Digest of Benefit Entitlement Principles - Chapter 18

18.1.0    STATUTORY POWER

18.1.1     A Sanction
18.1.2     A Violation
18.1.3     Scope of Application

18.1.0    STATUTORY POWER

The Act and Regulations define the procedures governing the administration of Employment Insurance (EI) benefits and the Commission basically relies on the good faith and honesty of claimants and of those who act on their behalf. The essential role played by the program in the country's economy, and the substantial amounts involved, justify using serious deterrents against making false or misleading statements to ensure that it operates properly.

The Commission is not only authorized to recover overpayments, but it also has the power to impose penalties and violations on persons who have received or tried to receive benefits as result of knowingly making false or misleading statements. The objective of such measures is twofold: to eliminate any advantage gained by the person as a result of the false statements and to deter repetition of such conduct.

However, care must be taken to avoid being excessively harsh and to impose penalties and violations commensurate with the nature and gravity of the offenses while taking into consideration the circumstances in which it occurred.

There are four types of sanctions used by the Commission:

1. the warning letter–a non-monetary sanction,
2. the penalty–a monetary sanction,
3. the increased entrance requirements sanction–the existence of a violation¹ results in an increase in the number of hours required to qualify, and
4. prosecution.

The increased entrance requirements sanction² supplements the existing monetary and non-monetary sanctions and prosecution to make the consequence of fraud more severe and deter abuse by imposing a further sanction on repeat abusers.

Procedures regarding sanctions are governed by particular sections of the Act for claimants or persons acting on their behalf³, for employer or persons acting on their behalf⁴ and with respect to financial assistance under employment benefits (Part II)⁵.

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1. see 18.4.0, "Violations";
2. EIA 7.1;
3. EIA 38;
4. EIA 39;
5. EIA 61; EIA 65.1.

18.1.2 A Violation

The Act¹ clearly states that a person accumulates a violation when the Commission issues a notice of violation. A notice of violation is issued as a result of the imposition of any monetary or non-monetary sanction or court judgement on or after June 30, 1996. The violation in turn gives rise to the application of the increased entrance requirements sanction².     [Also see National Policy]

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1. EIA 7.1(4). 

2. See Section 18.5.3 “The Increased Entrance Requirement Sanction”. 

18.1.3    Scope of Application

The Commission may at any time within the legislated limitations¹ verify information provided by claimants, employers or representatives acting on their behalf. The type of benefits (regular or special) or whether benefits were paid or not is irrelevant. The Commission must determine whether a person received or attempted to obtain benefits by knowingly making false or misleading statements and whether 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. A penalty may be imposed on individuals who were corporate directors, officers or agents at the time the offence occurred whether or not a penalty has been imposed on the corporation. This can be in addition to a warning to the corporation. However, this determination may be revised by appellate review².

It is necessary to consider the legislative consequences whenever false or misleading statements and/or omissions have been knowingly made. While the Commission may impose penalties it must exercise this discretion³ and take into consideration all the relevant factors in each particular case. Furthermore, maximum penalty amounts should be imposed in only the most serious cases of fraud.

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1. EIA 52(1); EIA 52(5);
2. R. M. Purcell (A-694-94, CUB 25953);
3. S. Smith (A-330-93, CUB 22527).