Docket: CACV2106 James Fraser Appellant - v. -, 2013 SKCA 109

THE COURT OF APPEAL FOR SASKATCHEWAN Citation: 2013 SKCA 109 Date: 2013-10-10 Between: Docket: CACV2106 James Fraser Appellant - and - Saskatchewan Government Insurance Respondent Coram: Richards C.J.S., Lane and Caldwell JJ.A. Counsel: Jonathan Abrametz for the appellant Jane Wootten for the respondent Appeal: From: 2011 SKAIA 26 , 2011 SKAIA 026 Heard: October 10, 2013 Disposition: Appeal allowed (orally) Written Reasons: October 21, 2013

By: The Honourable Chief Justice Richards In Concurrence: The Honourable Mr. Justice Lane The Honourable Mr. Justice Caldwell Richards C.J.S. I. introduction [ 1 ] The appellant, James Fraser, was unemployed when he was injured in an automobile accident. He subsequently claimed income replacement benefits from the respondent, Saskatchewan Government Insurance (“SGI”). He did this in reliance on the terms of s. 113(2) (

b) of The Automobile Accident Insurance Act , R.S.S. 1978, c. A-35 (“ AAIA ”) which says that benefits are payable if, because of an injury, an insured person is unable to hold an employment he or she would have held. Mr. Fraser contended that he had been prevented from taking a job that had been offered to him shortly before the accident. [ 2 ] Mr. Fraser’s claim for benefits was denied by SGI and he then appealed to the Automobile Injury Appeal Commission.

The Commission examined the particulars of the offer of employment and it too denied his claim for benefits on the basis that, at the time of the accident, no employment contract had been concluded between Mr. Fraser and the individual who had offered him work. [ 3 ] Mr. Fraser appealed the Commission’s decision to this Court and we allowed his appeal following oral argument with a promise of written reasons to confirm those given orally in the court room.

These are those written reasons. [ 4 ] In our opinion, the Commission erred in law by focusing narrowly on the question of whether a valid employment contract was in place when the accident occurred. It should have addressed itself to the question raised by the terms of s. 113(2) (

b) of the AAIA , i.e. whether, as a result of the accident, Mr. Fraser had been unable to hold an employment that he would otherwise have held. As a result, the Commission must reconsider Mr. Fraser’s situation by applying s. 113(2) as interpreted by this decision. II. facts [ 5 ] Mr. Fraser resided in Cudworth, Saskatchewan. He had an established pattern of doing seismic work during the winter months (freeze up to thaw) and, during the summer months, of working in Cudworth if he could find employment. If employment was not available, he would collect Employment Insurance benefits. [ 6 ] In April of 2009, Mr.

Fraser was unemployed. Roger Schmidt, an acquaintance of Mr. Fraser’s, had a small Cudworth-based construction/renovation business. He wanted to take on bigger jobs but, in order to do that, needed help. Mr. Fraser had done some work for Mr. Schmidt three or four times in the past and, as a result, Mr. Schmidt knew him to be a good worker. Mr. Schmidt contacted Mr. Fraser and verbally offered him employment. Mr. Schmidt testified that he had done this because he faced a chronic challenge in finding reliable employees. [ 7 ] Mr. Schmidt said that he would have expected Mr.

Fraser to have started work shortly after he made the offer, i.e. sometime in April of 2009, because construction activity picked up in the spring and he was anticipating work coming on stream. He made specific reference to a tender that he had won in early or mid-May of 2009 to replace windows and siding on a group home (a project that he ultimately had to abandon because he did not have enough manpower to take it on). [ 8 ] Mr. Fraser said the offer involved pay at $20 per hour and that he had understood the work was going to be “pretty well full time.” He described his conversation with Mr.

Schmidt in these terms: A And back before that, like Roger said -- and I think it was around April or something, there -- he said there would be work coming up and if I would work for him and that, and I said, “Sure.” I said, “I’m not -- you know, I’m on Unemployment. I’ll work if I can work.” And that was it. That’s all of it. [ 9 ] As things turned out, Mr. Fraser did not become employed by Mr. Schmidt. He was injured in an automobile accident on April 24, 2009 and he was not cleared to return to work until October of 2009.

His Employment Insurance benefits expired effective June 6, 2009. [ 10 ] By way of a letter dated June 2, 2009, Mr. Schmidt wrote to Mr. Fraser and repeated his offer of employment. The letter reads as follows: To Whom It May Concern: Roger’s Repairs is prepared to offer James Fraser a full time job as a construction laborer starting Monday, June 8, 2009.

We are prepared to offer him full time (40hrs) employment starting at $20.00 dollars per hour. This position will still be available to him once he is medically cleared to resume work. [11] Mr. Schmidt explained in his testimony that Mr. Fraser had approached him and asked for a letter confirming that he would havehad work but for the injury. III. relevant statutory provisions [12] As indicated, Mr. Fraser claimed income replacement benefits pursuant to s. 113(2)(

b) of the AAIA. It reads as follows: 113(2) An insured is entitled to an income replacement benefit if, as a result of an accident, the insured: … (

b) is unable to hold an employment he or she would have held in the first 180-day period following the accident if the accident had notoccurred; [13] As explained by counsel for SGI, the benefits contemplated by s. 113(2)(

b) are available in relation to any employment that theinsured would have held during the 180 days following the accident. Thus, for example, if an insured was injured on January 1 andcould establish that he or she would have worked full-time from January 1 to the end of June, benefits would be paid in relation to full-time employment for a full 180 days.

At somewhere near the other end of the spectrum, an insured who was injured on January 1, butcould establish only that he or she would have worked part-time for two weeks in May, would receive benefits in respect of only part-time work and only for those two weeks. IV. the decision made by sgi [14] SGI rejected Mr. Fraser’s claim for benefits. In a letter dated June 11, 2009, a Personal Injury Representative very brieflyexplained the company’s decision in these terms: I have now completed a review of your claim for income benefits. Unfortunately as no replacement worker has been hired in your placeby Mr.

Schmidt and you do not have a work history with him an income benefit can not be considered. V. the decision Made by the commission [15] Mr. Fraser then appealed to the Commission. It heard evidence from both him and Mr. Schmidt. [16] The Commission began its decision by framing the issue as being whether Mr. Fraser “would have held an employment withRoger’s Repair (“the Employer”) [i.e. Mr.

Schmidt] within the first 180 days following the vehicle accident.” It then reviewed theevidence, the governing statutory provisions and the positions of the parties. [17] In turning directly to the analysis of the issue before it, the Commission noted that, in earlier rulings, it had defined theemployment referred to in s. 113(2)(

b) as “promised employment” and had identified “a number of factors to consider in determiningwhether or not an insured is entitled to an [income replacement benefit] pursuant to s. 113(2)(

b) of the Act.” This was a reference to R.S.v. SGI, 2009 SKAIA 44 , 2009 SKAIA 044 which had set out eight factors to consider “when determining whether an insuredhas been promised employment”: [32] …

i) whether there is a written or verbal offer; ii) whether there is an anticipated start date; iii) whether there is a defined salary;iv) are the job duties and requirements outlined;

v) have hours of work been discussed; vi) has there been an acceptance of the offer; vii)has the position been awarded to someone else? viii) is there a prior employment history if the parties are not at arms length? [18] The Commission ultimately concluded, as we read its decision, that Mr. Fraser was not entitled to benefits because there had beenno employment contract between him and Mr. Schmidt at the time of the accident. VI. analysis [19] As noted, the Commission focused its assessment of s. 113(2)(

b) on the question of whether an employment contract had existedbetween Mr. Fraser and Mr. Schmidt on the date of the accident. This is clearly revealed in the key parts of its analysis:

[39] The factors outlined in R.S. v. SGI, supra, are meant as guidelines to assist in the determination of whether an insured has been offered employment as contemplated by s. 113 (2)(

b) of the Act. In this case, we find three facts most compelling in arriving at our conclusion a valid Employment Contract did not exist. [40] The first factor is that the Employer did not award the Appellant's employment position to someone else. If valid employment truly existed for the Appellant, one would have expected the Employer to hire a replacement worker in place of the Appellant. [41] Secondly, the Employer was not able to even somewhat substantiate he had the work available to provide the Appellant with the full time hours as set out in the Employment Contract.

The Employer had never hired a full time worker at any time in the past. [42] Thirdly, we note the Employer was unable to provide employment details such as what benefits the Appellant would receive from the Employment Contract. It would be a normal process for an Employer and employee to discuss basic terms of an employment contract such as overtime hours, overtime rates of pay, holidays and benefits.

We conclude these employment benefits or details were not discussed or agreed upon because all that existed between the Employer and the Appellant was a possibility of employment. [43] The Appellant's testimony in regard to what occurred between the Employer and he was more helpful. His testimony did not support the finding of an Employment Contract but rather indicated there could be an opportunity or a possibility of employment with the Employer. [44] We say this because it was the Appellant's testimony that in April, 2009, prior to his vehicle accident; he had a discussion with the Employer.

From this discussion, it was the Appellant's understanding if the Employer had work available, and he was available, he would work. There was no certainly ( sic ) of an employment contract, only at most, the possibility of employment. [45] For all these reasons, we do not accept the validity of the proposed Employment Contract as between the Employer and the Appellant so as to entitle the Appellant to IRB pursuant to s. 113(2)(

b) of the Act. [emphasis added] [ 20 ] We agree with Mr. Fraser that the Commission erred in taking this approach. In our respectful view, s. 113(2)(

b) means exactly what it says. An insured need not have been employed or have had a valid employment contract in hand at the time of his or her accident in order to collect benefits. Rather, an insured must establish only that he or she “would have held” employment during the 180-day period following the accident. [ 21 ] In its most fundamental terms, the question of whether an insured would have held employment will be a function of two variables: (

a) the insured’s commitment or motivation to work if employment is available, and (

b) the insured’s opportunities to work. All of this seems clear enough. Thus, for example, an insured who has demonstrated a decided disinclination to take up employment of any sort, preferring instead to collect Employment Insurance or to indulge personal interests, might find it difficult to establish that, but for an accident, he or she would have worked.

Similarly, a highly motivated individual who has the misfortune to find himself or herself trapped in a collapsing job market with no marketable job skills might also face challenges in bringing himself or herself within the reach of s. 113(2)(b). [ 22 ] By way of contrast, an insured with much-in-demand skills and a proven motivation to work would likely not have much difficulty proving that, but for an accident, he or she would have been employed. For instance, assume an insured is not working at the time of the accident, having just concluded an extended round-the-world 12-month vacation.

Assume as well that the insured is a journeyman carpenter (a trade for which there is overwhelming demand) with a steady work record and that he has indicated a clear intention to immediately seek out employment, perhaps even with a former employer who wants him back. If the insured is injured and rendered unable to begin work as planned, it seems obvious enough that he would be entitled to benefits pursuant to s. 113(2)(

b) even though he had no employment contract in hand. This is so because the facts would establish that he was unable to hold an employment that he would have held if the accident had not occurred. [ 23 ] Each claim for income replacement benefits will obviously turn on its own facts and on how those facts speak to the commitment or motivation of the insured on the one hand and the employment opportunities of the insured on the other.

SGI (in the first instance) and the Commission (on appeal) must weigh all of the relevant evidence with a view to determining whether an insured has established, on a balance of probabilities, that he or she would have worked but for the accident. [ 24 ] When SGI or the Commission is dealing with s. 113(2)(b), an interest in employment contracts is not misplaced. This is because it is self-evident that an insured who is stably employed on the date of an accident will presumably have little difficulty establishing an entitlement to benefits.

Similarly, an insured who is not working on the date of the accident but who has a valid contract to begin work in the future will presumably also have little difficulty bringing himself or herself within the terms of s. 113(2)(b). In both of these situations, it will be apparent that the insured is both motivated to work and that there is an obvious opportunity to work. [ 25 ] In general terms, the picture becomes less clear in a circumstance where no formal employment contract is in place but where there

have been discussions about employment or there is some less than certain prospect of employment. In those kinds of situations, SGI or the Commission, as the case might be, will want to take into account a variety of factors in determining whether the insured would have been employed but for the accident. These factors might include whether a formal offer of employment had been made, whether the offer was credible, how strongly the insured would have been inclined to act on the offer and so forth.

Other considerations including whether someone else was hired in the wake of the insured’s injury may serve to inform the bottom-line question of whether the insured would have been employed. It is impossible to enumerate all of the considerations that might be relevant in this regard and the foregoing list of considerations is not exhaustive.

The question will always be whether, in light of both the insured’s motivation to work and his or her work opportunities, it is more likely than not that he or she would have been employed but for the injury. [ 26 ] Having said all of this, it may be useful to comment directly on the list of factors developed by the Commission in R.S. v. SGI , supra for purposes of determining whether an insured is entitled to benefits under s. 113(2)(b). Those factors are as follows: (

i) whether there is a written or verbal offer; (ii) whether there is an anticipated start date; (iii) whether there is a defined salary; (iv) whether the job duties and requirements have been outlined; (

v) whether hours of work have been discussed; (vi) whether there has been an acceptance of the offer; (vii) whether the position has been awarded to someone else; and, (viii) whether there is a prior employment history if the parties are not at arm’s length. [ 27 ] The difficulty with this list, in our view, is that it tends – certainly items (

i) to (vi) tend – to confine the analysis under s. 113(2)(

b) to the question of whether an employment contract was in place as of the date of the accident. If there is an accepted offer of employment and there is a valid contract, then it will presumably not be difficult to find that benefits are payable to an insured. However, as indicated, questions about the existence of an employment contract do not exhaust the required inquiry. The real question, as per the words of s. 113(2)(

b) itself, is whether the insured is unable to hold an employment he or she “would have held” if the accident had not occurred. VII. conclusion [ 28 ] Mr. Fraser’s appeal is allowed with costs. The Commission’s decision is set aside and Mr. Fraser’s appeal is remitted to the Commission to be reconsidered in light of s. 113(2)(

b) as it has been explained above.