Employment Insurance (EI)

Decision

[1] The appeal is allowed. The file returns to the General Division to determine whether the Claimant was entitled to benefits from September 27, 2020, when she was taking training.

Overview

[2] The Appellant, the Canada Employment Insurance Commission (Commission), decided that the Respondent (Claimant) was not entitled to Employment Insurance (EI) regular benefits from September 27, 2020, because she was taking unauthorized training and was not available for work. The Claimant appealed the Commission’s reconsideration decision to the General Division.

[3] The General Division determined that the Commission had not used its discretion judicially in deciding to verify and reconsider the Claimant’s claim for benefits. It found that the Commission could not retroactively determine that the Claimant was not entitled to EI benefits.

[4] The Appeal Division gave the Commission permission to appeal the General Division decision. The Commission argues that the General Division made an error of law in its interpretation of section 153.161 of the Employment Insurance Act (EI Act).

[5] I have to decide whether the General Division made an error of law in its interpretation of section 153.161 of the EI Act.

[6] I am allowing the Commission’s appeal on the issue of the exercise of judicial power.

[7] The file returns to the General Division to determine whether the Claimant was entitled to benefits from September 27, 2020, when she was taking training.

Issue

[8] Did the General Division make an error of law in its interpretation of section 153.161 of the EI Act?

Analysis

Appeal Division’s mandate

[9] The Federal Court of Appeal has established that the Appeal Division’s mandate is conferred to it by sections 55 to 69 of the Department of Employment and Social Development Act.^{Footnote 1}

[10] The Appeal Division acts as an administrative appeal tribunal for decisions made by the General Division and does not exercise a superintending power similar to that exercised by a higher court.

[11] So, unless the General Division failed to observe a principle of natural justice, made an error of law, or based 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, I must dismiss the appeal.

Did the General Division make an error of law in its interpretation of section 153.161 of the EI Act?

[12] The General Division determined that the Commission had not used its discretion judicially in deciding to verify and reconsider the Claimant’s claim for benefits. It found that the Commission could not retroactively determine that the Claimant was not entitled to EI benefits.

[13] The Commission argues that it exercised its discretion judicially when it decided, under section 153.161 of the EI Act, that the Claimant was not entitled to benefits. It argues that its reconsideration policy is not relevant to this case given that section 153.161 of the EI Act is what applies to this situation.

[14] The Claimant argues that the General Division did not make an error in finding that the Commission had not exercised its power judicially, since she reported being in training full-time in her claim and on her reports. She was always honest.

[15] To determine whether the General Division made errors, it is important to look at the Commission’s reconsideration powers first before considering the impact of the temporary pandemic measures to facilitate access to benefits.

[16] The Commission’s reconsideration powers are set out in section 52 of the EI Act. This section says that the Commission may reconsider a claim for benefits within 36 months after the benefits have been paid.^{Footnote 2}

[17] Case law has established that the only limitation on the Commission’s power to reconsider under section 52 of the EI Act is time. This means that the Commission may reconsider a claim under section 52 even if there are no new facts. In other words, it can withdraw its earlier approval and require claimants to repay the benefits paid under that approval.^{Footnote 3}

[18] During the pandemic, the government temporarily changed the EI Act. Section 153.161 was added to the EI Act and came into force on September 27, 2020. This provision applies to the Claimant, who established an initial claim for EI benefits on September 27, 2020.

[19] Section 153.161 of the EI Act says:

Availability

Course, program of instruction or non-referred training

153.161 (1) For the purposes of applying paragraph 18(1)(a), a claimant who attends a course, program of instruction or training to which the claimant is not referred under paragraphs 25(1)(a) or (b) is not entitled to be paid benefits for any working day in a benefit period for which the claimant is unable to prove that on that day they were capable of and available for work.

Verification

(2) The Commission may, at any point after benefits are paid to a claimant, verify that the claimant referred to in subsection (1) 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.

[20] This temporary provision says that for the purposes of applying section 18(1)(a) of the EI Act, the Commission may verify that a claimant is entitled to benefits by requiring proof of their availability for work at any point after benefits are paid. This means that the verification of availability may not have happened while benefits were being paid.

[21] Section 52 of the EI Act is written differently. It says that the Commission may reconsider a claim for benefits within 36 months after the benefits have been paid. In my view, this power is not similar to the one under section 153.161 of the EI Act.

[22] Despite these differences, I am of the view that section 153.161 has to be read together with section 52 of the EI Act. One section allows the Commission to verify entitlement to benefits if it has not done so, and if it has, the other section allows it to reconsider its decision. Both sections are concerned with recovering amounts that claimants should not have received.

[23] The evidence shows that the Claimant’s availability was verified for the first time on April 1, 2022. The Claimant said that she was available evenings and weekends because her priority was to finish her training. There is no evidence before the General Division that the Claimant talked with a Commission agent or that her availability was verified before that.

[24] I am of the view that section 153.161 allowed the Commission to verify that the Claimant was entitled to benefits. However, the decision to carry out a verification under section 153.161 or to reconsider under section 52 is discretionary. This means that although the Commission has the power to carry out a verification or to reconsider, it does not have to do so.

[25] The law says that discretionary powers must be exercised judicially. This means that when the Commission decides to reconsider a claim, it cannot act in bad faith or for an improper purpose or motive, take into account an irrelevant factor or ignore a relevant factor, or act in a discriminatory manner.^{Footnote 4}

[26] The Commission developed a policy to help it exercise its discretion to reconsider decisions under section 52 of the EI Act. The Commission says that the reason for the policy is “to ensure a consistent and fair application of section 52 of the [EI Act] and to prevent creating debt when the claimant was overpaid through no fault of their own.” The policy says that a claim will only be reconsidered when:

• benefits have been underpaid
• benefits were paid contrary to the structure of the [EI 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 5}

[27] The policy says that a period of non-availability is not a situation where benefits were paid contrary to the structure of the EI Act.^{Footnote 6} The Claimant did not make any false or misleading statements and could not have known that she was not entitled to the benefits received. None of the factors mentioned in the Commission’s policy justify reconsidering the Claimant’s claim, since she acted in good faith and repeatedly reported her training to the Commission.

[28] Did the Commission have to apply the section 52 policy to help it exercise its discretion under section 153.161 of the EI Act? I do not think so.

[29] I find that during the temporary pandemic measures, the Commission’s discretionary decision whether to verify a claimant’s availability had to be made with the legislative intent of section 153.161 of the EI Act in mind.

[30] In implementing this section during the pandemic, Parliament clearly wanted to insist on the Commission’s power to verify that a claimant taking a course, program of instruction, or training was entitled to EI benefits, even after the payment of benefits.

[31] I find that the Commission exercised its discretion within the parameters set by Parliament during the pandemic.

[32] Considering the above factors, I find that the General Division made an error in deciding that the Commission had not exercised its power judicially and, as a result, could not retroactively determine that the Claimant was not entitled to EI benefits.

[33] This means that I am justified in intervening.

Remedy

[34] For the above reasons, I find that the Commission used its discretion judicially under section 153.161 of the EI Act.

[35] The Commission considered all the relevant information in deciding to verify availability. No new relevant facts were provided at the General Division hearing that the Claimant had not already provided to the Commission. There is no indication that the Commission considered irrelevant information or acted in bad faith or in a discriminatory manner. The Commission also acted for a proper purpose in verifying the Claimant’s entitlement to benefits.

[36] However, given the General Division’s findings, the file has to return to the General Division to determine whether the Claimant was entitled to benefits from September 27, 2020, when she was taking training.

Conclusion

[37] The Commission’s appeal is allowed on the issue of the exercise of judicial power.

[38] However, the file returns to the General Division to determine whether the Claimant was entitled to benefits from September 27, 2020, when she was taking training.