Date: 19980416
Docket: A-787-96
CORAM: STONE J.A.
LÉTOURNEAU J.A.
McDONALD J.A.
| IN THE MATTER OF the Unemployment Insurance Act, 1971 |
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| AND IN THE MATTER OF a claim for benefits by Annalee Estabrooks, |
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| AND IN THE MATTER OF an appeal to an Umpire by Annalee Estabrooks from a decision of the Board of Referees rendered November 8, 1993 |
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BETWEEN:
ANNALEE ESTABROOKS
Applicant
- and -
THE ATTORNEY GENERAL OF CANADA
Respondent
AND:
A-299-97
| IN THE MATTER OF the Unemployment Insurance Act, 1970-71-72, c. 48, S. 1, and amendments and regulations thereto. |
| AND IN THE MATTER OF a decision of the Umpire regarding the claim of Sean McIvor. |
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BETWEEN:
SEAN MCIVOR
Applicant
- and -
THE ATTORNEY GENERAL OF CANADA
Respondent
AND:
A-302-97
| IN THE MATTER OF the Unemployment Insurance Act, 1971 |
| AND IN THE MATTER OF a claim for benefits by Kevin St. Aubin, |
| AND IN THE MATTER OF an appeal to an Umpire by Kevin St. Aubin from a decision of the Board of Referees rendered October 26, 1994 |
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BETWEEN:
KEVIN ST. AUBIN
Applicant
- and -
THE ATTORNEY GENERAL OF CANADA
Respondent
Heard at Toronto, Ontario, on Monday, March 16, 1998
Judgment delivered at Ottawa, Ontario, on Thursday, April 16, 1998
REASONS FOR JUDGMENT BY: STONE J.A.
CONCURRED IN BY: LÉTOURNEAU J.A.
McDONALD J.A.
Date: 19980416
Docket: A-787-96
CORAM: STONE J.A.
LÉTOURNEAU J.A.
McDONALD J.A.
| IN THE MATTER OF the Unemployment Insurance Act, 1971 |
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| AND IN THE MATTER OF a claim for benefits by Annalee Estabrooks, |
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| AND IN THE MATTER OF an appeal to an Umpire by Annalee Estabrooks from a decision of the Board of Referees rendered November 8, 1993 |
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BETWEEN:
ANNALEE ESTABROOKS
Applicant
- and -
THE ATTORNEY GENERAL OF CANADA
Respondent
AND:
A-299-97
| IN THE MATTER OF the Unemployment Insurance Act, 1970-71-72, c. 48, S. 1, and amendments and regulations thereto. |
| AND IN THE MATTER OF a decision of the Umpire regarding the claim of Sean McIvor. |
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BETWEEN:
SEAN MCIVOR
Applicant
- and -
THE ATTORNEY GENERAL OF CANADA
Respondent
AND:
A-302-97
| IN THE MATTER OF the Unemployment Insurance Act, 1971 |
| AND IN THE MATTER OF a claim for benefits by Kevin St. Aubin, |
| AND IN THE MATTER OF an appeal to an Umpire by Kevin St. Aubin from a decision of the Board of Referees rendered October 26, 1994 |
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BETWEEN:
KEVIN ST. AUBIN
Applicant
- and -
THE ATTORNEY GENERAL OF CANADA
Respondent
REASONS FOR JUDGMENT
STONE, J.A.:
[1] These three applications for judicial review raise a common issue, which is whether the Umpire in each case correctly determined that the particular applicant was disqualified from receiving unemployment insurance benefits because of voluntarily leaving part-time employment without just cause so as to incur the disqualification penalty which is contemplated by section 28 of the Unemployment Insurance Act , R.S.C. 1985, c. U-I ("the Act") and section 59.1 of the Unemployment Insurance Regulations, C.R.C. 1978, c. 1576, as amended by SOR/93-178, s. 4 ("the Regulations").
[2] I shall begin by summarizing the facts in each of these cases.
[3] Ms. Estabrooks was employed full-time as an administrative secretary in Fredericton, New Brunswick with Job Oriented Training Inc. until September 1992. In that month she lost her job and, as a result, applied for and began receiving unemployment insurance benefits. In February 1993, while still receiving benefits, Ms. Estabrooks accepted part-time employment as a cashier with BMA Enterprises-Imperial Oil. On August 8, 1993, she left this part-time job and moved to Ontario in order to find work and attend university. On September 23, 1993, the Commission informed Ms. Estabrooks that as of August 8, 1993 she was disqualified from receiving benefits pursuant to sections 28 and 30.1 of the Act and subsection 59.1(1) of the Regulations because she voluntarily left her part-time job without just cause resulting in an over-payment of $656. Her appeals to the Board of Referees and ultimately to an Umpire failed.
[4] Mr. McIvor was employed full-time by the University of Ottawa. At the same time he held a part-time job as a cook with Main Street Roadhouse. On December 31, 1994, Mr. McIvor lost his employment with the University and, as a result, applied for and began receiving unemployment insurance benefits. On February 25, 1995, while still receiving benefits, he left his part-time job with Main Street Roadhouse. On September 1, 1995, Mr. McIvor was informed by the Commission that he was disqualified from receiving benefits pursuant to sections 28 and 30.1 of the Act and subsection 59.1(1) of the Regulations because he voluntarily left his part-time job without just cause. Consequently, an over-payment of $3,468 resulted. His appeals to the Board of Referees and to an Umpire proved unsuccessful.
[5] Mr. St. Aubin was employed on a full-time basis as a store manager with Newman Oil Company in Kingston, Ontario until July 14, 1993. On that day he lost his employment. He applied for and began receiving unemployment insurance benefits effective July 18, 1993. Mr. St. Aubin subsequently applied to take a course at the Ontario Business College, which did not begin until November 10, 1993. In mid-August, 1993, he accepted a part-time job as a waiter at Moroni Restaurant and Tavern in Gananoque, Ontario, which he left on September 4, 1993. Mr. St. Aubin neglected to report this part-time employment to the Commission. On September 26, 1994, the Commission informed Mr. St-Aubin that he was disqualified as of September 4, 1993, from receiving benefits pursuant to sections 28 and 30.1 of the Act and subsection 59.1(1) of the Regulations, because he voluntarily left his part-time job without just cause. According to the Commission Mr. St. Aubin has been overpaid to the extent of $17,034. His appeals to the Board of Referees and then to an Umpire were dismissed.
[6] In dismissing the Estabrooks and McIvor appeals, the learned Umpires felt bound by this Court's decision in Canada v. Locke, [1996] 3 F.C. 171. The learned Umpire's dismissal of the St. Aubin appeal is consistent with the result in that case. The Umpire there expressed the view that although Mr. St. Aubin might have had a good reason for quitting his job, i.e. to go to school, this was not "just cause" within the meaning of section 28 of the Act.
[7] None of the applicants disputes the Umpires' findings that they voluntarily left their part-time employment without just cause. As this Court maintained in Tanguay et al. v. Unemployment Insurance Commission et al. (1985), 68 N.R. 154 at 156, the term "just cause" in section 28 is not synonymous with the words "reason" or "motive". Rather, the term must be construed "in accordance with the duty that ordinarily applies to any insured, not to deliberately cause the risk" of his or her unemployment to occur. Pratte, J.A. speaking for the Court emphasized at page 156 that an employee
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who has voluntarily left his employment and has not found another has deliberately placed himself in a situation which enables him to compel third parties to pay his unemployment insurance benefits. He is only justified in acting in this way if, at the time he left, circumstances existed with excused him from thus taking the risk of causing others to bear the burden of his unemployment. |
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[8] Each of the applicants contends that their respective claims are governed by the jurisprudence of this Court that pre-dates the decision in Locke, supra, and that according to such jurisprudence, benefits are not to be denied unless there is a causal nexus between the disqualifying event and the employment from which the claim for benefit arose. That was the view taken by this Court, for example, in Canada (Attorney General) v. McLaughlin, [1995] 1 F.C. 734. In arriving at this view, the Court considered the language in subsection 30(1) of the Act as it stood at that time. Subsection 30(1) referred to a section 27 or 28 disqualification as operating "for such weeks for which benefit would otherwise be payable following the claimant's waiting period". It must be noted, however, that the decision in McLaughlin, supra, was rendered prior to April 4, 1993.
[9] This Court arrived at a similar result in Canada (Attorney General) v. Jenkins (1995), 182 N.R. 388, which was also decided before April 4, 1993.
[10] As I have already noted, both the Act and the Regulations were amended on April 4, 1993. It will be convenient here to first recite the text of subsections 28(1) and (3) of the Act, as well as the relevant 1993 amendments which are found in subsections 30.1(1) and (2) of the Act and subsections 59.1 (1) and (2) of the Regulations. These provisions read as follows:
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28. (1) A claimant is disqualified from receiving benefits under this Part if he lost his employment by reason of his own misconduct or if he voluntarily left his employment without just cause. |
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(3) In this section, "employment" refers to the claimant's last employment immediately prior to the time his claim for benefit is made unless otherwise prescribed by the regulations. |
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30.1 (1) Where a claimant is disqualified under section 28 from receiving benefit, the disqualification is for each week in the claimant's benefit period for which benefit would otherwise be payable following the claimant's waiting period. |
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(2) Where the event giving rise to the disqualification referred to in subsection (1) occurs during a benefit period of the claimant, the disqualification does not include any week in that benefit period before the week in which the event occurs. |
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59.1 (1) Subject to subsection (2), for the purposes of section 28 of the Act, "employment" refers to the last employment lost by the claimant by reason of the claimant's own misconduct, or employment that the claimant left voluntarily without just cause since the commencement of the qualifying period. |
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(2) Subsection (1) does not apply where the claimant has, since losing or leaving the employment referred to in subsection (1), been employed in insurable employment |
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(a) for the number of weeks required by paragraph 6(2)(a) of the Act; or |
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(b) for 20 weeks where the claimant is a new entrant or re-entrant to the labour force, within the meaning of subsection 6(4) of the Act. |
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(3) Subsections (1) and (2) apply in respect of a claimant who loses or leaves employment on or after April 4, 1993. |
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[11] Apart from the decision in Locke, supra, this Court has handed down two other decisions interpreting section 28 of the Act and subsection 59.1 of the Regulations since the 1993 amendments came into effect. The first of these is Canada (Attorney General) v. Larocque (1996), 195 N.R. 316 (F.C.A.), where the Court determined that a claimant was not disqualified from receiving benefits after losing her full-time job due to layoff, even though she had earlier left a concurrently held part-time job voluntarily and without just cause. The second is Canada (Attorney General) v. Droege (1996), 197 N.R. 296 (F.C.A.). The claimant in that case lost his full-time job in August 1993 for failing to work scheduled shifts. Later in the same month he commenced part-time employment with another employer by whom he was laid off in December 1993. He contended that the weeks of insurable employment that he accumulated during his full-time job could be added to the weeks accumulated during his part-time job so as to entitle him to qualify for benefits pursuant to subsection 59.1(2) of the Regulations. This Court rejected that argument on the ground that having lost his full-time job by reason of his own misconduct, the weeks of insurable employment earned during that employment could not be added to the weeks of insurable employment earned during the part-time employment for the purpose of qualifying for benefits pursuant to subsection 59.1(2) of the Regulations. In my view, the decision in Droege, supra, is of no assistance in disposing of the present applications.
[12] The applicants in the present cases submit that the decision in Locke, supra, is inconsistent with the decisions in McLaughlin, Jenkins and Larocque, supra. As I have noted, however, both McLaughlin and Jenkins were based on the relevant provisions of the Act and the Regulations as they stood prior to the 1993 amendments which took effect on April 4, 1993. Larocque was a post-April 4, 1993 decision. However, as the respondent here points out, the result in Larocque is that because the full-time employment was the last to be lost and was held concurrently with the part-time employment, only the former employment could be considered.
[13] This Court's decision in Locke, supra, on the other hand, relied heavily on the language of those subsections read in conjunction with subsection 59.1(1) of the Regulations.1 The facts in the Locke case may be summarized as follows. On November 5, 1992, the claimant was laid off from his full-time employment due to a shortage of work. He applied for and began receiving unemployment insurance benefits. The claimant commenced a part-time job during the week of November 22, 1992 which he reported to the Commission. On April 23, 1993, he was fired from his part-time job for missing his shift without notifying his supervisor. He continued to receive benefits until June 1993. In January 1994, the Commission informed the claimant that he was disqualified from receiving benefits as of April 23, 1993 because he had lost his part-time job by reason of his own misconduct. The disqualification was based upon sections 28 and 30.1 of the Act and subsection 59.1(1) of the Regulations which came into effect on April 4, 1993. The Commission's decision was upheld by the Board of Referees but was reversed by the Umpire. This Court disagreed with the Umpire and restored the decision of the Board of Referees.
[14] It seems to me that the basic teachings of Locke, supra, may be found in the following passages in the judgment of Marceau J.A., speaking for the Court. As he states at page 176:
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Two partially related issues were left unresolved by these provisions. The first was whether the employment to be considered was only the one on the basis of which the claim for benefit was made or any other that the claimant could have held concurrently. Until recently, the prevailing opinion appeared to be that the wording of subsection 30(1), coupled with a purposive analysis of the disqualification provisions, led to the conclusion that a causal nexus had to exist between the improperly lost employment susceptible of giving rise to disqualification and the claim for benefit against which it would have to be imposed. It was felt that, if the possible misbehaviour of workers in the marketplace was the legitimate concern of the unemployment insurance scheme, it was only in so far as it had some effect on the payment of benefits. But the majority decision of this Court in Canada v. Cymerman, [1996] 2 F.C. 593 (C.A.) appears to disapprove of such a conclusion. |
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The second issue that was not completely resolved by the pre-1993 legislation is precisely the one here involved. Was the loss of employment contemplated by the legislator in section 28 one that had to occur before the approval of a claim for benefit by the claimant and the establishment of a benefit period in his or her favour? |
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At page 177:
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Before 1993, therefore, it was for all practical purposes definitively settled that the loss penalized by disqualification under section 28 of the Act had to have occurred before the making of a claim for benefit and the establishment of a benefit period. |
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At pages 179-80:
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The fact is, however, that the new Regulations do not stand alone. They were not adopted in isolation. In 1993, Parliament intervened to amend the Act itself and, among the new provisions inserted, was subsection 30.1(2) which must be read in conjunction with subsection 30.1(1): |
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It may be that the drafters of the 1993 amendments inserted subsection 30.1(2) with very special cases in mind, like that of a "renewal claim" after a suspension of the established benefit period, but the terms used do not even imply any limitation. The provision, on its face, renders obsolete and now to be rejected the proposition that a purposive analysis of the whole of the legislation leads to the conclusion that, for the application of section 28, a link between the unjustifiable loss of employment by the claimant and the payment of benefits to him or her was necessary. As seen above, subsection 59.1(1) of the Regulations took full advantage of that fact as regards a loss occurring before the establishment of a benefit period. But even more clearly and directly, the provision gives full support to the Attorney General's submission that, pursuant to section 59.1 the penal sanction of section 28 is applicable after, as well as before, the establishment of the benefit period and whether or not the unjustifiably lost employment had an effect on the payment of benefits. It is obviously no longer possible to sustain that "permanent benefits already obtained", to use the Umpire's phrase, that is to say benefits actually payable to a claimant on the basis of an on-going benefit period established in his or her favour, cannot be affected by the loss of employment from part-time work, however insignificant that employment may have been. |
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And at page 181:
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There is no doubt that the new subsection 59.1(1) of the Regulations, when interpreted in conjunction with subsection 30.1(2) of the Act, compel one to accept that the inexcusable loss of any employment by a claimant, since the beginning of his or her qualifying period, will trigger the application of the section 28 disqualification regardless of whether it was a part-time job held concurrently with another or whether it occurred after the establishment of a benefit period based on a lay off from some other regular employment. |
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[15] The applicants in the present case raise two additional arguments. First, they contend that the effect of section 59.1 of the Regulations as interpreted in Locke, supra, is to render inoperative section 27 of the Act. That section reads in part as follows:
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27. (1) A claimant is disqualified from receiving benefits under this Part if without good cause since the interruption of earnings giving rise to his claim |
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(b) he has neglected to avail himself of an opportunity for suitable employment; ... |
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[16] The argument is that a claimant while receiving benefits need only have "good cause" for neglecting to avail himself or herself of the opportunity for suitable employment, whereas under subsection 28(1) of the Act, a person is disqualified from receiving benefits if he or she voluntarily leaves employment without "just cause". For instance, Mr. St. Aubin as a former store manager might well have been in a position to refuse the part-time employment with Moroni Restaurant and Tavern for "good cause" because it was not "suitable employment", and he would therefore suffer no loss of benefits. Instead, he has been disqualified from receiving benefits because he accepted the part-time position and voluntarily left it without "just cause".
[17] A similar point appears to have been raised in Locke, supra, but was considered by Marceau, J.A. at page 180, to have been "ill-taken" because "[t]here is a basic condition for the application of section 27, namely, that the employment be 'suitable'". I share this view. I would add that both sections 27 and 28 are intended to discourage claimants, to use the words of Pratte, J.A. in Tanguay, supra, from "deliberately causing the risk" of their own unemployment to occur. While section 27 is directed at encouraging claimants to accept suitable employment during a benefit period, section 28 combined with section 30.1 of the Act and subsection 59.1(1) of the Regulations is aimed at encouraging claimants to hold onto their employment unless they have just cause for leaving it.
[18] The second argument is that this Court's finding in Locke, supra, that section 30.1 of the Act supports its interpretation of section 59.1 of the Regulations is a case of "putting the cart before the horse", because it is only where a disqualification is properly imposed in the first place under section 28 that the duration and timing of the disqualification in section 30.1 can be considered. The applicants contend, rather, that it must first be determined that section 59.1 creates the authority to impose a disqualification during a benefit period under subsection 28(3) before subsection 30.1(2) of the Act comes into play. Section 59.1 refers only to employment lost during the qualifying period. Accordingly, section 28 of the Act should be construed as applying to the loss of employment which qualified a claimant to receive benefits in the first place -- in other words, to a claimant's initial claim for benefit. The applicants maintain that once a claimant has made an initial claim and is found to be "qualified to receive benefit", he or she cannot later be disqualified because the role of section 28 is exhausted.
[19] With respect, this argument has failed to persuade me that the analysis of section 28 in Locke, supra, is incorrect. First, I disagree that subsection 59.1(1) of the Regulations when construed on its own pertains solely to employment which is lost during a qualifying period. Rather, that provision refers to the "last employment lost" by a claimant "since the commencement of the qualifying period" [my emphasis]. As Marceau, J.A. stated in Locke at page 181, when subsection 59.1(1) is considered in conjunction with subsection 30.1(2) of the Act, it becomes clear that a section 28 disqualification is not restricted to employment which is unjustifiably lost during a qualifying period, but that it may strike during a claimant's benefit period. I also share Marceau, J.A.'s opinion at page 180 that the language of subsection 30.1(2) of the Act clearly "renders obsolete" the notion that a disqualification pursuant to section 28 must be causally connected to the claim for benefit against which it is imposed.
[20] The idea that a claimant is disqualified from receiving benefits flowing from the loss of full-time employment because of subsequently losing a part-time job by reason of misconduct or leaving employment voluntarily without just cause, has been severely criticized by judges and umpires alike. In Jenkins, supra, at page 389, Robertson, J.A. quoting from his judgment in Canada (Attorney General) v. Sears, [1995] 1 F.C. 393, stated his understanding that "it is not the purpose of the Act to discourage claimants from seeking part-time employment" and that to do so, as Hugessen, J.A. put it in Canada (Procureur Général) v. Fortin (1989), 109 N.R. 385 (F.C.A.), at page 395, "would only seem to encourage laziness". The same general view was expressed by McDonald, J.A. in Larocque, supra, at page 318, where he stated that the claimant in question "should not be penalized for being a hard worker". In Locke, supra, Marceau, J.A. was obviously uncomfortable with the result that he felt was compelled by the 1993 amendments. At page 181, he maintained:
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The disqualification here strikes unconditionally. Its effect, it seems to me, is fostering a system in which the best thing for anyone to do while in receipt of benefits is absolutely nothing. Unless provided with employment that would be deemed "suitable" under the Act, the best course of action for a claimant in receipt of benefits is not to take any job at all. It merely encourages people not to take on part-time work. |
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[21] The Umpire in one of the cases at bar, McIvor, was similarly critical, stating at pages 5-6 of her reasons:
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I have held this decision under reserve for some time, hoping there might be a way to distinguish the Locke decision. I, like Mr. Justice Marceau, am shocked at the consequences of the legislative provisions. I cannot believe that had Parliament properly put its mind to this issue the results that arise would have been condoned. |
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[22] Counsel for the respondent acknowledged in oral argument that the result arrived at in Locke, supra, would appear to be harsh indeed, but that the new language of the statute as adopted in 1993 requires it. A person who does not take part-time employment subsequent to being laid off from his or her full-time job would ordinarily qualify for benefits under the insurance scheme to which he or she has made the contributions required by law. On the other hand, a person so laid off who happens to take a part-time job and leaves it without just cause is disqualified from receiving benefits from the date the part-time job ended.
[23] Despite the harshness of this result and the criticisms which have been lodged against section 30.1 of the Act, in my view the judgment in Locke, supra was correctly decided and each of the present cases is governed by it. While I agree entirely that section 30.1 appears ill-conceived and antithetical to the underlying purpose of the Act and that the result in these cases is extremely unfortunate, in my opinion the interpretation of section 28 advanced in Locke is, as Marceau, J.A. maintained at page 181, "unavoidable". It is, of course, open to Parliament to revisit the matter and temper the severity of the disqualification provisions if it should consider it appropriate to do so.
[24] Each of the applications for judicial review should accordingly be dismissed.
"A.J. STONE"
J.A.
"I concur
Giles Létourneau J.A."
I concur
F.J. McDonald J.A."
FEDERAL COURT OF APPEAL
Date: 19980416
Docket: A-787-96
BETWEEN:
Annalee Estabrooks
- and -
The Attorney General of Canada
Docket A-299-97
BETWEEN:
Sean McIvor
- and -
The Attorney General of Canada
Docket A-302-97
BETWEEN:
Ken St. Aubin
- and -
The Attorney General of Canada
REASONS FOR JUDGMENT
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1 It is clear from the record in Locke that in its arguments before this Court, the applicant specifically raised the application of section 30.1 of the Act as an issue.
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