund established for the purpose.
6. The impugned legislation has existed in Canada in essentially the same form since 1940. Private contracting parties who choose to arrange their affairs in such a way that some of them suffer in the face of pre‑existing legislation on the happening of certain events do so of their own volition. It cannot be argued that the pre‑existing legislation interferes with the appellant's right to associate because his union has set itself objects that may adversely affect his ability to claim unemployment insurance benefits.
The McKinnon Decision
16. Since the Federal Court of Appeal's brief reasons relied solely on its previous decision in McKinnon, supra, it is relevant here to summarize the facts and give more fully the reasons for judgment delivered by Pratte J. on behalf of that Court.
17. The facts in the McKinnon case closely resemble those in the present instance. Pratte J. summarized them as follows at p. 570:
Mrs. McKinnon was employed by a company where the employees, although represented by the same labour union, were divided into several bargaining units. She belonged to the union and, like all members, paid union dues part of which were used, as provided by the union's constitution, for a strike fund. In May 1975 Mrs. McKinnon lost her job as the result of a strike by employees of the same company who belonged to another bargaining unit but were represented by the same union. During the strike this union paid the strikers money from its strike fund, which had been set up using dues paid by all members of the union.
18. His ratio is as follows at pp. 571‑72:
Counsel for the applicants first maintained that Mrs. McKinnon had not financed the strike because she had not paid any dues during the strike. He pointed out that the verb "finance" is used in the present tense in section 44(2), leading him to say that a person is financing a dispute within the meaning of this provision only if he is giving the strikers financial help during the strike. This argument seems to us to be without foundation. A person who is financing an activity is a person who is defraying its cost, and it does not matter whether the funds necessary for this purpose have been disbursed before the activity took place or while it is taking place; in either case it will be said, while the activity is taking place, that it is financed by the person who has made it possible.
Counsel for the applicants also maintained that a person could not be considered to be financing a labour dispute if he had not voluntarily procured financial assistance for one of the parties to the dispute. This condition has not been met in this case, he said. According to him, when Mrs. McKinnon paid her dues to the union, it was in consideration of services that the union could eventually render to her and not in order to contribute to the strike fund, which was to benefit the members of other bargaining units. This argument must also be rejected. A person who pays union dues that are to be used for a strike fund may do so for selfish reasons, but this does not mean he is participating any less voluntarily in the setting up of the fund. Moreover, such participation must be considered voluntary even if the obligation to pay the dues is imposed as a condition of employment, since legally the employee is always free to leave his job if the conditions of employment do not suit him.
Finally, counsel for the applicants pointed to the absurd consequences that would result from the Umpire's decision. If the fact that a person has contributed in the past to a union's strike fund is sufficient for that person to be considered to be financing a strike called by that union, the same would apply even if the contribution to the strike fund was made several years before the work stoppage. In our opinion this objection does not stand scrutiny. In each case it must be determined whether there is a sufficient connection between the financial contribution made by an individual and the labour dispute this contribution may have financed. This is a question of fact that must be resolved in light of the circumstances of each case.
19. The decision in McKinnon appears to be the only Canadian precedent on the specific point at issue and does not seem to have been challenged until now.
Legislative History of the Act
20. A good starting point to interpret a statute properly is to examine, however briefly, its legislative history. The precursor of the Canadian statute, the National Insurance Act, 1911 (U.K.), 1 & 2 Geo. 5, c. 55, was enacted in the United Kingdom in 1911 and was designed to provide benefits to those who were unemployed mainly because of lack of job opportunities. The Act was amended a number of times, mostly to alleviate problems encountered in its application (1920 (U.K.), 10 & 11 Geo. 5, c. 30; 1924 (U.K.), 14 & 15 Geo. 5, c. 30; 1927 (U.K.), 17 & 18 Geo. 5, c. 30) and was finally consolidated in 1935 (1935 (U.K.), 25 Geo. 5, c. 8).
21. The adoption of a similar scheme in Canada had been urged for a number of years. Eventually, in 1935, the Canadian Parliament introduced The Employment and Social Insurance Act, S.C. 1935, c. 38, which, while presenting obvious differences in many respects, contained a number of similarities, particularly as regards the disqualification provision which is of interest here. The same policy considerations seem to have inspired both pieces of legislation.
22. Although introduced in 1935, the Act was not enacted until 1940 because the question of the statute's constitutionality had been referred to the Supreme Court of Canada, which by a majority judgment held the statute to be ultra vires (Reference re The Employment and Social Insurance Act, [1936] S.C.R. 427). The Privy Council having affirmed the judgment, [1937] A.C. 355, the Constitution Act, 1867 , was amended by adding in s. 91 a new heading "2A. Unemployment Insurance". The statute previously held invalid was re‑enacted with some modifications as The Unemployment Insurance Act, 1940, S.C. 1940, c. 44.
23. The Act was frequently amended in order to expand its scope, to remedy practical problems encountered in its administration, and to respond to changing social values and economic conditions; the present Act (S.C. 1970‑7l‑72, c. 48) was assented to June 23, 1971. Amendments enacted since then did not affect the disqualification provision. It is remarkable that throughout these at times material amendments to the Act respecting both its philosophy and scope, s. 44, the central issue in this appeal, has changed very little from the original text in the English statute of 1924.
Section 44
24. It is instructive to trace the legislative history of s. 44.
(a) England
25. The first English disqualification provision, adopted in 1911, read as follows:
87.‑‑(1) A workman who has lost employment by reason of a stoppage of work which was due to a trade dispute at the factory, workshop, or other premises at which he was employed, shall be disqualified for receiving unemployment benefit so long as the stoppage of work continues, except in a case where he has, during the stoppage of work, become bonâ fide employed elsewhere in an insured trade.
Where separate branches of work which are commonly carried on as separate businesses in separate premises are in any case carried on in separate departments on the same premises, each of those departments shall, for the purposes of this provision, be deemed to be a separate factory or workshop or separate premises, as the case may be.
(2) A workman who loses employment through misconduct or who voluntarily leaves his employment without just cause shall be disqualified for receiving unemployment benefit for a period of six weeks from the date when he so lost employment.
(3) A workman shall be disqualified for receiving unemployment benefit whilst he is an inmate of any prison or any workhouse or other institution supported wholly or partly out of public funds, and whilst he is resident temporarily or permanently outside the United Kingdom.
(4) A workman shall be disqualified for receiving unemployment benefit while he is in receipt of any sickness or disablement benefit or disablement allowance under Part I. of this Act.
26. Section 107, with its definitions of "workman", "employment", "trade dispute", and other terms, is not relevant here.
27. In the 1920 statute, the exception clause was widened to enable a claimant to avoid disqualification by showing that he had cut himself off from his former job by changing his occupation. Until 1920, only a change in the place of employment brought the exception into play. As amended, the exception read:
8.‑‑(1) An insured contributor who has lost employment by reason of a stoppage of work which was due to a trade dispute at the factory, workshop, or other premises at which he was employed shall be disqualified for receiving unemployment benefit so long as the stoppage of work continues, except in a case where he has, during the stoppage of work, become bonâ fide employed elsewhere in the occupation which he usually follows or has become regularly engaged in some other occupation.
Where separate branches of work which are commonly carried on as separate businesses in separate premises are in any case carried on in separate departments on the same premises, each of those departments shall, for the purposes of this provision, be deemed to be a separate factory or workshop or separate premises, as the case may be.
28. In 1924, the formula ultimately adopted provided:
4.‑‑(1) Subsection (1) of section eight of the principal Act (which imposes a disqualification for the receipt of benefit during a stoppage of work) shall not apply in any case in which the insured contributor proves that he is not participating in or financing or directly interested in the trade dispute which caused the stoppage of work, and that he does not belong to a grade or class of workers members of which are participating in or financing or directly interested in the dispute, or that the stoppage is due to an employer acting in a manner so as to contravene the terms or provisions of any agreement existing between a group of employers where the stoppage takes place, or of a national agreement to either of which the employers and employees are contracting parties.
29. In 1927, two amendments were made to s. 4(1):
6. Subsection (1) of section four of the Unemployment Insurance (No. 2) Act, 1924, shall have effect as if there were substituted for the words "members of which" the words "of which immediately before the commencement of the stoppage there were members employed at the premises at which the stoppage is taking place any of whom," and as if all the words after "in the dispute" were omitted.
30. The Unemployment Insurance Acts were consolidated in 1935 without any discussion of the trade dispute disqualification provision. Section 26 of the Unemployment Insurance Act, 1935 read as follows:
26.‑‑(1) An insured contributor who has lost employment by reason of a stoppage of work which was due to a trade dispute at the factory, workshop or other premises at which he was employed shall be disqualified for receiving benefit so long as the stoppage of work continues, except in a case where he has, during the stoppage of work, become bona fide employed elsewhere in the occupation which he usually follows, or has become regularly engaged in some other occupation:
Provided that this subsection shall not apply in a case where the insured contributor proves‑‑
(a) that he is not participating in or financing or directly interested in the trade dispute which caused the stoppage of work; and
(b) that he does not belong to a grade or class of workers of which, immed