Employment Insurance (EI)

Decision

[1] The appeal is dismissed with modification.

[2] I find that the earnings the Appellant received have to be allocated from the week he was separated from his job.

Overview

[3] The Appellant was let go from his job at X on May 3, 2019. He applied for benefits on May 4, 2019.

[4] The Canada Employment Insurance Commission (Commission) made a decision on October 24, 2023. It said that it had allocated $19,330.38 to the Appellant’s benefit period starting on May 5, 2019.

[5] The Appellant doesn’t dispute that he received money as vacation pay and severance pay. But he argues that he can’t confirm the exact amount he got and that he didn’t get the severance pay on June 13, 2019, as the employer says; he says he got it a month later, perhaps two.

[6] The Appellant also says that the Commission didn’t provide him with clear and accurate information. For these reasons, he asks that the amount not be allocated to his benefit period.

[7] I have to decide whether the $19,330.38 was correctly allocated to the Appellant’s benefit period.

Issues

[8] Was the $19,330.38 allocated correctly?

[9] Since the Commission reconsidered a benefit period, I will also answer the following question:

[10] Did the Commission exercise its discretion judicially when it reconsidered the Appellant’s benefit period starting on May 5, 2019?

Analysis

[11] The entire income from a claimant’s employment has to be taken into account in calculating the amount to be deducted from the claimant’s benefits.^{Footnote 1}

[12] The vacation pay and severance pay are earnings within the meaning of section 35(2) of the Regulations. The Appellant agrees that they are earnings, but he takes issue with the fact that they were allocated to his benefit period.

[13] Money paid by an employer because of a separation from employment has to be allocated to the claimant’s benefit period.^{Footnote 2}

[14] Section 36(9) of the Regulations states:

Subject to subsections (10) to (11), all earnings paid or payable to a claimant by reason of a lay-off or separation from an employment shall, regardless of the period in respect of which the earnings are purported to be paid or payable, be allocated to a number of weeks that begins with the week of the lay-off or separation in such a manner that the total earnings of the claimant from that employment are, in each consecutive week except the last, equal to the claimant’s normal weekly earnings from that employment.^{Footnote 3}

[15] The Appellant indicated that he was let go on May 3, 2019. After his employment ended, he received his vacation pay and severance pay. However, he argues that when he applied for benefits, he could not have known that he would get severance pay or what the amount would be.

[16] The Commission says that it isn’t when the payment is made but why that determines the period it should be allocated to. The Commission says that the Appellant got the money for being separated from his job and that it correctly allocated this amount to his benefit period from May 5, 2019, to July 20, 2019.

[17] The Record of Employment that the employer issued on May 7, 2019, indicates that the Appellant was paid $91.58 as vacation pay for being separated from his job. This amount also appears on the Record of Employment issued on July 19, 2019.

[18] A form completed by the employer and sent to the Commission on August 5, 2019, shows that the Appellant was paid $91.58 as vacation pay on May 16, 2019, and that he was paid two amounts—$16,849.80 and $2,389—as severance pay on June 13, 2019. When these three amounts are added together, they add up to $19,330.38.

[19] Section 36(9) of the Regulations (https://www.canlii.org/fr/ca/legis/regl/dors-96-332/derniere/dors-96-332.html) says that it doesn’t matter when you receive the amount; it has to be allocated to the week of your benefit period that is the last week worked.

[20] The Appellant was separated from his job on Friday, May 3, 2019. That week started on Sunday, April 28, 2019.

[21] So, I find that the total amount of $19,330.38 has to be allocated to a number of weeks that begins with the week of the separation from employment, that is, the week of April 28, 2019.

[22] This allocation is done in such a manner that the Appellant’s total earnings from that employment are, in each consecutive week except the last, equal to his normal weekly earnings from that employment.^{Footnote 4}

[23] While I understand that when he applied for benefits on May 4, 2019, the Appellant could not have known that he would get severance pay, he had to declare it on his claimant report when he received it. He didn’t declare any severance money received.

[24] In any event, I note that misrepresentations were made and that the Commission didn’t impose a penalty. The overpayment that the Appellant owes is just the benefits he was overpaid because he had failed to declare these earnings.

[25] This means that the entire amount has to be allocated to his benefit period, and the timing of the severance payment has little impact on the final result, since money paid because of a separation from employment is considered paid from the week of the separation.

[26] The Appellant argues that the Commission didn’t provide him with clear and accurate information and that he didn’t understand its contentions until he received the documents in the file sent by the Tribunal. That is when he learned that the employer had provided a form with information for the Commission.

[27] So, even though he admits that he received vacation pay and severance pay, the Appellant argues that the amount should not be allocated at all to his benefit period, since he can’t provide an exact date and amount for the severance pay he received.

[28] As for the vacation pay, he says that he got $57.48, not $91.58, as the employer indicated.

[29] I am considering all of the Appellant’s arguments, and I note that I am making this decision on a balance of probabilities. Given the facts before me, I find that it is more likely than not that the Appellant received money as vacation pay and severance pay. He also doesn’t dispute that he received these earnings.

[30] So, the earnings were paid to the Appellant, and he accepted and received vacation pay and severance pay.

[31] Concerning the correctness of the amounts, on a balance of probabilities, the amount received as vacation pay is net income according to the Appellant and gross income according to the employer. The employer indicated $91.58 on the Record of Employment and on a form that it completed and sent to the Commission. The Commission also provided this information to the Appellant on July 4, 2022. I accept that the Appellant received gross earnings of $91.58 as vacation pay.

[32] Concerning the amount of the severance pay, the employer indicated on the form that it had paid the Appellant a total of $19,330.38 on June 13, 2019. This amount consists of $91.58 received as vacation pay and $19,238.80 paid as severance pay. The employer specified two separate amounts, namely $16,849.80 as severance pay and $2,389 as severance insurance, which add up to $19,238.80. After weighing the evidence before me, I accept this amount as severance earnings.

[33] Although the Appellant argues that there is confusion because the employer indicated three different amounts on the form and he didn’t receive those amounts on the dates specified on the form, that is, May 16, 2019, and May 13, 2019, he himself has remained evasive about the actual date he received those amounts. He also argues that the amounts are incorrect.

[34] After weighing all the evidence before me, I accept the amounts the employer provided to the Commission. I find this information to be plausible and accurate. The Records of Employment indicate the same amount as vacation pay, and it is also on the form that was sent later on.

[35] Given that the Appellant admits receiving severance pay, I find that it is more likely than not that the amounts the employer indicated are correct. Moreover, the Commission contacted a supervisor at the employer, and she confirmed on March 12, 2020, that the information on the form was correct.

[36] So, although the Appellant has submitted written arguments, he says in his arguments that he didn’t receive a severance payment between April 28, 2019, and May 4, 2019. He also says that he received earnings on May 16, 2019, but that this amount is inconsistent with the ones indicated by the employer and/or the Commission.^{Footnote 5} In addition, he says that he didn’t receive severance earnings on May 16, 2019.

[37] At the hearing, the Appellant admitted receiving an amount, but before both the Commission and the Tribunal, he was evasive about the date and the exact amounts he had received. He said he didn’t remember.

[38] It is the Appellant’s responsibility to declare these amounts. Although he argues that the Commission is confused given the mistakes that were made on a number of occasions, he gives evasive answers, saying that he doesn’t remember at all the exact amount or when he received it. Yet, he submitted a bank statement for May 2019 proving that he didn’t receive severance pay during that period. Surprisingly, he didn’t submit any bank statements for June 2019, July 2019, or August 2019 to show when the severance pay was paid.

[39] Since he received amounts as severance pay and vacation pay, it is more likely than not that the amounts indicated by the employer are correct, and I accept the Commission’s version of the facts.

[40] As mentioned, even if the Appellant got the money later, what he was paid still has to be allocated starting the week he was separated from his job.

[41] I find that the total amount of $19,330.38 paid to the Appellant as vacation pay and severance pay has to be allocated to his benefit period starting the week he was separated from his job, that is, the week of April 28, 2019.

Did the Commission exercise its discretion judicially when it decided to reconsider the Appellant’s benefit period?

[42] I understand the Appellant’s disappointment, since the allocation of this amount resulted in an overpayment of benefits that he has to repay. I note, however, that the Commission didn’t impose a penalty on him. It didn’t find that he had knowingly failed to declare the vacation pay and severance pay he had received from his employer.

[43] The Commission also made a favourable decision concerning an earlier benefit period established in 2016. The Commission’s file shows that the Appellant had failed to declare his earnings while receiving benefits during that period. However, the Commission didn’t allocate the undeclared earnings to that benefit period given the time it had to reconsider that period.

[44] However, the Commission reconsidered the Appellant’s benefit period starting on May 5, 2019.

[45] The Commission may reconsider a claim for benefits within 36 months after the benefits have been paid. If, in the opinion of the Commission, a false statement has been made, the period can be extended to 72 months.^{Footnote 6}

[46] To reconsider a claim for benefits within 72 months, the Commission doesn’t have to show that the false statements were made “knowingly.” But it has to do so when it imposes a penalty.^{Footnote 7}

[47] In the Appellant’s case, the Commission didn’t impose a penalty. However, a false or misleading statement had been made, given the undeclared earnings of $19,330.38.

[48] The Commission may, at any time in a specific period, reconsider its decision and, if it decides that a person has received money for which they weren’t qualified, it must calculate the amount due or payable and notify the claimant.^{Footnote 8}

[49] To decide whether the Commission judicially exercised its discretion to reconsider, I have to determine whether it properly exercised this discretion. In other words, I must properly determine whether it considered all relevant factors when it decided to exercise its power to reconsider, and/or whether it acted in a perverse or capricious manner.

[50] In making its decision, the Commission considered all the factors relevant to the Appellant’s situation. It refrained from issuing an overpayment of benefits for an earlier period, and it didn’t issue any penalty on the Appellant for his benefit period starting on May 5, 2019.

[51] It also considered that the bank statement he had submitted for May 2019 didn’t show he had received $19,238.80, and it considered that he needed more time to present other evidence. To date, even before the Tribunal, he has said that he doesn’t know the date he received the money. He admits that he received severance pay, but he can’t confirm that this amount is correct. He is simply disputing the dates and amounts the Commission used.

[52] So, I would add that even though no penalty was imposed, the Appellant has responsibilities: He has to declare his earnings on his claimant reports. By failing to declare the earnings he received as severance pay, he was ensuring that he would continue to receive benefits for a period of time.

[53] While I understand that on May 4, 2019, the Appellant didn’t know the amount he would get as severance pay and that he wasn’t even sure he would get severance pay, when he did, he didn’t declare it on his claimant report, hence the overpayment. To date, he hasn’t declared this amount, and he says he doesn’t remember the amount or the date it was deposited. In support of his assertions, he wants none of the amount to be allocated to his benefit period.

[54] I also understand that it is a large amount for him to pay back, but he would not have been overpaid if he had declared his earnings on his claimant report, as he was supposed to.

[55] So, the Commission exercised its discretion judicially when it reconsidered the Appellant’s file, since it considered all relevant factors while making sure to ignore irrelevant ones. It even decided not to reconsider an earlier benefit period even though misrepresentations had been made, and it also chose not to impose a penalty in this case.

[56] The Commission was justified in reconsidering the Appellant’s benefit period.

Conclusion

[57] The appeal is dismissed with modification.