http://decision.tcc-cci.gc.ca/site/tcc-cci/decisions/en/item/64957/index.do 
Thériault v. M.N.R.[1] (November 27, 2013) is an EI appeal that dealt with the claim of a Mr. Bernier to EI benefits. During the relevant period he worked a sugar bush operation for the appellant, Ms. Thériault, his wife. The Minister disallowed the claim on the basis that the parties were not dealing at arm’s length and the parties had not “entered into a substantially similar contract of employment” to that they would have, had they been dealing with each other at arm’s length.
The respondent’s position was based largely on the absence of a record of the hours that Mr. Bernier worked and the evidence that his hours of work varied from week to week. The court rejected this line of argument:
[12] The appellant submits that she decided to hire an employee because she had to take care of her daughter’s children, who lived in Lac‑Beauport. Since Mr. Bernier had lost his previous job and had experience in the maple industry, the appellant hired him. The appellant stated that if Mr. Bernier had not been available to do the work, she would have hired another employee. The appellant feels that the Minister’s finding that Mr. Bernier’s employment is not insurable is a wrongful exercise in facts and in law of his discretionary power.
[13] The appellant claims that Mr. Bernier enjoys compensation and working conditions that conform to those in the maple industry and the pay rate is reasonable for the seasonal work of the maple industry.
[14] Specifically, the appellant claims that although no exact record was kept of Mr. Bernier’s hours of work, she did control his hours of work by talking with Mr. Bernier every evening on the phone and going to the sugar bush every weekend. According to the appellant, the work performed is ascertainable and she can assess the number of hours Mr. Bernier actually worked because she herself performed these same duties for many years.
[15] The appellant claims that the sap flow varies a great deal and this is why Mr. Bernier’s schedule fluctuated from week to week. The 50-hour work week represents an average and if Mr. Bernier worked less one week, he would make up the hours the following week.
[16] The respondent claims that it is hard to accept that the missing hours of work would actually be made up in the subsequent weeks unless there was an effective accounting of the hours of work, that the hours of work for each week were not recorded by Ms. Thériault and Mr. Bernier, and that unrelated parties, acting in their own interests, would have insisted on accurate weekly accounting.
[17] I do not agree with the respondent. Although Ms. Thériault did not have a record of Mr. Bernier’s hours of work, I accept that she was in a good position to know whether the work was done or not and, as such, she controlled the work carried out by Mr. Bernier. I also feel that Mr. Bernier was paid for a 50‑hour work week, namely $500, even though these hours could vary from week to week, but this is not because there was no arm’s length relationship. I accept Mr. Bernier’s and Ms. Thériault’s uncontradicted testimony to the effect that Mr. Bernier worked an average of 50 hours per week, which makes his compensation reasonable. This situation is similar, in part, with regard to hours of work and compensation to
Théberge v. Canada, in which the applicant worked 40 to 80 hours per week for a set salary and his hours were not recorded. The Federal Court of Appeal decided that these factors were not sufficient to find that there was no arm’s length relationship because the applicant’s salary was established based on an average of 60 hours of work per week.
[Footnote omitted]
The court also rejected the respondent’s claims that Mr. Bernier was paid in an irregular fashion, that his hours were determined to maximize his EI benefits and that prior unpaid work cutting wood at the lot was somehow relevant:
[20] In my opinion, Ms. Thériault’s and Mr. Bernier’s testimony is sufficient for me to conclude that the cheques were not prepared in bulk and there was no delay in the payment of Mr. Bernier’s salary. The copies of the statements produced by Ms. Thériault clearly show that she had the funds necessary to pay Mr. Bernier at all times. Therefore, she would have no reason to delay his paycheques.
[21] The respondent claims that Mr. Bernier’s work periods were highly influenced by the non-arm’s length relationship between the appellant and Mr. Bernier. Whereas the appellant claims it was she who established Mr. Bernier’s periods of employment, the Minister feels that they were determined by Mr. Bernier based on the depletion of his employment insurance benefits.
[22] However, according to an analysis by the respondent submitted as Exhibit I-1, tab 3, when Mr. Bernier started working for the appellant in February 2010, his employment insurance benefits had not been exhausted. Moreover, from February to May 2010, he worked 700 hours for the appellant although he only needed 490 hours of work to re-qualify for benefits. Additionally, he still had benefits when he began working for the appellant again in November 2010. Lastly, the appellant also showed that the Minister erred in presuming that Mr. Bernier only worked 7 weeks in 2011 as opposed to 21 weeks in 2010. The 7 weeks in 2011 only takes into consideration the weeks during the period in question, which ends on June 10, 2011. However, Mr. Bernier went back to work on November 1, 2011. Therefore, it was not 7 weeks but 14 that Mr. Bernier worked in 2011. All these elements convince me that Mr. Bernier’s periods of work corresponded to the needs of Ms. Thériault’s business.
[23] Ms. Thériault also successfully showed that Mr. Bernier’s hourly rate roughly complied with applicable standards. The respondent did not challenge that the hourly rate of workers in the maple industry was between $10 and $15 in 2010, but claims that Mr. Bernier did not receive vacation pay of 4% of his gross pay. Mr. Bernier and Ms. Thériault both testified that the hourly rate of $10 included the vacation pay and I accept this testimony.
[24] The respondent also noted that Mr. Bernier had worked for Ms. Thériault without pay before the period in question and after the sugaring season in 2010. The evidence showed that Mr. Bernier and his son-in-law voluntarily cut around 45 cords of wood for Ms. Thériault in the years before 2010. Mr. Bernier allegedly also cut wood on a smaller scale during the summer of 2010. The issue is whether this volunteer work is relevant in this case. In Théberge, the Federal Court of Appeal stated at paragraph 19:
What a claimant does outside the period during which he or she is employed in what the Minister considers to be insurable employment can be relevant, for example, to verify that the claimant is unemployed, to determine the amount of his or her benefits, or to establish his or her period of unemployment. However, for the purposes of the exception provided in paragraph 3(2)(c) of the Act, what a claimant does outside of his or her period of employment will be of little relevance when, as in this case, it is not alleged that the salary paid during the period of employment took into account the work performed outside of that period, that the applicant had included, in the hours spent on his or her insurable employment, hours worked outside of the period, or that work performed outside of his or her period of employment had been included in the work performed during his or her period of employment. It seems to me to be self-evident, and this is confirmed by the evidence, that in the case of family businesses engaged in seasonal work, the minimal amount of work that remains to be done outside the active season is usually performed by family members, without pay. Excepting seasonal employment, in a family farm business, on the ground that cows are milked year-round amounts, for all practical purposes, to depriving family members who qualify by working during the active season of unemployment insurance and to overlooking the two main characteristics of such a business: that it is a family business and a seasonal business.
[25] In my opinion, these principles apply in the present case because Ms. Thériault’s business is a seasonal family business and the work Mr. Bernier performed without pay was neither continuous nor significant. Before 2010, he cut wood during his free time after his work elsewhere and with the help of his son-in-law. As for the period after May 2010, it seems the amount of work performed was very limited because he did most of the woodcutting in November and December that year. Since the respondent is not claiming that the salary paid to Mr. Bernier during the period of employment took into consideration this work performed outside the period or that the work performed or hours worked outside this period were included in any way in the work during the period of employment, I find that the work performed outside his period of employment is not relevant.
Accordingly the appeal was allowed.
[1] 2013 TCC 374.