Employment Insurance (EI)

Decision

[1] The appeal is allowed in part. The General Division didn’t decide two issues that it should have decided. I have decided those issues.

[2] The Canada Employment Insurance Commission^{Footnote 1} (Commission) correctly reactivated the previous claim in April 2020.

[3] The Commission didn’t exercise its discretion properly when it decided to reconsider the benefits paid from May through September 2020 on the previous claim. The benefits will not be reconsidered. This means that the Commission’s earlier decision to pay benefits, without any allocation, remains in place.

Overview

[4] The Claimant, M. S., received Employment Insurance (EI) regular benefits from May to September 2020 under her September 2019 claim. In 2021, the Commission decided to reconsider her claim^{Footnote 2} for benefits. The Commission then allocated (offset) separation monies that had been reported in 2019, against the 2020 benefits. This resulted in an overpayment.

[5] On appeal, the Tribunal’s General Division agreed with the Commission that the separation monies were earnings. The General Division decided that the allocation should have started a week earlier than the Commission said.

[6] The General Division didn’t consider whether the Claimant had applied for benefits under her previous claim or for the EI emergency response benefit (EI ERB). The General Division didn’t consider whether the Commission properly decided to reconsider the earlier claim for benefits. I have found that these were errors of jurisdiction.

[7] I have decided the first of these two issues in favour of the Commission, and the second in favour of the Claimant. This means that the benefits paid to the Claimant from May to September 2020, under the September 2019 claim, will not be reconsidered.

Issues

[8] The issues in this appeal are:

1. a) Did the General Division fail to decide issues it should have decided, specifically
• whether the April 2020 claim was a reactivation of a previous claim or a new application for the EI ERB?
• whether the Commission exercised its discretion properly when it reconsidered the 2020 benefits in June 2021?
2. b) If the General Division made errors of jurisdiction, how should I fix the errors?
3. c) Did the Commission properly reactivate the previous claim?
4. d) Did the Commission properly exercise its discretion to reconsider? If not, how should I exercise that discretion on its behalf?

Analysis

The General Division made errors of jurisdiction

[9] One of the grounds of appeal to the Appeal Division is that the General Division refused to exercise its jurisdiction.^{Footnote 3} This happens when a party raises an issue in an appeal, and the issue is within the General Division’s power to decide, but the General Division doesn’t decide the issue.

The General Division had the power to decide the nature of the claim and whether the Commission properly reconsidered the claim

[10] The General Division’s mandate is to hear appeals of decisions made by the Commission in its reconsideration (internal appeal) process.^{Footnote 4} So, the scope of the General Division’s jurisdiction flows from the scope of the Commission’s reconsideration decision.^{Footnote 5}

[11] The Commission’s representative says that the General Division didn’t have the power to decide whether the April 2020 claim was a reactivation or an EI ERB application, because the reconsideration decision didn’t mention this issue. The Commission’s representative acknowledges that the General Division did have the power to decide whether it properly exercised its discretion to reconsider. The Claimant did not make arguments on this point.

[12] I find that the General Division had jurisdiction over both issues.

[13] The Tribunal takes a broad approach to its jurisdiction, within the limits of the law, to manage appeals fairly and efficiently. Reconsideration decisions are not always detailed, and it is sometimes necessary to look at the underlying requests and decisions to determine the scope of the reconsideration decision.^{Footnote 6} This approach is necessary here, because the reconsideration decision gives no detail and actually references the wrong underlying decision.^{Footnote 7}

[14] The basic, uncontested facts of this appeal are the following:

• The Claimant was let go from her job in September 2019. She applied for EI regular benefits, and a benefit period was established effective September 29, 2019.
• The Commission allocated separation monies against the Claimant’s claim from September to November 2019 (the 2019 decision). The Claimant did not dispute the 2019 decision.
• By November 2019 the Claimant had found another job, and so she did not receive any EI benefits at that time.
• The employer issued an amended Record of Employment in December 2019, outlining additional separation monies paid to the Claimant.
• The Claimant was laid off from her new job in April 2020, and completed an application for benefits. The Commission reactivated the previous claim, and paid EI regular benefits under that claim from May to September 2020.
• In June 2021, the Commission realized that it had not allocated the additional separation monies reported back in December 2019. The Commission exercised its discretion to reconsider the 2020 benefits on its own initiative, without communicating this decision to the Claimant. The Commission allocated the additional separation monies against the 2020 benefits, resulting in an overpayment.
• Having received only the Notice of Debt, the Claimant requested reconsideration. Among other things, she pointed out that she had applied for the EI ERB^{Footnote 8} not regular EI, and that she had spoken with the Commission about her separation monies at an earlier stage and there were no concerns.
• In August 2021, the Commission maintained its decision on the issue of “separation monies,” referencing only the undisputed 2019 decision.

[15] In disputing the overpayment, the Claimant challenged the Commission’s decisions to reactivate her previous claim and to allocate separation monies after the claim had been paid out.

[16] I agree with the Commission’s representative that the August 2021 reconsideration decision doesn’t mention the reactivated claim. But, maintaining the allocation decision necessarily required maintaining the reactivation decision. This is because only a reactivated claim could lead to the allocation, since there was no allocation of separation monies against the EI ERB.^{Footnote 9}

[17] And, although there was no initial decision in writing outlining the allocation in June 2021,^{Footnote 10} the Commission’s representative concedes that this was a reconsideration on its own initiative under section 52 of the Employment Insurance Act (Act).^{Footnote 11} So, the August 2021 decision was a mandatory reconsideration (at the Claimant’s request) of a discretionary reconsideration (on the Commission’s own initiative).

[18] Accordingly, I am satisfied that the scope of the August 2021 reconsideration decision, and hence the General Division’s jurisdiction, encompassed the issues of:

• Whether the April 2020 claim was a reactivation of the 2019 claim or a new claim for the EI ERB;
• Whether the Commission properly exercised its discretion to reconsider the 2020 benefits on its own initiative in June 2021;^{Footnote 12} and
• Whether the allocation of benefits was correct.

The General Division didn’t decide the nature of the claim and whether the Commission properly reconsidered the claim

[19] The General Division decided whether the allocation of benefits was correct, by looking at the sub-issues of whether the money received was earnings and whether the allocation was properly calculated.

[20] It is undisputed that the General Division did not address the nature of the claim (reactivation versus EI ERB).

[21] The General Division did not say anything about the Commission’s exercise of its discretion to reconsider the 2020 claim for benefits. The Commission’s representative argues that the General Division implicitly considered this issue, and that there were no concerns about the exercise of discretion. I find nothing in the General Division decision to support that argument.

[22] There is no indication in the decision that the General Division was even aware that the Commission had used its discretionary power to reconsider in this case.^{Footnote 13} Moreover, the General Division spoke of the Claimant’s concern about the Commission changing their decision — without ever mentioning the exercise of discretion. This tells me that the member didn’t turn his mind to the Commission’s discretionary power and whether it was properly exercised.

[23] The Claimant raised concerns about the nature of the claim (reactivation or EI ERB) and the retroactive allocation of separation monies, at the Commission and at the General Division. The General Division ought to have dealt with these issues.^{Footnote 14} I find that the General Division made errors of jurisdiction by not addressing these two issues.

How to fix the errors: I can decide the issues the General Division didn’t decide

[24] Having found jurisdictional errors, my options are to return one or both issues to the General Division, or to decide one or both issues myself.^{Footnote 15} The Appeal Division will usually make decisions itself, so long as the parties have already had a full and fair opportunity to present their evidence.

[25] The Commission’s representative suggested that I return the question of the nature of the claim to the General Division. This is primarily because the Commission failed to give the General Division a copy of the Claimant’s April 2020 application for benefits.

[26] I have decided that this kind of additional evidence isn’t necessary. Regardless of any warnings or instructions that may have been given to the Claimant in the application, the Commission was obliged to pay benefits under the previous claim. I’ll explain below.

[27] As for the question of the exercise of discretion, the parties accept that I can decide this issue. Although the General Division didn’t address the issue, there is no new evidence to be considered and the parties have now made their arguments.

The previous claim had to be reactivated

[28] The Claimant applied and qualified for EI regular benefits, and so a benefit period was established effective September 2019. The benefit period was 52 weeks.^{Footnote 16} The Claimant’s benefit period was still open when she applied for benefits in April 2020.

[29] The term “reactivation” is misleading, since it implies a step that doesn’t exist in the law. During a benefit period, EI regular benefits are payable for each week of unemployment (subject to a maximum based on the regional rate of unemployment) as long as the claimant makes a claim for that week and they are not otherwise disqualified or disentitled.^{Footnote 17} It doesn’t matter if there has been a gap of several weeks or months.

[30] The Claimant did not try to cancel or end the previous benefit period.^{Footnote 18} She did not specifically ask the Commission to start a claim for the EI ERB instead. And, the EI ERB provisions did not automatically end or otherwise affect benefit periods that had started before March 15, 2020.^{Footnote 19}

[31] The Claimant claimed benefits from May to September 2020, during an open benefit period. She was not subject to any disqualification or disentitlement. I conclude that the Commission was obliged to pay the Claimant benefits under the September 2019 claim. And, while she was receiving EI regular benefits, she was not eligible for the EI ERB.^{Footnote 20}

The Commission didn’t exercise its discretion properly when it decided to reconsider the benefits paid from May to September 2020

[32] Having paid EI regular benefits to the Claimant in 2020, the Commission later decided to reconsider those benefits.

[33] Section 52 of the Act says that the Commission “may reconsider a claim for benefits” within certain timeframes.^{Footnote 21} This is a discretionary power: the Commission can choose whether or not it will reconsider the claim. I agree with the Commission’s representative’s description of the four steps it must complete within the time limit:

• Decide whether or not to exercise the discretion to reconsider;
• Make the new decision;
• Calculate the amount to be recovered or paid;
• Notify the claimant.^{Footnote 22}

[34] The focus in this appeal is on the first step: did the Commission properly decide whether it should exercise its discretion to reconsider in this case?

[35] The Commission’s representative acknowledges that the discretion must be exercised “judicially.” This means that a decision made in bad faith, for an improper purpose, in a discriminatory manner, considering irrelevant factors, or failing to consider relevant factors, must be set aside.^{Footnote 23} Only the question of whether the Commission considered relevant factors arises in this appeal.

The factors set out in Commission policy are relevant factors

[36] What factors are relevant to a discretionary decision?

[37] Sometimes, the relevant factors are in the law. An example of this is the Commission’s discretion to extend the time for a claimant to request reconsideration.^{Footnote 24} The law tells the Commission to consider certain factors in certain cases.^{Footnote 25}

[38] Sometimes, there are constraints in the law but no guidance on the exercise of discretion within those constraints. An example of this is the Commission’s discretion to impose a penalty for misrepresentation, which is subject to maximum amounts as well as a time limit.^{Footnote 26} Commission policy requires consideration of the value associated with the misrepresentation, any repeated misrepresentation, and any mitigating circumstances.^{Footnote 27} In such cases, the Tribunal has considered Commission policy when deciding whether the discretion was exercised properly.^{Footnote 28}

[39] The situation is similar here. The law doesn’t tell the Commission when it should or should not exercise its discretion to reconsider a claim for benefits, within the time limits. So the Commission developed an internal policy to guide its agents.

[40] The parties have made arguments about that policy, and I have taken official notice of its contents.^{Footnote 29} The Commission’s policy requires consideration of whether:

• benefits have been underpaid;
• benefits were paid contrary to the structure of the Act (in other words, the basic elements of a claim weren’t met, such as an interruption of earnings, insurable hours, conditions for special benefits);
• benefits were paid as a result of a false or misleading statement;
• the claimant ought to have known there was no entitlement to the benefits.^{Footnote 30}

[41] The Tribunal’s General Division has previously decided that the policy factors are relevant to the discretionary decision.^{Footnote 31} To my knowledge, the Appeal Division hasn’t addressed this question. I agree that the policy sets out relevant factors to be considered at the first step of deciding whether or not to exercise the discretion to reconsider.

[42] There is support for this approach in a decision from the Supreme Court of Canada.^{Footnote 32} In the immigration context, the Court considered factors set out in administrative guidelines for the exercise of discretion to be relevant to that discretionary decision.^{Footnote 33}

[43] Only the latter three policy factors relate to a possible overpayment, and so my discussion from this point forward focuses on those three factors.

[44] The Commission’s representative’s position on whether these are relevant factors was difficult to follow. She said that the factors in the policy were not irrelevant “wholesale” or on a “macro” level, yet they were irrelevant in this particular case. Ultimately, she took the position that these factors were not relevant factors that had to be considered in order for the discretion to reconsider to be properly exercised. She took this position despite the fact that her client, the Commission, has identified and published these factors to guide their agents in exercising their discretion.^{Footnote 34}

[45] The Commission’s representative suggested that the only relevant factor is whether benefits were wrongly paid (in this case, that the Employment Insurance Regulations required an allocation of earnings). But Parliament did not direct the Commission to reconsider every claim for benefits that may have been overpaid. Rather, the Commission was given the power to choose whether or not to reconsider a claim for benefits after it had been paid.

[46] That choice reflects the tension between finality (claimants should be able to rely on decisions made about their benefits) and accuracy (mistakes and misrepresentations should be corrected). In my view, factors that could favour either finality or accuracy, helping to resolve that tension in a particular case, are relevant to the discretionary decision.^{Footnote 35}

[47] The Commission has publicly adopted an approach in which it fixes some but not all overpaid claims retroactively.

[48] In developing this approach, the Commission decided that the nature of the error matters: Did it lead to benefits being paid contrary to the basic structure of the Act? This may have come from guidance in an Umpire^{Footnote 36} decision that said that the Commission should go back to fix an error when a person didn’t meet the basic requirements for benefits, but couldn’t reconsider other decisions without new facts.^{Footnote 37}

[49] The Commission also decided that the behaviour and knowledge of the claimant matters: Was there misrepresentation? Should the claimant have known they were being overpaid? In these situations, the argument that a claimant should be able to rely on the decision is less compelling.

[50] Each of these factors is relevant to the tension between finality and accuracy, and hence relevant to the Commission’s decision whether to reconsider a claim for benefits.

The Commission didn’t consider relevant factors when it decided to reconsider the claim for benefits

[51] In this case, the Commission didn’t document its reasons for choosing to reconsider the Claimant’s 2020 benefits. When the Commission doesn’t show its work, it is difficult to know what factors, if any, it considered. Here, the decision to reconsider went squarely against Commission policy, without any explanation of competing factors supporting that decision. I find it more likely than not that the Commission did not consider certain relevant factors — the nature of the error or the behaviour and knowledge of the Claimant — in making its decision. The Commission did not exercise its discretion judicially.

Relevant factors are not binding factors

[52] The Commission’s representative appeared to be reluctant to accept the policy factors as relevant because of a concern about fettering the Commission’s discretion. This concern is misguided.

[53] I fully agree with the Commission’s position that administrative policies “cannot limit the discretionary power of an administrative decision maker granted by statute” and should not be elevated to the level of legislative authority.^{Footnote 38} Commission policy is not binding.

[54] Saying that certain factors outlined in policy are relevant factors that must be considered in the judicial exercise of discretion does not mean that the decision maker is bound by that policy. It just means that the factors must be taken into account. The Commission can choose not to follow its policy in a specific case (and could have done so in this case) so long as it has first considered the relevant factors.

The May to September 2020 benefits will not be reconsidered

[55] Having found that the Commission didn’t properly exercise its discretion, I will go on to decide whether that discretion should be exercised in this case. This is because I am giving the decision that the General Division should have given, and the General Division can give the discretionary decision that the Commission should have given.^{Footnote 39}

[56] I agree with the Commission’s representative that it is relevant that the Claimant’s 2020 benefits would have been offset by the separation monies if the Commission had correctly processed her claims. In other words, if the Commission hadn’t made a mistake, the Claimant wouldn’t have received EI regular benefits from May to September 2020.

[57] It is also relevant that this error did not lead to benefits being paid contrary to the basic structure of the Act. The Commission has defined that term, and allocation of earnings is not included.^{Footnote 40}

[58] It is also relevant that the separation monies were accurately reported to the Commission well in advance of the claims that were paid out. The Claimant was not responsible for any delay, much less a false or misleading statement.

[59] It is also relevant that the Claimant could not have known that she wasn’t entitled to the benefits received. The evidence is undisputed that the Claimant spoke with the Commission and was assured that her benefits were in order.

[60] There is another factor that I find relevant in this case, which I would describe as a form of detrimental reliance. The Claimant’s benefits were paid in the early months of the Covid-19 pandemic. As a matter of policy, the government decided not to reduce income-replacement benefits by separation monies received. Any other claimant who lost their job in April 2020 (and didn’t have an open claim) received the flat rate EI ERB without any reduction for allocated earnings.^{Footnote 41} If the Claimant had known that her separation monies would affect her EI regular benefits, she might have been able to collect the EI ERB instead. By June 2021, it was too late.^{Footnote 42}

[61] Finally, I have considered the importance of consistency and predictability. The courts have repeatedly supported the use of internal administrative guidelines “to guarantee some consistency nationally and avoid arbitrariness.”^{Footnote 43} The Commission’s policy says not to reconsider a claim if the benefits weren’t paid contrary to the structure of the Act, there wasn’t a false or misleading statement, and the claimant couldn’t have known there was no entitlement. Under that policy, the Claimant’s 2020 claim for benefits would not be reconsidered. When mistakes are made, the Commission should ideally treat like situations alike. I see no reason to depart from the usual policy approach in this case.

[62] Having considered the relevant factors and the importance of consistency, I have decided that the Claimant’s claim for benefits should not be reconsidered. This means that the Commission’s original decision to pay benefits from May to September 2020, without any allocation, remains in place.^{Footnote 44} As a result, no overpayment is created.

Conclusion

[63] The appeal is allowed in part. The General Division made jurisdictional errors.

[64] The Commission correctly reactivated the previous claim in April 2020.

[65] The Commission didn’t exercise its discretion properly when it decided to reconsider the benefits paid from May through September 2020 on the previous claim. The benefits will not be reconsidered, so the earlier decision to pay benefits without any allocation remains in place.