Supreme Court Judgments

hills v. canada (a.g.), [1988] 1 S.C.R. 513

 

Dennis Hills et al.        Appellants

 

v.

 

The Attorney General of Canada                                                     Respondent

 

indexed as: hills v. canada (attorney general)

 

File No.: 19094.

 

1987: October 7; 1988: March 24.

 

Present: Dickson C.J. and Beetz, McIntyre, Lamer, Wilson, La Forest and L'Heureux‑Dubé JJ.

 

on appeal from the federal court of appeal

 

                   Unemployment insurance ‑‑ Labour disputes ‑‑ Unemployment due to a work stoppage ‑‑ Claimant not a member of the striking local but a member of another local of the same union ‑‑ Portion of claimant's mandatory union dues deducted prior to the strike diverted by the union to International Union's strike fund ‑‑ Fund used to pay strikers at claimant's place of work ‑‑ Whether claimant was financing the labour dispute ‑‑ Whether claimant entitled to unemployment insurance benefits ‑‑ Meaning of the word "financing" in s. 44(2)(a) of the Unemployment Insurance Act, 1971, S.C. 1970‑71‑72, c. 48.

 

                   Appellant, a member of Local 7484 of the United Steelworkers, was laid‑off as a result of a strike by employees of the same company represented by Local 6399 of the same union. Local 7484 and its members were not involved in the labour dispute and had no direct interest in it. Under the collective agreement between his employer and his local, appellant was required to pay union dues, part of which were remitted by the local union to the International Union and placed by the latter in its strike fund. During the work stoppage, the International Union paid strike pay to the Local 6399 strikers. While out of work, appellant applied for unemployment insurance benefits. Under section 44(2)(a) of the Unemployment Insurance Act, 1971, an employee who has lost his employment by reason of a stoppage of work attributable to a labour dispute is entitled to unemployment insurance benefits if he proves that "he is not participating in or financing or directly interested in the labour dispute that caused the stoppage of work". The Unemployment Insurance Commission denied appellant's application and the Board of Referees dismissed his appeal holding that the appellant was unable to establish that he was not "financing" the labour dispute. In its decision, the Board relied solely on the fact that union dues which had been remitted prior to the strike by the appellant formed part of a common fund out of which strike pay was issued. Both the Umpire and the Federal Court of Appeal affirmed the Board's decision. This appeal is to determine whether the mandatory payment by an employee of union dues, part of which were diverted to a strike fund handled by the International Union, constitutes "financing...the labour dispute that caused the stoppage of work", and accordingly disentitles such employee of the benefits provided for in the Act during his unemployment due to a strike by another local of the same union.

 

                   Held (Beetz, McIntyre and Lamer JJ. dissenting): The appeal should be allowed.

 

                   Per Dickson C.J. and Wilson, La Forest and L'Heureux‑Dubé JJ.: Section 44(2)(a) of the Unemployment Insurance Act, 1971 was not designed to deprive innocent victims of a labour dispute of the benefits of the Act but only the claimants who took an active role in the labour dispute at the place of employment or contributed to it freely and voluntarily. Indeed, the word "financing" used in s. 44(2)(a) implies a meaningful connection between the payment and the dispute and requires an active and voluntary involvement by the claimant. In the circumstances of this case, the claimant was not "financing" the labour dispute at his place of employment within the meaning of s. 44(2)(a). The claimant had no choice but to pay his dues and had no voice in the decision of the International Union to finance the strike. The strike fund, handled by the International Union, was established by the union, not the claimant, and the union was neither the agent nor the mandatary of the employees. The claimant did not pay his union dues in order to finance the strike of the employees represented by another local but rather to insure membership in good standing in his local, continued service from local executives, and strike payments if his local were to decide to go on a lawful strike. The claimant would have been entitled to unemployment insurance benefits had the strike fund been administered by the local union or a financial institution rather than the International Union. The legislature cannot have intended disentitlement to be dependent upon such a trivial fact.

 

                   The interpretation of the word "financing", according to its natural meaning, as requiring a voluntary contribution on the part of the union member is substantiated by the historical context. The original "financing" provision, enacted in 1935 and re‑enacted in 1940, was drafted at a time when very different social conditions prevailed, particularly in the area of labour relations. At the time, labour unions were purely voluntary organizations. Individuals would join unions on a voluntary basis and would make their financial contributions in the same manner. They were therefore presumed to be intentionally financing the union's activities within the meaning of the disentitlement provision. While this interpretation today may appear to deprive the term of much of its application, this is merely a historical contingency which does not entail a conclusion that such an interpretation is unwarranted.

 

                   Apart from the ordinary meaning of the words, the focus of s. 44(2)(a) is on the individual claimant, not the union, and the meaning of "financing" flows from the context of which the statute's purpose is an integral element. While section 44 may be open to a broad interpretation of "financing", the purpose of the section (to disentitle strikers from benefits) as well as the purpose of the Act as a whole (to provide benefits to involuntarily unemployed persons) dictate that a narrow interpretation be given to the disentitlement provisions of that section. Any doubt should be resolved in favour of the claimant. Finally, an interpretation consistent with the values embodied in the Charter‑‑namely, freedom of association‑‑must be given preference to an interpretation which would run contrary to those values. A claimant should not be penalized for belonging to an international union.

 

                   Per Beetz, McIntyre and Lamer JJ. (dissenting): By contributing to the strike fund, appellant financed the labour dispute within the meaning of s. 44(2)(a) of the Unemployment Insurance Act, 1971. The verb "finance" is clear and in no sense confusing. It means "obtaining the capital necessary to operate" or "paying, providing money". Under section 44(2)(a), a person who finances a labour dispute is a person who provides money to assist in starting and sustaining a work stoppage. It does not matter whether this monetary contribution is made to "finance" a particular labour dispute or in anticipation of a possible strike. It is also irrelevant whether the contributions are paid into a common strike fund. In all cases, the ordinary meaning of the verb "finance" must prevail. Moreover, the choice of language used in s. 44(2)(a) reinforces this conclusion. While the verb "participate" inevitably implies an active and personal role in the ongoing labour dispute and the adverb "directly", which qualifies the nature of the claimant's interest, establishes an actual link between him and the dispute, it is impossible to find in the word "finance" used by itself a requirement of active and personal participation or a direct link between the claimant's contribution and the immediate labour dispute.

 

                   The use of the verb "finance" in the present tense in s. 44(2)(a) does not necessarily imply an actual link between the financing and the strike. The use of the present is recommended in the drafting of legislation. This drafting technique does not lead to the conclusion that an employee is financing a labour dispute solely where he makes a financial contribution while the strike is in progress.

 

                   Finally, although Parliament has frequently amended the unemployment insurance legislation to take account of the ongoing evolution in the field of labour relations, the wording of s. 44(2)(a) has received little or no alteration since the adoption of The Unemployment Insurance Act, 1940. Contributions to strike funds were probably voluntary at the time but that does not mean that the scope of the word "finance" is limited to this particular situation. The fact that, despite the changes that have occurred in the working world, Parliament has not limited the application of a word with a general meaning indicates that it intended to cover all situations that the word might apply to. The fact that there has been no legislative intervention since the judgment in McKinnon, [1977] 2 F.C. 569 (C.A.), as to the meaning of the word "finance", is very significant in this respect.

 

Cases Cited

 

By L'Heureux‑Dubé J.

 

                   Overturned: McKinnon v. The Honourable Mr. Justice Dubé, [1977] 2 F.C. 569; considered: General Motors Corp. v. Bowling, 426 N.E.2d 1210 (1981); referred to: Outboard, Marine & Mfg. Co. v. Gordon, 87 N.E.2d 610 (1949); Watt v. Lord Advocate, [1979] S.C. 120; Reference re The Employment and Social Insurance Act, [1936] S.C.R. 427, aff'd [1937] A.C. 355; Abrahams v. Attorney General of Canada, [1983] 1 S.C.R. 2; Canadian Pacific Ltd. v. Attorney General of Canada, [1986] 1 S.C.R. 678; In re McKay (1946), 53 Man. R. 364; Salomon v. Salomon & Co., [1897] A.C. 22; Pfizer Co. v. Deputy Minister of National Revenue, [1977] 1 S.C.R. 456; Grey v. Pearson (1857), 6 H.L. Cas. 60; Syndicat catholique des employés de magasins de Québec Inc. v. Compagnie Paquet Ltée, [1959] S.C.R. 206; McGavin Toastmaster Ltd. v. Ains­cough, [1976] 1 S.C.R. 718; RWDSU v. Dolphin Delivery Ltd., [1986] 2 S.C.R. 573; Manitoba (Attorney General) v. Metropolitan Stores Ltd., [1987] 1 S.C.R. 110; International Longshoremen's Association, Local 273 v. Maritime Employers' Association, [1979] 1 S.C.R. 120; Re Patterson & Nanaimo Dry Cleaning & Laundry Workers Union, Local No. 1, [1947] 4 D.L.R. 159.

 

By Lamer J. (dissenting)

 

                   McKinnon v. The Honourable Mr. Justice Dubé, [1977] 2 F.C. 569; Abrahams v. Attorney General of Canada, [1983] 1 S.C.R. 2.

 

Statutes and Regulations Cited

 

Act to amend The Unemployment Insurance Act, 1940, S.C. 1946, c. 68, s. 7.

Canadian Charter of Rights and Freedoms , s. 2 ( d ) .

Constitution Act, 1867 , s. 91.2 A.

Employment and Social Insurance Act, S.C. 1935, c. 38.

Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, s. 28.

Labour Relations Act, R.S.O. 1980, c. 228.

National Employment Commission Act, 1936, S.C. 1936, c. 7, preamble.

National Insurance Act, 1911 (U.K.), 1 & 2 Geo. 5, c. 55, ss. 87, 107.

Rights of Labour Act, R.S.O. 1970, c. 416, s. 3(2).

Unemployment Insurance Act, S.C. 1955, c. 50, ss. 2(j), 63.

Unemployment Insurance Act, 1920 (U.K.), 10 & 11 Geo. 5, c. 30, s. 8.

Unemployment Insurance Act, 1927 (U.K.), 17 & 18 Geo. 5, c. 30, s. 6.

Unemployment Insurance Act, 1935 (U.K.), 25 Geo. 5, c. 8, s. 26.

Unemployment Insurance Act, 1940, S.C. 1940, c. 44, s. 43.

Unemployment Insurance Act, 1971, S.C. 1970‑71‑72, c. 48, s. 44.

Unemployment Insurance (No. 2) Act, 1924 (U.K.), 14 & 15 Geo. 5, c. 30, s. 4.

Wagner Act, 49 Stat. 449.

Wartime Labour Relations Regulations, P.C. 1003, February 17, 1944.

 

 

 

Authors

 

Abella, Irving. The Canadian Labour Movement, 1902‑1960. Ottawa: Canadian Historical Association, 1975.

Adams, George W. Canadian Labour Law. Aurora, Ont.: Canada Law Book, 1985.

Arthurs, Harry W., Donald D. Carter and Harry J. Glasbeek. Labour Law and Industrial Relations in Canada, 2nd ed. Toronto: Butterworths, 1984.

Carrothers, A. W. R., E. E. Palmer and W. B. Rayner. Collective Bargaining Law in Canada, 2nd ed. Toronto: Butterworths, 1986.

Côté, Pierre‑André. The Interpretation of Legislation in Canada. Translated by Katherine Lippel, John Philpot and Bill Schabas. Cowansville, Que.: Yvon Blais Inc., 1984.

Driedger, Elmer A. Construction of Statutes, 2nd ed. Toronto: Butterworths, 1983.

Ephron, Susan H. "Redefining Neutrality: Alternative Interpretations of the Labor Dispute Disqualification in Unemployment Compensation" (1986), 8 Comp. Lab. L. 89.

Grand Larousse de la langue française, "financer". Paris: Librairie Larousse, 1973.

Haggard, Thomas R. Compulsory Unionism, the NLRB, and the Courts: A Legal Analysis of Union Security Agreements. Philadelphia: University of Pennsylvania, 1977.

Hickling, M. A. Labour Disputes and Unemployment Insurance Benefits in Canada and England. Don Mills, Ont.: CCH, 1975.

Jamieson, Stuart. Industrial Relations in Canada. Toronto: MacMillan of Canada, 1957.

Lesser, Leonard. "Labor Disputes and Unemployment Compensation" (1945), 55 Yale L.J. 167.

Logan, H. A. Trade Unions in Canada. Toronto: MacMillan of Canada, 1948.

McCormick, Thomas P. "Unemployment Compensation‑‑An Examination of Wisconsin's "Active Progress" Labor Dispute Disqualification Provision," [1982] Wis. L. Rev. 907.

Norris, Terry. "Dissociating from a Trade Dispute, and Claiming Unemployment Benefit" (1985), 135 New L.J. 967.

Note. "Eligibility for Unemployment Benefits of Persons Involuntarily Unemployed Because of Labor Disputes" (1949), 49 Colum. L. Rev. 550.

Petit Robert 1, "financer". Paris: Le Robert, 1986.

Shadur, Milton I. "Unemployment Benefits and the "Labor Dispute" Disqualification" (1950), 17 U. Chi. L. Rev. 294.

Williams, Jerre S. "The Labor Dispute Disqualification‑‑A Primer and Some Problems" (1955), 8 Vand. L. Rev. 338.

 

                   APPEAL from a judgment of the Federal Court of Appeal¹, dismissing appellants' application under s. 28 of the Federal Court Act to review and set aside the decision of an Umpire, CUB 8764, under the Unemployment Insurance Act, 1971. Appeal allowed, Beetz, McIntyre and Lamer JJ. dissenting.

 

¹ F.C.A., No. A‑175‑84, September 21, 1984.

                   Brian Shell, for the appellants.

                   J. E. Thompson, for the respondent.

                   The judgment of Dickson C.J. and Wilson, La Forest and L'Heureux‑Dubé JJ. was delivered by

 

1.                       L'Heureux‑Dubé J.‑‑The single issue in this appeal is the interpretation of s. 44 of the Unemployment Insurance Act, 1971, S.C. 1970‑71‑72, c. 48 ("the Act"), which reads:

 

                   44. (1) A claimant who has lost his employment by reason of a stoppage of work attributable to a labour dispute at the factory, workshop or other premises at which he was employed is not entitled to receive benefit until

 

(a) the termination of the stoppage of work,

 

(b) he becomes bona fide employed elsewhere in the occupation that he usually follows, or

 

(c) he has become regularly engaged in some other occupation,

 

whichever event first occurs.

 

                   (2) Subsection (1) is not applicable if a claimant proves that

 

(a) he is not participating in or financing or directly interested in the labour dispute that caused the stoppage of work; and

 

(b) he does not belong to a grade or class of workers that, immediately before the commencement of the stoppage, included members who were employed at the premises at which the stoppage is taking place and are participating in, financing or directly interested in the dispute.

 

                   (3) Where separate branches of work that are commonly carried on as separate businesses in separate premises are carried on in separate departments on the same premises, each department shall, for the purpose of this section, be deemed to be a separate factory or workshop.

 

                   (4) In this Act, "labour dispute" means any dispute between employers and employees, or between employees and employees, that is connected with the employment or non‑employment, or the terms or conditions of employment, of any persons.

 

2.                       More particularly, the dispute centers on s. 44(2)(a) of the Act and the interpretation of the word "financing" therein. A crucial feature is the mandatory payment by an employee of union dues, part of which were diverted to a strike fund handled by the International Union. This was found to constitute "financing...the labour dispute that caused the stoppage of work" and accordingly to disentitle such employee from receiving the benefits provided for in the Act during his unemployment due to a strike by another local of the same union.

 

Facts

 

3.                       The facts are not contested and are stated in the appellant's factum as follows:

 

                   The Applicant Dennis Hills (hereinafter referred to as the "Applicant") was employed by C.E. Tyler Company of Canada Limited (hereinafter referred to as the "Employer"), as a shipping clerk in its office. Office employees employed by C.E. Tyler are represented by Local 7484 of the United Steelworkers of America, who [sic] pursuant to the laws of the Province of Ontario were [sic] recognized as the exclusive bargaining agent of all employees in the office unit. Local 7484 is an affiliated body chartered by the United Steelworkers of America (hereinafter referred to as "Local 7484").

 

                   As a result of the collective agreement entered into between the Employer and Local 7484, all employees including the Applicant in the office bargaining unit were required to have union dues deducted from their gross wages. Part of the union dues are remitted by the local union in accordance with the International Union's constitution are placed in a Strike and Defence Fund (the "Fund"). Pursuant to the constitution, money may be paid to employees on strike where the President of the International Union so approves.

 

                   C.E. Tyler Company of Canada at all material times also had a collective bargaining relationship with Local 6399, another chartered local of the United Steelworkers of America, with respect to all employees in the plant in their production operations.

 

                   On or about February 14, 1983, the plant employees represented by Local 6397 [sic] commenced a lawful strike. There is no relationship between Local 6397 [sic] and 7484, other than affiliation with the same international union. The decision to go on strike was taken solely by the membership of Local 6397 [sic]. Members of Local 7484 were not entitled to participate in any way in the collective bargaining process of the other local.

 

                   Pursuant to the Union's constitution the President of the international union authorized strike pay be paid to employees of Local 6397 [sic] participating in the strike.

 

                   On or about February 14th, the employees in the office unit, whose collective agreement continued until March 31, 1983, were laid‑off pursuant to the terms of the collective agreement, as a result of the halt in production caused by the strike.

 

(The appellant's factum referred to local 6397 whereas local 6399 is the local in question here. Also, I have underlined those facts which bear crucially on the issue of the appeal. Finally, although appellant Hills appealed on behalf of himself and other members of his local, appellants are herein referred to as "the appellant".)

 

Judgments

 

4.                       On February 14, 1983, the appellant applied for unemployment insurance benefits pursuant to the provision of the Act. The appellant was denied benefits by Notice of Refusal dated March 8, 1983. The Unemployment Insurance Commission refused payment of benefits on the ground that the appellant lost his employment by reason of a stoppage of work attributed to a labour dispute, pursuant to s. 44(1) of the Act.

 

5.                       On March 15, 1983, the appellant appealed his disentitlement on the basis that s. 44(1) was not applicable to him by virtue of s. 44(2)(a), since he was "not participating in or financing or directly interested in the labour dispute . . . ."

 

6.                       On May 9, 1983, the Board of Referees held that the appellant was unable to establish that he was not "financing" the labour dispute which caused the stoppage of work and as a result was lawfully disentitled.

 

7.                       In holding that the appellant was "financing" the strike, the Board of Referees relied solely on the fact that union dues which had been remitted prior to the strike by the appellant formed part of a common fund out of which strike pay was issued. In this connection, the Board stated:

 

The Board is of the opinion that each office, clerical and technical employee of C. E. Tyler who are members [sic] of Local 7484 (USWA) has contributed to the international strike fund through their union dues, from which "strike pay" has been issued from 07 March, 1983 . . . .

 

8.                       On July 6, 1983, the appellant appealed the decision to the Umpire on the basis that the interpretation of the Act, which would deprive employees of unemployment insurance benefits by virtue of belonging to the same international union and paying dues to it, infringed their freedom of association, contrary to the provisions of s. 2( d )  of the Canadian Charter of Rights and Freedoms .

 

9.                       In his reasons dated December 6, 1983, dismissing this ground of appeal, CUB 8764, the Umpire held that the fact that benefits may be lessened as a result of the exercise of one's freedom of association does not affect freedom of association itself. On this point, the Umpire wrote:

 

                   In my view, a provision in the Act determining the conditions by which a benefit should or should not be paid does not constitute an infringement upon the freedom of association. It may and indeed does in this particular instance work to effect a lessening of benefits to the persons involved because their local is in association with a similar local that is involved in the work dispute but the mere limiting of a benefit does not, in my opinion, affect the freedom of association.

 

10.                     Pursuant to s. 28 of the Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, the appellant applied to review and set aside the decision of the Umpire on the grounds that:

 

(1)               The Umpire erred in law in the interpretation of s. 44(2)(a) and particularly by interpreting the word "financing" found therein to include past and indirect financing.

 

(2)               The Umpire erred in law by failing to hold that s. 44(2) as interpreted by the Board of Referees offends s. 2( d )  of the Charter .

 

11.                     The Federal Court of Appeal dismissed the appeal from the Umpire's decision relying on its previous ruling in McKinnon v. The Honourable Mr. Justice Dubé, [1977] 2 F.C. 569.

 

12.                     The present appeal, on leave from this Court, is from the judgment of the Federal Court of Appeal.

 

Arguments

 

13.                     The appellant advanced the following arguments:

 

1. The term "financing" as used in s. 44(2)(a) of the Act denotes an act of present, personal, active involvement by the claimant concerned in the particular labour dispute. An individual cannot be said to be financing a labour dispute within the meaning of s. 44(2)(a) solely as a result of the fact that the union to which he belongs pays strike pay out of a common strike fund made up of union dues remitted by all union members. Payment is not made by the individual concerned, but rather by the union which represents him. The individual concerned has no control over whether or not such payments are made; rather, such decision is at the discretion of the President of the union in accordance with the provisions of the union's constitution. Moreover, the payment of union dues constitutes a term and condition of employment, and the trade union in negotiating such dues is not in law an agent of the employee, but rather acts as an independent entity. The fact that union dues were paid in the past and are not paid during the currency of the strike indicates that there is no active personal involvement in the financing of the strike. The payment of union dues was not made in order to finance the particular strike in question but rather to ensure membership in good standing in the union, to ensure continued service from the union, and to ensure strike payments to the applicant should his local engage in strike actions.

 

2. The purpose of the Act when read in its entirety is to make benefits available to those who are unemployed. As a result, a liberal interpretation of the re‑entitlement provision should be given and any doubt arising from the difficulties of the language should be resolved in favour of the claimant.

 

3. Disentitling a claimant in the present instance is absurd for a number of reasons: First, employees are disentitled by the mere coincidence that they belong to the same international union and are required to bear the cost of their unemployment even though they have no connection with the particular labour dispute. Second, this interpretation favours unlawful disputes, which result in consequential lay‑offs where no strike pay is paid, over lawful and authorized disputes where strike pay is paid. Third, an employee may or may not be entitled to unemployment insurance benefits depending whether the trade union has a strike fund, whether an official determines to pay strike benefits, or whether the governing collective agreement contains a dues deduction clause.

 

4. An interpretation of s. 44(2)(a) which would penalize employees wishing to select the bargaining agent of their choice should be avoided, since such an interpretation would be inconsistent with the freedoms guaranteed by the Charter , and in particular, the freedom of association guaranteed by s. 2(d).

 

14.                     On this last point, at the hearing, counsel for the appellant did not particularly address the Charter  issue which was raised in his factum, but rather expressed the view that a construction promoting constitutional values is to be preferred, i.e., in this case, freedom of work and freedom of association.

 

15.                     The respondent's arguments can be summarized as follows:

 

1. The manifest purpose of the legislation is to ensure that the state remains neutral and does not participate in the labour dispute by conferring benefits upon one side or the other. Providing public funds through unemployment insurance benefits to a group of employees who are financing the strike of another group of employees against their common employer would upset the natural balance of power that exists in the market‑place and would result in the state's losing the neutrality it is attempting to maintain by this legislation.

 

2. Whether there is a sufficient connection between the financial contribution made by an individual and the labour dispute that this contribution may have financed is a question of fact that must be resolved in the light of the circumstances of each case. Contributions by union members to a common strike fund have historically, both in Canada and England, been found to be a sufficient connection.

 

3. Section 44(2)(a) of the Act expresses in clear and unambiguous language that a claimant is not entitled to benefits under the Act if he fails to prove that he is not financing the labour dispute that caused the stoppage of work. Financing is an activity which includes drawing from pre‑existing funds established for the very purpose for which they are being used.

 

4. The right to freedom of association, as embodied in s. 2( d )  of the Charter , entitles everyone to join a trade union and to pursue with other members the collective interests of the membership. It neither protects the objects or purposes of the association nor the means of attaining those objects or purposes. The Charter does not give, and was never intended to give, constitutional protection to all the acts of an individual which are essential to his or her personal goals or objectives. If Charter protection is given to an association for its lawful acts and objects, then the Charter ‑protected rights of the association would exceed those of the individual merely by virtue of the fact of association.

 

5. The appellant's disentitlement to benefits arose, not because of his membership in a trade union, but rather because one of the objects of the International Union, to which his local was affiliated, was the allocation of union dues for the financing of the labour dispute at the appellant's place of work through the payment of strike pay from a common fund established for the purpose.

 

6. The impugned legislation has existed in Canada in essentially the same form since 1940. Private contracting parties who choose to arrange their affairs in such a way that some of them suffer in the face of pre‑existing legislation on the happening of certain events do so of their own volition. It cannot be argued that the pre‑existing legislation interferes with the appellant's right to associate because his union has set itself objects that may adversely affect his ability to claim unemployment insurance benefits.

 

The McKinnon Decision

 

16.                     Since the Federal Court of Appeal's brief reasons relied solely on its previous decision in McKinnon, supra, it is relevant here to summarize the facts and give more fully the reasons for judgment delivered by Pratte J. on behalf of that Court.

 

17.                     The facts in the McKinnon case closely resemble those in the present instance. Pratte J. summarized them as follows at p. 570:

 

                   Mrs. McKinnon was employed by a company where the employees, although represented by the same labour union, were divided into several bargaining units. She belonged to the union and, like all members, paid union dues part of which were used, as provided by the union's constitution, for a strike fund. In May 1975 Mrs. McKinnon lost her job as the result of a strike by employees of the same company who belonged to another bargaining unit but were represented by the same union. During the strike this union paid the strikers money from its strike fund, which had been set up using dues paid by all members of the union.

 

18.                     His ratio is as follows at pp. 571‑72:

 

                   Counsel for the applicants first maintained that Mrs. McKinnon had not financed the strike because she had not paid any dues during the strike. He pointed out that the verb "finance" is used in the present tense in section 44(2), leading him to say that a person is financing a dispute within the meaning of this provision only if he is giving the strikers financial help during the strike. This argument seems to us to be without foundation. A person who is financing an activity is a person who is defraying its cost, and it does not matter whether the funds necessary for this purpose have been disbursed before the activity took place or while it is taking place; in either case it will be said, while the activity is taking place, that it is financed by the person who has made it possible.

 

                   Counsel for the applicants also maintained that a person could not be considered to be financing a labour dispute if he had not voluntarily procured financial assistance for one of the parties to the dispute. This condition has not been met in this case, he said. According to him, when Mrs. McKinnon paid her dues to the union, it was in consideration of services that the union could eventually render to her and not in order to contribute to the strike fund, which was to benefit the members of other bargaining units. This argument must also be rejected. A person who pays union dues that are to be used for a strike fund may do so for selfish reasons, but this does not mean he is participating any less voluntarily in the setting up of the fund. Moreover, such participation must be considered voluntary even if the obligation to pay the dues is imposed as a condition of employment, since legally the employee is always free to leave his job if the conditions of employment do not suit him.

 

                   Finally, counsel for the applicants pointed to the absurd consequences that would result from the Umpire's decision. If the fact that a person has contributed in the past to a union's strike fund is sufficient for that person to be considered to be financing a strike called by that union, the same would apply even if the contribution to the strike fund was made several years before the work stoppage. In our opinion this objection does not stand scrutiny. In each case it must be determined whether there is a sufficient connection between the financial contribution made by an individual and the labour dispute this contribution may have financed. This is a question of fact that must be resolved in light of the circumstances of each case.

 

19.                     The decision in McKinnon appears to be the only Canadian precedent on the specific point at issue and does not seem to have been challenged until now.

 

Legislative History of the Act

 

20.                     A good starting point to interpret a statute properly is to examine, however briefly, its legislative history. The precursor of the Canadian statute, the National Insurance Act, 1911 (U.K.), 1 & 2 Geo. 5, c. 55, was enacted in the United Kingdom in 1911 and was designed to provide benefits to those who were unemployed mainly because of lack of job opportunities. The Act was amended a number of times, mostly to alleviate problems encountered in its application (1920 (U.K.), 10 & 11 Geo. 5, c. 30; 1924 (U.K.), 14 & 15 Geo. 5, c. 30; 1927 (U.K.), 17 & 18 Geo. 5, c. 30) and was finally consolidated in 1935 (1935 (U.K.), 25 Geo. 5, c. 8).

 

21.                     The adoption of a similar scheme in Canada had been urged for a number of years. Eventually, in 1935, the Canadian Parliament introduced The Employment and Social Insurance Act, S.C. 1935, c. 38, which, while presenting obvious differences in many respects, contained a number of similarities, particularly as regards the disqualification provision which is of interest here. The same policy considerations seem to have inspired both pieces of legislation.

 

22.                     Although introduced in 1935, the Act was not enacted until 1940 because the question of the statute's constitutionality had been referred to the Supreme Court of Canada, which by a majority judgment held the statute to be ultra vires (Reference re The Employment and Social Insurance Act, [1936] S.C.R. 427). The Privy Council having affirmed the judgment, [1937] A.C. 355, the Constitution Act, 1867 , was amended by adding in s. 91 a new heading "2A. Unemployment Insurance". The statute previously held invalid was re‑enacted with some modifications as The Unemployment Insurance Act, 1940, S.C. 1940, c. 44.

 

23.                     The Act was frequently amended in order to expand its scope, to remedy practical problems encountered in its administration, and to respond to changing social values and economic conditions; the present Act (S.C. 1970‑7l‑72, c. 48) was assented to June 23, 1971. Amendments enacted since then did not affect the disqualification provision. It is remarkable that throughout these at times material amendments to the Act respecting both its philosophy and scope, s. 44, the central issue in this appeal, has changed very little from the original text in the English statute of 1924.

 

Section 44

 

24.                     It is instructive to trace the legislative history of s. 44.

 

(a) England

 

25.                     The first English disqualification provision, adopted in 1911, read as follows:

 

                   87.‑‑(1) A workman who has lost employment by reason of a stoppage of work which was due to a trade dispute at the factory, workshop, or other premises at which he was employed, shall be disqualified for receiving unemployment benefit so long as the stoppage of work continues, except in a case where he has, during the stoppage of work, become bonâ fide employed elsewhere in an insured trade.

 

                   Where separate branches of work which are commonly carried on as separate businesses in separate premises are in any case carried on in separate departments on the same premises, each of those departments shall, for the purposes of this provision, be deemed to be a separate factory or workshop or separate premises, as the case may be.

 

                   (2) A workman who loses employment through misconduct or who voluntarily leaves his employment without just cause shall be disqualified for receiving unemployment benefit for a period of six weeks from the date when he so lost employment.

 

                   (3) A workman shall be disqualified for receiving unemployment benefit whilst he is an inmate of any prison or any workhouse or other institution supported wholly or partly out of public funds, and whilst he is resident temporarily or permanently outside the United Kingdom.

 

                   (4) A workman shall be disqualified for receiving unemployment benefit while he is in receipt of any sickness or disablement benefit or disablement allowance under Part I. of this Act.

 

26.                     Section 107, with its definitions of "workman", "employment", "trade dispute", and other terms, is not relevant here.

 

27.                     In the 1920 statute, the exception clause was widened to enable a claimant to avoid disqualification by showing that he had cut himself off from his former job by changing his occupation. Until 1920, only a change in the place of employment brought the exception into play. As amended, the exception read:

 

                   8.‑‑(1) An insured contributor who has lost employment by reason of a stoppage of work which was due to a trade dispute at the factory, workshop, or other premises at which he was employed shall be disqualified for receiving unemployment benefit so long as the stoppage of work continues, except in a case where he has, during the stoppage of work, become bonâ fide employed elsewhere in the occupation which he usually follows or has become regularly engaged in some other occupation.

 

                   Where separate branches of work which are commonly carried on as separate businesses in separate premises are in any case carried on in separate departments on the same premises, each of those departments shall, for the purposes of this provision, be deemed to be a separate factory or workshop or separate premises, as the case may be.

 

28.                     In 1924, the formula ultimately adopted provided:

 

                   4.‑‑(1) Subsection (1) of section eight of the principal Act (which imposes a disqualification for the receipt of benefit during a stoppage of work) shall not apply in any case in which the insured contributor proves that he is not participating in or financing or directly interested in the trade dispute which caused the stoppage of work, and that he does not belong to a grade or class of workers members of which are participating in or financing or directly interested in the dispute, or that the stoppage is due to an employer acting in a manner so as to contravene the terms or provisions of any agreement existing between a group of employers where the stoppage takes place, or of a national agreement to either of which the employers and employees are contracting parties.

 

29.                     In 1927, two amendments were made to s. 4(1):

 

                   6. Subsection (1) of section four of the Unemployment Insurance (No. 2) Act, 1924, shall have effect as if there were substituted for the words "members of which" the words "of which immediately before the commencement of the stoppage there were members employed at the premises at which the stoppage is taking place any of whom," and as if all the words after "in the dispute" were omitted.

 

30.                     The Unemployment Insurance Acts were consolidated in 1935 without any discussion of the trade dispute disqualification provision. Section 26 of the Unemployment Insurance Act, 1935 read as follows:

 

                   26.‑‑(1) An insured contributor who has lost employment by reason of a stoppage of work which was due to a trade dispute at the factory, workshop or other premises at which he was employed shall be disqualified for receiving benefit so long as the stoppage of work continues, except in a case where he has, during the stoppage of work, become bona fide employed elsewhere in the occupation which he usually follows, or has become regularly engaged in some other occupation:

 

                   Provided that this subsection shall not apply in a case where the insured contributor proves‑‑

 

(a)               that he is not participating in or financing or directly interested in the trade dispute which caused the stoppage of work; and

 

(b)               that he does not belong to a grade or class of workers of which, immediately before the commencement of the stoppage, there were members employed at the premises at which the stoppage is taking place, any of whom are participating in or financing or directly interested in the dispute.

 

                   (2) Where separate branches of work which are commonly carried on as separate businesses in separate premises are in any case carried on in separate departments on the same premises, each of those departments shall for the purposes of this section be deemed to be a separate factory or workshop or separate premises, as the case may be.

 

(b) Canada

 

31.                     The Unemployment Insurance Act, 1940 incorporated almost verbatim s. 26 above of the English statute:

 

                   43. An insured person shall be disqualified for receiving benefit‑‑

 

(a) if he has lost his employment by reason of a stoppage of work, which was due to a labour dispute at the factory, workshop or other premises at which he was employed, except where he has, during a stoppage of work, become bona fide employed elsewhere in the occupation which he usually follows, or has become regularly engaged in some other occupation, but this disqualification shall last only so long as the stoppage of work continues, and shall not apply in any case in which the insured person proves

 

(i)                that he is not participating in, or financing or directly interested in the labour dispute which caused the stoppage of work, and

 

(ii)               that he does not belong to a grade or class of workers of which immediately before the commencement of the stoppage there were members employed at the premises at which the stoppage is taking place any of whom are participating in or financing or directly interested in the dispute, and where separate branches of work which are commonly carried on as separate businesses in separate premises are carried on in separate departments on the same premises, each of those departments shall, for the purposes of this provision, be deemed to be a separate factory or workshop or separate premises, as the case may be;

 

32.                     In 1946, An Act to amend The Unemployment Insurance Act, 1940, S.C. 1946, c. 68, s. 7, provided that "Sections twenty‑seven to forty‑nine, inclusive ... of the said Act ... are repealed and the following substituted therefor:

 

                                                                    ...

 

                   39. (1) An insured person shall be disqualified from receiving benefit if he has lost his employment by reason of a stoppage of work due to a labour dispute at the factory, workshop or other premises at which he was employed unless he has, during the stoppage of work, become bona fide employed elsewhere in the occupation which he usually follows, or has become regularly engaged in some other occupation; but this disqualification shall last only so long as the stoppage of work continues.

 

                   (2) An insured person shall not be disqualified under this section if he proves

 

(a)               that he is not participating in, or financing or directly interested in the labour dispute which caused the stoppage of work; and

 

(b)               that he does not belong to a grade or class of workers of which immediately before the commencement of the stoppage there were members employed at the premises at which the stoppage is taking place any of whom are participating in, financing or directly interested in the dispute.

 

                   (3) Where separate branches of work which are commonly carried on as separate businesses in separate premises are carried on in separate departments on the same premises, each department shall, for the purpose of this section, be deemed to be a separate factory or workshop."

 

33.                     A slight change was made to the drafting of the disqualification provision during a complete revision of the Act which took place in 1955 (S.C. 1955, c. 50):

 

                   63. (1) An insured person who has lost his employment by reason of a stoppage of work attributable to a labour dispute at the factory, workshop or other premises at which he was employed, is disqualified from receiving benefit until

 

(a)               the termination of the stoppage of work,

 

(b)               he becomes bona fide employed elsewhere in the occupation that he usually follows, or

 

(c)               he has become regularly engaged in some other occupation,

 

whichever event first occurs.

 

                   (2) An insured person is not disqualified under this section if he proves that

 

(a)               he is not participating in, or financing or directly interested in the labour dispute that caused the stoppage of work, and

 

(b)               he does not belong to a grade or class of workers that, immediately before the commencement of the stoppage, included members who were employed at the premises at which the stoppage is taking place and are participating in, financing or directly interested in the dispute.

 

                   (3) Where separate branches of work that are commonly carried on as separate businesses in separate premises are carried on in separate departments on the same premises, each department shall, for the purpose of this section, be deemed to be a separate factory or workshop.

 

34.                     The phrase "labour dispute" was defined in s. 2(j) of the Act:

 

(j)                "labour dispute" means any dispute between employers and employees, or between employees and employees, that is connected with the employment or non‑employment, or the terms or conditions of employment, of any persons;

 

35.                     The current provision, set out in s. 44 of the Unemployment Insurance Act, 1971 and reproduced at the outset of my reasons, has undergone no change to this date.

 

The Purpose of the Act

 

36.                     "A statute begins with an objective that may be called a political or social objective. This objective is but a vision of the ultimate end the desired law is intended to achieve. The means for the attainment of that objective must then be devised; these will be embodied in some social, financial, political, economic, legal or other plan" (E. A. Dried­ger, Construction of Statutes (2nd ed. 1983), at p. 73).

 

37.                     There is no doubt that legislation relating to unemployment, when first enacted in England and later in Canada, had a social objective. The economic depression of the 1930's resulted in a number of people being unemployed because of a lack of job opportunities. It gave rise to pressure for a wider range of social programs on the part of the Canadian government. Those concerns are clearly stated in the preamble of The National Employment Commission Act, 1936, S.C. 1936, c. 7, later re‑enacted as the 1940 Act:

 

WHEREAS unemployment has been for several years Canada's most urgent national problem, and until such time as the normal revival of trade and industry will absorb a large percentage of unemployed workers, it is essential that steps be taken to find ways and means of providing remunerative employment, thus reducing the numbers at present on relief, and lessening the burden of taxation; and whereas, to achieve a nation‑wide co‑operative effort in reducing the numbers on relief and in providing employment, it is necessary to have the effective co‑operation of the provinces and municipalities, and to enlist the co‑operation of employers' and employees' associations throughout the Dominion, as well as of such other public and private agencies as may be in a position to provide employment or to suggest what is practicable in the way of re‑employment projects; and whereas, it would appear that such nation‑wide co‑operative effort can best be effected through the appointment of a representative national commission, with power to co‑operate with the provinces, municipalities and other agencies in respect of unemployment relief, and in an endeavour to provide work for the unemployed: Therefore His Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:

 

38.                     Wilson J., in the course of her reasons in Abrahams v. Attorney General of Canada, [1983] 1 S.C.R. 2, stated at p. 10:

 

Since the overall purpose of the Act is to make benefits available to the unemployed, I would favour a liberal interpretation of the re‑entitlement provisions. I think any doubt arising from the difficulties of the language should be resolved in favour of the claimant.

 

39.                     La Forest J. in Canadian Pacific Ltd. v. Attorney General of Canada, [1986] 1 S.C.R. 678, wrote at p. 680:

 

                   The Unemployment Insurance Act, 1971, 1970‑71‑72 (Can.), c. 48, as the name implies, establishes a scheme that provides for cash payments to persons exercising an insurable employment on the termination of their employment. The necessary monies are derived in part from premiums paid by the employees and their employers. These premiums, fixed each year by the Unemployment Insurance Commission established under the Act, are calculated in terms of a percentage of the "insurable earnings" of the employees in that year.

 

40.                     The basic thrust of the original Act remained constant through the years. Its numerous amendments were designed to expand qualifying conditions and increase benefits and contributions in order to eliminate inequities, to promote employment opportunities and to co‑ordinate other social assistance programs. The shift, if any, was rather from the main protection objective to the labour market objective. The Act's insurance feature prevailed all along through the national pooling of both the risks and the costs of unemployment.

 

The Purpose of s. 44

 

41.                     At the time the s. 44 provision was enacted in England, it was undoubtedly intended that the use of union strike funds for strike pay at the claimant's place of work would disentitle employees, out of work because of the strike, from unemployment benefits. It was not intended to compensate employees who either left their employment voluntarily or lost it for reasons of misconduct.

 

42.                     As the unemployment insurance fund was made up of contributions from employers, employees and government, it was considered undesirable or even inequitable that such benefits be used to support employees, on strike or locked‑out, against the employer. State neutrality in a labour dispute was a main consideration. However, it can reasonably be assumed from the wording of s. 44 that the innocent victims of a labour dispute were not intended to be penalized. Furthermore, it is noteworthy that the English Royal Commission on Trade Unions and Employers' Associations (1965‑1968) recommended that a claimant should not be regarded as financing a dispute simply because he was a member of a trade union which is paying strike benefits to those on strike (M. A. Hickling, Labour Disputes and Unemployment Insurance Benefits in Canada and England (1975), at p. 215).

 

43.                     In Abrahams, supra, Wilson J. discussed the interpretation of s. 44(1)(c) of the Act‑‑albeit in a different context‑‑in terms of whether the claimant had become "regularly engaged in some other occupation". Delivering the unanimous judgment of the Court, she said at p. 9:

 

                   It is, I think, legitimate to ask what the object of the legislature was in enacting s. 44. Clearly involvement in a labour dispute was to terminate a complainant's entitlement to benefits. However, his entitlement would be restored if the requirements of either para. (b) or para. (c) were met.

 

Since the purpose of the Act is to make benefits available to the unemployed, a liberal interpretation of the re‑entitlement provisions is warranted, given that the Act was not designed to deprive innocent victims of a labour dispute of the benefits of the Act and also given that employees do contribute to the unemployment insurance fund.

 

The Underlying Rationale

 

44.                     The two principles generally invoked in the interpretation of s. 44 rest on the proposition that government neutrality should be preserved in a labour dispute and that it would be inequitable for an employer's contribution to the Unemployment Insurance fund to finance a strike against himself. Hickling, op. cit., at p. 1, puts it as follows:

 

                   The neutrality of the state is to be preserved, and funds to which employers are compelled to contribute are not to be used against them.

 

45.                     This rationale has been criticized.

 

(a)               Government Neutrality in a Labour Dispute

 

46.                     In order to remain neutral the law should but does not distinguish between strikes and lock‑outs. The reasonableness of the claims and the merits of the dispute are ignored in the determination of the question whether the labour dispute actually exists. The government can hardly invoke neutrality if it declines to differentiate between a legitimate grievance leading to a lock‑out and a voluntary stoppage of work following a breakdown in industrial relations. It is indeed difficult to classify as neutral a refusal to pay benefits in the former situation (T. Norris, "Dissociating from a Trade Dispute, and Claiming Unemployment Benefit" (1985), 135 New L.J. 967, at p. 967). As mentioned by S. H. Ephron: "The neutrality principle can serve as a justification for the "labor dispute disqualification" only if the parties to the dispute stand on equal footing. In the majority instances they do not" (S. H. Ephron, "Redefining Neutrality: Alternative Interpretations of the Labor Dispute Disqualification in Unemployment Compensation" (1986), 8 Comp. Lab. L. 89, at p. 104).

 

47.                     If an employer insists upon unreasonable terms in the settlement of a labour dispute and the employees are aware of the fact that unemployment insurance benefits will not be paid if there is a stoppage of work due to lack of agreement, the employees may be induced to accept unfavourable terms of employment which they would not otherwise accept. Under such conditions the Act becomes an instrument of coercion (In re McKay (1946), 53 Man. R. 364, at pp. 372‑73). A refusal to pay benefits in those circumstances is hardly a neutral stance. Likewise, to guarantee benefits only to those who do not pay union dues may deter workers from combining their economic strength, particularly if the payment of union dues is construed as financing the dispute (see M. I. Shadur, "Unemployment Benefits and the "Labor Dispute" Disqualification" (1950), 17 U. Chi. L. Rev. 294, at pp. 296 to 298; L. Lesser, "Labor Disputes and Unemployment Compensation" (1945), 55 Yale L.J. 167; Note, "Eligibility for Unemployment Benefits of Persons Involuntarily Unemployed Because of Labor Disputes" (1949), 49 Colum. L. Rev. 550).

 

48.                     In the final analysis, while it might be desirable that the government remain neutral in a labour dispute, it is questionable whether the disqualification provision, applied to the circumstances of this case, would in fact achieve such a result. Absent proof, as here, that the claimant voluntarily chose unemployment in order to foster the strike, the neutrality principle does not seem to justify depriving such claimant of unemployment insurance benefits.

 

(b)               Employer Financing Strike Against Himself

 

49.                     It is also argued that the legislature cannot have intended that the employer, through his contribution to the unemployment compensation fund, finance a strike against himself. This argument does not take into account that such contributions will eventually be shifted by the employer to the consumer or to his or her employees. Such "financing" may not even materialize since strikes are often of lesser duration than the usual benefit‑waiting period. Even if it did, the absence of benefits during the waiting period, combined with the prospect of benefits amounting to a fraction of normal wages, will rather dissuade labour unions from calling a strike than encourage them to do so (Shadur, loc. cit., at p. 298).

 

50.                     I do not think that it is necessary to belabour the point further. Suffice it to say that the rationale underlying s. 44 as it was originally enacted in England and later incorporated in its Canadian counterpart, does not today enjoy much favour in the United States or in Canada and no wonder, given the materially different state of labour relations.

 

The Labour Relations Context

 

51.                     Many changes have taken place in labour relations between the England of 1924 and the Canada of 1940, on the one hand, and the Canada of today on the other. In the early part of this century, Canadian unionism was patterned after the British model. Labour unions were voluntary organizations which were not recognized by the state as the legitimate bargaining agents of their members. This situation changed significantly in the United States with the passage of the Wagner Act in 1935. For the first time, labour unions were granted legal recognition as representative of their members in negotiating work conditions and settling disputes with employers.

 

52.                     Almost a decade later, in February of 1944, and nine years after the first attempt to enact The Employment and Social Insurance Act which included the disentitlement provision, the Canadian federal government adopted a similar legislative scheme by an Order in Council, P.C. 1003, entitled the Wartime Labour Relations Regulations. The provinces quickly followed suit. These enactments marked a profound departure from the structure of labour relations in England. As Carrothers, Palmer and Rayner explain in Collective Bargaining Law in Canada (2nd ed. 1986), at p. 42:

 

When in the early years of confederation parliament considered legislative reform of its labour laws it turned naturally for precedents to the Mother of Parliaments. The judicial precedents respecting civil conspiracy and internal affairs of unions flowed naturally across the Atlantic from the heartland of the common law. But by 1935 new forces were at work. The labour movement itself had changed. It was now heavily influenced by American parentage; accents from the British Isles were no longer dominant voices in union affairs. Problems‑‑economic, social and political‑‑were North American. And British precedents since the Trade Disputes Act of 1906 reflected policies out of tune with forces determining the character of collective bargaining in North America.

 

53.                     Following the Second World War, the Canadian labour movement was increasingly concerned about continuing the protection afforded by the Wartime Labour Relations Regulations through the establishment of national labour legislation. Organized labour placed great emphasis on union security and sought to make it compulsory through legislation. (H. A. Logan, Trade Unions in Canada (1948), at p. 549.) The period after the war was marked by increasing sophistication of internal union organization and by increasing use of investigation and conciliation procedures as conditions precedent to legal strikes or lock‑out. The period is also characterized by the incorporation of the Rand Formula in collective agreements. This formula imposes on the employer the duty to remit to the union a portion of the wages of each employee in the bargaining units. (I. Abella, The Canadian Labour Movement, 1902‑1960 (1975), at p. 21.)

 

54.                     While it is certain that the Canadian legislators could not have been unaware of the constant changes in the labour relations panorama, as evidenced by frequent, sometimes significant amendments of the Act, the labour dispute disqualification provision was never amended. One can only speculate about the reasons for this legislative inaction. However, one can readily appreciate the concerns underlying the amendments which focused on extending the scope of the Act to include classes of employees not initially covered by the scheme and modifying employer and employee contributions to cope with the fund's liquidity and actuarial soundness. The legislators never seem to have re‑examined the labour dispute provision. In any event, the fact that they did not is not in itself conclusive as it relates to the interpretation of this section of the Act.

 

Doctrinal and Jurisprudential Interpretation of s. 44

 

55.                     While the respect for precedent and judicial restraint on which respondent relies are to be commended, one should not forget that an important function of this Court is the interpretation of legislation. This function is particularly useful in disputes such as the present one where the original rationale on which the legislation in question was predicated has lost most of its relevance through the intervening years due to the evolution in Canadian labour relations, the labour movement, and the social and economic conditions of Canadian society. Furthermore, this Court was never called upon to rule on the point here at issue.

 

56.                     As Lord Watson noted in Salomon v. Salomon & Co., [1897] A.C. 22, at p. 38, the ""Intention of the Legislature" is a common but very slippery phrase, which, popularly understood, may signify anything from intention embodied in positive enactment to speculative opinion as to what the Legislature probably would have meant, although there has been an omission to enact it. In a Court of Law or Equity, what the Legislature intended to be done or not to be done can only be legitimately ascertained from that which it has chosen to enact, either in express words or by reasonable and necessary implication."

 

57.                     In this regard, it may be useful to examine the historical context of the enactment of similar legislation in the United Kingdom, the United States and in Canada.

 

(a) United Kingdom

 

58.                     English Umpires have consistently interpreted the disqualification provision as disentitling any employee paying dues to a union engaged in a dispute. This interpretation is based upon the argument that each member has a proprietary interest in the fund of his or her union (Ministry of Labour, Analytical Guide U.I. Code 7, Part III, §97 (1939 ed.); Brit. Ump. 823/36 (1936); Brit. Ump. 13/25, BU‑627 (1925)). He or she is considered as part‑owner in the union and therefore is held responsible for its actions (Note, loc. cit., at pp. 560‑61).

 

59.                     This construction has been criticized in many respects. Hickling, op. cit., summarizes this criticism at pp. 213‑14 and 215:

 

                   The Umpire's decisions rest upon the basis either that the member has a proprietary interest in the funds which are being dispensed in support of those who are on strike or locked out, or that as a member he shares responsibility for his union's action. Neither basis is entirely satisfactory, as has been pointed out above. His proprietary interest is often infinitesimal and his power of control over the dispensation of funds illusory.

 

                   It is clear that the present rule on financing can lead to hardship and to anomalies. A claimant may be disqualified simply because his union is giving financial aid to men who are locked in a dispute at his place of employment. He is penalized though he has no direct interest in the outcome of the dispute, is innocent of any participation in it, and is opposed to his union's action. The dispute may not even be in his department. Fellow workers who are members of the same union and employed at the same works may be entitled to benefit if they are working in a department which is deemed to be separate premises for the purposes of the Act. The worker who is disqualified may perhaps be forgiven if he dismisses the difference between departments as a mere technicality, and complains that those in receipt of benefit are just as guilty of financing the dispute as he.

 

                   It may be argued that the rule favours unofficial disputes which are not financed by a union over official disputes which are, and for that reason ought to be abolished. In some cases even official disputes are not given financial support in the form of strike benefits. A union may be unable to support a strike once its funds are exhausted, or may choose not to pay strike benefit for other reasons. Unofficial stoppages and non‑payment of strike benefits can usually be traced to factors other than a desire to facilitate claims for unemployment insurance benefit by non‑participants who are thrown out of work.

 

                                                                    ...

 

                   After weighing the arguments the Royal Commission with one exception recommended that a claimant should no longer be regarded as financing a trade dispute simply because he is a member of a union which is paying strike pay to those on strike. The one dissentient felt that the financing disqualification should continue to be operated as at present in order to bring home to the union member a measure of personal responsibility for his union's action. There is no evidence that the disqualification for unemployment insurance benefit has had much effect on the degree to which members participate in the affairs of unions. It seems unlikely that abolition of the financing rule would lessen the incentives to do so.

 

60.                     It is of interest to note that more recent English interpretation seems to depart from earlier pronouncements, as evidenced by this observation of the Lord President in Watt v. Lord Advocate, [1979] S.C. 120, at pp. 127, 134 and 135:

 

                   Before examining the Commissioner's decision to see whether or not the pursuer's contention is well founded it will be convenient to express my view as to what is meant by the words "directly interested in the trade dispute" which are to be found in proviso (a) to section 22(1). These words appear in close company with the words "participating in" and "financing" which predicate an active involvement in the particular dispute by the claimant in question.

 

                                                                    ...

 

                   "Participating in" or "financing" are plain enough words to involve active connection with the dispute. In my opinion the words "directly interested in the trade dispute" should be read ejusdem generis and involve a direct interest in the cause of the dispute and its merits or demerits, the reasons for its existence and its justification or non‑justification.

 

                                                                    ...

 

The Commissioner has proceeded to his decision on the ground that because the dispute might have affected the working and pay conditions of the claimant, he was de‑barred from receiving unemployment benefit. That is not a condition of the proviso. I repeat, an onerous burden, such as the proviso places on the claimant, must be construed strictly, since it deprives him of a statutory right to benefit.

 

(b) United States

 

61.                     In the United States, jurisdiction over unemployment compensation belongs to the states. While the original English provision similar to our s. 44 has been retained in a majority of American state statutes, several, in contrast to Canada, have since excised the entire provision embodied in our s. 44 from their legislation. Others have enacted specific provisions to the effect that payment of regular union dues does not constitute financing a labour dispute (T. P. McCormick, "Unemployment Compensation‑‑An Examination of Wisconsin's "Active Progress" Labor Dispute Disqualification Provision," [1982] Wis. L. Rev. 907). No useful purpose would be served by an extensive review of American authorities, given the diversity both of statutes and of judicial interpretation.

 

62.                     What is striking in the American experience is the early judicial departure from English precedents apparently for reasons of policy. Shadur, loc. cit., referring to the English construction of the statute, expressed the view that (at p. 328):

 

This construction applied to the American statutes would contradict every theoretical basis for labor‑dispute disqualification. It would deny benefits to workers who are involuntarily unemployed and who have no interest in the outcome of the dispute, so that compensation payment would not be unneutral. Furthermore, the level of maximum benefit payments insures that benefits will be used to support the unemployed and their families and not diverted to financing the strike.

 

                   Accordingly, judicial desertion of the British precedents seems quite justifiable. Courts may readily employ the time‑honored ground that adopted statutes bring with them their settled interpretations only when the latter are consistent with the public policy of the importing jurisdiction.

 

He continued:

 

                   Disqualification for "financing" a dispute has been virtually a dead letter in the United States. Eleven jurisdictions differ from the Draft Bill by omitting the word entirely from the "participating‑financing‑directly interested" combination, and three others have specific provisions that "financing" does not include payment of regular union dues. Only a single appellate court and a handful of administrative tribunals have been called upon to define "financing."

 

63.                     The American experience is in this respect of some interest, as a number of states have excised the word "financing" from their statutes with no seemingly disastrous results.

 

64.                     The Note previously referred to states at p. 561:

 

                   Reasons of policy have led American administrative tribunals to depart from this construction. Further antipathy to the English construction has been demonstrated by the excision of this entire provision from its usual context in the statutes of several jurisdictions, and by the enactment in others of express provisions that payment of regular union dues does not constitute financing a labor dispute.

 

                   Although the original English provision still appears in a majority of American statutes, there can be little doubt that it will not be held applicable to the mere payment of union dues. As thus devitalized, the provision is of small practical significance.

 

65.                     In "The Labor Dispute Disqualification‑‑A Primer and Some Problems" (1955), 8 Vand. L. Rev. 338, Professor J. S. Williams summarized the general rule adopted by American courts at pp. 349‑50:

 

The litigation has been largely concerned with whether mere payment of regular union dues is sufficient to establish a financing in those cases where only a part of the union is on strike and other members of the union are out of work because the plant has shut down. The rule generally accepted today is that the payment of union dues alone is not enough to establish a financing of a labour dispute.

 

66.                     Two American cases, which dealt with a statute similar to the one here in dispute, illustrate the point. In Outboard, Marine & Mfg. Co. v. Gordon, 87 N.E.2d 610 (1949), Daily J. of the Supreme Court of Illinois, after recounting the history of the labour dispute disqualification provision, discussing the facts, which are similar to those in the present instance, and reviewing the varied interpretations of similar statutes, went on to say at p. 617:

 

                   The conclusion is unescapable that the legislature intended to provide for the innocent victims of a labor dispute by specifically excluding them from the denial of unemployment compensation. The previously quoted subsection of section 7 of the Illinois Act was meant to protect and except such victims from the classes denied compensation by its terms.

 

In that case, however, the Court was dealing with judicial review of a finding of the Director of Labor who had ruled in favour of the employees. The evidence justified the finding that office workers had not financially assisted a work stoppage so as to preclude them from recovering unemployment compensation for work time lost because of a work stoppage resulting from a strike by factory employees.

 

67.                     More to the point is a 1981 decision of the same court dealing with the same statute (General Motors Corp. v. Bowling, 426 N.E.2d 1210 (1981)). Having concluded that none of the shop clerks who claimed unemployment benefits participated in the labour dispute or were "directly interested in the dispute", the sole issue before that court, there as here, was whether the union shop clerks financed the strike through payment of their union dues which, diverted to the international union's strike fund, financed the strike of another local of the same union. Simon J. came to the conclusion that they did not on the basis that the mere payment of union dues in such circumstances did not amount to "financing the labour dispute that caused the stoppage of work". I will have more to say about that case later.

 

68.                     However, a contrary American judicial interpretation of the same or similar statutes based on the same set of facts relied for the most part on traditional English judicial interpretation.

 

(c) Canada

 

69.                     In Canada, neither the Unemployment Insurance Commission umpires nor the Federal Court of Appeal in McKinnon, supra, departed from the English judicial interpretation. The adoption by Canadian courts of British legal precedents was to be expected given "the umbilical cord‑like attachment of Canada to the United Kingdom through the Judicial Committee of the Privy Council, which was the court of last resort in Canada until 1949" (G. W. Adams, Canadian Labour Law (1985), at p. 5). At the same time, this adherence to British case law is surprising because the Canadian labour context resembled that of the United States much more strongly than that of England. (S. Jamieson, Industrial Relations in Canada (1957), at pp. 102 and 107; Carrothers, Palmer and Rayner, op. cit., at p. 42.) It is against that historical, doctrinal and jurisprudential background that the word "financing" in s. 44(2)(a) of the Act must be interpreted.

 

"Financing"

 

70.                     Was the claimant, on the undisputed facts of this case, financing the labour dispute at his place of employment?

 

71.                     It is alleged against the claimant that he was "financing" the labour dispute because of:

 

(a) the mandatory payment of union dues by him under the collective agreement;

 

(b) the fact that part of such dues was remitted by the local union to the International Union and placed by the International Union in its strike fund; and

 

(c) the fact that the International Union's strike fund was used by the International Union to pay strike pay to employees of another local involved in a labour dispute at the claimant's place of employment.

 

72.                     The claimant was not the recipient of strike pay while unemployed because of the strike. He was not in any way a participant in the labour dispute or directly interested in it. There is no evidence that either he or his local stood to benefit from its outcome. It was a dispute to which he was a total stranger and of which he was the innocent victim. His only relationship to it was that it was the cause of his unemployment.

 

73.                     In my view, there is no way in which depriving the claimant of unemployment insurance benefits in these circumstances can be viewed as "neutral" within the principle discussed earlier in these reasons. The claimant is, in effect, being penalized not for financing a labour dispute but for belonging to an international union. By belonging to such a union, it is alleged, the claimant should be held to be financing all strikes engaged in by all other members of the international union to whose members strike pay is paid. Can this really have been the intention of the legislature?

 

Ordinary Meaning of Words

 

74.                     Whatever the English, American and Canadian judicial interpretations of s. 44(2)(a) of the Act, and whatever the rationale underlying the labour dispute disqualification provisions, there is no compelling reason why ordinary rules of interpretation should not apply here. While legislative history may be useful in providing the background and assisting in determining the purpose of legislation, the interpretation of the statute must, in this as in other contexts, be ascertained from the words used by the Legislature to convey its intent. As Dried­ger wrote, op. cit., at p. 87:

 

                   Today there is only one principle or approach, namely, the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.

 

In Pfizer Co. v. Deputy Minister of National Revenue, [1977] 1 S.C.R. 456, Pigeon J. expressed the principle, at p. 460, as follows:

 

                   The rule that statutes are to be construed according to the meaning of the words in common language is quite firmly established and it is applicable to statutes dealing with technical or scientific matters . . . .

 

The rule dates back centuries, as Lord Wensleydale stated very clearly in Grey v. Pearson (1857), 6 H.L. Cas. 60, at pp. 104‑5:

 

I have been long and deeply impressed with the wisdom of the rule, now, I believe, universally adopted, at least in the Courts of Law in Westminster Hall, that in construing wills and indeed statutes, and all written instruments, the grammatical and ordinary sense of the words is to be adhered to, unless that would lead to some absurdity, or some repugnance or inconsistency with the rest of the instrument, in which case the grammatical and ordinary sense of the words may be modified, so as to avoid the absurdity and inconsistency, but no further.

 

75.                     Analyzing the ordinary meaning of words, one is immediately struck by the fact that s. 44(2)(a) focuses on the individual "claimant". The claimant here is the employee not the union. The claimant pays union dues but the union establishes the strike fund, diverts strike fund money from the union dues, sends that money to the International Union which in turn decides to use that strike fund to pay strikers. The claimant has no choice but to pay union dues and has no say in this process other than through the democratic process of election of members or officers of the union. Although the Federal Court of Appeal has said that he "is always free to leave his job if the conditions of employment do not suit him", this is hardly a realistic proposition given today's labour market conditions and, if I may add, a very unlikely effect contemplated by the Act.

 

76.                     Unless it can be said that the union is the agent or mandatary of the employee, it is the union and not the claimant which is establishing the strike fund. At the time of the enactment of the provision in England, unions were not incorporated so that it could be said that the claimant had a proprietary interest in the fund. (In fact, as Hickling, op. cit., points out, that was the very basis for the legal reasoning of British umpires.) Not so today where it has clearly been recognized by this Court that a union is neither the agent nor the mandatary of employees.

 

77.                     In Syndicat catholique des employés de magasins de Québec Inc. v. Compagnie Paquet Ltée, [1959] S.C.R. 206, Judson J. said at p. 214:

 

                   If the relation between employee and union were that of mandator and mandatary, the result would be that a collective agreement would be the equivalent of a bundle of individual contracts between employer and employee negotiated by the union as agent for the employees. This seems to me to be a complete misapprehension of the nature of the juridical relation involved in the collective agreement. The union contracts not as agent or mandatary but as an independent contracting party and the contract it makes with the employer binds the employer to regulate his master and servant relations according to the agreed terms.

 

That dictum was affirmed in McGavin Toastmaster Ltd. v. Ainscough, [1976] 1 S.C.R. 718.

 

78.                     While those cases dealt with collective agreements entered into between an employer and a union certified as bargaining agent for the employees, it is now well recognized that trade unions are "deemed to have been constituted by the Legislature as legal entities for the purpose of discharging their function and performing their role in the field of labour relations" (International Longshoremen's Association, Local 273 v. Maritime Employers' Association, [1979] 1 S.C.R. 120, at pp. 135‑36). Here, the union is a certified bargaining agent. Collecting union dues and allocating funds so collected for the union's purpose are part of its role in the field of labour relations.

 

79.                     When the Ontario Labour Relations Act, R.S.O. 1980, c. 228, provides for certification of a union with, among others, power to compel an employer to bargain with it and enter into a collective agreement as is the case here, it invests the trade union with those corporate elements characteristic of a legal entity or as Robertson J.A. wrote a "persona juridica" (Re Patterson & Nanaimo Dry Cleaning & Laundry Workers Union, Local No. 1, [1947] 4 D.L.R. 159 (B.C.C.A.))

 

80.                     We are not here concerned with the restrictions set out in s. 3(2) of The Rights of Labour Act, R.S.O. 1970, c. 416, which prevent a union from being sued or suing, a provision which has an historical background alluded to by Estey J. in International Longshoremen's Association, supra. The right to sue or to be sued is but one of the characteristics of a legal entity. Given the fact that the union is the certified bargaining agent of the employees in this particular instance, clothed with such power as to collect mandatory union dues from its members through the employer, it can be fairly said that it possesses for that purpose at least the essential characteristics of a legal entity or personality distinct from that of its members.

 

81.                     One has to conclude that unions in Canada today, in contrast to those in England at the time of enactment, are recognized as legal entities for the purpose of proceedings under labour law statutes. At common law, a union was simply an unincorporated collection of individuals with no legal personality (H. W. Arthurs, D. D. Carter and H. J. Glasbeek, Labour Law and Industrial Relations in Canada (2nd ed. 1984), at p. 263). Today, it is settled that unions are neither agent nor mandatary of the employee. Upon this construction, a claimant who pays mandatory union dues could not be held to finance a strike through such dues. It cannot however be ignored that the claimant's portion of his union dues which goes to the union strike fund may have been so directed with or without his consent. The evidence here does not disclose if the appellant's consent to that end was explicitly or implicitly given or if it was solely the union's decision to allocate part of the union dues to a strike fund. On this basis alone, I would hesitate to draw any conclusion.

 

82.                     However, in my opinion, an analysis of the word "financing" in s. 44(2)(a) provides a persuasive answer. Section 44 sets out three different terms, namely "financing", "participating" and "directly interested". Each of these words has a distinct meaning and is not tautologous. The word "participating" requires that the employee be actually involved in the labour dispute, "directly interested" that he has something to gain or fear from it, and "financing" that he is helping to fund it. The employee has to show that he is not doing any of them. In the case at bar, the word "financing" is the only one in issue. One cannot quarrel with the fact that an active involvement in a labour dispute at the place of employment or a free and voluntary contribution by a claimant to a strike fund which supports a dispute at the place of employment would trigger the labour dispute disqualification provision. It seems to me that the provision clearly envisaged such a situation which corresponded to the socio‑economic conditions and the realities of collective bargaining at a time when a member of the union shared responsibility for his union's action.

 

83.                     This was exactly the situation when the predecessor of s. 44 was first enacted. It should be recalled that before the passage of the Wartime Labour Relations Regulations labour unions were purely voluntary organizations. At the time, payments by the members could be taken as indicating approval of the trade union's policy. As Professor T. R. Haggard explains in Compulsory Unionism, the NLRB, and the Courts: A Legal Analysis of Union Security Agreements (1977), at p. 132:

 

When labor unions were purely private, voluntary associations, all of these activities were financed with similarly voluntary membership dues. If a member objected either to the union's mode of bargaining or to its choice of political candidates, then he could simply withdraw his financial support of these activities by cancelling his membership.

 

                   All of this changed, however, when Congress made majority unions the statutory agent of all employees in a given unit and authorized the negotiation of labour agreements requiring membership (in the form of financial support) in the union as a condition of continued employment.

 

84.                     In Canada a similar development occurred after the passage of the Wartime Labour Relations Regulations and the advent of the Rand Formula. In the last few decades, statutory "check‑off" provisions have been enacted in all Canadian jurisdictions (Adams, op. cit., at p. 780).

 

85.                     Here, payment of union dues is mandatory, imposed by the collective agreement between union and employer without the participation and often against the will of the employee. Theoretically, it cannot be denied that union policies are shaped by elected representatives of the employees who are members of the union. As such, an employee may have a right to vote for the election of his representatives and to vote on the adoption of the union's by‑law. However, as Hickling, op. cit., notes at p. 174: "To attribute to an individual member personal responsibility for a decision to finance a dispute is somewhat unreal", particularly when, as in this case, the decision to finance the strike is taken at an international level where an individual member has no voice.

 

86.                     Coming back to the ordinary meaning of the words, one cannot ignore that the term "financing" in s. 44(2)(a) implies an active connection between the financing and the strike. The qualifying word "directly", which is associated with "in­terested", would have been redundant if adjoined to "financing" since the latter in itself is indicative of a direct action. On this point, I would borrow the words of the Lord President in Watt v. Lord Advocate, supra, that ""participating in" or "financing" are plain enough words to involve active connection with the dispute." As he further states "the words "directly interested in the trade dispute" should be read ejusdem generis and involve a direct interest in the cause of the dispute and its merits or demerits, the reasons for its existence and its justification or non‑justification."

 

87.                     Moreover, this interpretation of the word "financing" is substantiated by the historical context. The original "financing" provision, enacted in 1935 and re‑enacted in 1940, was drafted at a time when very different social conditions prevailed, particularly in the area of labour relations. Indeed, it is only after the adoption of the Wartime Labour Relations Regulations in 1944 that employers were obliged to bargain collectively with unions as the certified representatives of employees. In 1935 and until 1944, labour unions were purely voluntary organizations. Individuals would join unions on a voluntary basis and would make their financial contributions in the same manner. They were therefore presumed to be intentionally financing the union's activities within the meaning of the disentitlement provision.

 

88.                     It is as a result of historical contingencies such as the use of the closed shop and mandatory deduction of union dues from wages that the possible applications of the term "financing" have been reduced. This is no impediment to the Court interpreting the term in its ordinary grammatical sense. Quite to the contrary, on this analysis the ordinary sense of the word accords both with the historical facts of its enactment and the conclusion that the legislation cannot have intended the section to have application so as to exclude parties in the position of appellant from collecting benefits.

 

89.                     While today interpreting the term "financing" according to its natural meaning as requiring a voluntary, intentional act of contribution on the part of the union member may appear to deprive the term of much of its application, this is merely a historical contingency which does not entail a conclusion that such an interpretation is unwarranted. This is not to say that the provision has lost all meaning in today's context. Even if the word "financing" were to be excised, the provision would still retain its usefulness as regards other disentitlement provisions therein contained. Moreover, one can envisage situations where an employee, in the circumstances of the present claimant, would subscribe voluntarily to the union strike fund in order to support a labour dispute at the place of employment or would participate actively in the raising of funds or a special levy for such strikers. I, of course, express no opinion on whether Parliament is justified in disentitling an employee in these circumstances, as this is a matter for constitutional argument, not statutory interpretation.

 

90.                     As Daily J. remarked in Outboard, Marine & Mfg. Co., supra, in adverting to the purpose of the disqualification provision, at p. 617:

 

Those who were to be excluded from benefits by the statute were those who attempted to gain by conduct which caused their unemployment or those who actively aided or abetted the previous group, whether or not they gained or lost. A proximity of conduct aiding or abetting the strikers or proximity of result to be gained from the dispute were meant to be the measuring factors. The legislature did not intend to bar, because of remote claims of causation or result, those who were deprived of their employment from the benefits to be received under the Act.

 

91.                     More forceful still is the reasoning in General Motors Corp., supra, where the sole issue was the interpretation of the word "financing" in the context of similar legislation and where the financing in question resulted, as here, solely from the mandatory payment of union dues by the claimant (at pp. 1212‑13):

 

                   The word "financing," moreover, implies something active and voluntary. If the city paid strike benefits, that would not make every taxpayer a financier of the strike. The claimants assert that they had no real choice but to pay their dues and assessments. They worked in a union shop; anyone who refused to pay would have been fired. The General Assembly, the claimants contend, did not mean to force workers to risk imminent unemployment to maintain their eligibility for unemployment benefits if they later got caught in the middle of someone else's strike. That would be too hard a choice.

 

                                                                    ...

 

A payment of money is not "financing" a labor dispute unless there is a meaningful connection between the payment and the dispute (Baker v. General Motors Corp. (1980), 409 Mich. 639, 297 N.W. 2d 387), such as a purpose to support the strike . . . . The shop clerks' voluntary choice was to join the international, establish a union shop, and pay whatever dues might be called for from time to time. They made that decision not to aid the present strike, which was then unimagined, but rather to assure themselves adequate support in their own labor disputes, when necessary. The strike fund is a sort of private insurance against unemployment due to strikes. One does not pay insurance premiums to finance other people's claims, but to provide for one's own need. To the extent the shop clerks' payments were voluntary, they were not meaningfully connected to the labor dispute; to the extent they were sufficiently related, they were not voluntary. The union dues, therefore, did not constitute financing.

 

                   The essential fact of this case is that it is only coincidence that the shop clerks belonged to the same international union as the strikers. That membership did not affect the progress of the labor dispute; had the shop clerks belonged to some other union, and paid their dues into some other strike fund, while persons similarly employed at another plant belonged to Local No. 694, everything would have happened just as it did, except that the striking union (Local No. 719) might not have been so willing to let the shop clerks keep working. The shop clerks in that hypothetical would clearly have been covered by the relieving proviso and so eligible for benefits; the members of the other local of UAW would also have been eligible because they would be at a different establishment. The shop clerks should not be denied benefits simply because they were unlucky enough to get caught in the repercussions of a strike at their own plant by people fortuitously associated with the same strike fund. Such a discrimination would be unrelated to any purpose or policy of the statute.

 

The argument made by Simon J. is very persuasive, particularly having regard to the state of labour relations today, in Canada as in the United States, as compared to the more primitive state of labour relations in England at the time of the enactment of the Act.

 

92.                     Here, as in General Motors Corp., supra, it might be out of sheer convenience that claimant's union strike funds were handled by the International Union. They could just as well have been administered by the union local to which appellant belonged or deposited in a bank or other financial institution. There is no doubt that in such case, the claimant would have been entitled to unemployment insurance benefits as neither he nor his union could have been held to have financed the strike of the other local of the union. Could the legislature really have intended disentitlement to be dependent upon such a trivial fact? I think not.

 

93.                     Appellant, while not relying on any specific provision of the Charter , nevertheless urged that preference be given to Charter  values in the interpretation of a statute, namely freedom of association. I agree that the values embodied in the Charter  must be given preference over an interpretation which would run contrary to them (RWDSU v. Dolphin Delivery Ltd., [1986] 2 S.C.R. 573; Manitoba (Attorney General) v. Metropolitan Stores Ltd., [1987] 1 S.C.R. 110).

 

94.                     Simon J. in General Motors Corp., supra, alluded to such freedom of association when he said at p. 1213:

 

                   The effect of interpreting "financing" as GM suggests would be to burden, arbitrarily, affiliations among bargaining units at the same establishment. Only by remaining independent, or affiliating solely with workers at other plants, could local bargaining units assure that no innocent bystanders would be denied unemployment compensation. As GM itself urges, the policy of this State is to remain neutral in labor disputes (Buchholz v. Cummins (1955), 6 Ill.2d 382, 128 N.E.2d 900) and collective bargaining generally. To favor one form of labor organization‑‑or disorganization‑‑over another would not be neutral. This court should not lightly impute to the legislature a policy of discouraging various workers at a plant from pooling their resources in one large union. The Act judges claimants by where they work and in what grade or class, not by what international union they belong to. The shop clerks and the international should not have to bear the cost of their unemployment simply because they are members.

 

The interpretation which I propose avoids this result. Under this construction, s. 44(1) would still ensure that a claimant who is on strike, and presumably getting strike pay, would not be entitled to unemployment insurance benefits, as contemplated by s. 44 as a whole. However, the thrust of s. 44(2)(a) will still be preserved should a claimant, out of work because of a labour dispute at the place of employment, although not himself on strike, be actively fostering the strike by financing it voluntarily and freely. This, however, is not the case at bar.

 

95.                     In my view, the Federal Court's interpretation of the word "financing" in s. 44(2)(a) is too broad. As appellant submits, the term "financing" has to have an air of reality to it. It ought to be read as requiring active and voluntary involvement by the claimant and as implying a meaningful connection between the payment and the dispute. An individual, generally speaking, pays dues to insure membership in good standing in his or her local, to insure continued service from local executives, and to insure strike payments to him or her if the local decides to engage in a lawful strike.

 

96.                     In the case at bar, apart from the ordinary meaning of the words, the focus is on the individual claimant and the meaning of "financing" flows from the context of which the statute's purpose is an integral element. While section 44 may be open to a broad interpretation of "financing", in my view, the purpose of the section (to disentitle strikers from benefits) as well as the purpose of the Act as a whole (to provide benefits to involuntarily unemployed persons) dictate that a narrow interpretation be given to the disentitlement provisions of that section. Any doubt, as Wilson J. pointed out in Abrahams, supra, should be resolved in favour of the claimant, particularly in the context described above.

 

97.                     In the result, and for the reasons given above, I would allow the appeal, reverse the judgment of the Court of Appeal, set aside the decision of the umpire and direct that the matter be referred back to the Unemployment Insurance Commission for the proper disposition of appellant's claim in light of his entitlement to unemployment insurance benefits, the whole with costs throughout.

 

                   English version of the reasons of Beetz, McIntyre and Lamer JJ. delivered by

 

98.                     Lamer J. (dissenting)‑‑I have had the advantage of reading the reasons for judgment of Justice L'Heureux‑Dubé and I adopt her summary of the facts and the judgments of the lower courts. With respect for the contrary view, however, I am of the opinion that the appeal should be dismissed.

 

99.                     There is no doubt that appellants did not participate in the dispute leading to the work stoppage. It is clear that they were not directly interested in it. The only issue to be decided in the case at bar, therefore, is the proper interpretation of the word "financing" contained in s. 44(2)(a) of the Unemployment Insurance Act, 1971, S.C. 1970‑71‑72, c. 48. Did the appellants, by contributing to the strike fund, finance the labour dispute within the meaning of s. 44(2)(a)?

 

100.                   The appellants argued that any uncertainty resulting from ambiguous wording should be resolved in favour of the claimant. In support of this argument they cited the comments of Wilson J. in Abrahams v. Attorney General of Canada, [1983] 1 S.C.R. 2, as to the meaning of the phrase "regularly engaged" contained in s. 44 of the Unemployment Insurance Act, 1971. Wilson J. said (at p. 10):

 

Since the overall purpose of the Act is to make benefits available to the unemployed, I would favour a liberal interpretation of the re‑entitlement provisions. I think any doubt arising from the difficulties of the language should be resolved in favour of the claimant. [Emphasis added.]

 

101.                   I recognize that if a statute is not clear, interpretation becomes a necessity. In the case at bar, however, the word "financing" is clear, unambiguous and in no sense confusing. "Financing" means [TRANSLATION] "obtaining the capital necessary to operate" (Petit Robert 1 (1986)), [TRANSLATION]  "paying, providing money" (Grand Larousse de la langue française (1973)). Under section 44(2)(a), a person who finances a labour dispute is a person who provides money to assist in starting and sustaining a work stoppage. It does not matter whether this monetary contribution is made to finance a particular labour dispute or in anticipation of a possible strike. It is also irrelevant that the contributions are paid into a common strike fund. In all cases, the ordinary meaning of the verb "finance" must prevail.

 

102.                   Moreover, the words used in s. 44(2)(a) reinforce this conclusion. Without going so far as to say that a word has no meaning in itself, it is true that its real meaning will depend on the context in which it is used. Section 44(2)(a) reads as follows:

 

                   (2) Subsection (1) is not applicable if a claimant proves that

 

(a) he is not participating in or financing or directly interested in the labour dispute that caused the stoppage of work;

 

103.                   The verb "participate" inevitably implies an active and personal role in the ongoing labour dispute; the adverb "directly", which qualifies the nature of the claimant's interest, establishes an actual link between him and the dispute. On the other hand, it is impossible to find in the word "financing" used by itself a requirement of active and personal participation or a direct link between the claimant's contribution and the immediate labour dispute. If such was Parliament's intention, it would have made it clear by, for example, adding the adverb "directly" before the word "financing".

 

104.                   A unionized claimant may therefore "finance" a labour dispute even though when he paid his dues into a strike fund, he had no intention of supporting a particular labour dispute.

 

105.                   Appellants argued that the verb "financing", as used in s. 44(2)(a), implies an active and personal participation in the ongoing labour dispute. In my opinion, the use of the verb "is...financing" in the present tense does not necessarily imply an actual link between the financing and the strike. The use of the present is recommended in the drafting of legislation and Parliament was here simply complying with this requirement. This drafting technique does not lead to the conclusion that an employee is financing a labour dispute simply because he makes a financial contribution while the strike is in progress. In this regard, I repeat the observations of Pratte J. in McKinnon v. The Honourable Mr. Justice Dubé, [1977] 2 F.C. 569 (C.A.), at p. 571:

 

                   A person who is financing an activity is a person who is defraying its cost, and it does not matter whether the funds necessary for this purpose have been disbursed before the activity took place or while it is taking place; in either case it will be said, while the activity is taking place, that it is financed by the person who has made it possible.

 

106.                   Furthermore, the interpretation suggested by the appellants would deprive the word "financing" in s. 44(2)(a) of its meaning. The word would then have little or no practical effect. There will be very few cases indeed where employees who are not themselves on strike will contribute voluntarily to a strike fund in order to support a particular labour dispute. In reading a statute it must be "assumed that each term, each sentence and each paragraph have been deliberately drafted with a specific result in mind. Parliament chooses its words carefully: it does not speak gratuitously" (P.‑A. Côté, The Interpretation of Legislation in Canada (1984), at p. 210).

 

107.                   Finally, there are other reasons why a narrow interpretation of the word "financing" should be rejected. First, if the same word were contained in a union by‑law designed to provide strike pay to union members who have contributed to the strike fund, there is no doubt that the word "financing" would be construed as I interpret it. Further, the interpretation suggested by the appellants leads to a rather surprising result. If an employee who has contributed to a strike fund were to receive unemployment insurance benefits during a work stoppage, the employer would be partly financing the labour dispute which is paralyzing the operation of its business.

 

108.                   Lastly, it should be noted that Parliament has frequently amended the unemployment insurance legislation to keep pace with the ongoing evolution in the field of labour relations. Parliament is manifestly aware of the circumstances in which the Act applies and makes the changes that become necessary to adapt it to those circumstances. As L'Heureux‑Dubé J. has indicated, the wording of s. 44(2)(a) has received little or no alteration since the Unemployment Insurance Act was adopted in 1940. In my opinion, the fact that contributions to strike funds were probably voluntary at the time does not mean that the scope of the word "financing" is limited to this particular situation. If that had been Parliament's intention, the application of the word would have been restricted by an adverb such as "directly" or "voluntarily". Though aware of the changes that have occurred in labour relations, Parliament has not felt it necessary to limit the application of a word of general import undoubtedly because it intended to cover all situations to which the word might apply. We cannot assume that this is a mere oversight. Furthermore, the fact that there has been no legislative intervention since the judgment in McKinnon, supra, seems to me very significant in this respect.

 

109.                   For all the foregoing reasons, I would dismiss the appeal.

 

                          Appeal allowed, Beetz, McIntyre and Lamer JJ. dissenting.

                          Solicitor for the appellants: Brian Shell, Toronto.

                          Solicitor for the respondent: Frank Iacobucci, Ottawa.