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| This is some information that Dwayne Mitchell obtained from Gordon Cowie who is an Income Support Consultant at HRSDC or Employment Insurance. It concerns what is involved and what are the implications: “Re: Profit Sharing Plan of IPSCO and the United Steelworkers of America This is in response to our telephone conversation and your submission of Article 15.07 of your Collective Bargaining agreement. The questions which you offered included: 1: What affect will the payment of Profit Sharing have on the current claims for benefit? According to Article 15.07 the profit sharing plain is paid quarterly according to a formula relating to the profit of the business, the number of employees and the number of hours worked by the individual. It is clear that the transfers of shares arises from an individuals employment with IPSCO, therefore are determined to be earnings pursuant to Regulations 35 (2) which states in part: Subject to the other provisions of this sections, the earnings to be taken into account for the purpose of determining whether an interruption of earnings has occurred and the amount to be deducted from the benefits payable under the section 19 or subsection 21(3) or 22(5) or the Act, and to be taken into account for the purposes of sections 45 and 46 of the Act, are the entire income of the claimant arising out of any employment . . . . The next matter to determine how these earnings would allocated. Regulation 36(6) states: The earnings of a claimant who is self-employed in employment other than farming, or the earnings of a claimant that are from participation in profits or commissions, shall be allocated to the week in which the services that gave rise to those earnings are performed and, where the earnings arise from a transaction, they shall be allocated to the week in which the transaction occurred. It is clear from Article 15.07 the calculation of the amount of shares owed to an individual is based on the amount of time worked during a given time period . By this it has been concluded the shares are based on services performed and will be so allocated. This means that the value of the shares will be determined at the time of the quarterly transfer to the employee and will be allocated on a weekly, prorated manner over the time period when the shares were earned. If the employee was claiming EI benefit during that period when the shares were earned the transfer of shares will have no affect on a current claim. The employee need not report the receipt of the shares to HRSDC. If the employee was working during the time period when the shares were earned and was claiming EI benefit, they are required to contact HRSDC at 1-800-206-7218 as soon as possible and report the value of the shares received and be prepared to advise of the period when the shares were earned. The share value will allocated in the fashion noted in the preceding paragraph. 2: Are the payments under Profit Sharing considered to be insurable? Insurability is under the authority of the Canadian Revenue Agency and therefore to obtain a definitive decision you must contact them. From HRSDCs understanding, these monies are not insurable.
3: What affect will there be on entitlement to EI should the shares be cashed while on claim? See 1 above. The shares are only considered earning when received and will be allocated to the period in which they were earned. Any liquidation of shares after this time are not earnings and need not be reported to HRSDC. Again .if the employee is working, earning shares and is claiming EI benefit they need to report the value of the shares and the time period in which they were earned to HRSDC. Gordon M.Cowie |