Employment Insurance (EI)

Reasons and Decision

Overview

[1] A claim for employment insurance benefits was established by the Appellant effective January 10, 2017. (GD3- 4-12) This claim was, on February 10, 2017, denied as the Canada Employment Insurance Commission (Commission) determined that the Appellant was disqualified from receiving benefits because he had lost his employment due a labour dispute. The Appellant sought and was granted a reconsideration of this decision resulting in the Commission maintaining its original decision. (GD3 –106) He then appealed to the Social Security Tribunal on October 16, 2017.

[2] The Tribunal must decide whether the Appellant lost or was unable to resume his employment because of a work stoppage attributable to a labour dispute.

[3] The hearing was held by in-person for the following reasons:

1. The complexity of the issue under appeal.
2. The fact that the credibility is not anticipated to be a prevailing issue.
3. The fact that more than one party will be in attendance.
4. The information in the file, including the need for additional information.
5. The fact that multiple participants, such as a witness, may be present.
6. The fact that the appellant or other parties are represented.
7. The form of hearing respects the requirement under the Social Security Tribunal Regulations to proceed as informally and quickly as circumstances, fairness and natural justice permit.
8. This is a Group Appeal.

[4] The following people attended the hearing:

J. F., Appellant

D. L., Representative

Ms. Princelene Mitchell, Business Expertise Consultant, Commission Representative (Attended via teleconference)

D. W., Witness

C. W., Witness / Local Union President

L. A., Observer / Member of Group Appeal

D. F., Observer / Member of Group Appeal

K. L., Observer / Member of Group Appeal

D. I., Observer / Member of Group Appeal

P. P., Observer / Member of Group Appeal

S. S., Observer / Member of Group Appeal

C. S., Observer / Member of Group Appeal

O. H., Observer / Member of Group Appeal

H. B., Observer / Member of Group Appeal

W. D., Observer / Member of Group Appeal

M. S., Observer / Member of Group Appeal

W. M., Observer / Member of Group Appeal

R. H., Observer / Member of Group Appeal

D. G., Observer / Member of Group Appeal

J. R., Observer / Member of Group Appeal

I. O., Observer / Member of Group Appeal

C. P.(?), Observer

K. W., Observer

[5] The Tribunal finds the Appellant lost his employment because he was laid off in anticipation of a work stoppage, not because of a stoppage of work attributable to a labour dispute The reasons for this decision follow.

Prelminary issues

[6] A pre-hearing conference was held to confirm issue in the appeal and also to continue the process of identifying all possible individuals to be part of this group appeal.

Evidence

[7] According to the evidence and language used in the docket, the Appellant is a member of the union. He was employed as an Assembly Technician with X at X, Newfoundland and Labrador until December 19, 2016 when he stopped working due to a strike or lockout. GD3-15-26

[8] The Appellant has not been scheduled to be recalled with X at this time as the dispute is ongoing. GD3-25

[9] According to the representations of the Commission, the facts on the record show that members of X and X were negotiating a new collective agreement. The union representing members of X served a strike notice to take effect on December 19, 2016 commencing a work stoppage at X in X Newfoundland and Labrador. GD3-15-26

[10] The employer upon receiving the strike notice, locked out X and the affected employees of X, to take effect at December 19, 2017 commencing a work stoppage at X in X, Newfoundland and Labrador. GD3-15-26

[11] The Commission determined that the Appellant lost his employment with X on December 19, 2016 because of a work stoppage attributable to a labour dispute. Therefore, the Commission imposed a disentitlement pursuant to subsection 36(1) of the Act as of December 20, 2016. GD3-28

[12] The Appellant’s representative made a request for reconsideration of the Commission’s decision on the question of his entitlement to benefits during the labour dispute. In support of the request for reconsideration, the representative argued that the reconsideration is about whether the Employment Insurance Commission properly considered all relevant sections of the Employment Insurance Act and Regulations specifically whether there was in fact a work stoppage. The reconsideration is also based on the actions of the employer in this labour dispute and whether the findings of bargaining in bad faith by the employer should entitle the Appellants to receive benefits.

[13] The representative’s statement of claim states that the appellants were locked out by X on December 19, 2016. In anticipation of the lock out, the employer promoted two members of the bargaining unit to supervisory positions in order to continue to operate the facility along with replacement workers from X. The employer also admitted that the lock out was done in an effort to protect the remaining work at the facility. Based on the fact that the facility has continued operations since December 19, 2016 this should be deemed a lay off and the workers should be entitled to benefits. The employer has been found in violation of Labour Relations Act by bargaining in bad faith by insisting on including an offer with language that they clearly knew would prolong the work stoppage. The Commission is violating the purpose of the Legislation by favouring the employer and not taking a neutral stance. 

[14] The Appellant, in response to questioning from his representative at his hearing, testified that:

1. a) he was 17 years with this employer as an assembly technician
2. b) he was trained to work into different areas of the plant
3. c) he trained other staff
4. d) there are four members on the bargaining committee
5. e) their contract expired in October 2015
6. f) the union decided to extend the contract
7. g) work was very slow
8. h) members supported extending the contract
9. i) in May 2016 negotiation began for a new contract
10. j) the employer said there were no work
11. k) the employer also stated they wanted a merit based program in place
12. l) in addition the employer made some outrageous demands
13. m) the old pay scale system needed to be changed
14. n) the union wanted to work with the employer
15. o) the employer wanted the discretion to dictate criteria for salary increments
16. p) the employer wanted to use “scrap parts” (unusable product) against giving raises
17. q) a worker’s attitude would also be considered
18. r) there were a number of other issues
19. s) salary rates were the main issue
20. t) the employer was unwilling to work with the Union regarding salary
21. u) the company offer of October 26, 2016 was rejected by the union by 100% on December 19, 2016
22. v) a strike quote was taken
23. w) the company representatives were in and were notified of the strike quote result
24. x) there is no mention of a planned strike date
25. y) two members of the bargaining unit had been promoted to management in the two week period before the locker
26. z) (in response to the Member’s question the Appellant stated) there are 16 management personnel
27. aa) others have been hired as management personnel
28. bb) in addition to the two former union members being promoted to management at least five had been hired since the lockout
29. cc) he doesn’t believe there was ever a labour dispute therefore he applied for Employment Insurance Benefits
30. dd) he should’ve been laid off but this employer does not want a union
31. ee) a Record of Employment was issued

[15] The Representative of the Commission, at this point, stated that the employer completed the Record of Employment and is responsible for the information contained and the Commission then assumes that the forms are filled responsibly. Upon investigation, penalties can be imposed if false information is given.

[16] The Representative of the Commission then asked the Appellant why a strike vote was taken if there was no plan to act on it?

[17] The Appellant replied that they were trying to work with the employer.

[18] The witness, C. W., in response to questioning by the Appellant’s Representative at the hearing, testified that:

1. a) she was President of X
2. b) this consisted of 41 units with in excess of 2200 members
3. c) she assisted in bargaining with this employer
4. d) the employer’s representatives in bargaining were “guns for hire”
5. e) there was an agreement with the members to extend the original contract agreement
6. f) business was slow at the employer’s facility
7. g) there had been layoffs prior to the contract extension
8. h) bumping began with 35 workers being retained and 15 being let go
9. i) the employer agreed with the extension of the contract
10. j) there was only one day of negotiation in May 2016
11. k) the employer did not show or respond after the Union presented its proposals
12. l) regarding the salary grid presented by the employer the Union asked for an explanation
13. m) under this grid it was impossible for anyone to get to the top tier
14. n) the Union asked for wage increments and language changes
15. o) there were sporadic meetings through to October 2016
16. p) a conciliator was appointed, B. K.
17. q) there was no agreement, parties were too far apart, and the conciliator’s report was filed
18. r) there was no progression in talks, the company did not want to bargain
19. s) the employer’s demands included changing classifications, cutting staff upon return to work, stripping of seniority clauses and picking and choosing who they want
20. t) normally workers always progress through salary steps
21. u) in the company’s offer there was no such progression
22. v) this offer of October 25 was rejected by the membership
23. w) before the conciliator’s report was filed the employer wanted to strip workers rights, cut salary of top workers and give savings to junior staff
24. x) after the conciliator’s report was filed a meeting was held December 19, 2016
25. y) the membership rejected the employer’s offer
26. z) a strike vote was then taken and 100% were in favour
27. aa) the bargaining committee notified the employer of the results of the meeting
28. bb) there was no “notice of strike” action given to the employer
29. cc) in addition, there had been no permission given to the local by the national office to give strike notification as would be required
30. dd) at this point the witness denied giving information to the Commission that was contained at GD3-19 (The Commission Representative indicated she would seek an explanation and report back to the hearing.)
31. ee) The witness then referenced a number of job postings for positions with the employer that were union positions
32. ff) during bargaining the employer had indicated possible new hires
33. gg) the employer has since hired seven new positions, non-union
34. hh) the current level of production is not known by this witness
35. ii) there is however constant traffic in and out of the facility
36. jj) on April 5, 2017 the Union filed a Labour Board complaint of bad faith bargaining
37. kk) it had not been possible to come to a compromise agreement
38. ll) the employer was bringing in outsiders
39. mm)   the assumption was these new people were doing union work
40. nn) the strike vote was taken to show the employer the result of the members
41. oo) there was definitely no intent to strike six days before Christmas

[19] At this point in the proceedings, one of the union members in the gallery stated that he knew a management worker who was now doing union work. The “visitors” felt very stressed as did the families, many of whom had one member on strike and another working in the facility. (While this individual was not “sworn in”, I include his comments as he was expressing the feelings of others in the room who have a vested interest in the outcome here. jn)

[20] The next witness, D. W., in response to questioning by the Appellant’s Representative at the hearing testified that:

1. a) he was 16 years with this employer working in the tooling department
2. b) upon hiring he had completed a nine month training program
3. c) training at this facility was an ongoing process
4. d) at the December 19 meeting he and others were not in favour of the employer’s proposal
5. e) he did not like the lack of progression on the pay scale
6. f) one could not progress on the pay scale if there is even an argument with a supervisor
7. g) less than half an hour after the meeting ended he was notified of a lockout by the employer
8. h) he filed for employment insurance benefits because the situation was not brought on by the membership
9. i) they had tried to continue negotiations
10. j) he was aware of the advertisement for new hires, online and through the local newspaper
11. k) his own niece by marriage had been hired by the employer after the lockout
12. l) he, of course, witnessed her enter the workplace

[21] The Appellant’s Representative then brought to the attention of the Member a number of, what he believed to be, discrepancies in the information provided in the file as well as references to jurisprudence regarding labour disputes and section 121.1 of the Newfoundland and Labrador Provincial Labour Act. (Nothing in this Act prohibits the suspension or discontinuance of operation in an employer’s establishment, in whole or in part, not constituting a lockout or strike.)

[22] The Commission’s Representative, in reference to GD3-19, informed the hearing that this was a typed copy of the handwritten form supplied by X to the Commission, completed by and signed by C. W. on January 9, 2017 and submitted to the Commission via fax the same day.

[23] C. W.’s sworn testimony included a total denial of having ever having been involved in the completion of this form as it was transcribed by the Commission. This would normally bring all her testimony into question since it has been proven that she did, in fact, complete, sign and submit same to the Commission but, since most of her testimony only served to support the testimony of the Appellant, I will consider the pertinent statements.

[24] The Commission’s Representative went on to say that the circumstances under review here meet the definition of a “labour dispute”. Section 36.1 outlines the conditions required.

[25] Re: condition one; The Record of Employment shows the reason for loss of employment as a “lockout”.

[26] Re: condition two; The loss of employment was a direct result of the lockout, the collective agreement had expired on May 11, 2016 negotiations resumed, a conciliator were brought in, on December 19 there was a strike vote taken and shared with the employer, it is reasonable to assume the strike vote triggered the lockout, there was an offer in mid-May and if there was no labour dispute the members would still be working. It is the Commission’s contention that the jurisprudence related to the National Air case is not applicable here, in the current case new staffing happened seven months after the lockout.

[27] Four court rulings were then offered by the Commission to support its position: FCA A – 1063 – 87, A– 78781, A – 611 – 96 and A – 825 – 95.

Submissions

[28] The Appellant’s submissions are available to both parties in the docket therefore in the interest of brevity they are not copied / repeated here. Please be assured that the pertinent information constitutes part of this decision.

[29] The Respondent’s submissions are available to both parties in the docket therefore in the interest of brevity they are not copied / repeated here. Please be assured that the pertinent information constitutes part of this decision.

Analysis

[30] The relevant legislative provisions are reproduced in the Annex to this decision.

[31] The issue in this case was whether or not the Appellant /claimant should have been disentitled pursuant to subsec. 36(1) of the EI Act.

[32] Section 36(1) states: "Subject to the Regulations, if a claimant loses an employment, or is unable to resume an employment, because of a work stoppage attributable to a labour dispute at the factory, workshop or other premises at which the claimant was employed, the claimant is not entitled to receive benefits until the earlier of (a) the end of the work stoppage, and (b) the day on which the claimant becomes regularly engaged elsewhere in insurable employment."

[33] While having studied all of the submissions, representations, evidence and testimony from both the Appellant and the Respondent in this case, I am going to focus on the main issue before me, “Is this a labour dispute?”. If it is shown to be, the Act dictates that the Appellant is not eligible to receive benefits, but if it is determined that there is not a labour dispute, there is nothing in section 36 of the Act that would deny him such benefits.

[34] While recognizing that “labour dispute” is the terminology used by the union, the employer and the Commission, throughout the period of time since the employer locked out the union membership on December 19, 2016, this in itself is not sufficient to the determination of what constitutes a “labour dispute” under the Act.

[35] In this case, it must be asked, was the loss of employment because of an anticipation of a work stoppage and not because of a stoppage of work attributable to a labour dispute.

[36] I have studied the jurisprudence submitted to support the position of both parties to this matter..

[37] The facts in this case are that the employer and the union had restrained from either lock out or strike while negotiations were ongoing.

[38] The Member finds that there was, indeed, a contract in place until March 2015 which, by mutual agreement, was extended. When the time came to begin renegotiating this contract, the employer presented conditions that were not acceptable to the union bargaining committee therefore the negotiating continued.

[39] The list of contract items presented to the union by the employer in the fall of 2016 were not acceptable to the membership and the bargaining committee recommended they be rejected, which, on December 19, 2016, they were. A strike vote was taken at the same meeting which resulted in 100% of those in attendance voting to give their union the authority to call for a strike.

[40] The employer, through its bargaining committee in the next room, was informed of this vote and within minutes the employer “locked out” the union workers.

[41] The Appellant asserts that the strike vote was a show of solidarity taken to let the employer know they were serious when it came to the retention of their seniority and pay scale. There was no intention to commence strike action especially six days before Christmas.

[42] The result of the vote as was presented to the employer was not strike notification.

[43] The Appellant’s Representative asserts that, in Newfoundland and Labrador, a union must give a period of notice before proceeding with a strike after a strike vote is taken. This applies to only to “public sector” unions, not to private employers therefore is not the case here.

[44] However; this local of X is bound by the governance of X which requires that all strike action by any of its members be sanctioned / approved by “head office”. Such approval was not sought therefore not conferred, prior to the employer being notified of the strike vote result. This being said, I find there was no strike notification given to the employer by the X local so its action in declaring a lockout was, at the very least, premature.

[45] As per the Federal Court of Appeal case, White v. Canada (A-1036-92), a judgment written by Mr. Justice Linden for the Court, at page 8 of that decision, Justice Linden referring to the decision in Letourneau v. Canada Employment Insurance Commission, 1986 2 F.C. 82, it was stated by Justice MacGuigan: "Here the employer, like the employee in Letourneau foresaw that a strike was coming and took steps to minimize its impact on his business by distributing work to others and laying off employees. This action, because of the foresight of the employer, cannot be treated differently than similar action taken because of the foresight of an employee. In each case the result was the same termination of the employment relationship. As a consequence the applicants did not lose their employment by reason of a stoppage of work attributable to a labour dispute. Rather, they lost it by the actions of the employer who took steps, which, from his perspective, were calculated to minimize the disruption resulting from the impending stoppage of work. In other words, the Umpire erred when he asked whether the applicants lost their employment by reason of a labour dispute - they, of course, did; he should have asked whether they lost it by reason of a stoppage of work attributable to a labour dispute - they did not. They lost their employment because they were laid off in anticipation of a work stoppage, not because of a stoppage of work attributable to a labour dispute."

[46] In the case before me, it was the decision of the employer to commence a lockout after hearing the result of the strike vote by the union in anticipation that a strike may take place. That anticipated strike was not sanctioned by X therefore could not, at that point, proceed. The employer had just a few weeks prior “promoted” two union members to management in anticipation of job action by the union so as these two could train new workers an enable the production facility to continue operations.

[47] David G. Riche, Umpire, states in CUB 67324 that “The issue boils down to one of whether or not negotiations between parties constitute a labour dispute. It is my view that while the parties are negotiating, unless they come to an impasse that results in a stoppage of negotiations and a resulting stoppage of work, I do not believe one can say that there is a labour dispute. Labour negotiations do not in my view constitute a labour dispute.”

[48] In this case, I find that the same situation exists, negotiations were ongoing, both sides were using all legal tools available to them, including the strike vote which was useless until sanctioned by X head office.

[49] The employer here knew, or should have known, that its proposal would not be acceptable to the membership as presented. This action was another tool for them to use.

[50] There is no evidence before me to prove there has been any reduction in the “output” at the employer’s place of business in X, NL. I cannot refer to the jurisprudence that states that when a facility reaches 85% of its capacity, the work stoppage is deemed to be over. In this case there is no evidence to show that the X facility ever fell below this 85% threshold.

[51] In Létourneau [1986] 2 F.C. 82, the Federal Court of Appeal expressed the opinion that a work stoppage means that the normal operations of an employer's business cease.

[52] In this case, there was no such stoppage.

[53] ' In CUB 39839, Létourneau J., the Umpire, stated:

I have concluded, based on my interpretation of the jurisprudence, that there was no work stoppage in this case and that the employer's actions do not constitute extraordinary or exceptional measures as established in the jurisprudence.

I am more inclined to believe the directives of the Supreme Court of Canada which encouraged courts to recognize the right to benefits when the wording of the legislation gives it this choice.

….

In this case, I am convinced that there was no work stoppage under section 31 of the Act, according to the evidence. It is obvious that it was business as usual for the company, even though the employer and the flight attendants were embroiled in a dispute. By hiring and training replacement employees, the employer took the measures required to ensure that operations would continue. However, this constitutes no more or no less than an unjustified dismissal of a complete sector of the firm. I therefore feel that the claimants did not lose their employment due to a work stoppage resulting from a labour dispute and that their right to benefits must be restored.

In my opinion, to conclude otherwise would be contrary to the neutrality provided in the legislation and the principles stated by the Supreme Court of Canada in Hills, supra.

[54] In Hills, (1988) 1 S.C.R. 513, the Supreme Court of Canada stated:

Since the Act is intended to provide the unemployed with benefits, it is justifiable to give a liberal interpretation of provisions pertaining to the reeligibility for benefits, seeing that the Act was not designed to take away benefits it extends to the innocent victims of a labour dispute and that the employees contribute to the unemployment insurance fund.

If an employer were to set unreasonable conditions to resolve a conflict and employees knew that they would not collect unemployment insurance benefits if a work stoppage were to result due to a lack of consensus, employees would perhaps be prompted to accept unfavourable working conditions they would not have accepted otherwise. In such a case, the Act would become an instrument of coercion. The refusal to pay premiums under these circumstances scarcely reflects a position of neutrality. [TRANSLATION]

[55] As in the cases referred to here, the evidence very clearly shows that I can concur with these comments regarding a work stoppage and that, based on the evidence in the docket as well as the sworn testimony of the Appellant and his witnesses, a work stoppage did not occur at X on December 19, 2016

Conclusion

[56] For these reasons I find that the Commission has not proven that there was a labour dispute in existence on December 19, 2016 as the provisions of s. 36 of the Act have not been met.

[57] I find that the Appellant lost his employment because he was laid off in anticipation of a work stoppage, not because of a stoppage of work attributable to a labour dispute and for this reason the appeal of the Appellant is allowed.

Annex

The law

Employment Insurance Act

1. 36 (1) Subject to the regulations, if a claimant loses an employment, or is unable to resume an employment, because of a work stoppage attributable to a labour dispute at the factory, workshop or other premises at which the claimant was employed, the claimant is not entitled to receive benefits until the earlier of
   1. (a) the end of the work stoppage, and
   2. (b) the day on which the claimant becomes regularly engaged elsewhere in insurable employment.
2. (2) The Commission may, with the approval of the Governor in Council, make regulations for determining the number of days of disentitlement in a week of a claimant who loses a part-time employment or is unable to resume a part-time employment because of the reason mentioned in subsection (1).
3. (3) A disentitlement under this section is suspended during any period for which the claimant
   1. (a) establishes that the claimant is otherwise entitled to special benefits or benefits by virtue of section 25; and
   2. (b) establishes, in such manner as the Commission may direct, that before the work stoppage, the claimant had anticipated being absent from their employment because of any reason entitling them to those benefits and had begun making arrangements in relation to the absence.
4. (4) This section does not apply if a claimant proves that the claimant is not participating in, financing or directly interested in the labour dispute that caused the stoppage of work.
5. (5) If separate branches of work that are commonly carried on as separate businesses in separate premises are carried on in separate departments on the same premises, each department is, for the purpose of this section, a separate factory or workshop.

Employment Insurance Regulations

Section 53 of the Regulations

1. (1) For the purposes of section 36 of the Act and subject to subsection (2), a stoppage of work at a factory, workshop or other premises is terminated when
   1. (a) the work-force at the factory, workshop or other premises attains at least 85 per cent of its normal level; and
   2. (b) the level of activity in respect of the production of goods or services at the factory, workshop or other premises attains at least 85 per cent of its normal level.
2. (2) Where, in respect of a stoppage of work, an occurrence prevents the attainment of at least 85 per cent of the normal level of the work-force or activity in respect of the production of goods or services at a factory, workshop or other premises, the stoppage of work terminates
   1. (a) if the occurrence is a discontinuance of business, a permanent restructuring of activity or an act of God, when the level of the work force or of the activity attains at least 85 per cent of that normal level, with the normal level adjusted by taking that occurrence into account;
      and
   2. (b) if the occurrence is a change in economic or market conditions or in technology, when
      1. (i) there is a resumption of activity at the factory, workshop or other premises, and
      2. (ii) the level of the work-force and of the activity attains at least 85 per cent of that normal level as adjusted by taking that occurrence into account.
3. (3) For the purposes of calculating the percentages referred to in subsections (1) and (2), no account shall be taken of exceptional or temporary measures taken by the employer during the stoppage of work for the purpose of offsetting the effects of the stoppage.