Digest of Benefit Entitlement Principles Chapter 8 - Section 1

8.1.0 Authority

Employment Insurance (EI) benefits are paid from public funds comprised of premiums paid by employers and claimants, the two parties traditionally involved in labour disputes, and whose interests clearly differ. The legislative provisions relating to labour disputes provide for neutrality in the administration of these funds (FCA A-879-82, CUB79649; FCA A-521-86, CUB 12543).

Pursuant to EI Act 36(1), if a claimant loses an employment, or is unable to resume an employment, because of a work stoppage attributable to a labour dispute at their place of employment the claimant is not entitled to receive benefits until the earlier of

1. the end of the work stoppage, and
2. the day on which the claimant becomes regularly engaged elsewhere in insurable employment.

EI Regulation 52 provides that the number of days of disentitlement in a week may be less than five for a claimant who loses or is unable to resume part-time employment because of the reason mentioned above. The intention of this provision is to disentitle a claimant only to the extent of the part-time employment that they lost or cannot resume because of a labour dispute.

Furthermore, under certain conditions, the disentitlement may be suspended when the claimant proves that they are otherwise entitled to certain types of benefits (EI Act 36(3)).

The disentitling provisions will not apply if the claimant proves they are not participating in, financing, or directly interested in the labour dispute that caused the stoppage of work (EI Act 36(4)).

8.1.1 Purpose

The EI account from which benefits are paid, consists of amounts deducted as premiums from the income of employees (EI Act 67) and from premiums paid by employers (EI Act 68). In labour disputes, the interests of these two groups of contributors usually differ. To prevent the act from having any influence whatsoever on labour-management relations, Parliament has imposed strict rules that prohibit the use of EI funds from being used to support either party in a labour dispute (FCA A-521-86, CUB 12543; and FCA A-226-88, CUB 14715).

Moreover, the EI program was never intended to insure the loss of employment due to participation in such disputes, regardless of which party is right or wrong (CUB 76451). The issue is not one of equity; the determination of entitlement in these circumstances is not based on fault or merit. The Commission must demonstrate an ongoing impartiality at every step of the decision making process, as well as avoid any judgment or interference in the dispute.

Even though a refusal of benefits to claimants may appear to provide assistance to an employer in resolving a dispute in their favour, this approach does not contravene Parliament's concern for neutrality (FCA A-521-86, CUB 12543; FCA A-1036-92, CUB 21237; FCA A-226-88, CUB 14715).

It should rather be viewed in the context that the payment of benefits to employees involved in a strike could tip the balance in the negotiations that have reached an impasse (CUB 21842; CUB 16202).

8.1.2 Scope

The act's provisions relating to labour disputes are not discriminatory and in no way contravene the principles set forth in the Canadian Human Rights Act(FCA A-226-88, CUB 14715). They apply equally to all claimants without exception, including those employed in job creation partnerships (EI Act 25), or under work sharing agreements (EI Act 24). Special rules apply, however, to reflect the specific characteristics of the fishing industry (Digest chapter 15). With respect to entitlement, the provisions of labour disputes apply to workers employed in the fishing industry, but there exist differences in its application (EI Act 36; EI fishing Regulations). All provisions dealing with entitlement to benefits (EI Act 6(1)) coexist in such a way that, an individual may meet the requirements under a specific section of the act, but may not receive benefits if the requirements under another section are not met for the same period.

A person who has been disentitled under the labour dispute provisions may be otherwise entitled to special benefits or to benefits while attending a course or employment activity, as directed by a designated authority. The conditions that permit the suspension of the disentitlement, however, must be met (EI Act 36(3)). Special benefits include maternity, parental, sickness, compassionate care or family caregiver benefits.

The protection provided in the act with respect to the right of union association does not apply when the loss of employment results from a stoppage of work attributable to a labour dispute (EI Act 35). The labour dispute provisions do not affect the right of employees to strike. As well, the fact that a disentitlement continues after settlement of the dispute, does not go against the freedom of association provided in the Canadian Bill of Rights and in the Canadian Charter of Rights and Freedoms (the Charter) (FCA A-226-88, CUB 14715; Supreme Court decision 1909488, CUB 8764). The right of a union to strike is not protected by the freedom of association of its members and the consequence of exercising this right does not infringe this freedom. The same can be said for the consequences of an employer exercising the legal right to resort to a lock-out.

The rule outlined in the labour dispute provisions is neither fundamentally unjust nor unreasonable and does not contravene the Charter. Moreover, the particular scheme set up in the act contemplates that a claimant has the right to appeal to the Social Security Tribunal if they believe the decision on their claim contravenes the act.

8.1.3 Prerequisites

The legislative provisions dealing with labour disputes specifically apply to claimants (EI Act 36):

1. who have lost an employment or are unable to resume an employment
2. because of a stoppage of work
3. attributable to a labour dispute
4. at the factory, workshop or other premises at which they worked.

These four elements are a prerequisite in order for the provisions of the EI Act to apply. The first major element is the existence of a labour dispute (EI Act 2(1)); which must take place at the claimant's place of employment (EI Act 36(5)). There must be a cause-and-effect relationship between the employment that was lost or cannot be resumed, the stoppage of work, and the labour dispute. Thus it is fundamental that the claimant has lost employment or is unable to resume an employment, as a result of a stoppage of work caused by the dispute.

In the absence of any one of these four elements, the labour dispute provisions do not apply. In such instances, the exempting conditions do not come into play (EI Act 36(4) and Digest 8.1.4).

8.1.4 Exempting conditions

Even if, in a given situation, the four elements of disentitlement were present, the claimant could still avoid a disentitlement under these provisions if the claimant proves that they are:

1. not participating in the labour dispute,
2. not financing it, and
3. not directly interest in it (EI Act 36(4); CUB 77462).

These conditions must all be met for the duration of the work stoppage. If any of them are not met at any time throughout the work stoppage, the claimant is subject to disentitlement under the labour dispute provisions.

8.1.5 Commencement of the period of disentitlement

Depending on a claimant's particular situation, the period of disentitlement from benefits begins at the latest of the following dates. This interpretation is based on section 36 of the act as a whole, of which specific elements and terms are explained later:

1. the day on which the claimant lost an employment or is unable to resume an employment because of a stoppage of work attributable to a labour dispute;
2. in the case where the claimant filed a claim as a result of the labour dispute, the Sunday of the week in which the claim for benefits is effective (EI Act 10);
3. in some exceptional cases, the first day on which the claimant no longer meets at least one of the exempting conditions (Digest 8.6.9; Digest 8.7.5 and Digest 8.8.11).

8.1.6 Disentitlement for days in a week

Once the period of disentitlement is established, it will continue for each working day in a week of unemployment until the conditions permitting its suspension are met (EI Act 36(3); Digest 8.1.7; Digest 8.10.0 to 8.10.4) or one of the two situations provided in the legislative text for its termination occurs (EI Act 36(1); Digest 8.1.8).

The number of days of disentitlement in a week may be less than five in the case of a claimant who has lost part-time employment or who is unable to resume this employment because of a stoppage of work attributable to a labour dispute (EI Act 36(2); EI Regulation 52). These situations are discussed in separate headings (Digest 8.9.0 to 8.9.4).

8.1.7 Suspension of the period of disentitlement

A disentitlement that continues for one or more days a week will reduce the amount of benefits payable to a claimant in a week of unemployment.

Meeting the requirements to have the disentitlement terminated is not the only condition under which a claimant may again become entitled to a full week of benefits. A disentitlement may be suspended in the case of pregnancy leave, care for a newborn or a child placed for the purposes of adoption, illness, injury, quarantine, providing care or support to a family member with a serious medical condition, or attending a training course to which the claimant was directed by an authority designated by the Commission. (EI Act 36(3)).

These issues will be more fully discussed under other headings (Digest 8.10.0 to 8.10.4).

8.1.8 Termination of the period of disentitlement

A disentitlement can only be terminated once the work stoppage due to the labour dispute ends or a claimant becomes regularly employed in other insurable employment (EI Act 36(1); Digest 8.11.0; Digest 8.12.0). The disentitlement will be removed when the claimant successfully establishes that one of these exempting conditions are met (FCA A-942-85, CUB 11403; Digest 8.13.0 to 8.13.5; Digest 8.6.9; Digest 8.7.5; Digest 8.8.11; CUB 77469).

There may also be other factors that lead to the termination of the period of disentitlement (Digest 8.12.0 to 8.12.2).

8.1.9 Proof

The Commission's main concern is to ensure sound management of the EI program, and to rule on the entitlement of the claimant to benefits. In order to do so, the Commission must remain neutral and objective toward those who pay premiums.

The Commission bears the onus of proving the presence of the four elements of the labour dispute provisions; that is, that there has been a loss of employment, by reason of a stoppage of work, attributable to a labour dispute, at the claimant’s place of employment (EI Act 36(1), CUB 39840).

Once this has been established, the onus of proof shifts to the claimant. Generally, the claimant bears the onus of proof of entitlement to benefits in general, including in the context of labour disputes. It is up to the claimant to show that the provisions of the labour dispute legislation should not apply to their case. This includes proving initial entitlement to benefits during a stoppage of work, as well as meeting specific conditions in order to have the disentitlement suspended (EI Act 36(3 & 4)).

In this context, the Commission is responsible for gathering all relevant information on the subject, whether favourable or unfavourable to one party or the other. Actual facts must be examined, and not the interested parties’ interpretation of those facts.

The Commission must then weigh the evidence to rule on the claimant's entitlement to benefits. It must consider not only the four elements that result in disentitlement to benefits, but the exempting conditions for these provisions. The same rule applies when considering suspension or termination of a disentitlement.

8.1.10 Newspaper articles and press releases

Strictly speaking, newspaper articles are simply a written form of hearsay. Such published information may in principle be considered but as with any other form of information, its credibility must be assessed at the time the decision is actually made (FCA A-1873-83, CUB 8750).

This assessment is especially important in the case of labour disputes; by their very nature, such disputes involve contradictory claims by the parties involved. As for newspaper reports, it must be kept in mind that journalists have access to information originating from both sides of the dispute; media reports should not be accorded any importance unless their foundation and accuracy can be verified with both parties involved; employer and union.

Newspaper articles and press releases should be considered as useful indications of the nature of a dispute in that they focus on such features as the position of the parties concerned, sensational incidents of violence, termination of a stoppage of work, and so on.

Once these indications are available, the next step, in keeping with a fundamental principle of natural justice, is to provide each party with an opportunity to clarify and comment on the situation.

One should not lose sight of the fact that the claimant bears the onus of proof to entitlement to benefits. For example, with respect to exempting conditions, claimants or their representatives are required to refute all unfavourable facts that appear in a news item or release (FCA A-468-00, CUB 37455).

[April 2019]