[1995] 1 F.C. 734
A-244-94
The Attorney General of Canada (Applicant)
v.
Gloria McLaughlin (Respondent)
Indexed as: Canada (Attorney General) v. McLaughlin (C.A.)
Court of Appeal, Stone, Linden and Robertson JJ.A.—Fredericton, December 1; Ottawa, December 12, 1994.
Unemployment insurance — Claimant disqualified from benefits for misconduct under U.I. Act, s. 28 — Whether disqualification applicable to subsequent claim when laid off due to seasonal demands — Causal nexus required between disqualification, benefit claim — Purposes of disqualification provisions not to unduly penalize claimants but to deter from unjustifiably quitting or losing job for own fault.
The respondent, who was employed as a general labourer, was laid off in November 1990 due to “seasonal demands” and fired in September 1991, for misconduct. She made a claim for benefit to the Employment and Immigration Commission but a nine week disqualification was imposed for having voluntarily quit. She grieved her dismissal and returned to work after a three-week suspension. In late November 1991 respondent was once again laid off in view of seasonal demands. The Commission determined that she was disqualified for seven weeks by reason of misconduct but that decision was overturned by a Board of Referees. The Umpire ruled that, as the respondent failed to take the necessary steps to obtain benefits arising from her suspension, the renewal claim of November 1991 did not constitute a “claim for benefit” under section 28 of the Unemployment Insurance Act and dismissed the appeal. The central issue upon this application for judicial review was whether a disqualification for misconduct made with respect to one claim for benefit could be applied against subsequent claims, irrespective of the cause of such claims.
Held, the application should be dismissed.
Under subsection 30(1) of the Unemployment Insurance Act, there must be a causal connection between a disqualification and a claim for benefit in respect of which it applies. This interpretation of subsection 30(1) is supported by a purposive analysis of the disqualification provisions of the Act which are generally recognized as penal sanctions intended to deter claimants from unjustifiably quitting their job, losing it through their own fault, or failing to avail themselves of employment opportunities. The applicant’s argument, that a section 28 disqualification is unaffected by events—such as failure to file report cards—which would disentitle a claimant to benefits, did not promote any of these purposes but would unduly penalize respondent. The interpretation placed on section 28 by the Umpire did not have the effect of unfairly advancing the financial interests of the respondent at the expense of those who contribute to the unemployment insurance scheme and Canadian taxpayers generally.
STATUTES AND REGULATIONS JUDICIALLY CONSIDERED
Unemployment Insurance Act, R.S.C., 1985, c. U-1, ss. 27, 28 (as am. by S.C. 1990, c. 40, s. 21), 30(1) (as am. idem, s. 22), 40.
CASES JUDICIALLY CONSIDERED
DISTINGUISHED:
Rondeau v. Simard, [1977] 1 F.C. 519 (1977), 13 N.R. 567 (C.A.).
REFERRED TO:
Canada (Attorney General) v. Kachman (1986), 72 N.R. 70 (F.C.A.); Goulet v. Canada Employment and Immigration Commission, [1984] 1 F.C. 653(C.A.); Re Bhavsar (1986), CUB-11941.
APPLICATION for judicial review of Umpire’s decision under section 28 of the Unemployment Insurance Act. Application dismissed.
COUNSEL:
Peter J. Leslie for applicant.
No one appearing for respondent.
SOLICITORS:
Deputy Attorney General of Canada for applicant.
No one appearing for respondent.
The following are the reasons for judgment rendered in English by
Robertson J.A.: This judicial review application involves the interpretation of section 28 of the Unemployment Insurance Act [R.S.C., 1985, c. U-1 (as am. by S.C. 1990, c. 40, s. 21)] (the Act). The central issue in this proceeding is whether a disqualification for misconduct made with respect to one claim for benefit can also be applied against subsequent claims, irrespective of the cause of such subsequent claims. The essential facts leading up to this application are as follows.
The respondent was employed as a general labourer with Connors Bros., Limited until laid off on November 7, 1990 due to “seasonal demands.” She filed an “initial claim for benefit” on February 1, 1991 for which a benefit period effective January 20, 1991 was established. The respondent returned to work on July 22, 1991 and continued with her employment until September 12. On that day, the respondent “walked out of work without proper notification to the foreman” and was terminated from her employment. On September 17, 1991, she submitted an application to renew her claim while awaiting the outcome of a grievance which had been filed. Initially, the Canada Employment and Immigration Commission (the Commission) imposed a disqualification period of nine weeks for voluntarily leaving her employment.
In the interim, the respondent’s grievance resulted in the imposition of a three-week suspension covering the period September 13 to October 4, 1991. She returned to work on October 7, 1991 and did nothing more to collect benefits, such as filing the customary bi-weekly report cards. In late November of 1991, the respondent was laid off because of seasonal demands. Once again, she renewed her claim for benefit.
In light of the suspension that had been imposed by the respondent’s employer, the Commission reviewed its earlier disqualification decision. On December 10, 1991, the Commission informed the respondent that it had amended its earlier decision and that, pursuant to section 28 of the Act, she was disqualified from receiving benefits for seven weeks because of a loss of employment by reason of her own misconduct. The benefit was reduced from 60% to 50% of her average weekly insured earnings.
The respondent was also informed that the seven-week disqualification period was applicable to the November renewal claim. The respondent’s appeal to the Board of Referees was allowed. The Commission then appealed the Board’s decision.
The Umpire concluded that as the respondent had failed to take the steps necessary to obtain benefits arising from the suspension, the renewal claim of November, 1991, did not constitute a “claim for benefit” as contemplated by section 28 of the Act. The relevant subsections read as follows:
28. (1) A claimant is disqualified from receiving benefits under this Part if he lost his employment by reason of his own misconduct or if he voluntarily left his employment without just cause.
…
(3) In this section, “employment” refers to the claimant’s last employment immediately prior to the time his claim for benefit is made unless otherwise prescribed by the regulations.
Because the respondent did not file the reporting cards necessary to receive benefits during her three-week suspension but filed them following her lay-off in November, the Umpire reasoned that the respondent’s last employment immediately prior to making her claim for benefit, pursuant to subsection 28(3) of the Act, was her employment from October 7, 1991 to late November, 1991. On this basis, the Umpire dismissed the appeal. Before this Court, the applicant framed the issue as follows:
The issue to be decided is whether the disqualification provided for in subsection 28(1) of the Unemployment Insurance Act may be avoided, once a benefit period has been established, by not filing a bi-weekly claim for benefit.
However, for the reasons stated below, I must respectfully disagree that the matter in issue has been properly framed by the applicant. The true issue in this proceeding is not whether a disqualification under section 28 of the Act can be avoided by failure to file bi-weekly reporting cards. A “claim for benefit,” against which a disqualification applies under section 28 of the Act, does not require a claimant to file bi-weekly reporting cards; see Canada (Attorney General) v. Kachman (1986), 72 N.R. 70 (F.C.A.). The filing of such reporting cards is only a requirement of eligibility to receive benefits once a claim has been made. This is clear from section 40 of the Act:
40. (1) No person is entitled to any benefit for a week of unemployment in a benefit period that has been established for him, until he makes a claim for benefit for that week in accordance with section 41 and the regulations and proves that
(a) he meets the requirements entitling him to receive benefit; and
(b) no circumstances or conditions exist that have the effect of disentitling or disqualifying him from receiving benefit.
(2) On receiving a claim for benefit, the Commission shall decide whether or not benefit is payable to the claimant for that week and notify him of its decision.
In the case at bar, the respondent made two claims for benefit; the September renewal claim and the November renewal claim.
The proper issue in this proceeding is whether the disqualification imposed in respect of the September claim is also applicable in respect of the November claim. In other words, where there is more than one claim for benefit, should a disqualification for misconduct made with respect to one particular claim also apply to any subsequent claims, irrespective of the cause of such subsequent claims?
The substance of the applicant’s argument is that a disqualification imposed for misconduct under section 28 of the Act is unaffected by events which would disentitle a person from receiving unemployment benefits such as a failure to file bi-weekly report cards. The applicant rests his case on Rondeau v. Simard, [1977] 1 F.C. 519(C.A.), per Le Dain J. (as he then was), at page 536:
It seems to be clear, particularly in view of the terms of section 43(1) [now s. 30(1)], but also in view of the general economy of the Act, that disqualification is something that is to operate separately from and in addition to disentitlement by virtue of section 25 [now s. 14]. If the facts of a particular case support disentitlement under section 25 then it is the duty of the Commission to apply that basis for denying a claim, and to apply any disqualification to which the facts give rise to a period for which benefit would otherwise be payable.
In my opinion, the context in which these remarks were made by Le Dain J. bear no relevance to the case under consideration. In Rondeau, the claimant argued, inter alia, that a disqualification imposed on her could not be applied because she was disentitled on other grounds during the period of the purported disqualification. The Court in Rondeau rejected this effort to avoid the disqualification by holding that the disqualification operated in addition to any disentitlement.
In the case at bar, the respondent is not attempting to avoid the cumulative effect of a disentitlement and disqualification. The sole issue in this proceeding is determining to which “claim for benefit” a disqualification, standing alone, applies. In my opinion, there must be a causal connection between a disqualification and a claim for benefit in respect of which it applies. Therefore, the result reached by the learned Umpire is the correct one. I have reached this conclusion based on both the wording and purpose of the Act. In the circumstances, I need not invoke the decision of this Court in Goulet v. Canada Employment and Immigration Commission, [1984] 1 F.C. 653(C.A.), per Hugessen J.A., at page 659. Therein it was held that as section 28 [then s. 41] is an exception to the general rule that insured, unemployed individuals are entitled to benefits, it must be strictly interpreted.
The wording of the Act suggests that a disqualification imposed under section 28 applies only to benefits which would otherwise be payable had the reason for disqualification not occurred. Subsection 30(1) [as am. by S.C. 1990, c. 40, s. 22] of the Act provides as follows:
30. (1) Where a claimant is disqualified under section 27 or 28 from receiving benefit, the disqualification shall be for such weeks for which benefit would otherwise be payable following the claimant’s waiting period as are determined by the Commission. [Emphasis added.]
In the present case, the reason for disqualification was “misconduct” and the benefits otherwise payable would have been those payable had the suspension not occurred. It seems clear to me that subsection 30(1) contemplates a causal nexus between the disqualification and the claim for benefit against which it is imposed.
The causal interpretation of subsection 30(1) is further supported by a purposive analysis of the disqualification provisions. I take it to be accepted law that the interpretation which most accords with the purpose of the legislation must be deemed the proper one. Thus, the question that must be addressed is whether the applicant’s interpretation promotes the purposes underlying the imposition of a disqualification period. In my opinion, it does not.
The disqualification provisions of the Act (sections 27, 28 and 30) are generally recognized as penal sanctions intended “to deter claimants from unjustifiably quitting their job, losing it through their own fault, or failing to avail themselves of employment opportunities” (Re Bhavsar (1986), CUB-11941, at page 3). In the present circumstances, I fail to see how the imposition of a disqualification unrelated to the employment which is ultimately lost could possibly have a deterrent effect as outlined above.
In my view, the interpretation advocated by the applicant does not advance any of the purposes underlying the disqualification provisions. Rather, it unduly penalizes a claimant such as the respondent. First, she received no compensation with respect to the three-week suspension from either her employer or the Unemployment Insurance Fund. Moreover, the disqualification period greatly exceeded the penalty already imposed by the employer. As well, it is not unreasonable to speculate that a job suspension will impact negatively on future determinations respecting the number of insurable weeks of employment held by her.
In summary, the interpretation placed on section 28 of the Act by the learned Umpire does not have the effect of unfairly advancing the financial interests of the respondent at the expense of those who contribute to this insurance scheme and Canadian taxpayers generally. Accordingly, I would dismiss this application.
Stone J.A.: I agree.
Linden J.A.: I agree.