Mr. Speaker, the current Unemployment Insurance Act was proclaimed on October 23, 1990 with an extended section 3(2)(c).
It maintains a hidden discrimination mainly against women whose regular work helps their spouses' business.
The amendment now extends this discrimination to all close relatives of the employer but, in fact, wives are still affected the most.
Meanwhile, the Liberal government advocates job creation and, to this end, gives greater importance to small and medium-sized businesses. The situation of these businesses is such that they sometimes must involve only the family, since, among other things, they need to minimize start-up costs and the family members can, if needed, make an additional effort.
This is especially true for seasonal businesses. These need a flexible and very devoted staff to ensure a viable work organization in the short run.
Spouses involved in an allegedly fraudulent employer-employee relationship should be considered just like employees who buy work weeks from their employer to complete their number of insurable weeks. This is more and more frequent and yet no discriminating provision adresses this issue in the law.
On the other hand, in the insurance cases that concern us, the applicants have the burden of proving that their normal work is distinct from family activities. In effect, they must demonstrate to the civil servants processing their file that because of the volume of work, the wages paid, the conditions of employment, they should be considered to be dealing with their employer at arm's length.
Bill C-218 to amend the Unemployment Insurance Act must allow businesses to use the most qualified and available workers, whether they be family members or not. Of course, the government must remain vigilant and exercise effective control in order to prevent abuse. Cases of family relationships must be dealt with in the same way as any other unemployment insurance application. If there is a serious concern about fraud on the part of the client applying for benefits, the official of the Department of Human Resources Development will ask the Investigation and Control Office to look into the legitimacy of the request. On the other hand, a worker not dealing at arm's length with his employer is required from the outset to demonstrate that his situation is normal.
To change this state of affairs the client must prove, by his or her own means, that he or she is not defrauding the system. It can often happen that this person must engage the services of a lawyer, and I can tell you that those who find themselves in this situation are not the wealthiest members of our society.
In this regard, the act must recognize the true employee status of those who face this situation. Those people's work should be compared with that of individuals in similar positions in companies of the same sector, with a comparable level of activity and where the owner and employees are unrelated. We should consider the amount of work done, working hours, and salary in each company to determine whether the job could be held by someone who is unrelated to the employer.
Small business people strive to reduce operating costs in order to survive. They will often set up their office in their own home, and tax deductions for that are accepted by Revenue Canada. Hiring one's spouse to perform certain tasks for the business is another way of reducing costs and minimizing supervision.
I will now describe two cases of employers and employees with family ties. They live and work far from big cities in remote communities, where working from the family home is more frequent, where work is structured differently and not always done in office buildings, shopping centres, or plants.
Section 3(2)(c) leaves the door open to interpretation on the part of the officers who have to administer it. At present, all applications where the employee and the employer do not deal at arm's length are examined individually by the Department of Revenue and the ruling depends solely on the officer's interpretation of the section of the Act and on his opinion concerning the operational context of the applicant's former job.
Naturally, there are some criteria to be taken into account, but these are so broad that there are as many interpretations as there are officers administering the Act.
Let us take for example the owner of a hunting and fishing equipment store, which is a seasonal venture, where the employer has a full-time job elsewhere. In order to ensure the proper operation of his business, he must have employees to look after the customers. Therefore, he hires two part-time employees for evenings and week-ends. To keep costs at a minimum, he sets up his store in a building adjacent to his place of residence and he hires his spouse as a replacement for him when he goes to work.
The tasks of his spouse are equivalent to those of the other two part-time employees. Business hours are regular, the payroll record and the cheques issued are proof enough of the authenticity, the reliability and the regularity of the payroll and the hours worked. These items should be sufficient as references in the absence of any contract. But, because the work is done in the same building as the home, and given the fact there is a reason for dependence, the applicant was declared not entitled to benefits.
Moreover, if we compare that with another company from the same area of activity and with a comparable volume of business, the company has to hire a full-time seasonal worker to do that kind of job. Of course, the job description, supervision and work control should also be part of the work agreement.
Mr. Speaker, I would like to give you another example, in this case a forestry contractor from the northern part of my riding of Champlain. His workplace is in a forest area, quite far from his place of residence. For the needs of his company, he must set up a forest camp where approximately thirty people are working. To ensure the operation of the camp, and since he must be frequently absent, he must hire a supervisor, who happens to be his wife. She acts as the camp supervisor, as would anybody in such a business. But just because she is related to her employer and has no work contract, her employment is deemed uninsurable. If we compare these circumstances and the volume of work that has to be done, all this is similar to what an unrelated person would do.
The act as it is presently written is open to much interpretation and subjectivity about an employee who is related to the employer. That employee is considered uninsurable.
As you know, the Department of Human Resources Development lets the Department of Revenue decide on the interpretation and enforcement of clause 3(2)(c) of the Unemployment Insurance Act and forces the applicants to prove that the fact that they are members of the same family has no influence whatsoever on the nature and parameters of the work performed.
That clause is discriminatory and its enforcement causes frustration among applicants. There are more and more administrative and judicial procedures and in spite of the amendment made in 1990 to the section we are dealing with, women who work with their spouses are still the most affected population group.
Discrimination based on marital status jeopardizes co-operation and entrepreneurship in remote and sparsely populated areas, where employment is often of a seasonal nature. For many people, working for a relative is the only way to enter the labour force and for small businesses, it is the only way to get reliable and dedicated labour requiring little supervision.
