Summary of Issue: Monies By Reason Of Separation

Decision 75912 Full Text of Decision 75912

The Commission was informed that the claimant would be receiving monies as a payment in lieu of notice, a severance pay, and his vacation pay as well as an amount in return of employer contributions. The amounts received constituted earnings which had to be allocated. The situation in this case was complicated because the claimant’s employer had filed for bankruptcy and the claimant received his payment after he had received his employment insurance benefits. Fortunately, part of the overpayment had been reimbursed directly by the Trustee in Bankruptcy. In his appeal to the BoR the claimant submitted that he was being penalized for occurrences that had been out of his control. He noted that he had been laid off months before his employer had gone bankrupt. The uncontested evidence in the case is that the claimant had received monies following his termination of employment. The appeal by the claimant is dismissed by the Umpire.

Decision A0064.10 Full Text of Decision A0064.10

Following termination of his employment, the claimant received a severance pay and vacation pay. The Commission found that the amount received constituted earnings and allocated the money which caused an overpayment. The FCA concluded that a link existed between the claimant's employment and the amount received. Consequently, the amount constituted earnings pursuant to s. 35 of the EIR.

Decision A0392.07 Full Text of Decision A0392.07

The claimant was discharged on August 9, 2005 following a mass layoff that took place at one of the Tembec plants. On September 24, 2005 the claimant signed a document entitled "Receipt, Release and Settlement", which indicated specifically that in exchange for severance pay, the latter would agree to waive his layoff rights and terminate his employment with Tembec. The Commission allocated the severance pay in accordance with Regulation 36(9) and (10) effective from the end of employment: August 7, 2005. The Umpire, in supporting the decision of the BOR, concluded that the severance pay made out to the claimant had been paid in exchange for forfeiting layoff and reinstatement rights and that it had to be apportioned allocated as provided by Regulation 36(19)(b). The Court, unlike the BOR and the Umpires, found that the severance pay could not be merged with a payment carried out to waive a layoff right or reinstatement right while it was, in the case at hand, solely a layoff right. In federal law, reinstatement right is the right of an employee to resume work following an unjustified discharge, if the reinstatement is granted to that employee. The Umpire and the BOR incorrectly enforced the applicable legislation, namely paragraph 36(19)(b) instead of subsections 36(9) and (10) of the Regulations.

Decision A0299.05 Full Text of Decision A0299.05

This is one of several cases involve the closing of a shipbuilding company and payments made pursuant to a closure pay plan some four years later. The payments were allocated from the date of separation identified by the Commission, i.e. the date of the termination of bargaining rights confirmed by the respective provincial governing body, some four years after the date of layoff. The Umpire reversed the Board's ruling that the payments were not earnings. But the Umpire considered the allocation should be from the earlier date of layoff. The Court said that the trigger for eligibility for benefits is a cessation of work and an interruption of earning and since the allocation is relevant to the calculation of the benefits payable and the commencement of the benefit period, it is logical that it should coincide with the date of eligibility. Whether the events which give rise to eligibility occur as a result of lay-off or separation is immaterial, the relevant date being the date of eligibility. See related cases A-250-05 (Walsh), A-300-05(Burns) and A-301-05(McKee). These decisions are restricted to the facts of these cases. The current Commission policy on the interpretation of section 36(9) of the Regulations continue to apply.

Decision A0362.06 Full Text of Decision A0362.06

Subsequent to dismissal of employment as an accountant, the claimant was paid $27,500 under a settlement agreement. The Board ruled that the payment was not earnings as it was paid for not filing a complaint. The Umpire varied the Board's decision by considering that $25,000 of the payment related to the claimant's uncovering of wrongdoing within the Company. Based on the details of the settlement agreement, the Umpire concluded that the $25,000 portion must be considered as having been paid for consideration other than loss of income, i.e. the promise not to report the employer to the authorities.

Decision 66824 Full Text of Decision 66824

The accumulation of the lay days were similar to paid holidays which a person accumulates during the course of their employment. The claimant had a right to take time off as paid leave during their period of employment as one would take holidays or he could leave the lay days in the bank until he was terminated at which time the lay days would be paid to him in the same way as holiday money, or vacation pay as it is now called, would be payable.

Decision 67655 Full Text of Decision 67655

The performance incentive was available by agreement to eligible employees who agreed to work for the employer until their scheduled lay-off date. That incentive was not a production bonus covering a particular period of time for a particular production. The words "regardless of the nature of the earnings" in section 36(9) of the Regulations require that the earnings from separation from employment shall be allocated. The Production Incentive payment merely forms part of the claimant's settlement package on separation.

Decision 74820 Full Text of Decision 74820

The claimant had received a sum of money after he resigned. This money came from a community development trust. The purpose of the trust was to provide new opportunities to forest workers affected because of the difficult market conditions at that time. The trust was set up in the spring of 2008 and was for a period of three years. The assistance was for forest workers who were over 55 years of age and interested in retiring. The claimant was awarded $30,072 from the trust fund program. When the claimant received these monies, he was on EI benefits. The Commission therefore under subsection 36(9) of the Regulations, allocated this money according to his normal weekly earnings and this resulted in the claimant having an overpayment. The appeal by the claimant is dismissed by the Umpire.

Decision A0340.06 Full Text of Decision A0340.06

The claimant received a payment on the voluntary termination of employment pursuant to an income extension aid program contained in a collective agreement. The program was designed to assist employees laid off for lack of work. The Court said that there was no factual basis for allocating the payment within the various items of the collective agreement. The payment could not be likened, as did the Umpire, to one made pursuant to a settlement over alleged wrongful dismissal. Rather it is analogous to a payment made under a work force reduction program. Given the breadth of the words "earnings", there was nothing unreasonable in the Board's conclusion that the program fell within the scope of "earnings".

Decision 66605 Full Text of Decision 66605

The claimant received $ 4,000 in layoff benefits under the employer's Layoff Assistance Benefits Plan which were allocated retroactively under subsection 36(9) of the Regulations from the point of termination of employment. See also CUB 66562.

Decision A0315.12 Full Text of Decision A0315.12

The claimant and her previous employer signed an agreement resolving their dispute. The employer agreed to give her 19,230.80$ as retirement benefits in exchange of her withdrawing her grievances. In dismissing the application for judicial review, the FCA stated that given the wording of the transaction and the fact that no recourse abandoned by the claimant would have given place to an allocatable payment, if prosecuted successfully, it was open to the Umpire and the BOR before it to conclude that the sum received by the claimant was not allocatable under EIR even in the absence of a breakdown.

Decision A0280.11 Full Text of Decision A0280.11

While receiving benefits, the claimant settled a grievance with her former employer. In the settlement agreement, she agreed to resign and waive a number of rights, and the employer agreed to pay her $12,000. The Commission allocated those monies as earnings, which resulted in an overpayment of $1,536. The BOR and, in turn, the Umpire misinterpreted the law stated in Plasse and Meechan. The legal principle to be taken from these authorities was succinctly stated in he decision of this Court in Attorney General of Canada v. Cantin. There, the Court stated that, in federal law, the right to reinstatement is an employee's right to resume his or her position following a wrongful dismissal. In such circumstances, compensation to relinquish the right to reinstatement following a wrongful dismissal does not constitute earnings within the meaning of the Act and the Regulations. However, wrongful dismissal is a prerequisite to a right to reinstatement. This is not the case here. The claimant filed a grievance with respect to the employer's refusal to pay benefits under the STIP plan and she received settlement monies.