Summary of Issue: Corporate Veil

Decision A-0348.96 Full Text of Decision A-0348.96

Claimant a co-adventurer with a 50% interest in an amusement device business. It was determined that the profits were income within the meaning of the Regulations. Citing Caron Bernier (A-136-96), the FCA upheld the decision, recalling the three constants that have emerged from the case law regarding self-employed workers, in respect of the income from their business: 1) the legal status of the business is of no importance; 2) the time devoted to the business changes nothing; and 3) current receipt of income from the operation or business is not required; the simple entitlement to such income suffices. These constants seem to be necessary in order to reflect the desire of Parliament, which wanted to cover all income directly or indirectly related to work, in contrast to income from straight investment.

Decision A-0136.96 Full Text of Decision A-0136.96

Through efforts to pierce the corporate veil, three constants have emerged from the case law, reflecting Parliament’s desire to cover all income directly or indirectly related to work, in contrast to income from straight investment. These constants are: 1) the legal status of the operation or business in which the self-employed worker is engaged is of no importance; 2) the relative importance of the time devoted to the operation or business changes nothing; and 3) current receipt (i.e., during the period of unemployment) of income from the operation or business is not required; the simple entitlement to such income suffices.

Decision A-0698.95 Full Text of Decision A-0698.95

Umpire concluded that the claimant decided to use the facade of a corporation to camouflage the fact that he was working and receiving regular earnings. The existence of the corporation cannot be relied upon to insulate him in this way. The fact that the claimant's wife held a majority share ownership in the company, of which there were no other shareholders apart from claimant and his wife, no other directors and no other employees, during the time in question, clearly brings the claimant's activity under the definition set out in Reg. 43(1). Decision upheld by FCA.

Decision 33274 Full Text of Decision 33274

Refer to summary indexed under FCA A-0348.96

Decision 31527 Full Text of Decision 31527

Claimant is one of 3 shareholders of a corporation. Held that they had overwhelming control of the corporation and that it could not be suggested that the theory of incorporation, which shields its director, could apply to avoid the application of the Act. Not unemployed.

Decision 29143 Full Text of Decision 29143

Argued by claimant that ss.43(1) applies only to natural persons who are self-employed and not to one who operates through a limited company. Corporate veil not to be lifted. Held that "co-adventure" covers the concept of a joint venture but not the relationship between a shareholder and a company.

Decision 24094 Full Text of Decision 24094

Claimant is one of three shareholders of a corporation (a construction company being in operation for 19 years) and had been working as an employee in insurable employment. Held that he was self-employed otherwise than to a minor in extent at a time when he was laid off due to no contract.

Decision 21898 Full Text of Decision 21898

Disentitled under both reg. 43(1)(a) and (b). Incorporated business, 3 shareholders and a Board of Directors. Claimant worked 2 weeks on and 2 weeks off. Whether or not he determined his working hours, he was engaged in a co-adventure, so 43(1)(a) wouldapply even if (b) did not.

Decision 20498 Full Text of Decision 20498

It is obvious that arrangements such as these can give rise to concerns about the abuse of the UI system. The problem arises out of the lack of an arm's-length relationship. The Commission should concern itself with enforcement of other requirements: availability and job search. It is not open to the Commission to treat the work of the claimant prior to 31-10-90 as that of a farm employee, in receipt of insurable employment income from her husband, and then seek to treat her as a self-employed person for terminating her UI. This is an error of law.

Decision 20431 Full Text of Decision 20431

If a person essentially controls a corporation or is its directing mind, it is reasonable to conclude that that individual is engaged in a business on his own account. One must look behind the corporate nature of the enterprise and consider the reality of the situation. The phrase "on his own account" does not require that the activity has to be undertaken only for the claimant's benefit. Even if it was accepted that he was not in business but working for the corporation, he would be engaged in a co-adventure for the purpose of reg. 43(1)(a).

Decision 18345 Full Text of Decision 18345

Holds 20% of the shares of the company; acts as controller and manager of 3 stores. In order to maintain his business and employees during the slack period (6 months a year) he reduced his working hours and relied financially on UI. Not unemployed in accordance with Reg. 43(1).

Decision 18248 Full Text of Decision 18248

Co-owner with 20% interest who continued to work without salary to make the business survive. As to whether he was working in an employment in which he controlled his working hours, there is no basis on which I may interfere with the finding of the Board. No error in law.

Decision 16358 Full Text of Decision 16358

Holds 1/3 of the shares in the company bearing his name and his employment there is insurable. Regulation 43 does not apply in the case of a salaried employee whose employment is insurable within the company.

Decision 14085 Full Text of Decision 14085

Held 60% of shares, wife held rest. Co-adventurer. Under Regs. 43 and 57 can pierce corporate veil and eliminate technicalities of corporate law that makes a company a separate legal person from its shareholders.

Decision 14048 Full Text of Decision 14048

Owns 38% of the shares and works as an employee in insurable employment. Disentitled due to being self-employed. Decision not erroneous. Commission should give consideration to apparent inconsistency: employment insurable vs self-employment.

Decision 11189 Full Text of Decision 11189

Sometimes difficult to reconcile regs. 14(a) and 43. Here the employment was insurable under 14(a) but claimant was in fact controlling the company even though he owned only 39% of the shares. Appears to come under reg. 43(1)(b) rather than 43(1)(a).

Decision A-0801.81 Full Text of Decision A-0801.81

3-men partnership operated as family affair. NR/T ruled that claimant's employment, even though a partner, was insurable. Implicit in this is a finding that claimant was an employee and cannot be found to have been in business. As NR/T's ruling was not appealed , it is binding on the Commission.