Employment Insurance Benefit Entitlement (8:VII)

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LSLAP Manual
LSLAP Manual
This page is from the
Law Students' Legal
Advice Program Manual.
See the full contents.
LSLAP Manual
Introduction
Chapters
8. Employment Insurance
 · I. Introduction

 · II. Governing Legislation and Resources
 · III. Qualifying for EI
 · IV. Types of Benefits
 · V. Benefit Period
 · VI. Quantifying Benefits
 · VII. Benefit Entitlement
 · VIII. Penalties, Violations, and Offences
 · IX. Keeping Out of Trouble
 · X. Timing for Reporting
 · XI. Overpayment and Collections
 · XII. Reconsideration
 · XIII. Social Security Tribunal
 · XIV. Appeals
 · XV. Judicial Review
 · XVI. LSLAP's Use of This Chapter

 · Appendix A: Initial Application Checklist
v • d • e



Once a claim is established, the basic requirement for receiving weekly benefits is that the claimant be “capable of and available for work and unable to obtain suitable employment”. To prove this in the event of a dispute, the claimant should keep a “job search record” (see Section IX.A: Job Search Record).

A. Capable and Available

A claimant will be disentitled if the Commission has evidence (often supplied inadvertently by the claimant) to show that the claimant was not capable and available for work during a given period. For example, if a claimant volunteers the fact that he or she is only applying for jobs paying $20 per hour or more, the Commission could disentitle the claimant if there are few if any such jobs for which the claimant would be suitable. For an example of how unforeseen events can affect availability, see Canada (Attorney General) v Leblanc, 2010 FCA60. In this case, a desire to work was insufficient to establish availability because the claimant lacked proper clothing and a means to get to work as the result of a house fire.

1. Vacation and Travel

A claimant cannot collect benefits for times he or she is on vacation, as he or she must be ready for work to collect benefits. However, he or she can collect up to the day he or she leaves, and from the day he or she returns, if he or she becomes immediately available again. To avoid potentially onerous penalties, vacations – including short ones – must be properly recorded and reported.

The Customs Match program allows Human Resources and Skills Development Canada (HRDC) to match data from Canada Customs and Revenue Agency’s Customs Declaration form to determine whether an EI claimant has been out of Canada without notifying HRDC. Under the EI Act, a claimant is not allowed to collect regular or sickness benefits while not in Canada, except under certain circumstances.

2. Sickness

A claimant may receive up to 15 weeks of sickness benefits where he or she can prove that he or she was “incapable of work by reason of prescribed illness, injury or quarantine on that day, and that they would otherwise be available for work” (s 12(3)(c)). In theory, if the claimant is already receiving regular benefits from EI and is ill for even one day, that day must be recorded as a day on which he or she is not capable of or available for work, if that is indeed the case.

3. Attending Courses

Most claimants taking a full-time course will be considered unavailable for work unless the Commission-or an agency authorized by the Commission-specifically referred the claimant to the program. Even if the course is part-time and improves the claimant’s chances of finding employment, the claimant may still be disentitled because he or she is considered unavailable for work. In these circumstances a claimant may attempt to prove availability, if the course does not interfere with the job search and he or she would immediately be able to accept an offer of employment.

According to s 25(2) of the EI Act, a decision refusing to refer a claimant to a course is not reviewable under s 112. However, a claimant who takes a course without the Commission's approval can still appeal a finding that he or she is disentitled for not being available for work while taking the course.

Persons attending full-time courses not approved by the Commission may still be entitled to EI benefits if they have established their eligibility by working part-time while attending classes and if they are still available for their previous hours of work on virtually no notice.

4. Starting a Business

Claimants who are trying to start a business are generally considered to be working full-time, regardless of whether they are receiving any income from the business. They are therefore not eligible for any benefits. The only escape for such claimants is to convince the Commission, or the Referees in an appeal, that the self-employment was so minor in extent that a person would not normally rely upon it as a principal means of livelihood.

5. Working Part-time

A claimant who worked part-time may be able to claim an earnings exemption. If the claimant receives any benefits at all, the week counts toward the maximum number of weeks that can be paid under that claim. Thus, it may be in a claimant’s interest not to claim benefits for a week in which only a small amount would be paid.

B. Suitable Employment

A claimant must accept suitable work but is not required to take work considered not suitable. Most of the criteria that define ‘suitable work’ are contained in the Employment Insurance Regulations s 9.002-9.004. They are as follows:

  • “the claimant’ s health and physical capabilities allow them to commute to the place of work and to perform the work” (9.002(a))
  • “the hours of work are not incompatible with the claimant’s family obligations or religious beliefs” (9.002(b))
  • “the nature of the work is not contrary to the claimant’s moral convictions or religious beliefs” (9.002(c))
  • "the daily commuting time to or from the place of work is not greater than one hour or, if it is greater than one hour, it does not exceed the claimant’s daily commuting time to or from their place of work during the qualifying period or is not uncommon given the place where the claimant resides, and commuting time is assessed by reference to the modes of commute commonly used in the place where the claimant resides” (9.002(d))
  • “by accepting the employment, will not be put in a less favourable financial situation than the less favourable of (i) the financial situation that the claimant is in while receiving benefits, and (ii) that which the claimant was in during their qualifying period.” (9.002(f))
  • The employment does not arise in consequence of a stoppage of work attributable to a labour dispute (Employment Insurance Act, s 27(2))
  • The level of earnings meets the requirements in EIR s 9.004 (see below)
  • The similarity of the employment to the claimants past employment meets the requirements in EIR s 9.003. (see below)

The level of earnings and similarity of employment required vary based on how often the claimant has claimed EI benefits. Claimants are broken into three categories for the purpose of determining what constitutes suitable work. Employment Insurance Regulations (SOR/96-332)s 9.003 categorizes as follows:

1. Long-Tenured Workers

A claimant who has paid into EI seven of the past ten years and who has claimed 36 weeks or less of regular benefits in the past five years is considered a long-tenured worker. During the first 18 weeks of their EI claim in which they claim regular benefits, they need only accept jobs in their previous occupation that pay 90% of their previous wages. Following that, they must accept any jobs in similar occupations that pay 80% of their previous earnings.

2. Frequent Claimants

Claimants who have had three or more claims totalling 60 weeks or more in the past five years are considered frequent claimants and must be willing to accept a wider range of employment. For the first six weeks of their claim in which they claim regular benefits they must accept jobs in similar occupations with 80% of their previous earnings. Following that, they must accept any job paying 70% of their previous wages.

3. Occasional Claimants

Claimants who do not fit into either category above are considered occasional claimants. In the first six weeks in which they claim regular benefits, they must accept jobs in their previous occupation that pay 90% of their previous earnings. For the twelve weeks following that, they must accept jobs in similar occupations paying 80% of their previous earnings. Following that, they must accept any job paying 70% of their previous wages.

4. Proof of Search for Suitable Employment

Section 50(8) of the EI Act requires that a claimant prove he or she is making “reasonable and customary” efforts to obtain suitable employment. Again, this emphasizes the importance of keeping a job search record, which the claimant should update daily. The criteria are further elaborated in Employment Insurance Regulations (SOR/96-332) s9.001:

  • (a) the claimant’s efforts are sustained;
  • (b) the claimant’s efforts consist of
    • (i) assessing employment opportunities,
    • (ii) preparing a resumé or cover letter,
    • (iii) registering for job search tools or with electronic job banks or employment agencies,
    • (iv) attending job search workshops or job fairs,
    • (v) networking,
    • (vi) contacting prospective employers,
    • (vii) submitting job applications,
    • (viii) attending interviews, and
    • (ix) undergoing evaluations of competencies; and
  • (c) the claimant’s efforts are directed toward obtaining suitable employment.

C. Disqualification

There are two categories of disqualification: s 27(1) and s 30(1). The effects of disqualification differ depending on what category the disqualification falls into:

Section 27(1) states that a claimant is disqualified from 7 to 12 weeks of benefits when, without good cause, he or she:

  • refuses a suitable employment offer;
  • refuses to apply for suitable employment when aware that a position is vacant or is becoming vacant;
  • neglected to avail himself or herself of an opportunity for suitable employment;
  • failed to attend an interview recommended by the Commission; or
  • under s 27(1.1), has failed to attend a course of instruction or training referred to by the Commission.

NOTE: In these cases the length of disqualification is appealable.

Section 30(1) states that a claimant is disqualified when he or she is fired due to his or her own misconduct or when he or she quits without just cause. However, s 35 states that s 30(1) does not disqualify a claimant from receiving benefits if remaining in or accepting employment would interfere with the claimant's membership in a union or the claimant's ability to observe a union's rules.

The effect of a s 30 disqualification is a cut-off of all regular benefits in a benefit period. Such a disqualification is imposed if the claimant has lost any job in the qualifying period for the reasons set out in s 30, even if the claimant had other work before applying for EI (ss 30(5) and (6)). Only if the claimant has worked enough hours since the disqualifying loss of employment to meet the hourly requirements to establish a claim will the disqualification not be imposed. For example, if a worker is employed in a job for five years, and gets fired for misconduct, the worker would be totally disqualified under s 30 from all regular benefits. If the worker subsequently finds a second job, and gets laid off from that second job after 10 weeks, the total insurable employment would be calculated as the number of hours worked during those 10 weeks after the earlier s 30 disqualification. The worker’s previous five years of insurable employment would not count unless the worker had enough hours in the 10-week period to qualify under the s.7 table. In that case, the previous hours would count toward the number of weeks of payable benefits.


1. Just Cause for Voluntarily Leaving Employment

“Just cause” is defined under s 29(c) as follows: “having regard to all the circumstances, the individual had no reasonable alternative to leaving the employment. ”Where an employee had “just cause”, for leaving his or her employment, he or she will not be disqualified. The onus is on the worker to show “just cause”. The Commission must show that leaving was voluntary and that the claimant took the initiative in severing the employer-employee relationship; the worker must then prove just cause.

The Decisions of the Umpires and the SST provide examples of what is and is not considered voluntary. Once the facts have been established to show voluntary leaving, the onus then shifts to the claimant to show that he or she had just cause. When the evidence of the employee and the employer contradict one another, and the evidence is evenly balanced, s 49(2) of the EI Act provides that the claimant shall receive the benefit of the doubt.

a) Statute & Case Law

Whether the employees had “just cause” for leaving his or her employment is decided with statutes and case law.

Sections 29(c)(i) – (xiv) of the EI Act provide a list of the circumstances that can constitute “just cause”. This list is neither exhaustive nor conclusive. In other words, circumstances not described in s 29(c) can also be just cause if they satisfy the main definition in s 29(c). On the other hand, circumstances listed in s 29(c)(i) –(xiv) will not be considered “just cause” if the conditions in s 29(c) are not met (if, for example, the claimant had a reasonable alternative).

Under s 29(c), just cause includes:

  • i) sexual or other harassment;
  • ii) obligations to accompany a spouse, common law partner, or dependent child to another residence;
  • iii) discrimination on a prohibited ground of discrimination within the meaning of the Canadian Human Rights Act, RSC; 1985, c. H-6;
  • iv) working conditions that constitute a danger to health and safety;
  • v) obligations to care for a child or member of the immediate family;
  • vi) reasonable assurance of other employment in the immediate future;
  • vii) significant modification of terms and conditions respecting wages or salary;
  • viii) excessive overtime work or refusal to pay for overtime work;
  • ix) significant change in work duties;
  • x) antagonism with supervisor if the claimant is not primarily responsible for the antagonism;
  • xi) employer’s practices that are contrary to law;
  • xii) discrimination with regard to employment because of membership in an association, organization or union of workers;
  • xiii) undue pressure by an employer on employees to leave employment; and
  • xiv) such other reasonable circumstances as are prescribed.

To date, the only prescribed circumstance under s 29(c)(xiv) is EI Regulations s 51. This states that leaving employment when the employer is downsizing the business and the claimant’s decision preserves the employment of another worker does constitute just cause.

According to cases decided before Bill C-21 (1990) was introduced, and under the old Unemployment Insurance Act, for a claimant to prove just cause, he or she must show:

  • a) a genuine grievance, or other acceptable reason for leaving the employment;
  • b) proof of taking all reasonable steps to alleviate the grievance; and
  • c) proof of a search for alternate employment before the termination, unless circumstances are so immediate that a proper search is impossible.

In Canada v Hernandez, 2007 FCA 320, the claimant was disqualified for quitting his job after a public health nurse advised him that the silica dust which was a main material in the factory was a carcinogen. The court decided he did not exhaust his alternatives because he should have asked the employer to change its business or find him a new job somewhere else. While this case is an aberration, it shows the importance of being able to prove that the worker did everything possible to avoid quitting.

There are thousands of decisions by the Umpires, SST and Federal Court of Appeal addressing “just cause” issues that may help determine whether just cause existed (see Section XIII.D: Umpire’s Decision is Final). CUB 21681 (23 Sept. 1992) confirms that just cause may result from all of the circumstances together, although no single factor would be sufficient: “When the statute says ‘having regard to all the circumstances’, it imposes a consideration of the totality of the evidence.” Thus, if the claimant’s reason for leaving is not one of the enumerated factors under s 29 but the claimant feels that they had no reasonable alternative to quitting or that they were fired without committing intentional misconduct, a case could still be made that the totality of the claimant’s circumstances gives rise to just cause.

b) Importance of Evidence

Detailed evidence like records or diaries is exceptionally important in the determination of a claim. An employee should try to remember as many specific incidents, dates and times as he or she can. Though the older CUBs (Umpire decisions) or SST decisions may provide an indication of what “just cause” means, they are not determinative.

c) Returning to School

The Federal Court of Appeal continues to find that voluntarily leaving one’s employment to return to school, except for programs authorized by the EI Commission, does not constitute “just cause” and is a ground for disqualification from benefits under ss 29 and 30 of the EI Act.

In the case of Attorney General of Canada v Mattieu Lamonde, 2006 FCA44, the court held that the claimant should be disqualified from benefits because he took a year’s leave from his full time job to attend school in another community, although he immediately found part time work when he arrived there.

NOTE: While nothing in the legislation indicates that improving one’s qualifications can never be just cause, the Court of Appeal continues to set aside decisions on this basis.

2. Misconduct

Section 30(1) states that a claimant is disqualified when he or she is fired due to his or her own misconduct.

a) Determining Misconduct

“Misconduct” is not defined in the EI Act, but previous decisions have stated that the word must be given its dictionary meaning. According to Black’s Law Dictionary:

Misconduct occurs when conduct of employee evinces wilful or wanton disregard of [the] employer’s interest, as in deliberate violations or disregard of standards of behaviour which employer has right to expect of his or her employees, or in carelessness or negligence of such degree or recurrence as to manifest wrongful intent or evil design.

The alleged misconduct must be the real or the actual and direct cause for the dismissal, not merely an excuse for it. An employer cannot invoke previously forgotten or forgiven incidents to justify a dismissal.

The onus of establishing a misconduct allegation rests on the party alleging it. So, the Commission or employer must prove positively the existence of misconduct and must prove the misconduct caused the loss of employment. Again, refer to the CUBs for examples of what constitutes misconduct justifying lawful dismissal.

b) Dishonesty

In its decision in McKinley v BC Tel, [2001] S.C.R. 38, the Supreme Court of Canada held that an employee’s dishonesty does not automatically constitute a blanket grounds for dismissal. Dishonesty is only grounds for dismissal “where the dishonesty violates an essential condition of the employment contract, breaches the faith inherent to the work relationship, or is fundamentally or directly inconsistent with the employee’s obligations to his or her employer”. This decision places a duty on the trial judge to determine whether the dismissal was warranted by the nature and degree of the dishonesty, or alternatively, whether lesser sanctions were appropriate. It is likely that the same principle could be applied to EI appeals. For an example of a situation where dishonesty did not amount to just cause see Fakhari v Canada (Attorney General), A-732-95.

c) Theft

In the case of Attorney General of Canada v Linda Caul, 2006 FCA251, the court decided that theft is always misconduct, regardless of the claimant’s state of mind.

d) Addiction

In Mishibinijima v Attorney General of Canada, 2007 FCA36, the court examined whether an addiction has the element of wilfulness necessary for a finding of misconduct. The court found that the applicant’s evidence was too weak to support the claim that he was not acting wilfully. The court left open the possibility that with stronger evidence of compulsion due to addiction a claimant might succeed in rebutting misconduct.

See also Attorney General of Canada v Brent Pearson, 2006 FCA 199, where despite his addiction the claimant was disqualified for misconduct. In that case, the employee knew that his absences were unacceptable and notwithstanding his employer’s offers to help with the addiction the employee refused to take any such measures.

In Canada v McNamara, 2007 FCA 107, the claimant was fired from his job because he failed a random drug test due to trace amounts of marijuana. The court declined to overturn the disqualification, despite the argument that such illegal, but decriminalized conduct as smoking a joint on the previous weekend could not amount to misconduct for EI purposes.

NOTE: Determinations of “just cause” and “misconduct” by the Commission can be appealed and where disqualification is imposed, a client should be advised to appeal. Many claimants mistakenly believe that they are automatically disqualified from EI if they have been fired, however unfairly. Unfortunately, many such claimants do not apply for EI benefits at all, or if disqualified do not realize that they can challenge the Commission’s decision until their 30-day period to appeal expires.

D. Disentitlement

Disentitlement means that the claimant is not eligible to receive benefits. This may be due to any of a number of reasons including:

  • illness of a minor attachment claimant (s 21(1));
  • the claimant is an inmate of a prison or similar institution, except when on parole (s 37(a));
  • the claimant is absent from Canada, unless he or she falls within the category set out in s 55 of the EI Regulations (s 37(b));
  • the claimant does not have child care in place; or
  • loss of employment due to a labour dispute (i.e. either a strike or lockout (s 36)).

However, the most common basis for disentitlement is that the claimant failed to prove that he or she is “capable of and available for work and unable to find suitable employment” s 18(a)). Students should ensure the claimant understands that he or she must keep a job search record.

Disentitlements can last indefinitely until the situation is remedied. Further, a disentitlement can be retroactive, which can lead to decisions of overpayment (see below). The EI Act places the onus on the claimant to prove entitlement on the balance of probabilities (s 49). In cases where the evidence as a whole indicates that the claimant’s availability was doubtful, it might be held that the claimant had failed to prove that he or she was available for suitable employment. For example, if a woman is disentitled because she has no child care arrangements, she may need to give the Commission the name of a relative or friend who will care for the child until permanent arrangement can be made.

As discussed above, the longer the period of unemployment, the less “picky” the claimant can be in his or her employment search: see section VII(B) for details. When claimants fill out EI application forms, they should not be too restrictive, especially about the wages they are willing to accept, or the distances they are willing to commute. Further, the Commission is likely to disentitle a claimant who is searching for a job that is virtually non-existent in the area the claimant is searching. Also, a former employee searching for a job in a field where the wages were atypically high can be disentitled if he or she restricts the search to jobs with similar wage levels. This can often be the case with formerly unionized workers.

What it comes down to in the end is that the Commission will make a judgment call about whether the claimant genuinely wants to find work and whether his or her current strategy maximizes the chances of success.

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