Employment Insurance (EI)

Decision and reasons

Decision

[1] The appeal is allowed, and I have made the decision the General Division should have made. The disqualification is confirmed.

Overview

[2] The Appellant, H. G. (Claimant), was dismissed from his employment for a violation of the employer’s mobile device policy. When he applied for Employment Insurance benefits, the Respondent, the Canada Employment Insurance Commission (Commission), determined that the Claimant had been dismissed for misconduct. He was therefore disqualified from receiving benefits. The Commission maintained its decision when the Claimant asked for a reconsideration. The Claimant appealed to the General Division of the Social Security Tribunal, but his appeal was dismissed. The Claimant is now appealing the General Division’s dismissal to the Appeal Division.

[3] The appeal is allowed. In finding the Claimant’s actions to be misconduct, the General Division relied on previous warnings that were not supported by the evidence and, in doing so, erred under section 58(1) of the Department of Employment and Social Development Act (DESD Act).

[4] Having found that the General Division erred, I have made the decision the General Division should have made. Based on the evidence, I must still find that Claimant knew or should have known that personal use of his company-issued mobile device was contrary to the employer’s policy and that the manner in which he used the device could result in his dismissal. I confirm the disqualification the Commission imposed.

Issue

[5] Did the General Division base its finding that the Claimant knew or ought to have known that his actions could result in his dismissal on a misunderstanding of the evidence related to previous warnings?

Analysis

General principles

[6] 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.

[7] 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.

[8] The grounds of appeal are as follows:

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 base its finding that the Claimant knew or ought to have known that his actions could result in his dismissal on a misunderstanding of the evidence related to previous warnings?

[9] The decision that the Claimant’s actions amount to misconduct under the Employment Insurance Act (EI Act) requires a finding that the Claimant’s actions were willful and deliberate and that he knew or ought to have known that his actions could result in his dismissal. The decision that the Claimant is disqualified from receiving benefits due to his misconduct is based on this finding.

[10] In the decision, the finding that the Claimant knew or should have known that his actions could result in his dismissal follows immediately after the General Division’s finding that the Claimant had been “warned several times.” It is apparent that the General Division relied in part on the existence of warnings to support its conclusion.

[11] The General Division determined the Claimant had received warnings based on the termination letter.^{Footnote 1} That letter states that the Claimant was questioned about the reasons for his excessive cell phone charges, that there was “further investigation,” and that the Claimant offered a second explanation for his usage in response. However, the substance of the letter appears to address a single investigation and to relate to the incident for which the Claimant was terminated.

[12] The letter also notes that this was “not the first time the [employer had] addressed questionable business expenses,” but it then identifies the previous time as an expense claim that was unrelated to any violation of the employer’s mobile device policy. The letter does not refer to any previous warning for violation of the mobile device policy.

[13] The employer’s statement to the Commission does not mention any previous warning.^{Footnote 2} In a statement to the Commission,^{Footnote 3} the Claimant specifically denied receiving any previous warning. According to the Claimant’s application for benefits,^{Footnote 4} the employer and the Claimant discussed his personal use of the business cell phone at the end of February, which was followed by the termination letter on March 5. The March 5 letter states, “[t]his letter will confirm our discussion where you were advised that your employment with [the employer] has been terminated.” The Claimant responded to the General Division’s question about his phone use after the February discussion with the employer by saying that he followed the employer’s instructions and did not use the cell phone afterwards. There was no evidence to the contrary.

[14] I find that there was no evidence that the Claimant had been previously warned for misuse of the employer-supplied mobile device. The General Division misunderstood the evidence of warnings and relied on its misunderstanding to conclude that the Claimant knew or ought to have known that he could be dismissed for misusing the device.

[15] Therefore, I find that the General Division erred under section 58(1)(c) of the DESD Act by basing 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.

Conclusion

[16] The appeal is allowed.

Remedy

[17] Section 59 of the DESD Act allows me to dismiss the appeal; give the decision that the General Division should have given; refer the matter back to the General Division for reconsideration; or confirm, rescind, or vary the General Division decision. In my view, the record is complete, and I may make the decision that the General Division should have made.

[18] To find that a claimant was dismissed for misconduct under the EI Act, the claimant must have engaged in the alleged conduct, lost his or her employment because of the alleged conduct, and the alleged conduct must constitute misconduct under the EI Act. To constitute misconduct, the conduct must be a breach of an express or implied duty or obligation owed to the employer,^{Footnote 5} and the conduct must be willful or so reckless as to approach willfulness.^{Footnote 6} The Commission has the burden of proof to establish misconduct.

[19] There is no reason for me to interfere with the General Division’s findings that the Claimant used the employer-provided mobile device for personal use and that this was the reason for his dismissal. The Claimant does not dispute either of these facts. I need only determine whether the manner in which the Claimant used the device constitutes misconduct under the EI Act.

[20] I accept that the Claimant understood that the employer had a mobile device policy that permitted the use of its mobile devices for business purposes only. In his application for benefits, the Claimant wrote the following: “The Mobile usage policy explains that all the assets of the company, including cell phone, laptop or any other computer device, should be used only for business purposes appropriately as required.”^{Footnote 7} In the Claimant’s first conversation with the Commission, the Claimant stated that he was “dismissed for misuse of company resources as he had used an excessive amount of internet data and made an excessive amount of personal phone calls using his company-issued device.” He also stated that he was “aware of the policy against this type of conduct, but had assumed it would have some flexibility given his personal situation.”^{Footnote 8} He admitted that he “did not seek to validate this assumption or discuss his situation or potential accommodations with his supervisors.”

[21] The Claimant did not ask the employer for permission to use the device for personal purposes, and he did not use the phone in a minor or incidental way for non-business purposes. The employer claimed that the Claimant had been using the phone excessively for personal use over a number of months and had been notified of several excess charges.^{Footnote 9} He then took the device with him to India, where he incurred $700.00 in long distance and data charges. The Claimant does not dispute these claims.

[22] Knowing that the policy only permitted the phone to be used for business purposes, the Claimant should not have required an additional warning that such a business-use policy would continue to apply when he was outside of Canada. This should have been all the more obvious.

[23] When the Claimant was asked by the General Division what he had told the employer when he was informed of the excessive monthly charges, the Claimant explained that he told the employer that he used the phone for business as well as to deal with his family emergencies.^{Footnote 10} In its termination letter,^{Footnote 11} the employer wrote that, when confronted with the excessive monthly charges, the Claimant initially maintained that his calls were for business purposes; he did not admit to calls to his ailing family until after an employer investigation.

[24] Despite the Claimant’s assertion that he informed the employer about his personal use, I prefer the evidence of the employer’s letter, in which it is stated that the Claimant initially denied that the excess charges were personal. Such a denial would be consistent with the Claimant’s failure to ask for permission to incur personal charges despite his admitted knowledge of policy restricting mobile device use to business purposes. It would also be consistent with the employer’s emphatic position that the Claimant knew about the policy and that he violated it.^{Footnote 12} Furthermore, I find it implausible that the Claimant would have admitted to excess personal charges when first confronted without some indication of a discussion or negotiation concerning the repayment or forgiveness of the personal-use charges. There is no evidence or claim that such a discussion took place or that the Claimant made any offer of repayment when the issue first arose with the employer. Having accepted that the Claimant initially denied his personal use of the device, I infer that he had hoped to hide the personal nature of his calls and charges from the employer. This suggests an awareness of consequences.

[25] I accept that the Claimant knew or should have known he could be disciplined or even dismissed for using the employer’s mobile device for personal purposes and for allowing the cost to be charged to the employer. As justification for the Claimant’s dismissal, the employer characterizes the Claimant’s disregard for the mobile device policy as having “damage[d] the employment relationship which is built on trust.” While I accept that the Claimant had not been warned specifically about using the company cell phone for personal purposes or violating the mobile device policy, the termination letter details a previous incident in which the employer had addressed “questionable business expenses”: The Claimant had attempted to expense “citizenship expenses”^{Footnote 13} to the employer without authorization. Both incidents could be understood as damaging to the employer-employee trust relationship, and the Claimant ought to have understood that the employer would not accept an employee’s practice of charging unauthorized personal expenses to the employer.

[26] The Claimant may consider the employer’s dismissal to be too severe a consequence for his unauthorized personal use of the mobile device. However, it is not my role to measure whether the employer’s response was appropriate or proportionate to the Claimant’s conduct. The Claimant incurred excess monthly charges on the employer’s account, and incurred a final charge of $700.00 during his trip to India, without seeking or obtaining the employer’s permission.  In my view, the Claimant was acting so recklessly as to approach willfulness.^{Footnote 14} The Claimant knew or ought to have known that the employer would treat such charges as “tantamount to theft”^{Footnote 15} and that dismissal was a real possibility.^{Footnote 16}

[27] I find, on a balance of probabilities, that the Claimant lost his employment by reason of his own misconduct, and he is therefore disqualified from receiving benefits.