Employment Insurance (EI)

Decision

[1] The appeal is allowed. I find that the Canada Employment Insurance Commission (Commission) didn’t exercise its discretion judicially in deciding to verify and reconsider the Appellant’s claim for Employment Insurance (EI) benefits.^{Footnote 1} This means that the Commission could not retroactively determine that the Appellant wasn’t entitled to EI benefits.

Overview

[2] In September 2019, the Appellant began full-time training at X University in X. The training leads to a bachelor’s degree in international development. His winter 2021 term ran from January 7 to April 30, his fall 2021 term from September 1 to December 20, and his winter 2022 term from January 5 to April 15.^{Footnote 2} In the fall of 2022, he continued his training full-time at the same institution and in the same program of study.

[3] From June 17, 2020, to January 22, 2021, the Appellant worked as a facilitator for the employer X. He stopped working for that employer because of a shortage of work.^{Footnote 3}

[4] On January 17, 2021, he made an initial claim for EI benefits (regular benefits).^{Footnote 4} A benefit period was established effective January 17, 2021.^{Footnote 5}

[5] On August 14, 2021, he applied to renew his benefit period.^{Footnote 6} His benefit period was renewed effective August 8, 2021.^{Footnote 7}

[6] On January 10, 2022, he applied to renew his benefit period again.^{Footnote 8} His benefit period was renewed effective December 26, 2021.^{Footnote 9}

[7] On March 28, 2022, the Commission told him that it was unable to pay him EI benefits from January 17, 2021, because he was taking training on his own initiative and hadn’t proven his availability for work.^{Footnote 10}

[8] On May 20, 2022, after a request for reconsideration, the Commission told him that a new decision had replaced the March 28, 2022, decision. It explained to him that, according to that new decision, it could not pay him benefits for the periods from January 18, 2021, to April 30, 2021, from September 1, 2021, to December 20, 2021, and from December 21, 2021, because he hadn’t shown his availability for work while he was taking training.^{Footnote 11}

[9] The Appellant explains that after his job at X ended on January 17, 2021, he visited the Commission (Service Canada) website to find out whether he might be entitled to benefits. He says that he contacted the Commission in mid-January 2021 and that one of its representatives helped him fill out his application for benefits. He explains that on his application, he indicated that he was taking training, that he spent 25 hours per week on it, and that he was available for work. He argues that the Commission representative never told him that he would not be able to get benefits given the answers he had provided about his training, or that a computer system was going to process his application because of the COVID-19^{Footnote 12} pandemic. He explains that after losing his job at X in August 2021, he followed the same steps as in January 2021 to claim benefits. He says that he answered the same questions about his training as in January 2021 and got the same response from the Commission. He says that he received benefits for the periods from January 2021 to April 2021 and from September 2021 until the end of December 2021. He explains that it was after he made a renewal claim for benefits in January 2022 that he learned that he hadn’t been entitled to benefits since applying in January 2021. He argues that he always reported studying full-time, that he answered the questions related to his training correctly, and that he received benefits. He says that the Commission made an error when analyzing and processing his file. He says it isn’t fair that he has to pay back the money that the Commission says he owes in overpaid benefits, given the administrative errors that it made. He says that he is unable to come up with the money he owes. On June 17, 2022, the Appellant challenged the Commission’s reconsideration decision. That decision is now being appealed to the Tribunal.

Preliminary matters

[10] In this case, the Appellant says he primarily disputes having to pay back the money he was overpaid in benefits even though he declared his full-time training and reported the hours spent on it.^{Footnote 13} He says that the Commission’s decision that he can’t receive benefits has to be overturned given the errors it made when analyzing and processing his file.^{Footnote 14}

[11] The Commission, meanwhile, says that it can retroactively disentitle a claimant to EI benefits under section 153.161(2) of the Act.^{Footnote 15} It says that under this section, it may, at any point after benefits are paid to a claimant, verify that the claimant was actually entitled to those benefits by requiring proof that they were capable of and available for work on any working day of their benefit period.^{Footnote 16}

[12] The Commission says that the benefit overpayment in the Appellant’s file is solely from being retroactively disentitled under section 153.161(2) of the Act for being unavailable for work.^{Footnote 17}

[13] So, my analysis and decision will take this situation into account.

Issues

[14] I have to determine whether the Commission had the power to retroactively decide whether the Appellant was entitled to benefits and, if so, determine whether it used its discretion judicially in deciding to verify and reconsider his claim for benefits.^{Footnote 18}

[15] If so, I have to determine whether the Appellant has shown his availability for work while in training for the periods from January 18, 2021, to April 30, 2021, and from September 1, 2021.^{Footnote 19}

[16] I also have to determine whether the Appellant has to pay back the benefit overpayment he owes the Commission.^{Footnote 20}

Analysis

The Commission’s exercise of discretion in deciding to verify and reconsider a claim for benefits

Issue 1: Did the Commission have the power to retroactively verify and review the Appellant’s claim for benefits?

[17] When it comes to the “reconsideration” of a claim, the Act says that the Commission has 36 months to reconsider a claim for benefits paid or payable to a claimant and that it has 72 months if, in its opinion, a false or misleading statement or representation has been made in connection with a claim.^{Footnote 21}

[18] If the Commission decides that a person has received an amount of money in benefits that they weren’t qualified for or entitled to, it must calculate the amount of the money and notify the claimant of its decision.^{Footnote 22}

[19] Because of the COVID-19 pandemic, changes were made to the Act to facilitate access to benefits with the implementation of “temporary measures.”

[20] Those changes include section 153.161 of Part VIII.5 of the Act. This section was in force from September 27, 2020, to September 25, 2021.

[21] This section says that the Commission may, at any point after benefits are paid to a claimant, verify that the claimant is entitled to those benefits by requiring proof that they were capable of and available for work on any working day of their benefit period.^{Footnote 23}

[22] In one of its decisions, the Tribunal’s Appeal Division (Appeal Division) found that the Tribunal’s General Division (General Division) could not refuse to exercise its jurisdiction to determine whether the Commission had the power to retroactively disentitle the claimant to benefits.^{Footnote 24}

[23] In another decision, the Appeal Division found that the file should return to the General Division for it to decide whether the Commission had the power to retroactively disentitle a claimant to benefits.^{Footnote 25} The Appeal Division said that if the General Division were to find that the Commission had this power, it must also determine whether the Commission exercised this power judicially when it decided to reconsider the claimant’s claim for benefits.^{Footnote 26}

[24] In this case, the Appellant made an initial claim for benefits on January 17, 2021, and a benefit period was established effective that same day.^{Footnote 27} He applied to renew his benefits on August 14, 2021, and his claim was renewed on August 8, 2021.^{Footnote 28}

[25] The Appellant received benefits from January 17, 2021, to December 25, 2021.^{Footnote 29}

[26] He didn’t receive benefits after making his renewal claim for benefits on January 10, 2022.

[27] On March 28, 2022, the Commission told him about the decision in his case on the issue of availability for work.^{Footnote 30}

[28] The Commission argues as follows:

1. a) Section 153.161 of Part VIII.5 of the Act changed the Act when it comes to the availability for work of a claimant who is taking a training course.^{Footnote 31}
2. b) Under section 153.161(1) of the Act, a claimant who is taking training on their own initiative is disentitled from receiving benefits for any working day in a benefit period for which they are unable to prove that they were capable of and available for work.^{Footnote 32}
3. c) Section 153.161(2) of the Act allows the Commission to retroactively impose such a disentitlement at any point after benefits are paid.^{Footnote 33}

[29] The Appellant, meanwhile, indicated that he was taking training full-time in his January 17, 2021, August 14, 2021, and January 10, 2022, claims and in the training questionnaires^{Footnote 34} he completed on April 30, 2021, and January 7, 2022.^{Footnote 35} He reported spending 15 to 24 hours per week for his winter 2021 term^{Footnote 36} and 25 or more hours per week for his fall 2021 and winter 2022 terms.^{Footnote 37}

[30] For the winter 2021, fall 2021, and winter 2022 terms, he indicated that he was obligated to attend scheduled classes or scheduled sessions (in person, online, or by telephone).^{Footnote 38} He also indicated that all his course obligations occurred outside his normal work hours.^{Footnote 39}

[31] For those three terms, the Appellant indicated that he was available for work and capable of working in the same type of job and under the same or better conditions (for example, hours, type of work) as he was before he started his course or program.^{Footnote 40}

[32] For all three terms, he indicated that he had made efforts to find work since the start of his training or since becoming unemployed.^{Footnote 41} He sent the Tribunal documents showing his job search efforts.^{Footnote 42}

[33] For his winter 2021 and winter 2022 terms, the Appellant indicated that if he found full-time work but the job conflicted with his training, he would change his course schedule to accept the job.^{Footnote 43} As for his fall 2021 term, he indicated that if he found full-time work but the job conflicted with his training, he would finish his course.^{Footnote 44}

[34] The Appellant says that he contacted the Commission in January 2021, before applying for benefits, to give information about his training and the number of hours spent on it. He did the same thing in August 2021, before making his renewal claim for benefits on August 14, 2021.

[35] He says that he always reported being in school on his claimant reports.

[36] The provisions of section 52 of the Act and those of section 153.161(2) of Part VIII.5 of the Act, despite being temporary, applied to the Appellant’s case for his January 17, 2021, initial claim for benefits and his August 14, 2021, renewal claim for benefits.

[37] I find that the Commission’s decision is based on sections 52 and 153.161(2) of the Act.

[38] Even though the Commission says that it relied on section 153.161(2) of the Act in making its decision,^{Footnote 45} I find that the provisions of section 52 of the Act continue to apply despite those of section 153.161(2) of the Act.

[39] Section 52 of the Act shows that the Commission has the discretion to reconsider a claim for benefits.

[40] Section 153.161(2) of the Act gives the Commission a power similar to the one it has under section 52(1) of the Act. The only difference between these two sections is that under the provisions of section 153.161(2) of the Act, the Commission’s power isn’t time-limited, but it is in the case of a reconsideration under section 52(1) of the Act.

[41] Under section 153.161(2) of the Act, the Commission may, at any point after benefits are paid to a claimant, verify that the claimant is entitled to those benefits.^{Footnote 46} This section also shows that the Commission has the discretion to verify a claim for benefits.

[42] Under section 52 of the Act, the Commission may reconsider a claim for benefits within 36 months after the benefits have been paid or would have been payable, or within 72 months if, in its opinion, a false or misleading representation has been made.^{Footnote 47}

[43] While section 153.161(2) is broader in time than section 52 of the Act, the question remains whether the Commission used its discretion to reconsider judicially.

[44] In making its decision, the Commission used its powers under section 153.161(2) of the Act. As a result of its verification, it changed its decision, finding that the Appellant wasn’t entitled to benefits. It made a new decision in accordance with the procedure set out in section 52(2) of the Act.

[45] I also note that even though section 153.161(2) of the Act says that the Commission may, “at any point” after benefits are paid to a claimant, “verify” that the claimant is entitled to those benefits, this section specifies that the Commission may do so, but “by requiring proof” that the claimant was capable of and available for work on any working day of their benefit period.^{Footnote 48}

[46] I find that the Commission didn’t verify the Appellant’s entitlement to benefits under section 153.161(2) of the Act. It didn’t apply the related provisions of this section. It didn’t ask the Appellant to prove his entitlement to benefits under section 153.161(2) of the Act.

[47] I find that before making its decision on March 28, 2022,^{Footnote 49} more than a year after the Appellant made his claim for benefits, the Commission didn’t tell him about the job search required to show his availability for work or about the proof he had to provide, before retroactively disentitling him from receiving benefits.

[48] Having established that the Commission reconsidered the Appellant’s claim for benefits under section 52 of the Act, while relying on the provisions of section 153.161(2) of the Act, I now have to determine whether it exercised its discretion judicially when it decided to retroactively verify the claim, reconsider it, and change its decision.

Issue 2: Did the Commission exercise its discretion judicially when it decided to retroactively verify the Appellant’s claim for benefits, reconsider it, and change its decision?

[49] The Federal Court of Appeal (Court) has held that there is no authority to interfere with discretionary decisions of the Commission unless it can be shown that the Commission “exercised its discretionary power in a non-judicial manner or acted in a perverse or capricious manner without regard to the material before it.”^{Footnote 50}

[50] It is up to the Commission to show that it exercised its discretion judicially. In other words, it has to show that it acted in good faith, considered all relevant factors, and ignored irrelevant ones.^{Footnote 51}

[51] Since the Commission’s power to reconsider is discretionary, its decisions can be interfered with only if it didn’t exercise this power judicially.^{Footnote 52}

[52] The Court has recognized various times that the fact that the Commission has guidelines or guides dealing with its discretion helps to make that discretion consistent.^{Footnote 53}

[53] The Digest of Benefit Entitlement Principles (Digest), a document prepared by the Commission, sets out conditions for reconsideration to determine whether the Commission considered all relevant factors in exercising its discretion.

[54] This document says that the Commission will reconsider a claim when:

• benefits have been underpaid
• benefits were paid contrary to the structure of the Act
• 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 received^{Footnote 54}

Benefits underpaid

[55] I find that the benefit “underpayment” factor doesn’t apply to the Appellant.

[56] Based on the documents the Commission submitted and the calculations it made after reviewing the Appellant’s file, the Appellant was overpaid $15,765 in benefits (overpayment).^{Footnote 55} In this case, it isn’t that “benefits have been underpaid.”

[57] The Digest says that the Commission always reconsiders if the claimant has been denied benefits that may become payable as the result of reconsideration.^{Footnote 56}

[58] In the case of an overpayment, the Commission may reconsider a claim for benefits, as set out in the Act.^{Footnote 57}

[59] The provisions of section 52 of the Act confirm the discretionary nature of the Commission’s decisions about reconsidering benefit periods within the time allotted to it.

[60] The provisions of section 153.161 of the Act also confirm the discretionary nature of the Commission’s power to decide to verify a claim for benefits.

Benefits were paid contrary to the structure of the Act

[61] I find that when the Appellant’s claim was set up and he was paid benefits, this was done in accordance with the structure of the Act—in other words, its basic elements.

[62] The Digest says that a “period of non-availability” falls outside the definition of Structure of the Act. But it says that this element can be reconsidered as long as it meets one of the other conditions set out under the policy that deals with this (Commission’s Reconsideration Policy).^{Footnote 58}

[63] I find that the Commission didn’t make a decision contrary to the structure of the Act.

Benefits were paid as a result of a false or misleading statement

[64] When benefits were paid as a result of false or misleading statements, the Commission may reconsider the claim for benefits.

[65] The Commission may reconsider a claim for benefits within 36 months after the benefits have been paid or would have been payable to the claimant.^{Footnote 59} If, in its opinion, a false or misleading statement or representation has been made in connection with a claim, the Commission may reconsider the claim within 72 months after the benefits have been paid or would have been payable.^{Footnote 60}

[66] The Commission isn’t accusing the Appellant of false statements. It says that he did declare his training.^{Footnote 61} It says that the overpayment in his file is solely from being retroactively disentitled under the provisions of section 153.161(2) of the Act for being unavailable for work.^{Footnote 62}

[67] The Appellant argues that he answered the questions about his training and his availability for work correctly.^{Footnote 63}

[68] In my view, the factor for benefits being paid as a result of a false or misleading statement doesn’t apply to the Appellant. I find that he was always honest with the Commission, whether in his claims, in answering questions about his training, or on his claimant reports.

[69] I find that the Commission could nonetheless reconsider or verify the Appellant’s claim for benefits.

The claimant ought to have known there was no entitlement to the benefits received (knowledge that there is no entitlement)

[70] I find that there is no evidence that the Appellant ought to have known (had “knowledge”) that he wasn’t entitled to the benefits received.

[71] The Commission argues as follows:

1. a) On August 28, 2020, and September 25, 2020, the government issued interim orders to ease the transition from the EI Emergency Response Benefit to the normal EI program.^{Footnote 64}
2. b) The goal of these interim orders was to avoid delays in the payment of benefits. Measures were introduced to make sure there were no payment delays just because the claimants had declared training. Even though benefits had been paid, the fact is that claimants taking training not authorized by a designated authority were still required by the Act to prove that they were capable of working and ready to work.^{Footnote 65}
3. c) Although these measures allowed thousands of claimants to get the benefits they were entitled to within a reasonable time frame, inevitably, some people, like the Appellant, were unfortunately disentitled to benefits later on.^{Footnote 66}
4. d) Even though the claims involving training were set up and benefits were paid, the fact is that claimants taking training not authorized by a designated authority were still required by the Act to prove that they were capable of working and ready to work. Section 153.161(2) of Part VIII.5 of the Act was added precisely so that the Commission could retroactively impose disentitlements.^{Footnote 67}
5. e) Concerning the Appellant’s argument that the [translation] “designated agents who work for that service” didn’t tell him that he wasn’t entitled to benefits, the Commission says that call centre agents or citizen services officers have neither the responsibility nor the qualifications to decide a claimant’s availability or any other issue. They can provide general information or support for many administrative formalities, but they can’t determine entitlement to benefits.^{Footnote 68}
6. f) Even though the Appellant finds it unfair that he has to pay back the money he was overpaid in benefits (overpayment), and he is unable to come up with this money, the fact is that he hasn’t shown his availability for work while taking training full-time. The Act has to be applied indiscriminately so that it is fair and impartial toward all claimants.^{Footnote 69}
7. g) Neither the Commission nor the Tribunal has the jurisdiction to decide liability to return benefits. The Appellant’s liability to return an overpayment doesn’t stem from a Commission decision. He takes on this liability as a “debtor” and not a “claimant.” His recourse for this issue is to apply to the Federal Court of Canada for judicial review. He can also make a payment arrangement with the Canada Revenue Agency (CRA). The CRA collects debts on behalf of Employment and Social Development Canada (ESDC).^{Footnote 70}

[72] The Appellant’s testimony and statements indicate the following:

1. a) The Appellant applied for benefits after losing his job on January 17, 2021, when his employment contract ended.^{Footnote 71}
2. b) He visited the Commission (Service Canada) website and contacted the Commission to find out whether he might be entitled to benefits.^{Footnote 72}
3. c) The Commission helped him fill out his application for benefits. On it, he indicated that he was taking training full-time, that he spent 25 hours per week on it, and that he was ready and willing to work.^{Footnote 73}
4. d) When he applied for benefits, no Commission representative told him that he would not be entitled to benefits in light of the information he had given to the Commission.^{Footnote 74}
5. e) He also didn’t know that [translation] “computer systems” were going to process his application for benefits, since the Commission had changed how it processed claims because of the COVID-19 pandemic.^{Footnote 75}
6. f) When he made his renewal claim for benefits after he stopped working in August 2021, he followed the same steps as in January 2021. He gave the same answers as in January 2021 and got the same response from the Commission.^{Footnote 76}
7. g) He answered the questions about his training correctly by indicating that he was studying full-time, and he received benefits until the end of December 2021.^{Footnote 77}
8. h) He has looked for work while in training.^{Footnote 78}
9. i) It isn’t fair that he has to pay back the benefits he was overpaid because of the Commission’s administrative errors.^{Footnote 79}
10. j) The Commission suggested that he challenge its decision.^{Footnote 80}

[73] I find that the Commission hasn’t shown that the Appellant could assume that there was no entitlement to the benefits received.

[74] I find that the Commission didn’t exercise its discretion judicially when it decided to verify the Appellant’s claim for benefits and when it reconsidered the claim.

[75] In my view, the Commission hasn’t shown that the Appellant ought to have known (had “knowledge”) that there was no entitlement to the benefits received—one of the rules set out in the Digest to show that it has exercised its discretion judicially.

[76] I find that the Commission didn’t follow the “Reconsideration Policy” it developed to ensure a consistent and fair application of section 52 of the Act and to prevent creating debt when the claimant was overpaid through no fault of their own, as the policy states.^{Footnote 81}

[77] In my view, all the elements were there for the Commission to set up the Appellant’s claim and pay him benefits.

[78] I note that the Commission had ample opportunity to verify what the Appellant had indicated in his claims, in the training questionnaires, and on his claimant reports. From the moment he applied for benefits in January 2021, the Commission knew that he was taking training full-time and the conditions he could work under.

[79] I find that the Appellant was transparent about his training and his availability for work. He was consistent in his statements to the Commission.

[80] I am of the view that the Appellant could reasonably believe that when his claims were approved and he received benefits, this meant he was entitled to those benefits.

[81] In summary, given the evidence and the particular circumstances of this case, I find that the Commission didn’t use its discretion judicially when it decided to verify the Appellant’s claim for benefits and when it reconsidered the claim.

[82] I find that the Commission didn’t consider all relevant factors in doing so. These factors refer to all the training information given by the Appellant in his claims, in the training questionnaires, and on his claimant reports.

[83] In my view, the Commission failed to follow its own rules in exercising its discretion. I find that it was inconsistent and misused its discretion.

[84] I find that a reconsideration of the Appellant’s claim for benefits is unwarranted, even if done within the time set out in the Act.

[85] Because of this, I won’t review the initial decision to grant the Appellant benefits.

Availability for work and repayment of benefits that were overpaid

[86] Since I have found that the Commission didn’t exercise its discretion judicially when it decided to verify the Appellant’s claim for benefits and when it reconsidered the claim, there is no need to review the initial decision in his case.^{Footnote 82}

[87] This means that there is no need to determine whether the Appellant has shown his availability for work while in training for the periods from January 18, 2021, to April 30, 2021, and from September 1, 2021.^{Footnote 83}

[88] There is also no need to determine whether the Appellant has to pay back the benefits that he was overpaid and that the Commission says he owes.^{Footnote 84}

Conclusion

[89] I find that the Commission didn’t use its discretion judicially in deciding to verify and reconsider the Appellant’s claim for benefits. This means that the Commission could not retroactively determine that the Appellant wasn’t entitled to EI benefits.

[90] So, there is no need to determine whether the Appellant has shown his availability for work while in training for the periods from January 18, 2021, to April 30, 2021, and from September 1, 2021, and whether he is entitled to benefits.

[91] There is also no need to decide whether the Appellant has to pay back the money that the Commission says he owes in overpaid benefits.

[92] This means that the appeal is allowed.