http://decision.tcc-cci.gc.ca/site/tcc-cci/decisions/en/item/64496/index.do 
Klassen v. M.N.R.[1] (October 31, 2013) is an employment insurance appeal from a decision denying coverage on the basis that the appellant was dealing at less than arm’s length from her employer and the terms and conditions of her employment were not substantially similar to those that would be found in an arm’s length relationship.
[4] Ms. Klassen is a qualified and experienced office administrator.
[5] By way of a verbal contract, Ms. Klassen was offered the position of office manager with Southpoint Growers at a salary of $400 per week. The parties agree that this is a reasonable rate of remuneration for a 16 hour work week. Ms. Klassen worked out of her home, where she was also looking after her three children.
[6] Ms. Klassen began by helping start up the business without pay during the months of January and February 2011.
[7] During March and April 2011, Ms. Klassen received remuneration of only $75 per week which was to enable her to qualify for maternity benefits. It was contemplated that the shortfall would be made up from future pay cheques. Ms. Klassen did receive partial reimbursement for the shortfall by receiving remuneration of $500 per week for several weeks. However, the extra payments did not come close to achieving full reimbursement.
[8] The business was not successful and it began to wind down after the growing season. In December 2011, Ms. Klassen received only $150 per week in light of the poor financial condition of the business.
[9] In 2012, which is outside the period at issue, Ms. Klassen continued to assist with the wind up of the business without pay.
[10] Although Ms. Klassen did not keep track of her hours, she estimates that she generally worked 16 to 20 hours per week, except for January, February and December when she worked approximately 25 to 30 hours per week.
[11] Ms. Klassen’s duties required her to travel between the farm and her office for which she received reimbursement. She also kept a cell phone in order to be available for urgent business matters.
[12] The other workers at the farm were migrant workers who were paid minimum wage on a regular basis.
The court dismissed the appeal on the basis that Ms. Klassen worked without pay or for very little pay as a favour for her family:
[22] Ms. Klassen submits that other employers would help out employees and that the remuneration was decided by the employer. Neither of these factors are of assistance to Ms. Klassen. First, it does not matter that the remuneration was decided by the employer. The relevant question is whether the remuneration was arm’s length.
[23] Second, it does not matter that other employers may help out employees. This argument was made to counter the Minister’s view that Ms. Klassen was not qualified for the work. I am satisfied by the evidence that she was adequately qualified. It was not a case of an employer helping out an employee. Rather, the situation involved an employee helping out an employer. It may seem odd that employment insurance is denied in these circumstances but this is the regime that Parliament has adopted.
[1] 2013 TCC 351.