Employment Insurance (EI)
Decision Information
Employment Insurance – dismissal for cause – Claimant argued his employer misrepresented an email to justify dismissing him for breach of trust – Federal Court found Claimant’s submission amounted to request to weigh evidence – the Appeal Division’s refusal to grant leave to appeal was reasonable
The Claimant was employed as chief financial officer (CFO) for a resource company until January 2019, followed by a short-lived job that ended in May 2019. He applied for Employment Insurance (EI) benefits in September 2019 and asked for his application to be antedated to May 2019. The Commission refused his request, as did the General Division (GD). On appeal, the Appeal Division (AD) antedated the application by four months, to May 2019 and ordered the Commission to pay the Claimant benefits.
On learning that the Claimant qualified for EI benefits, his former employer, the resource company, informed the Commission that the Claimant had been dismissed for misconduct. The employer explained that the Claimant’s mandate as CFO had included finding potential investors, yet he had demanded a commission for doing so. This caused the employer to question the Claimant’s loyalty. Based on this information, the Commission reconsidered its position to conclude that the Claimant was dismissed for breach of trust and was thus disqualified from EI benefits.
The Claimant appealed this reconsideration decision to the GD, which found that he had lost his job because of misconduct. The AD refused leave to appeal because, in its view, the Claimant was merely rearguing his case.
The Claimant asked the Federal Court (FC) to review the AD’s decision. The FC found that the AD decision was reasonable.
First, the Claimant alleged that the GD failed to properly investigate his claim. He noted that he applied for benefits in September 2019 and eventually succeeded in having his claim antedated in April 2020, only to see the GD challenge that decision based on new information. He argued that his alleged misconduct could have been raised earlier if Service Canada had made basic inquiries of his former employer.
The FC agreed that it did not seem sensible to deal with the antedate issue without first determining the eligibility of the claim. However, that process is provided for in the Employment Insurance Act and all decisions were made within the timelines that Parliament intended. Moreover, the Claimant’s argument was about the GD’s conduct and not about the AD’s decision and whether it was reasonable. Finally, the FC noted that the Claimant had not raised this argument at the AD and was therefore barred from raising it at the FC.
Second, the Claimant argued that the GD made an error of law. His refusal to “find” or “solicit” potential investors could not be a breach of trust because only registered securities brokers can solicit capital under Quebec securities law. He noted that his employer had hired two independent brokers to do this very task. He conceded that his employment contract called for him to seek “financing opportunities” for his employer but argued that his role as CFO required him only to support the raising of capital by performing tasks such as due diligence.
The FC characterised this submission as an error of fact rather than an error of law. Contrary to the Claimant’s submission, what was at issue was not whether he was allowed to solicit investors under Quebec securities law, but whether it was reasonable for the GD to make such a finding with the evidence it had. That evidence included the Claimant’s employment contract, his termination letter, his testimony, and various emails. From this evidence, the GD concluded that the Claimant’s demand for a commission led to his dismissal for a breach of trust. The AD concluded that the evidence supported this conclusion, and that the Claimant was simply rearguing his case to seek a different outcome. The FC found this conclusion reasonable.
Third, the Claimant alleged that the GD made an important error of fact by taking a narrow view of the evidence and failing to put it in context. The Claimant argued that the GD misinterpreted an email in which he appeared to ask for a commission; in fact, he was “cheekily” trying to make the point that it was the role of the broker, not the Claimant, to raise capital. This followed one of the employer’s attempts to pressure the Claimant to solicit capital from his personal network. The employer then used the email as a pretext to fire him for cause and avoid paying him severance.
The FC found that the AD considered the Claimant’s argument that the GD mischaracterized his email, but it ultimately saw no error in the GD’s finding that he lost his job due to a breach of trust. The FC’s job was not to reweigh evidence that was before the GD, but to assess whether the AD based its decision on an internally coherent and rational chain of analysis. The application for judicial review was dismissed.
Decision Content
Citation: S. V. v Canada Employment Insurance Commission, 2020 SST 801
Tribunal File Number: AD-20-781
BETWEEN:
S. V.
Applicant
and
Canada Employment Insurance Commission
Respondent
SOCIAL SECURITY TRIBUNAL DECISION
Appeal Division
| Leave to Appeal Decision by: | Pierre Lafontaine |
| Date of Decision: | September 22, 2020 |
On this page
Decision and reasons
Decision
[1] The Tribunal refuses leave to appeal to the Appeal Division.
Overview
[2] The Applicant, S. V. (Claimant), made an initial claim for employment insurance benefits after losing his job as a chief financial officer. The Respondent, the Canada Insurance Commission of Canada (Commission), initially allowed the claim for regular benefits, but later accepted the employer’s reasons for the dismissal during the reconsideration process.
[3] The Commission determined that the Claimant lost his job with the employer because he requested a commission in exchange for providing the name of a potential investor and this led to a breach of trust. It decided that the Claimant lost his job because of misconduct, and disqualified him from being paid benefits. The Claimant appealed this decision to the General Division of the Tribunal.
[4] The General Division found that the preponderant evidence showed that he spoke with two potential investors and would not provide their names to the employer’s broker without a commission for the information. It found that the Claimant knew or ought to have known that this would impair his employment relationship and could lead to his dismissal because of the breach of trust. The General Division disqualified the Claimant from receiving benefits.
[5] The Claimant now seeks leave to appeal of the General Division’s decision to the Appeal Division. He puts forward that the General Division erred in law and based its decision on an erroneous finding of fact that it had made in a perverse or capricious manner or without regard for the material before it.
[6] The Tribunal must decide whether there is some reviewable error of the General Division upon which the appeal might succeed.
[7] The Tribunal refuses leave to appeal because the Claimant’s appeal has no reasonable chance of success.
Issue
[8] Does the Claimant raise some reviewable error of the General Division upon which the appeal might succeed?
Analysis
[9] Section 58(1) of the Department of Employment and Social Development Act specifies the only grounds of appeal of a General Division decision. These reviewable errors are that:
(a) the General Division: failed to observe a principle of natural justice or otherwise acted beyond or refused to exercise its jurisdiction;
(b) the General Division erred in law in making its decision, whether or not the error appears on the face of the record; or
(c) the General Division based its decision on an erroneous finding of fact that it had made in a perverse or capricious manner or without regard for the material before it.
[10] An application for leave to appeal is a preliminary step to a hearing on the merits. It is an initial hurdle for the Claimant to meet, but it is lower than the one that must be met on the hearing of the appeal on the merits. At the leave to appeal stage, the Claimant does not have to prove his case but must establish that the appeal has a reasonable chance of success based on a reviewable error. In other words, that there is arguably some reviewable error upon which the appeal might succeed.
[11] Therefore, before granting leave, the Tribunal needs to be satisfied that the reasons for appeal fall within any of the above-mentioned grounds of appeal and that at least one of the reasons has a reasonable chance of success.
Does the Claimant raise some reviewable error of the General Division upon which the appeal might succeed?
[12] The Claimant submits that the General Division erred when it concluded that there had been a breach of trust because if he had complied with the employer’s request to “find” or “solicit” potential investors to invest in the company, he would have been in breach of Quebec securities law and would have put himself in a position of conflict of interest due to the terms of his employment contract. He puts forward that given that he is not a registered/licensed securities broker in Quebec, he could not legally have solicited capital nor earned or received any form of commission/payment from such activity.
[13] The Claimant also submits that the General Division made an important error of fact in its decision. He puts forward that he never asked his employer for a Commission in exchange for raising capital.
[14] The Claimant submits that the email in support of the General Division’s decision must be taken in its proper context. The email is a response by the Claimant to one of the two licensed securities brokers hired by the employer to solicit/raise capital on its behalf. He puts forward that the response was following one of several attempts by his employer to pressure him to assist in the soliciting of capital once it had become clear that the hired securities brokers were running out of leads for potential investors.
[15] The General Division had to decide whether the Claimant lost his employment by reason of his own misconduct in accordance with sections 29 and 30 of the Employment Insurance Act (EI Act). Its role was not to judge the severity of the penalty imposed by the employer, but rather, whether the Claimant’s conduct amounted to misconduct within the meaning of the EI Act.
[16] The General Division found that while the Claimant disputed that he asked for a commission, and testified multiple times that he was not allowed to solicit investors because he is not a broker, the preponderant evidence showed that the Claimant spoke with two potential investors and would not provide their names to the employer’s broker without a commission for the information. It found that the Claimant knew or ought to have known that this would impair his employment relationship and could lead to his dismissal because of the breach of trust. The General Division concluded that the Claimant’s behavior constituted misconduct within the meaning of the EI Act.
[17] The General Division gave more weight to the content of the email of January 9, 2019, than to the Claimant’s testimony. It found that the Claimant initially denied writing the email when speaking with the Commission and that, at the hearing, he admitted that he wrote it but submitted it did not mean what it appeared to mean.
[18] The General Division was unconvinced by the Claimant’s argument and found it was more likely than not that the email spoke for itself and showed that the Claimant sought a commission in exchange for providing the names of potential investors to the employer, through its broker.
[19] The Commission spoke to the employer on July 29, 2020, who stated the Claimant declared he had identified potential investors, but wanted a commission before giving their names.The employer was concerned that theClaimant may have been working for his own interests instead of the employer’s interests. The employer fired the Claimant for breach of trust.
[20] The email sent to the Claimant on January 8, 2019, reads as follows:
« Bonne Année S.,
(…)
J. nous a informé que tu pourrais amener des « friends & family » à investir en équité et que tu souhaitais recevoir une commission pour ce faire.
SVP me confirmer ce que tu désires comme contrepartie (%) afin que je fasses ce qui s’impose dans une telle situation. »
[Underlined by the undersigned]
[21] The email addressed to the Claimant clearly indicates that the broker was made aware that the Claimant had potential investors and that he wanted a commission for it. In said email, the broker specifically asked the Claimant what commission he was looking for in exchange for the information.
[22] The preponderant evidence before the General Division supports its conclusion that the Claimant’s behavior constituted misconduct within the meaning of the EI Act.
[23] The Claimant, in his leave to appeal application, would essentially like to represent his case to obtain a different outcome. Unfortunately, for the Claimant, an appeal to the Appeal Division of the Tribunal is not a new hearing, where a party can represent its evidence and hope for a favorable outcome.
[24] In his application for leave to appeal, the Claimant has not identified any reviewable errors such as jurisdiction or any failure by the General Division to observe a principle of natural justice. He has not identified errors in law nor identified any erroneous findings of fact, which the General Division may have made in a perverse or capricious manner or without regard for the material before it, in coming to its decision.
[25] For the above-mentioned reasons and after reviewing the docket of appeal, the decision of the General Division and considering the arguments of the Claimant in support of his request for leave to appeal, I find that the appeal has no reasonable chance of success.
Conclusion
[26] The Tribunal refuses leave to appeal to the Appeal Division.
Representative:
S. V., Self-represented