Digest of Benefit Entitlement Principles - Chapter 18

18.2.0    A CLAIMANT OR A PERSON ACTING ON THE CLAIMANT'S BEHALF

18.2.1     An Employer or a Person Acting on the Employer’s Behalf
18.2.2     A Claimant in Receipt of Financial Assistance Under Employment Benefits (Part II)
18.2.3     False or Misleading Statement
18.2.4     Knowingly Made

 18.2.0    A CLAIMANT OR A PERSON ACTING ON THE CLAIMANT'S BEHALF

The Act¹ authorizes the Commission to impose a penalty whenever a claimant or a person acting on the claimant's behalf knowingly makes a false or misleading statement in relation to a claim for benefit.

Without being restrictive, as a general rule², there are three situations where benefits may be paid to an authorized third party: when the claimant is mentally handicapped, incapacitated or deceased. There may be other circumstances which may require a representative (for example, an ill or incapacitated person who temporarily cannot manage his or her affairs, an illiterate claimant) and to which the Commission would not object.

By definition, this person is authorized to act on the claimant's behalf if this power has been conferred by a representation, power of attorney or judicial document. It is essential that this responsibility be expressed in clear and unambiguous terms. Once it is established that a person is properly appointed to act on behalf of the claimant, whether or not the claimant was aware of the actions of his or her representative, the claimant will be responsible for the false and misleading statements committed by this person and a penalty could be imposed against the claimant³.

There may be situations that, while there is an absence of a documented representation, it is nonetheless reasonable to conclude on the basis of the particular circumstances, that the claimant either gave formal or implicit authorization to that person to represent or to act on his/her behalf.

In all cases, it is up to the claimant to show that neither he nor she nor his/her representative who acted under a formal or implicit authorization is responsible for the offence. A penalty will not be imposed on the claimant who can show that the person who committed the offence was not authorized to do so.

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1. EIA 38;
2. EIR 27; see also Subject 4, Insurance Services Policy Manual;
3. Jurisprudence Index/penalties/cards signed by third party/.

18.2.1    An Employer or a Person Acting on the Employer's Behalf

Employers are subject to penalties when the offence involves the provision of information about any matter that involves the fulfillment of conditions for the qualification and entitlement of receiving or continuing to receive benefits¹.

An employer penalty may also apply to corporate directors, officers and agents if they held those positions at the time the offence occurred. This can be in addition to or regardless of the imposition of a sanction on the corporation itself.

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1. EIA 39.

18.2.2    A Claimant in Receipt of Financial Assistance Under Employment Benefits (Part II)

Pursuant to the Act¹ the Commission may impose a penalty of not more than the financial assistance provided on a person for knowingly making false or misleading representations, in relation to the application or request for assistance under employment benefits (Part II), or for without good cause failing to attend, carry out or complete a course, program or activity for which the assistance was provided or was expelled from it².

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1. EIA 61;
2. EIA 65.1.

18.2.3    False or Misleading Statement

Although Parliament has used the term "statement", it has also used the words "representation" and "information". Despite the variety of the terms used, their basic nature is the same, as they signify any information or documentation transmitted to the Commission orally or in writing in relation to a claim for benefit.

What must also be included in this definition is any relevant information which the claimant, or someone acting on their behalf, failed to provide to the Commission, knowing that he or she would consequently lose entitlement to benefits. This in itself would amount to a false or misleading statement. The same holds true in the case of an employer or a person acting on their behalf, when the offence involves the provision of information about any matter which involves the fulfillment of conditions for the qualification and entitlement of receiving or continuing to receive benefits.

The statement may come to our attention from the claimant, employer, or someone acting on their behalf, a third party, etc., by way of such forms as the application for benefit, the Record of Employment, a questionnaire, the bi-weekly claimant's report forms, or by a telephone call, or a meeting with an officer of the Commission.

Those persons claiming maternity, parental or apprenticeship training and not required to submit report cards are nonetheless subject to these penalty provisions¹. These claimants have entered into a legal agreement to inform the Commission of any information that may change their entitlement to benefits.

The interpretation of the expression "false" or "misleading" may vary from one individual to another and depends on the context in which the statement was made. Thus, it is important to refer to well-known definitions².

False:

The word "false" has two distinct and well-recognized meanings:

1) intentionally or knowingly or negligently untrue;
2) untrue by mistake or accident, or honestly after the exercise of reasonable care.

Misleading:

Delusive; calculated to lead astray or to lead into error.

It can be seen on reading these definitions that the expression can have a twofold meaning: a willful falsification, or simply a completely unintentional mistake by the person. A complete reading of the wording in the Act and Regulations is what permits us to see the legislator's intent and the approach to be adopted by the Commission's officers.

Before deciding this issue, however, it is extremely important to ensure that the allegations made against the person or persons acting on their behalf are accurate. To do this, it is first necessary to know the material facts and to determine whether the facts in the file are contrary to the information that has been gathered. This will also include verifying and assuring oneself of the credibility of the evidence. The relevance of the evidence and the impartiality of the sources from which the information is obtained are important criteria.

Finally, it is necessary to consider those circumstances where there is a difference in what actually happened and what was reported and then determine whether this is a case of unintentional or deliberate inaccuracies. To this end the insurance officer should be guided by the principles set out below³.

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1. EIR 77; pilot project no. 1;
2. Black's Law Dictionary, 5th edition, 1979;
3. see 18.2.4, "Knowingly Made."

18.2.4    Knowingly Made

The mere fact of furnishing false or misleading information to the Commission does not necessarily lead to the imposition of a penalty. Considering the variety of the information requested and the forms to be filled out, it should not be surprising that mistakes may be made.

Care must be taken not to jump to conclusions. Above all it is necessary to be able to prove that the act was committed knowingly. In fact, before the Commission may impose a penalty, the Act requires it to prove that the person or person acting on their behalf made a statement he or she knew to be false or misleading. To discharge this obligation, one must first start with the meaning of the term "knowingly", which has been defined as¹:

With knowledge; willfully; consciously. Used in a statutory provision of a penal nature, the word denotes that the person has knowledge of the facts that render the act complained of culpable.

This definition taps into the rather subjective aspects of the matter: knowledge and intent. However, the focus of our attention should be the person's degree of knowledge at the time the offence is committed, and this can be determined by reviewing the facts on the file and drawing the appropriate conclusions². Demonstrating the person's intent to deceive or defraud would be to impose an additional burden on the Commission that the legislation does not require³. The Commission need only believe, on the basis of the evidence on the file, that the person knew or should reasonably have known that what he or she stated was false or misleading. If the Commission is unable to reach such a conclusion, a penalty should not be imposed.

Making a false or misleading statement or providing inaccurate information is prima facie evidence that an offence has been committed, however that person may be able to prove that he or she is not responsible by showing that he or she took all the necessary precautions. The explanation may be accepted if the person believed on reasonable grounds in the authenticity of the information furnished or if he or she took all the normal precautions to avoid submitting erroneous information to the Commission.

Moreover, jurisprudence has established that a person is acting with full knowledge of the facts when there is a way for him or her to obtain information, that he or she knows so and he or she can obtain information upon making a request. Where a person through carelessness or neglect fails to clarify a doubtful situation, this will constitute a false or misleading statement knowingly made.

A distinction must be made between objective questions, such as those based on measurable facts (earnings, for example) and subjective questions which are more open to perception and personal interpretation (such as, availability, capability and being unemployed). Degree of knowledge is more easily demonstrated for offences involving objective questions since the facts are generally simple and easily determined.

However, subjective questions on the other hand are based to a large extent on interpretation that may vary substantially from one individual to the next. Offences related to questions of this nature require more substantial evidence and the insurance officer, who bears the burden of proof, must be very careful and circumspect before concluding that a false or misleading statement was knowingly made.

It may sometimes be difficult to prove that the person who made the statement had some particular knowledge. The test, however, is what would a reasonable person have done in the same circumstances. If an explanation of his/her actions is plausible, it cannot reasonably be concluded that he or she knew his/her statement to be false or misleading. In such cases, the claimant, employer, or persons acting on their behalf will be given the benefit of the doubt and a penalty will not be imposed.

Before concluding a false or misleading statement was knowingly made, the person must be given the chance to explain why the inaccurate statement was made. Although actually obtaining the explanation is not essential, it is essential that the person be given the opportunity to explain. If the person refuses or fails to give a credible explanation, imposing a penalty would be appropriate.

The factor of time⁴is another equally important factor that must be taken into account in determining the person's knowledge. One must determine as accurately as possible the degree of knowledge at the exact time the statement was made. It is for this reason that fact finding is so important. The imposition of a penalty would be inappropriate solely on the basis that the claimant, employer, or persons acting on their behalf should have known that he or she had made a mistake earlier.

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1. The Canadian Law Dictionary;
2. P. Zysman (A-27-94, CUB 23694);
3. C. Gates (A-600-94, CUB 25451);
4. see 18.3.2, "Required Standard of Proof"; Jurisprudence Index/penalties/late reporting of earnings/.