Employment Insurance (EI)

Persons in attendance

[1] L. T., the Claimant, participated in the hearing via teleconference. She was accompanied by M. M., her spouse, who acted as her representative.

Decision

[2] The Tribunal concludes that the amount received as wage loss insurance by the Claimant constitutes earnings pursuant to section 35 of the Employment Insurance Regulations (the Regulations) and that it must be allocated. The allocation of earnings for the period from July 21, 2013, to October 12, 2013, complies with section 36 of the Regulations. Despite the Claimant’s disagreement, the Tribunal accepts the amounts submitted into evidence by the Canada Employment Insurance Commission (the Commission) since it does not have any other information. The Tribunal notes that the amount received by the Claimant as a pay advance is not in question in this case since it was not allocated by the Commission.

Introduction

[3] The Claimant filed an Employment Insurance claim on August 1, 2013. On September 9, 2013, she was told by the Commission that she had to inform the Commission if she was receiving wage loss insurance benefits. On November 19, 2013, the Claimant and her employer were contacted for clarification of the amount of wage loss insurance benefits that the Claimant allegedly had received. This amount was allocated over the period from July 21, 2013, to October 12, 2013. The Commission failed to send a letter to inform the Claimant of the allocation. Nevertheless, a notice of debt was issued on November 23, 2013. Following a reconsideration of this decision by the Commission, the Claimant was informed on January 29, 2014, that the decision regarding the allocation of the wage loss insurance benefits was being upheld. The Claimant appealed from this reconsideration decision to the Social Security Tribunal (the Tribunal) on March 6, 2014. The Tribunal noted that the Claimant’s appeal was filed after the limitation period set out in subsection 52(1) of the Department of Employment and Social Development Act had expired. The Tribunal agreed to extend the appeal deadline since the Claimant had not been informed that her appeal had not been filed on time.

Form of hearing

[4] The hearing was held via teleconference for the reasons given in the notice of hearing dated April 16, 2014. The teleconference took place on May 20, 2014.

Issue(s)

[5] The issues are as follows:

1. (a) Are the amounts received earnings within the meaning of section 35 of the Regulations?
2. (b) If so, the following question must also be answered: Were these earnings allocated in accordance with section 36 of the Regulations?

Applicable law

[6] Subsection 35(1) of the Regulations reads as follows:

The definitions in this subsection apply in this section.

“employment”

“employment” means

1. (a) any employment, whether insurable, not insurable or excluded employment, under any express or implied contract of service or other contract of employment,
   1. (i) whether or not services are or will be provided by a claimant to any other person, and
   2. (ii) whether or not income received by the claimant is from a person other than the person to whom services are or will be provided;
2. (b) any self-employment, whether on the claimant's own account or in partnership or co-adventure; and
3. (c) the tenure of an office as defined in subsection 2(1) of the Canada Pension Plan. (emploi)

“income”

“income” means any pecuniary or non-pecuniary income that is or will be received by a claimant from an employer or any other person, including a trustee in bankruptcy. (revenu)

[7] Subsection 35(2) of the Regulations reads as follows:

Subject to the other provisions of this section, the earnings to be taken into account for the purpose of determining whether an interruption of earnings under section 14 has occurred and the amount to be deducted from benefits payable under section 19, subsection 21(3), 22(5)...[and 23(3)] of the Act, and to be taken into account for the purposes of sections 45 and 46 of the Act, are the entire income of a claimant arising out of any employment, including

1. (c) payments a claimant has received or, on application, is entitled to receive under
   1. (i) a group wage-loss indemnity plan,

[8] Subsection 35(7) of the Regulations states the following:

That portion of the income of a claimant that is derived from any of the following sources does not constitute earnings for the purposes referred to in subsection (2):

1. (a) disability pension or a lump sum or pension paid in full and final settlement of a claim made for workers' compensation payments;
2. (b) payments under a sickness or disability wage-loss indemnity plan that is not a group plan;
3. (c) relief grants in cash or in kind;
4. (d) retroactive increases in wages or salary;
5. (e) the moneys referred to in paragraph (2)(e) if
   1. (i) in the case of a self-employed person, the moneys became payable before the beginning of the period referred to in section 152.08 of the Act, and
   2. (ii) in the case of other claimants, the number of hours of insurable employment required by section 7 or 7.1 of the Act for the establishment of their benefit period was accumulated after the date on which those moneys became payable and during the period in respect of which they received those moneys; and
6. (f) employment income excluded as income pursuant to subsection 6(16) of the Income Tax Act.

[9] Subsection 35(8) of the Regulations states the following:

For the purposes of paragraphs (2)(c) and (7)(b), a sickness or disability wage-loss indemnity plan is not a group plan if it is a plan that

1. (a) is not related to a group of persons who are all employed by the same employer;
2. (b) is not financed in whole or in part by an employer;
3. (c) is voluntarily purchased by the person participating in the plan;
4. (d) is completely portable;
5. (e) provides constant benefits while permitting deductions for income from other sources, where applicable; and
6. (f) has rates of premium that do not depend on the experience of a group referred to in paragraph (a).

[10] Subsection 36(1) of the Regulations states the following:

Subject to subsection (2), the earnings of a claimant as determined under section 35 shall be allocated to weeks in the manner described in this section and, for the purposes referred to in subsection 35(2), shall be the earnings of the claimant for those weeks.

[11] Subsection 36(12) reads as follows:

The following payments shall be allocated to the weeks in respect of which the payments are paid or payable:

1. (b) payments under a group sickness or disability wage-loss indemnity plan.

Evidence

[12] The Claimant filed an Employment Insurance claim for sickness benefits on August 1, 2013. When filing her claim, she indicated that she did not have a plan that compensated her in case of sickness (paid sick leave or wage loss insurance).

[13] When contacted by the Commission on September 6, 2013, the Claimant confirmed that she did not have a wage loss insurance plan.

[14] On September 9, 2013, the Commission contacted her employer, Sears Canada. It was told that there had been a delay in paying the Claimant wage loss insurance benefits and that she was aware that if she received Employment Insurance, she would have to pay it back. The employer indicated that this is why the Record of Employment shows that it was made out at the employee’s request.

[15] On September 9, 2013, the Commission informed the Claimant that her claim for Employment Insurance benefits would start on July 21, 2013. The letter specified that [translation] “if you are covered by a wage loss insurance plan paid by your employer or your sick leave is paid by your employer, make certain that you have received all the benefits to which you are entitled under your wage loss insurance plan or that you have used up all your sick leave. If you have not done so already, you must send us the details of these payments (weekly amount and duration) as quickly as possible” (GD3-26).

[16] On October 28, 2013, the Claimant informed the Commission that she was gradually returning to work effective September 22, 2013, and that she was not available for or able to do the same kind of work as before. She indicated that, despite the gradual return starting September 22, 2013, she did not have any hours to declare until September 30, 2013.

[17] On November 20, 2013, the Claimant contacted the Commission to say that she had received an advance on her pay from her employer.

[18] On November 20, 2013, the Commission contacted the employer, Sears Canada. The employer confirmed that the Claimant had received the following amounts:

• - Week of July 21, 2013: $110.55 in wage loss insurance
• - Weeks of July 28, 2013, to September 28, 2013: $370.34 a week in wage loss insurance
• - Week of September 29, 2013: $148.14 in wage loss insurance; $228.38 in wages and $139.80 in commission (gradual return)
• - Week of October 6, 2013: $148.14 in wage loss insurance, $228.38 in wages and $342.65 in commission (gradual return)
• - Week of October 13, 2013: $304.50 in wages and $222.81 in commission

[19] On January 29, 2014, the Commission contacted the employer twice to confirm the amounts received by the Claimant. The employer confirmed the above amounts twice. The employer also indicated that the Claimant had received an initial payment of $1,962.25, which retroactively covered the period from July 21 to August 31, 2013. Then, every week, she received amounts totalling $1,777.64 for a total gross amount of $3,739.89 in wage loss insurance.

[20] On January 29, 2014, the Claimant and her representative indicated that the amounts received were for two weeks instead of one since she received her pay biweekly and she usually received $500 net every two weeks. The Commission advised the representative to check the pay stubs and referred him to the employer’s human resources centre. The Commission confirmed that the amount of $1,066.59 received as a pay advance does not affect her Employment Insurance benefits.

[21] On May 20, 2014, the Claimant sent her bank statements for July, August and September 2013.

[22] On May 22, 2014, the Claimant sent copies of her pay stubs for the period from September 29, 2013, to November 9, 2013, as well as for the period from April 28, 2013, to May 11, 2013.

Submissions of the parties

[23] The Claimant submitted the following:

1. (a) The Claimant disputes the amounts received as wage loss insurance. She indicated that she did not receive $370 a week in wage loss insurance. She stated that this was the base amount used to calculate the 67% that was the wage loss insurance. The Claimant also indicated that she did not receive any wage loss insurance before September 2013.
2. (b) The Claimant indicated that the amounts are incorrect and that they are higher than what she actually received. She indicated that she never received the $1,962.25 payment in August 2013, and that she only learned of its existence when reading the documents that the Tribunal sent her for her appeal.
3. (c) The Claimant indicated that if she had received money from her wage loss insurance, the amounts would appear on her bank statement. Her representative indicated that if the money had been received by cheque, she would have had to deposit it into her account and, consequently, it would appear on the statement.

[24] The Respondent submitted the following:

1. (a) Group wage loss insurance plans indemnify a group of workers who work for the same employer. Compensation paid under a group wage loss insurance plan constitutes earnings according to subparagraph 35(2)(c)(i) of the Regulations. Even if a claimant who is insured under a plan chooses not to apply for wage loss insurance benefits, the benefits to which he or she would have been entitled if the claimant had applied are still considered earnings under paragraph 35(2)(c).
2. (b) [translation] “The evidence shows that the Claimant received wage loss insurance benefits from her group plan with her employer, Sears Canada Inc., after she stopped working for medical reasons. The Claimant did not agree with the amounts that the employer gave but did not provide any proof to support her allegations. The burden of proof is on the Claimant to show that she is entitled to receive benefits. Consequently, the Commission considers the employer’s information to be accurate and maintains that these earnings were allocated according to the Regulations.” (GD4-4)

Analysis

Do the amounts received constitute earnings?

[25] The Tribunal notes that the Claimant does not dispute the issue of whether the amounts received constitute earnings. Instead, the Claimant disputes the amounts that the employer provided and indicates that she received less than $370 a week. She also argues that she did not receive the initial payment of $1,962.25 for the period from July 21, 2013, to August 31, 2013.

[26] Nevertheless, the Tribunal maintains that it must determine whether the amounts received from the Claimant’s wage loss insurance are earnings in order to be able to determine whether, if they are earnings, they have been correctly allocated according to section 36 of the Regulations.

[27] The employer indicated that the Claimant received sickness insurance benefits that covered 67% of her earnings at an average hourly rate (GC3-43). Although she stated on two occasions that she did not have wage loss insurance, the Claimant also indicated that she did not receive $370 a week in wage loss insurance, but that this was the basic amount used to calculate the 67% for wage loss insurance benefits. Moreover, in the bank statements that she submitted, she identified certain amounts as wage loss insurance. The Tribunal is satisfied that the amounts in question are for wage loss insurance.

[28] Subsection 35(8) of the Regulations establishes the criteria that must be met by a wage loss insurance plan for it not to be considered a group plan. According to the information in the file, it seems that the Claimant’s wage loss insurance plan is the one available with the employer and the one that she was offered as an employee. Since neither the Claimant nor the Commission is disputing the type of wage loss insurance benefits paid to the Claimant, the Tribunal is satisfied, based on the evidence presented, that the Claimant’s wage loss insurance plan is a group plan.

[29] The Tribunal is of the opinion that the amounts in question came from a group wage loss insurance plan, paid following an interruption in her employment because of illness. Since the nature of these amounts was not disputed, the Tribunal concludes that these amounts should be considered earnings within the meaning of subparagraph 35(2)(c)(i) of the Regulations.

Allocation of earnings

[30] The Tribunal established that the amounts received as wage loss insurance constituted earnings. They must therefore be allocated according to section 36 of the Regulations. Paragraph 36(12)(b) of the Regulations specifies that payments under a group sickness or disability wage-loss indemnity plan must be allocated to the weeks in respect of which they are paid or payable. Consequently, the Tribunal is of the opinion that the amounts received must be allocated to each of the weeks for which they were paid. The allocation of the wage loss insurance payments was done by the Commission as follows:

• - Week of July 21 to 27: $111.00
• - Weeks of July 28 to September 28: $370.00 per week
• - Weeks of September 29 to October 12: $148.00 per week

[31] The employer indicated that the Claimant had received wage loss insurance benefits for the period from July 21, 2013, to October 12, 2013. The Commission allocated the amounts sent in three payments by the employer to each of the corresponding weeks. The Commission also allocated the wages earned by the Claimant during the weeks starting October 6 and 12, 2013, when she was gradually returning to work. The Claimant had not reported the hours of work or her earnings for these two weeks. The Claimant did not dispute the wages received for the weeks of October 6 and 12.

[32] The Claimant is disputing the amounts received as wage loss insurance during the period. In fact, her representative maintains that the Claimant’s pay is $500 net every two weeks, which makes it impossible for her to receive $370 a week as wage loss insurance. This amount would therefore be received for two weeks of wage loss insurance. The pay stub for the period from April 28, 2013, to May 11, 2013, that is, before the Claimant stopped working because of illness, shows that the Claimant received $788.12 net and $631.23 net. Her pay for the period from October 27, 2013, to November 9, 2013, that is, after the Claimant went back to work, shows earnings of $886.59 gross and $689.05 net. Consequently, based on the average of these two pay periods, which would correspond to a single pay stub for complete periods (not sick) received, the Tribunal notes that the Claimant’s average earnings are $837 gross per week ($660 net), which contradicts what the Claimant’s representative claimed when he said that the Claimant’s gross earnings were $500 every two weeks. Based on this calculation and the Record of Employment from Sears Canada Inc., the Tribunal can confidently state that the amount indicated by the Claimant’s representative is the amount for one week of work and not two weeks.

[33] The pay stub for the period from September 29 to October 12, 2013, corresponds to the amounts reported by the employer to the Commission as the Claimant’s pay ($228.38 x 2 weeks = $456.76) and the commission received by the Claimant ($139.80 + $342.65 = $482.45. The stub indicates a commission of $521.12 + $8.00 - $46.67 = $482.45).

[34] Looking carefully at the pay stub for the period from October 13, 2013, to October 26, 2013, the Tribunal notes that, unlike the other pay stubs provided, the heading indicates [translation] “Health and Welfare Fund” whereas the heading on the other pay stubs is “Sears Canada Inc.” The Tribunal also notes that the total income indicated on the [translation] “Sal. Sickness pay schedule 67” line is $3,695.27. The Claimant and the employer both indicated that the wage loss insurance covered 67% of earnings. The employer confirmed that the hourly rate used was an average hourly rate.

[35] The employer indicated that the Claimant had received a total of $3,739.89. The Tribunal notes that there is a difference of approximately $41 between the amounts but, since the Claimant does not have all the pay stubs and wage loss insurance statements on hand, the Tribunal cannot confirm that the Claimant did not receive other wage loss insurance amounts in 2013, namely, between this pay stub and the moment the employer provided the information to the Commission. Based on the pay stubs submitted by the Claimant and the amounts reported by the employer, the Tribunal is of the opinion that they are consistent since the difference is minimal.

[36] The Claimant indicated that she had not received any money before September 2013. The Tribunal indicated to her that, according to the documents submitted, she had received $1,962.25, which was a retroactive payment for the period from July 21 to August 31, 2013. Therefore, it covered the entire period for which she should have received Employment Insurance benefits before September 2013. The Claimant’s representative indicated that she never received this money and he submitted bank statements for July, August and September 2013 to prove it.

[37] The Tribunal notes that there is no deposit for this amount made to the Claimant’s account. Nevertheless, the Tribunal cannot determine that the Claimant did not receive this amount in the form of a cheque or that this amount was not deposited in another account. Moreover, the Tribunal notes that the amounts indicated as wage loss insurance deposits and mentioned by the representative at the hearing were deposited at irregular intervals (September 6, 10, 20 and 30), whereas, according to the information provided by the employer and supported by the statement from the [translation] “Health and Welfare Fund,” the wage loss insurance payments were made according to the regular pay periods, although there may have been some delay when the Claimant first started receiving these wage loss insurance payments. Moreover, the Tribunal wonders about the fact that on the bank statement they are identified differently as [translation] “Direct deposit / HWT” or by “Deposit.”

[38] The Tribunal also took into consideration the fact that the Claimant indicated that she had never received this money. During the hearing, the Tribunal asked the Claimant to contact her employer to verify how this money was allegedly sent to her and, if it had been sent, into which bank account it had been deposited. The Tribunal also notes that the Claimant and her representative were asked by the Commission to validate the information with the employer.

[39] On this subject, the Claimant indicated that the people she contacted [translation] “gave her the run around” and that she was never able to get an answer. However, she did not try continuously to obtain the information from her employer. She was asked to try again and to submit any relevant information to the Tribunal. The Claimant did not submit any information regarding her attempts and/or any results obtained from her employer.

[40] The Tribunal considered the evidence provided by the parties. The Tribunal is of the opinion that, although there is a slight difference between the cumulative amount on the [translation] “Health and Welfare Fund” pay stub and the amounts submitted by the employer, the Tribunal does not doubt that the Claimant received the said amounts as wage loss insurance payments. The Tribunal also noted that the amounts indicated on the October 13 to 26, 2013, pay stub are consistent with the amounts indicated by the employer.

[41] Therefore, the Tribunal is not satisfied that the Claimant provided evidence to refute the amounts submitted by the employer, especially since these amounts were validated three times by different agents and the pay stubs submitted support the fact that the average earnings were closer to $500 a week and not every two weeks as the Claimant indicated.

[42] Consequently, the Tribunal is satisfied that the amounts were allocated by the Commission in accordance with section 36 of the Regulations.

Conclusion

[43] The appeal is dismissed.