Employment Insurance (EI)

Decision and reasons

Decision

[1] The appeal is allowed.

[2] I have given the decision that the General Division should have given.

Overview

[3] After the Appellant, M. G. (Claimant), and his wife had a child in October 2010, the Claimant’s wife applied for parental benefits, claiming the entire 35 weeks. Shortly afterwards and before the Claimant’s wife had accessed any benefits, the Claimant and his wife reassessed their circumstances and determined that the Claimant should take a leave from his work and claim a part of the parental benefits. He applied for 24 weeks of the parental benefit, stating that his wife wished to take the remaining 11 weeks. However, the Respondent, the Canada Employment Insurance Commission (Commission), paid the Claimant’s wife 31 weeks in accordance with her original application and paid the Claimant the 24 weeks that he had requested.

[4] Some years later, the Commission discovered that it had overpaid the Claimant by 20 weeks. The Claimant apparently appealed the Commission’s initial decision and/or its attempt to recover the overpayment, and the General Division of the Social Security Tribunal determined that the Commission was outside the 36-month limitation set out in section 52(1) of the Employment Insurance Act (EI Act). The Commission then made a further decision almost six years after the benefits were paid in which it found the Claimant to have made a false or misleading statement, with the result that the Claimant fell within the extended time to recover described in section 52(5) of the EI Act. The Commission maintained this decision and sought to recover the payment. The Claimant’s appeal to the General Division was dismissed. The Claimant now appeals to the Appeal Division.

[5] The appeal is allowed. The General Division erred in law by substituting its own judgment for that of the Commission without determining whether the Commission had been reasonably satisfied when it made its decision that a false or misleading statement had been made. Furthermore, the General Division failed to analyze how the statement was false or misleading in light of the evidence and arguments before it.

[6] I have given the decision the General Division should have given and I have found that the applicable limitation period is the 36-month limitation set out in section 52(1). The Commission is therefore out of time to recover any overpayment as a result of the mistaken payment in 2011 of parental benefits that were in excess of 35 weeks.

Issues

[7] Did the General Division err in law by failing to determine whether the Commission was reasonably satisfied that a false or misleading statement had been made?

[8] In finding that a false or misleading statement had been made, did the General Division fail to analyze the nature of the statement and consider the Claimant’s evidence that the statement was not, in fact, false or misleading?

Analysis

Standard of review

[9] The grounds of appeal set out in section 58(1) of the Department of Employment and Social Development Act (DESD Act) are similar to the usual grounds for judicial review in the Courts, suggesting that the same kind of standards of review analysis might also be applicable at the Appeal Division.

[10] However, I do not consider the application of standards of review to be necessary or helpful. Administrative appeals of Employment Insurance decisions are governed by the DESD Act. The DESD Act does not provide that a review should be conducted in accordance with the standards of review. The Federal Court of Appeal in Canada (Citizenship and Immigration) v Huruglica,^{Footnote 1} was of the view that standards of review should be applied only if the enabling statute provides for their application. It stated that the principles that guided the role of courts on judicial review of administrative decisions have no application in a multilevel administrative framework.

[11] Canada (Attorney General) v. Jean^{Footnote 2}, concerned a judicial review of a decision of the Appeal Division. The Federal Court of Appeal was not required to rule on the applicability of standards of review, but it acknowledged in its reasons that administrative appeal tribunals do not have the review and superintending powers that are exercised by the Federal Court and the Federal Court of Appeal where the standards of review are applied. The Court also observed that the Appeal Division has as much expertise as the General Division and is therefore not required to show deference.

[12] While certain other decisions of the Federal Court of Appeal appear to approve of the application of the standards of review,^{Footnote 3} I am nonetheless persuaded by the reasoning of the Court in Huruglica and Jean. I will therefore consider this appeal by referring to the grounds of appeal set out in the DESD Act only.

General principles

[13] The Appeal Division’s task is more restricted than that of the General Division. The General Division is required to consider and weigh the evidence that is before it and to make findings of fact. In doing so, the General Division applies the law to the facts and reaches conclusions on the substantive issues raised by the appeal.

[14] However, the Appeal Division may intervene in a decision of the General Division only if it can find that the General Division has made one of the types of errors described by the “grounds of appeal” in section 58(1) of the DESD Act.

[15] The only grounds of appeal are described below:

1. The General Division failed to observe a principle of natural justice or otherwise acted beyond or refused to exercise its jurisdiction;
2. The General Division erred in law in making its decision, whether or not the error appears on the face of the record; or
3. 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.

Issue 1: Did the General Division err in law by failing to determine whether the Commission was reasonably satisfied that a false or misleading statement had been made?

[16] Section 52(1) of the EI Act

[17] Section 52(5) of the EI Act allows the Commission 72 months in which to reconsider a claim if, in the opinion of the Commission, a false or misleading statement had been made in connection with the claim. According to the Federal Court of Appeal in Canada (Attorney General) v Langelier, the Commission “has a duty to tell the claimant precisely why, for the particular purposes of the exercise it is undertaking under [the former legislative provision in the Unemployment Act equivalent to what is now s. 52(5) of the EI Act), the statement seems false [in order to arrive at this conclusion].”^{Footnote 4} It is clear that the Commission had considered the fact that the Claimant “reported that the other parent was requesting only 11 weeks of parental benefits”,^{Footnote 5} to have been false or misleading, but it did not explain to the Claimant why it thought so.

[1] The Court also noted: “[I]n order to arrive at [the conclusion that a false or misleading statement has been made] the Commission must be reasonably satisfied that ‘a false or misleading statement or representation has been made in connection with a claim’”^{Footnote 6} [emphasis added]. The General Division did not determine whether the Commission had been reasonably satisfied that a false or misleading statement had been made but, based on its reading of (Canada (Attorney General) v. Dussault^{Footnote 7}, the General Division determined whether the Commission could reasonably consider that the Claimant made a false or misleading statement. However, Dussault used language such as “the Commission must be reasonably satisfied, “is reasonably satisfied” and, “was reasonably satisfied”.

[2] I appreciate that the distinction is a fine one. However, in my view, the requirement that the Commission be reasonably satisfied in forming its opinion is comparable to the requirement that discretion be exercised in a judicial fashion. The General Division is required to determine whether the Commission arrived at its opinion in a proper manner. In this case, the General Division conducted its own review of the evidence that was before it, forming its own opinion that the Commission’s could have been reasonably satisfied that a false or misleading statement had been made. In other words, it based its decision on its own retrospective assessment of the reasonableness of the Commission’s conclusions and not an assessment of whether or not the Commission itself had been reasonably satisfied at the time that it formed its opinion.

[3] The General Division’s finding that the Commission could reasonably consider that the Claimant made a false or misleading statement is not the same as a finding that the Commission had, in fact, been reasonably satisfied in reaching its conclusion. In the first case, the Commission might ignore relevant considerations and take irrelevant considerations into account but still reach a result that the General Division would consider reasonable base on its own assessment of the evidence available. In the second case, the Commission might follow a process by which it considered all of the evidence that related to the relevant considerations only, but still reach a conclusion with which the General Division might disagree.

[18] The General Division erred in law by failing to make a finding that the Commission had or had not been reasonably satisfied in forming its opinion that the Claimant had made a false or misleading statement. This is an error of law under section 58(1)(b) of the DESD Act.

Issue 2: In finding that a false or misleading statement had been made, did the General Division fail to analyze the nature of the statement and consider the Claimant’s evidence that the statement was not, in fact, false or misleading?

[19] As noted in the leave to appeal decision, the facts do not speak for themselves in this case. It is clear that the Claimant and his wife received more weeks of parental benefits than the weeks to which they were jointly entitled. The Claimant and his wife are entitled to a combined 35 weeks of benefits that they may choose to divide between them in accordance with section 23(4) of the EI Act. In this case, the Claimant’s wife had originally filed an application asking for 35 weeks of parental benefits. However, before she had received any benefits, the Claimant and his wife revisited their plans and decided to split the benefit. As a result, the Claimant put in a claim for 24 weeks of parental benefits and indicated that his wife wished to claim the other 11 weeks. The Commission paid to the Claimant the 24 weeks of benefits he requested but also paid to his wife the 35 weeks of benefits she had earlier claimed; the combined total exceeded the 35 week maximum.

[20] However, it is not sufficient to simply note that the Claimant indicated on his own claim application that his wife wished to claim 11 weeks and then to state: “This is a false or misleading statement because the [Claimant’s] wife had claimed the 35 weeks.”^{Footnote 8} The Claimant clearly disputed that he had made a false statement, arguing the Commission’s mistake in this case was not a result of false information provided by the Claimant but rather a result of the Commission’s misinterpretation of a true statement and the Commission’s own failure to check the information in its files to reconcile two incompatible claims.

[21] The General Division addressed the Claimant’s argument that he had not intentionally misled the Commission, but it did not engage the Claimant’s argument that this was not a false or misleading statement at all. Instead, the General Division presumptively concluded that the Claimant had made a false or misleading statement because his wife had earlier claimed 35 weeks and he was now indicating that she wished to claim 11 weeks.

[22] However, the Claimant’s arguments did not rest on the proposition that he had not intentionally made a false statement. His argument is that he provided only true information. He testified at the General Division hearing that the information he provided was “not false, it was exactly what happened”,^{Footnote 9} that he had not “misled someone”^{Footnote 10} or “provided false information”,^{Footnote 11} and that the Commission’s position that he made false or misleading statements is “absolutely not correct. [He] did not make any false or misleading statements.”^{Footnote 12}

[23] The Claimant explained that he believed his application would supercede his wife’s earlier request. In his application for benefits, the Claimant requested 24 weeks of the parental benefit for himself and selected 11 weeks in the drop-down box that asks how much the other parent “wishes” to claim. According to the Claimant, his and his wife’s joint intention was to claim 35 weeks. He would claim 24 of those weeks, and his wife would claim 11 weeks. The Commission’s system apparently misinterpreted the Claimant’s information and failed to reconcile the two incompatible claims. There is no evidence that the system and application form prompted the Claimant to state whether the other parent has already made a claim and, if so, how many weeks the other parent claimed.

[24] The Claimant had argued that it was up to the Commission to clarify the distribution of benefits and to adjudicate accordingly.^{Footnote 13} The Claimant acknowledged that the Commission had conflicting information^{Footnote 14}¾a reference to his wife’s request for 35 weeks of parental benefits in her benefit claim application^{Footnote 15}¾but he said that “[the Commission] never actually contacted [his] wife about it. Even though they received conflicting information (the conflicting claims), they never really tried to get to the bottom of it.” He went on to say: “It’s their computer systems. [He filled] out their forms.”^{Footnote 16}

[25] The General Division also did not consider whether a meaningful distinction exists between a mistake in the benefit claimed and a mistake in information provided in support of the adjudication of a benefit. The Claimant argued that the Commission has always had the correct information from both himself and his wife in relation to the birthdate of their child and the fact that they were the parents of the child.^{Footnote 17} If there was an error, it was not that false information was provided. The error was that the joint claim of the Claimant and his wife was in excess of the parental entitlement that could be paid: the Claimant’s request plus the request of the Claimant’s wife added up to more than the 35 weeks of parental benefit entitlement that they could jointly access under the EI Act.

[26] It is not possible to determine whether the General Division fully understood the Claimant’s argument because it did not analyze whether the Claimant’s statement might have been objectively true, despite the overpayment that resulted. Therefore, I find that the decision is based on an erroneous finding of fact that was made without regard for the material before the General Division, an error under section 58(1)(c) of the DESD Act. Alternatively, the General Division failed to provide sufficient reasons for its conclusion that a false or misleading statement was made an error of law under section 58(1)(b) of the DESD Act.

Conclusion

[27] The appeal is allowed.

Remedy

[28] Having allowed the appeal, I am authorized under section 59 of the DESD Act to give the decision the General Division should have made, refer the matter back to the General Division for reconsideration, or confirm rescind or vary the General Division decision in whole or in part.

[29] I consider the record to be complete. Accordingly, I will give the decision that the General Division should have given.

[30] At the General Division hearing, the Commission needed to establish that it had been reasonably satisfied that a false or misleading statement had been made at the time that it formed its opinion to that effect. In forming that opinion, the only evidence considered by the Commission was the Claimant’s application form, in which he indicated that he would take 24 weeks of the parental benefit and that his wife wished to take the other 11 weeks. It was not disputed that the Claimant completed this form at a time when his wife had not yet accessed any parental benefits. At the General Division, the member clarified that the Claimant’s wife would still have been on a maternity—not parental—benefit with a top-up by her employer.^{Footnote 18} The Claimant had also testified that it was his and his wife’s plan and their intention to split benefits in the manner indicated on his application, at the time he filed his application for parental benefits, which is why he claimed what he did.

[31] The Federal Court of Appeal has said that it is not necessary for the false or misleading statement to have been made knowingly.^{Footnote 19} I accept this. However, the fact that a claimant may unknowingly make a false or misleading statement does not mean that a statement may be subjectively defined as false or misleading based on the fact the Commission or, in this case, its online application system, was misled. The Claimant may have been mistaken in his expectation that his claim would supercede any prior claim, but his expectation was a reasonable one. 

[32] I do not accept that the Claimant can be held responsible for the fact that the Commission’s system was not set up to flag or manage incompatible claims for the same benefit. It is clear that the Commission’s adjudicative mistake to provide too many weeks of benefits was a result of a misinterpretation of information that the Claimant provided, and that it already had the information in its files or database, by which it might have understood its own error. 

[33] More to the point, I find the information that the Claimant provided was objectively true in terms of his and his wife’s intentions and that it was not objectively misleading at the time it was made. The Claimant testified that when he applied, he and his wife did not intend for her to receive more than 11 weeks. Although he qualifies that he is only “speculating” because of the significant length of time that has passed, he stated that when he asked for 11 weeks, he may have been thinking that his own benefits would begin about 11 weeks from the date his child was born.^{Footnote 20} He also said that his employer allowed him only six months of leave and that he may have asked for 24 weeks for himself for this reason.^{Footnote 21}

[34] The question remains as to whether the Claimant misled the Commission by not informing it of its error during the time when the Claimant’s wife continued to receive benefits that exceeded the 11 weeks that the Claimant specified in his application. The Claimant testified to the effect that he thought that his wife would continue to be paid during the time he was receiving parental benefits from the employer, and that he doesn’t know how it happened that the government was paying her money.^{Footnote 22} He said that their plan was that he would take six weeks off and his wife was supposed to receive the balance through a top-up from his wife’s employer. He said the extra 20 weeks should have come “from a different bucket [than the parental benefits]”.^{Footnote 23} He also said that “[He didn’t] know where a certain amount was coming from. It looked like it was coming from [his wife’s] employer.”^{Footnote 24}

[35] There is very little evidence as to the Claimant’s circumstances at the time the Claimant’s wife was receiving parental benefits. The Commission did not question what the Claimant or his wife may have known about any mistake in the processing of their claims at the time they were receiving the parental benefits, even in the Commission’s interview of the Claimant in November 2016.

[36] Given the significant amount of time that has passed, I will not draw an adverse inference from the fact that the Claimant presented no corroborating evidence to support his assertion that he and his wife did not know they were being overpaid by the Commission. I find that it is plausible that the Claimant did not know at the time the benefits were paid that he and his wife were receiving benefits to which they were not entitled, and I accept the Claimant’s unchallenged testimony on this point. Because I have found the Claimant did not know he and his wife were receiving benefits to which they were not entitled, it follows that the Claimant’s earlier statement cannot be transformed into a misleading statement, as a result of the fact that the Claimant did not inform the Commission of its error

[37] I therefore find, on a balance of probabilities, that the Claimant did not make a false or misleading statement in connection with his claim. Therefore, the extension of the Commission’s ability to reconsider described in section 52(5) of the EI Act does not apply.  The Commission is bound by the 36-month limitation set out in section 52(1) of the EI Act. The benefits were paid for the weeks from January 2, 2011, to June 18, 2011, and the Commission’s reconsideration decision is dated December 16, 2016; more than 36 months later.

[38] The Commission is out of time to reconsider its decision under section 52(1) of the EI Act and may not seek recovery of those parental benefits in excess of 35 weeks which were mistakenly paid in 2011.