Employment Insurance (EI)

Decision

[1] I am dismissing the appeal. The Employer has not proven that the Claimant lost her job because of misconduct.

Overview

[2] M. D. (the Claimant) worked for X (the Employer). The Claimant took several weeks of leave in December 2018. She was supposed to return to work in January 2019, but the Employer dismissed her before she returned to work. According to the termination letter, the Employer dismissed the Claimant for abusing her vacation time, poor attitude, and insubordination. The Claimant applied for employment insurance benefits. The Canada Employment Insurance Commission (Commission) decided that the reasons the Claimant lost her employment did not amount to misconduct. The Commission allowed benefits free from any disqualification.

[3] The Employer asked the Commission to reconsider its decision. The Employer argued that, after they dismissed the Claimant, they learned that the Claimant had changed her pay without permission. The Employer argued that the pay discrepancies should disqualify the Claimant from receiving benefits. The Commission maintained its decision to allow benefits. The Employer appealed to the Tribunal.

[4] I am dismissing the Employer’s appeal. The Employer has not proven that the Claimant lost her employment because of her misconduct. The Employer dismissed the Claimant for abusing her vacation time, not because of the pay discrepancies. The Employer acknowledges that the Claimant’s abuse of vacation time was not misconduct. An action discovered after the dismissal cannot amount to misconduct because a finding of misconduct under the Employment Insurance Act requires a direct, causal relationship between the action and the dismissal.

Preliminary matters

[5] At the hearing, the Claimant’s representative argued that he had not had enough notice that the Employer intended to argue about whether incidents discovered after a dismissal could amount to misconduct. He agreed to proceed with the hearing if he could make further submissions after the hearing. I agreed to accept submissions from the Claimant after the hearing. I did not ask the Employer for further submissions. However, the Employer also made further submissions after the hearing. The Claimant made additional submissions in response to the Employer’s submissions.

[6] I have decided to accept all of the post-hearing submissions from the Employer and the Claimant. The hearing was 60 minutes and I recognize that the Employer had difficulty going through all of their evidence in this time. Furthermore, after the hearing, the Employer submitted an Umpire decision that is directly relevant to the issues under appeal. The Claimant made submissions in response to the Employer’s post-hearing submissions and the Commission had the opportunity to review all of the submissions. As a result, I find that there would not be any prejudice to the parties involved if I accept the post-hearing documents. I find that allowing the post-hearing submissions respects the natural justice rights of all the parties to this appeal.

Issue

[7] I have to decide whether the Claimant lost her job because of misconduct. In order to make this decision, I must first decide whether conduct discovered after the dismissal can amount to misconduct within the meaning of the Employment Insurance Act.

Analysis

[8] The Employer dismissed the Claimant on January 24, 2019. According to the dismissal letter, the Employer dismissed the Claimant for abusing her vacation time, poor attitude, and insubordination. At the hearing, the Employer confirmed that they dismissed the Claimant because they had problems with her use of vacation time.

[9] After dismissing the Claimant, the Employer discovered pay discrepancies. The Employer decided that the Claimant had paid herself for more hours than she had actually worked. The Employer considered this time theft. The Employer acknowledged that they had no knowledge of the pay discrepancies at the time that they dismissed the Claimant.

Can conduct discovered after a dismissal amount to misconduct under the Employment Insurance Act?

[10] The causal relationship is a necessary element for a finding of misconduct. Conduct discovered after a dismissal cannot be the operative cause of the dismissal, and so conduct discovered after a dismissal cannot amount to misconduct under the Employment Insurance Act.

[11] The Employer argues that an action uncovered after the end of the employment relationship can amount to misconduct under the Employment Insurance Act. The Employer argues that the pay discrepancies discovered after the Claimant’s dismissal should disqualify the Claimant from receiving employment insurance benefits.

[12] In support of their argument, the Employer notes that jurisprudence affirms that events that occur outside of the employment period can amount to misconduct. In particular, the Employer relies on an Umpire decision that affirms that an action discovered after the end of an employment relationship can amount to misconduct.

[13] I am not persuaded by the Employer’s arguments. A finding of misconduct requires a direct, causal relationship between the conduct and the dismissal. In other words, the misconduct must be the thing that causes the dismissal.

[14] The Employment Insurance Act requires the Commission to disqualify a claimant who loses their employment because of their misconduct.^{Footnote 1} By using the phrase “because of,” the law implies that there should be a causal relationship between the misconduct and the dismissal. The jurisprudence goes a step further and explicitly affirms that there must be a direct, causal relationship between the action and the dismissal. There are several Federal Court of Appeal decisions that describe this principle.

[15] In Canada (Attorney General) v Brissette, A-1342-92, the Federal Court of Appeal held that there must be a causal relationship between the action and the dismissal:

There must, first, be a causal relationship between the misconduct and the dismissal. It is not sufficient, in order for the disqualification to come into play, for the misconduct to be a mere excuse or pretext for the dismissal…It must cause the loss of employment and must be an operative cause.

[16] Similarly, in Davlut v Canada (Attorney General), A-241-82, the Federal Court of Appeal held that the misconduct must be “the reason for the dismissal, not the excuse for it.”

[17] The Employer is correct that the misconduct can happen outside of the employment. For instance, the misconduct can happen outside of work hours. However, the requirement for a causal relationship remains. In Brissette, the claimant lost his driver’s license while driving impaired outside of work hours. He then lost his job because he needed a driver’s license to work. His misconduct – losing his driver’s license – directly caused the loss of his employment. In other words, he lost his job as a direct result of his actions.

[18] Similarly, the misconduct can even happen outside of the employment tenure. In both Smith v Canada (Attorney General), A-875-96 and Canada (Attorney General) v McNamara, 2007 FCA 107, the Federal Court of Appeal acknowledged that an action that happened even before the employment started could amount to misconduct. However, in both cases, the Court held that there could only be misconduct when the action causes the dismissal.

[19] In McNamara, the claimant took a drug test, started working before the results of the drug test, and then ultimately failed the drug test. He lost his job because passing the drug test was a condition of employment. The Court found that his actions were misconduct, even though he took the drug test before he started the job. The claimant lost his job because he failed the drug test. The Court noted that “the relationship between employment and misconduct is not one of timing, but one of causation.”

[20] Put simply, the Federal Court of Appeal has clearly and consistently held that a finding of misconduct requires a causal relationship between the action and the dismissal. For a finding of misconduct within the meaning of the Employment Insurance Act, an employer cannot first dismiss an employee and then look for a reason for the dismissal. The action must cause the dismissal.

[21] I acknowledge that the Employer has provided an Umpire decision that supports his argument that an action discovered after the end of the employment relationship can amount to dismissal. I am not bound by Umpire decisions. However, if I find the decision persuasive, I can choose to be guided by the reasoning.

[22] However, I do not find the Umpire’s decision in CUB 25896A persuasive. I acknowledge that there are some similar factual elements to the present case, but the Umpire does not consider whether the misconduct caused the dismissal. The Umpire does not address the requirement for a causal relationship between the action and the dismissal. I cannot ignore the Federal Court of Appeal jurisprudence that requires a causal relationship between the action and the dismissal.

[23] Similarly, I will not be guided by any common law principles related to cause for dismissal. The Employer refers to the Supreme Court of Canada decision Lake Ontario Portland Cement Co. Ltd v Groner, [1961] SCR 553 and argues that conduct discovered after a dismissal can retroactively provide cause for dismissal.

[24] However, I am not making a decision about whether the Employer had cause to dismiss the Claimant. I am only making a decision about whether the Claimant lost her employment because of her misconduct. These are separate issues and the Employer is free to pursue the issue of cause for dismissal in other venues.

[25] Misconduct, within the meaning of the Employment Insurance Act, requires a causal relationship between the action and the dismissal. There is no causal relationship between an action and a dismissal if the employer only learns of the action after the employment relationship has already ended.

[26] The Employer did not know about the pay discrepancies at the time they dismissed the Claimant. There is no dispute on this point. The Employer only linked the pay discrepancies to the Claimant’s dismissal when they asked the Commission for a reconsideration. This was six months after her last day of work. There is no causal relationship between the pay discrepancies and the Claimant’s dismissal. The Employer did not dismiss the Claimant because of the pay discrepancies.

[27] I decline to consider whether the Claimant actually engaged in time theft because the Employer has not demonstrated that the pay discrepancies caused the Claimant’s dismissal.

Did the Claimant lose her employment because of her misconduct?

[28] The Employer has not proven that the Claimant lost her employment because of her misconduct.

[29] The Employer told the Commission that they dismissed the Claimant because of her use of vacation time. The dismissal letter refers to abuse of vacation time, insubordination, and poor attitude. At the hearing, the Employer acknowledged that they initially dismissed the Claimant because of misuse of vacation time.

[30] Given the Employer’s statements and the dismissal letter, I am satisfied that the Employer dismissed the Claimant because of issues with her use of vacation time.

[31] At the hearing, the Employer acknowledged that they did not intend to make any submissions on the question of whether the Claimant’s abuse of vacation time amounted to misconduct. The Commission and the Claimant argue that the Claimant’s use of her vacation time does not amount to misconduct.

[32] No party involved in this appeal argues that the Claimant’s use of her vacation time amounts to misconduct. Conduct discovered after the Employer already dismissed the Claimant cannot amount to misconduct. As a result, I find that the Claimant did not lose her job because of her misconduct.

Conclusion

[33] I am dismissing the appeal. The Employer has not proven that the Claimant lost her job because of misconduct.