Employment Insurance (EI)

Reasons and decision

Decision

[1] The appeal is dismissed.

Introduction

[2] On February 24, 2017, the Tribunal’s General Division determined the following:

• Imposing a disentitlement to Employment Insurance benefits is warranted under paragraph 18(1)(a) of the Employment Insurance Act (Act).
• Imposing a penalty is warranted under section 38 of the Act for having committed an act or omission by knowingly making false or misleading representations.

[3] The Appellant filed an application for leave to appeal to the Appeal Division on March 29, 2017, after having received the General Division’s decision dated March 2, 2017. Leave to appeal was granted on April 5, 2017.

Type of hearing

[4] The Tribunal determined that the appeal would be heard via teleconference for the following reasons:

• The complexity of the issue or issues;
• The fact that the parties’ credibility was not a prevailing issue;
• The information on file, including the type of information missing; and
• The requirement under the Social Security Tribunal Regulations to proceed as informally and quickly as circumstances, fairness, and natural justice permit.

[5] The Appellant and her representative, Counsel Kim Bouchard, attended the hearing. Elena Kitova represented the Respondent.

The law

[6] According to subsection 58(1) of the Department of Employment and Social Development Act (DESDA), the only grounds of appeal are the following:

1. a) the General Division failed to observe a principle of natural justice or otherwise acted beyond or refused to exercise its jurisdiction;
2. b) the General Division erred in law in making its decision, whether or not the error appears on the face of the record; or
3. c) the General Division based its decision on an erroneous finding of fact that it made in a perverse or capricious manner or without regard for the material before it.

Issue

[7] The Tribunal must decide whether the General Division erred in finding that the imposition of a penalty was justified under section 38 of the Act.

Submissions

[8] The Appellant submits the following reasons in support of her appeal:

• The General Division failed to consider the material before it in coming to its decision.
• The evidence shows that she had kept up constant communication with the Respondent regarding the problems she was having with reporting her earnings and that, afterwards, she had always cooperated with the Respondent to properly establish her earnings.
• The General Division misinterpreted and misapplied the legal test on the issue of penalty. The evidence does not show that the Appellant had subjective knowledge that she had been making false statements, as required by Federal Court of Appeal jurisprudence.

[9] The Respondent submits the following arguments against the appeal:

• The Appellant was in attendance and was able to give her version of the facts. The General Division rendered a decision within its jurisdiction, and the General Division's decision is clearly not unreasonable in light of the relevant evidence.
• In the current matter, the Respondent had every reason to conclude that false or misleading statements were made. The Appellant failed to remind the Respondent to correct her earnings because the waiting time was too long and she believed that the Respondent owed her money.
• The penalty applies only to the period from October 19, 2014, because she said that she had not worked and had not received any earnings or tried to make the correction as she had done for previous statements.
• The General Division is the trier of fact and the Appeal Division's role is limited to deciding whether the view of facts taken by the General Division was reasonably open to them on the record.
• The General Division properly assessed the evidence and its decision is well founded. The General Division did not err in fact and in law in upholding the Respondent's decision.

Standard of review

[10] The Appellant did not make any representations regarding the applicable standard of review.

[11] The Respondent submits that the appropriate standard of review for questions of law is correctness, and that the appropriate standard of review for questions of mixed fact and law is reasonableness—Pathmanathan v. Office of the Umpire, 2015 FCA 50.

[12] The Tribunal notes that the Federal Court of Appeal in the case of Canada (Attorney General) v. Jean, 2015 FCA 242, indicates in paragraph 19 of its decision that “[w]hen it acts as an administrative appeal tribunal for decisions rendered by the General Division of the Social Security Tribunal, the Appeal Division does not exercise a superintending power similar to that exercised by a higher court.”

[13] The Federal Court of Appeal further indicated the following:

Not only does the Appeal Division have as much expertise as the General Division of the Social Security Tribunal and thus is not required to show deference, but an administrative appeal tribunal also cannot exercise the review and superintending powers reserved for higher provincial courts or, in the case of “federal boards”, for the Federal Court and the Federal Court of Appeal.

[14] The Federal Court of Appeal concluded by emphasizing that “[w]here it hears appeals pursuant to subsection 58(1) of the Department of Employment and Social Development Act,the mandate of the Appeal Division is conferred to it by sections 55 to 69 of that Act.”

[15] The mandate of the Tribunal’s Appeal Division as described in Jean was later confirmed by the Federal Court of Appeal in Maunder v. Canada (Attorney General), 2015 FCA 274.

[16] Therefore, unless the General Division failed to observe a principle of natural justice, erred in law, based its decision on an erroneous finding of fact that it had made in a perverse or capricious manner or without regard for the material before it or its decision was unreasonable, the Tribunal must dismiss the appeal.

Analysis

[17] In this case, the General Division had to decide whether to impose a penalty on the Appellant under section 38 of the Act. This is the only issue before the Tribunal.

[18] The Appellant states that the evidence submitted to the General Division shows that she had kept up constant communication with the Respondent regarding the problems she was having with reporting her earnings and that, afterwards, she had always cooperated with the Respondent to properly establish her earnings. The General Division must have misinterpreted and misapplied the legal test on the issue of penalty. According to the Appellant, the evidence does not show that she had subjective knowledge that she had been making false statements, as is required by Federal Court of Appeal case law.

[19] According to the Respondent, the evidence shows that the Appellant made 10 false statements because she knew she had worked for ACM Canada Inc. from June 23, 2014, to May 14, 2015. However, the penalty applies only to the statements from October 19, 2014, because it was as of that date that the Appellant stopped reporting that she was working, that she stopped reporting earnings and that she stopped trying to correct her statements, because she believed that the Respondent owed her money.

[20] The only requirement of Parliament in order to impose a penalty is that of knowingly making a false or misleading statement, that is, in full possession of the facts. The absence of the intent to defraud is therefore of no relevance — Canada (Attorney General) v. Bellil, 2017 FCA 104.

[21] Upon considering the evidence and the Appellant's testimony, the General Division found that she had knowingly made false or misleading statements by claiming that she had not worked during the period from October 19, 2014, to March 7, 2015.

[22] In Canada (Attorney General) v. Gates, 1995 CanLII 3601 (FCA) and Canada (Attorney General) v. Purcell, 1995 CanLII 3558 (FCA), the Federal Court of Appeal held that there is a reversal of the burden of proof as soon as a claimant gives a wrong answer to a simple question or to questions on a report card. In this particular case, the question to which the Appellant had to respond was simple: [translation] "Did you work of receive any earnings during the period covered by this report?" Then the following clarification was added: "[...] This includes self-employment or employment for which you will be paid later."

[23] Therefore, the onus was on the Appellant to explain why the incorrect answers were given. She had to prove that she was unaware that her answers were incorrect.

[24] As noted by the Federal Court of Appeal in Gates, the subjective knowledge test takes into account common sense and objective factors.

[25] Before beginning each statement, the Appellant received a warning about false or misleading statements, and she confirmed having read and understood the section on her rights and responsibilities. Furthermore, the Appellant confirmed that the answers provided in her statements were correct at the end of each statement that she completed for each week of unemployment.

[26] The Appellant stated that she did not work during the period from October 19, 2014, to March 7, 2015 (Exhibits GD3-30 to GD3-176); while the evidence clearly shows that the Appellant had worked for ACM Canada Inc. during the period in question.

[27] Based on the General Division's decision, it clearly did not grant the Appellant's testimony trust and credibility, according to which a Commission officer told her to answer "no" to the question asking whether she had worked because she did not know the salary that the employer would later pay her.

[28] The numerous efforts made by the Respondent to help the Appellant with her reported earnings give this explanation little credibility. Furthermore, the Appellant's conflicting explanations on this issue render her version—that she had received instruction from the Respondent not to report her work— improbable. Moreover, despite being given numerous opportunities to correct her statements after October 18, 2014, the Appellant made no attempt to do so.

[29] In an interview held on January 20, 2016, the Appellant stated that she believed that the Respondent owed her money and that she had therefore decided not to make the necessary corrections (GD3-208). However, the Appellant could not ignore the work she did after October 18, 2014, nor the disparity in the amount received from her employer while she was employed (approximately $20,000) and the amount reported to the Respondent (around $6,000). In a subsequent interview on February 11, 2016, the Appellant stated that she had not declared her work because she did not know whether she wanted to continue working for that employer (GD3-218). Such explanations clearly show that she was aware that her statements were incorrect.

[30] The Tribunal finds that, considering all the evidence, the General Division did not err in refuting the Appellant’s various explanations. It is obvious to the Tribunal that the Appellant was in full possession of the facts when she failed to declare her work. The Appellant was clearly aware of the implications of her work and earnings on her Employment Insurance benefits.

[31] As stated during the appeal hearing, the Tribunal does not have the authority to retry a case or to substitute its discretionary power for that of the General Division. The Tribunal’s jurisdiction is limited by subsection 58(1) of the DESDA. Unless the General Division failed to observe a principle of natural justice, erred in law, based its decision on an erroneous finding of fact that it had made in a perverse or capricious manner or without regard for the material before it, the Tribunal must dismiss the appeal.

[32] In this case, the Tribunal finds that the General Division did not err in fact or in law and that it respected the principles of natural justice. The General Division's decision is consistent with the evidence on file and with the relevant legislative provisions and case law.

Conclusion

[33] The appeal is dismissed.