Digest of Benefit Entitlement Principles - Chapter 2

2.3.0   Exception to the General Clause

2.3.1   Special Benefits
2.3.2   Lay Days or Periods of Leave
2.3.3   Compensatory Leave
2.3.4   Guaranteed Income
2.3.5   Real Estate Salespersons
2.3.6   Employees Paid by Commission

2.3.0    Exceptions to the General Clause

The regulation provides for certain exceptions to the general clause mentioned above¹. These will be considered in the context of their individual circumstances.

________________________

1. EIR 14(1).

2.3.1    Special Benefits

When an insured person ceases to work because of an illness, injury, quarantine, pregnancy or to care for a new born or a child placed for the purpose of adoption or to provide care or support to a family member with a serious medical condition and a significant risk of death within 26 weeks, there may be an interruption of earnings even if the claimant only has a partial reduction in remuneration. An interruption of earnings occurs in respect of an insured person at the beginning of the week in which a reduction in earnings occurs, of more than 40 percent in the insured person's normal weekly earnings, because he or she ceases to work in that employment for one of the reasons mentioned¹.

In this context, the normal weekly earnings are calculated on the basis of the regular hourly rate multiplied by the regular hours in a week, including overtime worked on a regular basis².

The interruption of earnings in the circumstances occurs when the individual's allocatable earnings³, including in particular wages or salary, fall below 60 percent of normal weekly earnings.

The amounts of payments a claimant has received or, on application, is entitled to receive under a group sickness or disability wage-loss indemnity plan or workers' compensation plan, are not earnings to be taken into account here⁴. What is taken into account, however, are payments a claimant has received or, on application, is entitled to receive under a paid leave plan for sickness, maternity or for the care of a new born or a child placed for the purpose of adoption⁵.

What is taken into account also, are the payments a claimant has received or, on application, is entitled to receive from motor vehicle accident insurance provided under or pursuant to a provincial law in respect of the actual or presumed loss of income from employment⁶ as well as the indemnity payments a claimant has received or, on application, is entitled to receive pursuant to a provincial law in case of preventive withdrawal of work⁷.

Moneys received as borrowed sick leave against future credits are earnings; thus, a person who requested and obtained an advanced sick leave payment was held not to have an interruption of earnings upon exhausting already earned credits⁸

[October 2006]

________________________

1. EIR 14(2);
2. Jurisprudence Index/earnings/allocation/normal weekly earnings/overtime/;
3. EIR 35(2);
4. EIR 35(4);
5. EIR 35(2)(c);
6. EIR 35(2)(d);
7. EIR 35(2)(f);
8. Jurisprudence Index/earnings/sick leave pay/.

2.3.2    Lay Days or Periods of Leave

In some workplaces, employees will regularly work more hours, days or shifts than that normally worked in a week by those who are employed full-time elsewhere. What comes to mind are isolated work mines or sites, ocean platform drilling rigs and vessels on the St. Lawrence or Great Lakes, or along the Pacific and Atlantic coasts.

Many other workplaces whose operations are continuous have also adopted similar uninterrupted work patterns. Quite often in these cases employees will work for 4, 5, 6, or 7 continuous days, followed by a period of leave. Another pattern of work that is available is one permitting the employee to work more hours in a week according to a schedule and as such accumulate a period of leave within an established calendar.

Specific provisions in the contract of employment or the collective agreement will generally provide the method pursuant to which the period of leave will be determined. There are two basic methods for determining the period of leave: one is based on a credit system whereby credits are earned and accumulated based on the number of hours or days worked, while the other method is based on an established schedule alternating periods of work and leave. Whichever method is used, this period of leave does not constitute an interruption of earnings regardless of whether the period is remunerated¹. Where a person has had a previous interruption of earnings, that person would not be considered unemployed in any week in which the period of leave falls².

However should a stoppage of activities occur or for some reason such employees have a lay-off or separation from employment, the application concerning the period of leave may differ somewhat.

With respect to the accumulated leave credit system, what needs to be determined when a stoppage of activities or a lay-off or separation occurs, is whether, according to the contract of employment or collective agreement the insured person has a right to liquidate the lay days or accumulated leave credits. If such is the case, then the interruption of earnings would only occur after the expiration of the period of leave that ensued from such lay days or accumulated credits³.

However, if the collective agreement or the employment contract stipulates that the claimant loses those lay days or accumulated leave credits at the cessation of employment or stoppage of activities, the interruption of earnings occurs at the cessation of employment as there is no longer an entitlement to a period of leave, unless the claimant is entitled to remuneration⁴. Where the claimant is only entitled to remuneration, the allocation of earnings⁵ would prevent an interruption of earnings⁶ but would not prevent the claimant from being considered unemployed in the weeks in which the allocation of earnings takes place.

With regard to the second method, it is considered that the established schedule of alternate periods of work and leave is interrupted for the duration of the stoppage of activities or of the cessation of employment. An interruption of earnings is therefore deemed to occur during the week of the stoppage of activities or the cessation of employment, provided that, during that week, the insured person did not have days without work prior to the stoppage of activities or the cessation of employment; if there were days without work, the interruption of earnings will be deemed to occur only from the following week.

________________________

1. EIR 14(3);
2. see 4.3.5, "Lay Days or Periods of Leave"; Jurisprudence Index/interruption of earnings/compensatory leave/;
3. G. Kieley (A-708-92, CUB 20866); G. Keagan (A-100-89, CUB 16027); G. Keagan (A-762-90, CUB 16027A); K. Kelly (A-106-89, CUB 16029);
4. H. Fortin (A-220-87, CUB 13443);
5. EIR 36(9);
6. EIR 14(1).

2.3.3    Compensatory Leave

When the contract of employment provides a period of paid leave to compensate for additional hours worked from time to time during a period of employment, there is no interruption of earnings. As an example, an employee works from time to time additional hours over and above regular hours and has paid leave for a given week.

Those situations where employees regularly work more hours, days or periods than normally worked in a week by those who are employed full-time elsewhere are covered in another section of this chapter¹.

In some cases, a claimant may have already had an interruption of earnings before the compensatory leave, or from other employment held during the qualifying period. In that case, the question will be the status of being unemployed and the determination of earnings.

________________________

1. see 2.3.2, "Lay Days or Periods of Leave."

2.3.4    Guaranteed Income

A claimant's contract of employment may provide for the payment of the usual remuneration for a period beyond a week, independent of the amount of work completed during that period. No matter how or when the remuneration is paid there is no interruption of earnings during this period¹. An example of this is a stevedore who is guaranteed an income equivalent to forty weeks of work during the year.

The same principle applies in the case of a claimant who has an agreement with the employer to embark upon a self-funded leave program. For example, the claimant works and defers a portion of his or her salary for four years in order to finance and be on leave for the fifth year. The claimant does not have an interruption of earnings during the self-financed leave period². Unless the agreement concerning the self-funded leave is broken, for example, by the claimant who definitively terminates this employment; the claimant, in principle, cannot establish a benefit period during such a leave period. This is so, regardless of the type of benefits that are claimed.

A claimant could establish a benefit period because of an earlier interruption of earnings from this employment before the self-funded leave, or from other employment obtained during the leave. In such a case, the issues to be examined are whether the claimant is unemployed³and the determination of earnings.

________________________

1. EIR 14(4);
2. EIR 14(6);
3. EIA 11(3).

2.3.5    Real Estate Salespersons

In the case of an insured person who holds a license issued by a provincial authority to work in the sale or purchase of real estate on a commission basis, the interruption of earnings occurs only when the license of the insured person is surrendered, suspended or revoked or when the insured person ceases to work in that employment due to illness, injury, quarantine, pregnancy or for the care of a new born or a child placed for the purpose of adoption¹.

If the claimant ceases to work for any other reason, there will be no interruption of earnings while he or she is the holder of such a licence². Simply returning the license to the broker while the office is closed for the winter, is not sufficient to prove that the claimant's actions are irrevocable, and that he or she no longer possesses such a licence³.

Like employees paid by commission⁴, a benefit period can be established for a real estate salesperson on the basis of an interruption of earnings that occurred from other employment during the qualifying period, even if that person is still in possession of a license. The proper questions to decide will be, whether the pertinent weeks are weeks of unemployment, and what are the applicable earnings.

________________________

1. EIR 14(5)(a);
2. Jurisprudence Index/interruption of earnings/real estate salespersons/;
3. Jurisprudence Index/interruption of earnings/real estate salespersons/;
4. see 2.3.6, "Employees Paid by Commission."

2.3.6    Employees Paid by Commission

For persons whose earnings consist mainly of commission, an interruption of earnings occurs only when the contract of employment is terminated; unless the claimant ceases to work due to illness, injury, quarantine, pregnancy or to care for a new born or a child placed for the purpose of adoption¹. In other words, if the claimant ceases to work for any other reason, there will be no interruption of earnings while the contract continues.

If an interruption of earnings occurred with respect to some other employment during the qualifying period, a benefit period can be established even if the person is under contract from the employment remunerated by commission².

________________________

1. EIR 14(5)(b);
2. see 2.1.2, "Scope."