The adjudicator found that the applicant was not receiving gross employment income as a result of being employed during the post-accident period in dispute as the applicant “has satisfied her onus and provided reliable and cogent evidence against the presumption that the income earned after the accident was employment income” and that “Both parties’ expert witnesses also agree that the payments the applicant received was not employment income”.
Both parties presented several cases in support of their position from the Financial Services Commission of Ontario (FSCO) and the LAT, however each case dealt with the interpretation of s.7(3)(b) and not s.7(3)(a) of the SABS. As such, the adjudicator dismissed them on the basis that the applicant in this case was an employee and not self-employed at the time of the accident.
While we concur that s.7(3)(a) of the SABS applies in this case, it could be that some of the cases presented are relevant in non- arm’s length situations such as this, where a claimant receives remuneration following an accident even though they did not work following the accident. For example, in the matter of Perth Insurance Company and Salim Surani (Financial Services Commission of Appeal Order P16-00022), the applicant was self- employed as a pharmacist at the time of the accident and owned her business with her spouse. Following the accident, Ms. Surani worked very little, but her pharmacy continued to operate.
Director’s Delegate Evans held that it would be inconsistent for a company’s profits to be relevant in determining pre-accident income, but irrelevant in determining post-accident income. The decision clarified that s.7 of the SABS, taken as a whole, allows business losses after an accident to be added to a person’s IRB, while business profits after an accident are deducted. Similarly, self- employment income before the accident remains self-employment income after the accident and is not re-characterized as “passive income” simply because little or no active work is performed.
The Director’s Delegate held that the purpose of an IRB is to “provide compensation for income loss—but subject to statutory limits” and that the cost of the claimant’s lack of active participation in the business post-accident had already been taken into account in calculating their IRB. Failing to then allow the deduction of the post-accident income from the business for the same reason effectively means that the claimant’s lack of active participation will be counted twice in the IRB calculation. Could the same reasoning not be applied in this case, as the applicant received her regular pay post-accident, which she reported for personal income tax purposes as income from employment, and which should therefore be deducted as such for SABS purposes? By virtue of the adjudicator’s finding, the applicant in this case is benefiting from both her employment and from the SABS.
In addition, although the adjudicator in this case dismissed s.7(3)(b) of the SABS, he referred to the applicant’s gross employment income in question as not being “earned [emphasis added] after the accident”, which is specified in s.7(3)(b) of the SABS, whereas s.(7)(3)(a) of the SABS specifically refers to gross employment income “received [emphasis added] … after the accident.” The adjudicator also apparently did not consider the definition of “gross employment income” in s.4(1) of the SABS, which “means salary, wages and other remuneration from employment [emphasis added] …”.
In this regard, we note that in the matter of Antoinette Nelson and State Farm Mutual Automobile Insurance Company (FSCO Al4 000848), the Arbitrator found that the Employment Insurance (El) maternity benefits that Ms. Nelson was receiving at the time of her motor vehicle accident and which she continued to receive following her motor vehicle accident were deductible as gross employment income in the calculation of her IRB, pursuant to s.7(3)(a) of the SABS. This is because they were received as a result of being employed after the accident and as they meet the definition of “gross employment income” in s.4(1) of the SABS. One could argue the “gross employment income” received by the applicant in this case was “as a result of being employed after the accident” and, as such, is no different from the EI benefits received by Ms. Nelson following her accident.