Employment Insurance (EI)

Decision and Reasons

Decision

[1] The appeal is allowed.

Overview

[2] After losing his job in August 2015, the Appellant, M. P. (Claimant), applied for and received Employment Insurance benefits. On further investigation, the Respondent, the Canada Employment Insurance Commission (Commission), determined that the Claimant had been self-employed and that he had not declared wages he had earned as a musician. An overpayment was declared relating to his undeclared earnings, but no penalty was assessed. The Commission maintained this decision on reconsideration.

[3] The Claimant appealed the reconsideration decision to the General Division of the Social Security Tribunal, which dismissed his appeal, finding that he had been self-employed or engaged in the operation of a business and that his involvement was not of a minor extent. The General Division determined that the Claimant should be disentitled from receiving benefits from November 18, 2018, onward. The Claimant now seeks leave to appeal this decision to the Appeal Division.

[4] The appeal is allowed. The General Division failed to consider evidence of the Claimant’s job search after November 17, 2015. The matter is returned to the General Division for reconsideration.

Issues

[5] Did the General Division exceed its jurisdiction by determining that the Claimant was not entitled to benefits from November 18, 2015, onward?

[6] Was the General Division’s finding that the Claimant’s job search after November 17, 2015, was sporadic and consisted of only three job searches made without regard for the Claimant’s list of 69 email applications?

Analysis

General principles

[7] 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.

[8] 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 Department of Employment and Social Development (DESD Act).

[9] The grounds of appeal are stated 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 exceed its jurisdiction by determining that the Claimant was not entitled to benefits from November 18, 2015, onward?

[10] In the leave to appeal decision, I found that there was an arguable case that the General Division exceeded its jurisdiction. The Claimant was said to be operating his own business (and possibly affiliated businesses) and was also said to be self-employed as a symphony musician. It was not clear in the Commission’s decision whether the Commission considered the Claimant’s self-employment to be his work as a musician only or whether the Commission considered the Claimant’s self-employment to also include his home construction business.

[11] The Commission argues that the original Commission decision included two decisions. The first decision was that the Commission considered the Claimant to be self-employed; the Commission argues that it considered all of his circumstances, including his home construction business, in making this decision. The second decision allocated the income he had earned from his self-employment as a musician. The Commission acknowledges that it did not specify the weeks of unemployment in its initial decision letter, but it states that the Claimant had been notified that he had failed to prove he was not involved in self-employment to a major extent in his home construction business (which the Commission characterized as “three businesses”) in addition to his work with the symphony.

[12] According to its records, the Commission did tell the Claimant that he had not proved that he was not involved to a major extent with all three businesses plus the symphony.^{Footnote 1} In the same conversation, the Claimant was told that the information would be sent for adjudication and that a decision would be made. The Commission did not receive any additional information before rendering its decision.

[13] While the Commission also investigated the extent of the Claimant’s involvement as a musician for the symphony, the greater part of its investigation prior to its initial decision,^{Footnote 2} and also for the purposes of its reconsideration decision,^{Footnote 3} concerned the Claimant’s self-employment in the home construction business. It is clear from the Claimant’s conversation with the Commission on March 3, 2017,^{Footnote 4} that he understood that his involvement in the businesses was relevant to the Commission’s determination of his self-employment. In the context of asking the Claimant about his involvement in the construction business, the Commission said this:

Explained that self-employment used to prevent payment of benefits because it meant the client was not unemployed which is the first condition of payment. Advised that within the last few years the legislation changed to allow self-employment as long as it is minor in extent, but if it is major in extent it can prevent payments.

[14] In the Claimant’s first telephone call to the Commission requesting a reconsideration, the discussion centres on the Claimant’s involvement in the businesses, not on his self-employment with the symphony.^{Footnote 5} He is asked for documents relating to those businesses, which he then provided. The Commission later informed him that the documents do not change the decision. The reconsideration decision states that the decision has not been changed under the heading “weeks of unemployment.”

[15] Having reviewed the matter, I am not satisfied, on a balance of probabilities, that the General Division exceeded its jurisdiction. I accept that the Claimant understood the nature of the investigation and anticipated the issues to be decided. Despite the ambiguous wording of the Commission’s decision letter itself, I am satisfied that the Commission determined and communicated to the Claimant that it had found him to be self-employed based on all his self-employment activities (including his work for the symphony and his other business involvement) and to be disentitled by reason of that self-employment.

[16] I therefore accept that these issues were properly before the General Division.  The General Division was therefore within its jurisdiction in reviewing and determining whether the Claimant had been self-employed and the extent of that self-employment, in relation to his involvement in the home-construction business as well as his work with the symphony.

Issue 2: Was the General Division’s finding that the Claimant’s job search after November 17, 2015, was sporadic and consisted of only three job searches made without regard for the Claimant’s list of 69 email applications?

[17] The General Division accepted that the Claimant had been actively seeking employment prior up to November 17, 2015, but it found that his job search became sporadic afterwards and that he had only submitted three applications within the eight-month period after November 17, 2015.

[18] In its submissions to the Appeal Division, the Commission accepted that the General Division erred by failing to consider the list that the Claimant had submitted to the General Division of 69 email job applications.^{Footnote 6}

[19] I agree; the General Division did not acknowledge the evidence of these additional job applications in its decision.

[20] Of those 69 applications, 31 of them are after November 17, 2015, and within eight months. Three of the applications are dated in November 2015, eight are in January 2016, seven are in February 2016, two are in March 2016, three are in April 2016, three are in May 2016, two are in June 2016, and three are in July 2016.

[21] The General Division found that the Claimant’s self-employment was not minor in extent from November 18, 2015, onward^{Footnote 7} apparently because he did not undertake serious, real steps to find work for himself.^{Footnote 8} Therefore, the General Division based its decision on an erroneous finding that the Claimant’s job search had been sporadic after November 17, 2015, with only three applications within eight months. This finding was made without regard for the evidence of an additional 31 applications in that period. Therefore, the General Division erred under section 58(1)(c) of the DESD Act.

Conclusion

[22] The appeal is allowed.

Remedy

[23] Having allowed the appeal, I have the authority under section 59 of the DESD Act to make the decision that the General Division should have made, to refer the matter back to the General Division for reconsideration, or to rescind or vary the General Division decision in whole or in part.

[24] In this case, the record is not complete. I have accepted that the General Division did not consider a list of email job applications, but there is no available audio recording of the oral hearing. As a result, I do not know if the Claimant provided additional testimonial evidence with which his job search efforts or his involvement in his businesses otherwise might be assessed.

[25] Therefore, I am referring the matter back to the General Division for reconsideration.