Labour Dispute
I. The Legislation
Section 31 of the Unemployment Insurance Act and section 36 of the Employment Insurance Act provide that a claimant who loses or is unable to resume employment because of a work stoppage attributable to a labour dispute at the place where the claimant is employed, is disentitled from receiving benefits.
Section 31 Unemployment Insurance Act
Section 36 Employment Insurance Act
The disentitlement is removed either when the work stoppage terminates or when the claimant becomes regularly engaged elsewhere.
Subsection 31(1) Unemployment Insurance Act
Subsection 36(1) Employment Insurance Act
A claimant who is "not participating in, financing or directly interested in" the labour dispute, is not subject to a disentitlement.
Subsection 31(2) Unemployment Insurance Act
Subsection 36(4) Employment Insurance Act
Where work that is commonly carried on as a separate business on separate premises is carried on by separate departments on the same premises, each department is deemed to be "a separate factory or workshop".
Subsection 31(3) Unemployment Insurance Act
Subsection 36(5) Employment Insurance Act
The Commission may make regulations with respect to the disentitlement of a claimant who loses or is unable to resume part-time employment because of a work stoppage attributable to a labour dispute.
Subsection 31(1.1) Unemployment Insurance Act
Subsection 36(2) Employment Insurance Act
The disentitlement to benefits is suspended for any period in which the claimant is otherwise entitled to benefits for any reason referred to in subsection 11(3)or section 26 of the Unemployment Insurance Act or section 25 of the Employment Insurance Act, and where the claimant can prove that, prior to the work stoppage, he or she had anticipated being absent from work for one of those reasons and had commenced making arrangements in that regard.
Subsection 31(1.2) Unemployment Insurance Act
Subsection 11(3) Unemployment Insurance Act
Section 26 Unemployment Insurance Act
Subsection 36(3) Employment Insurance Act
Section 25 Employment Insurance Act
II. Principles of Law
a. Purpose of the Legislation
The legislative provisions with respect to labour disputes are based on two assumptions. First, the government should take a neutral stance in a labour dispute and not support one side (the employees) by providing benefits during a labour dispute. Second, an employer should not have its contributions to the unemployment or employment insurance system used to support employees who are in a labour dispute with an employer.
White et al. v. The Queen, 1994 2 F.C. 233 (F.C.A.) A-1036-92
Valois v. Canada (A.G.), A-879-82, [1986] 2 S.C.R. 439 (S.C.C.) File No. 17814
Letourneau v. C.E.I.C., [1986] 2 F.C. 82 (F.C.A.) A-1082-84
Hills v. Canada (A.G.), A-175-84, [1988] 1 S.C.R. 513 (S.C.C.) File no. 19094
The Federal Court of Appeal has stated that the disentitlement imposed under these provisions is "neither fundamentally unjust nor unreasonable; on the contrary, it is necessary in order to insure that the Unemployment Insurance Commission will not take sides in labour complaints and that the funds of the Unemployment Insurance Commission will not be used to lend support to employees in a labour dispute with their employer."
Meredith v. C.E.I.C., A-226-88, December 11, 1989 (F.C.A.)
Zwarich v. Canada (A.G.) , [1987] 3 F.C. 253 (F.C.A.) A-521-86
b. Onus of Proof
The Commission bears the burden of demonstrating that the disentitlement should be imposed.
Valois v. Canada (A.G.), A-879-82, [1986] 2 S.C.R. 439 (S.C.C.) File No. 17814
c. When May Disentitlement be Imposed
I. General
A disentitlement to benefits may only be imposed if the following conditions exist:
- there is a loss of employment;
- the loss of employment is due to a stoppage of work;
- the stoppage of work is attributable to a labour dispute; and,
- the labour dispute is at the facility or workshop where the claimant is employed.
Morrison v. C.E.I.C. (1990), 114 N.R. 272 (F.C.A.) A-209-89
Hurren v. Canada (A.G.) (1986), 69 N.R. 117 (F.C.A.) A-942-85
British Columbia Maritime Employers Association v. Wellicome et al., A-690-96, December 11, 1997 (F.C.A.)
In order for a disentitlement to be imposed there must be a chain of causation between these events. The labour dispute must cause the work stoppage which in turn must cause the claimant's loss of employment.
White et al. v. The Queen, 1994 2 F.C. 233 (F.C.A.) A-1036-92
Caron v. C.E.I.C., [1989] 1 F.C. 628 (F.C.A.) A-1063-87; affirmed [1991] 1 S.C.R. 48 (S.C.C.) File no. 21188
Whether a claimant has lost his or her employment by reason of a stoppage of work attributable to a labour dispute or some other cause is a question of fact for the Board of Referees.
Morrison v. C.E.I.C. (1990), 114 N.R. 272 (F.C.A.) A-209-89
A claimant may be disentitled to benefits under these sections regardless of the type of employment he or she holds and even if the employment is precarious and irregular in nature. Furthermore, the disentitlement applies to claimants who lose either full-time or part-time employment.
Canada (A.G.) v. Bouillon, A-351-95, May 27, 1996 (F.C.A.)
Simard v. C.E.I.C., A-1415-84, September 23, 1985 (F.C.A.)
Also see below "Loss of Part-time Employment"
II. Loss of Employment
In order to be disentitled under these provisions, a claimant must lose employment. A claimant cannot lose what he or she does not have. Therefore, a claimant who is unemployed and who misses a chance or an opportunity to be employed, does not lose his or her employment within the meaning of the legislation and is not subject to a disentitlement. A claimant who has been laid off of work before the commencement of the strike and who has no scheduled recall date is not subject to a disentitlement. The mere expectation of recall is not enough. However, the disentitlement will apply to a claimant who is on lay-off at the time the labour dispute commences and who has a scheduled recall date but who does not commence work on that date because of the dispute.
White et al. v. The Queen, 1994 2 F.C. 233 (F.C.A.) A-1036-92; A-1037-92; A-1039-92
Morissette v. C.E.I.C., A-692-90, March 21, 1991 (F.C.A.)
Morrison v. C.E.I.C. (1990), 114 N.R. 272 (F.C.A.) A-209-89
Goulet v. C.E.I.C., [1984] 1 F.C. 653 (F.C.A.) A-358-83
Canada (A.G.) v. Carpentier, A-801-82, January 12, 1983 (F.C.A.)
Canada (A.G.) v. McKellar, A-833-82, May 31, 1983 (F.C.A.)
Gionest v. U.I.C., [1983] 1 F.C. 832 (F.C.A.) A-787-81
Cloutier v. U.I.C., A-549-81, June 11, 1982 (F.C.A.)
The question which must be asked is how did the claimant lose his or her employment at the start of his or her period of unemployment and not "why is the claimant unemployed now?" It is the cause of the claimant's loss of employment at the time he or she became unemployed which makes him or her ineligible for benefits. Once ineligibility is established, it does not end until one of the situations listed in the Act occurs. Therefore, once a claimant has lost employment by reason of a labour dispute, the disentitlement remains in force even if the labour dispute "ceases to be the real cause of the unemployment."
Imbeault v. U.I.C. (1984), 68 N.R. 74 (F.C.A.) A-181-83
III. "by reason of a stoppage of work"
In order for a disentitlement to be imposed, the loss of employment must have been caused by the work stoppage itself. It is not sufficient to find that a claimant has lost his or her employment by reason of a labour dispute alone. Therefore, a claimant who quits his or her job because a strike is imminent, does not lose his or her employment by reason of a stoppage of work attributable to a labour dispute and is not subject to a disentitlement under these provisions. In the same manner, a claimant whose job terminates or who is laid off before the start of a labour dispute will not be disentitled
White et al. v. The Queen, 1994 2 F.C. 233 (F.C.A.) A-1036-92; A-1037-92; A-1039-92
Letourneau v. C.E.I.C., [1986] 2 F.C. 82 (F.C.A.)A-1082-84
IV. "attributable to a labour dispute"
In order for a disentitlement to be imposed, the work stoppage must be attributable to a labour dispute. The term "labour dispute" is defined in subsection 2(1) of the Unemployment Insurance Act and subsection 2(1) of the Employment Insurance Act as "any dispute between employers and employees, or between employees and employees, that is connected with the employment or non-employment, or the terms or conditions of employment, of any persons."
Subsection 2(1) Unemployment Insurance Act
Subsection 2(1) Employment Insurance Act
The term "dispute" has been defined by the Courts as meaning a disagreement or dissension. Accordingly, when employees and the employer are negotiating a collective agreement, there is a labour dispute.
Gionest v. U.I.C., [1983] 1 F.C. 832 (F.C.A.) A-787-81
The term "labour dispute" is not restricted to a dispute involving unionized employees. Furthermore, it is not limited to a strike, since the dispute may be initiated by the employer by way of a lockout.
Meredith v. C.E.I.C., A-226-88, December 11, 1989 (F.C.A.)
Canada (A.G.) v. Guillemette, A-568-79, May 27, 1980 (F.C.A.)
In order for a disentitlement to be imposed, there must be a causal connection between a labour dispute and a work stoppage. Whether that causal connection exists is a question of law.
Canada (A.G.) v. Simoneau, A-611-96, May 2, 1997 (F.C.A.)
J.D. Laval Dallaire et al. v. C.E.I.C., A-825-95, September 18, 1996 (F.C.A.); leave to appeal to Supreme Court of Canada denied File No. 25667
Whether a work stoppage is attributable to a labour dispute as defined in the Employment Insurance Act is a question of mixed fact and law. An Umpire's decision in this regard will only be set aside by the Federal Court of Appeal if it was unreasonable based upon the evidence.
Canada (A.G.) v. Stillo, [2002] F.C.J. No. 1323 (F.C.A.) A-651-01
d. Loss of Part-time Employment
A disentitlement imposed under these provisions will apply to claimants who lose either full-time or part-time employment.
Simard v. C.E.I.C., A-1415-84, September 23, 1985 (F.C.A.)
However, section 49.1 of the Unemployment Insurance Regulations provides for a lesser disentitlement where a claimant loses or is unable to resume part-time employment by reason of a stoppage of work attributable to a labour dispute. In accordance with the Regulations, the disentitlement can range from zero (0) to five (5) days per week, depending on the ratio between the claimant's average weekly earnings from the part-time employment and the claimant's average weekly insurable earnings in the claimant's qualifying weeks.
Section 49.1 Unemployment Insurance Regulations
Section 13 Unemployment Insurance Act
Section 52 of the Employment Insurance Regulations also provides for a lesser disentitlement where a claimant loses or cannot resume part-time employment because of a labour dispute. In accordance with that Regulation, the disentitlement ranges from zero (0) to five (5) days per week, depending on the ratio between the claimant's average weekly insurable earnings in that part-time employment and the weekly insurable earnings as determined under section 14 of the Employment Insurance Act.
Section 52 Employment Insurance Regulations
Section 14 Employment Insurance Act
e. Loss of Casual Employment
The fact that a claimant is engaged in casual employment does not necessarily mean that he or she had no employment with the employer when the stoppage of work occurred. There may be cases where casually employer workers should be treated as not employed at the time of a work stoppage at the premises of an employer who gives them casual work from time to time. In making this determination however, one must consider the patter, extent and regularity of the casual employment, its continuing nature, and the immediate prospect of continuing work at the date of the stoppage.
f. Removal of Disentitlement
I. General
Pursuant to subsection 31(1) of the Unemployment Insurance Act and subsection 36(1) of the Employment Insurance Act, a disentitlement to benefits will be removed when either the work stoppage terminates or, the claimant becomes regularly engaged elsewhere in insurable employment.
Subsection 31(1) Unemployment Insurance Act
Subsection 36(1) Employment Insurance Act
II. Termination of Stoppage of Work
Section 49 of the Unemployment Insurance Regulations and section 53 of the Employment Insurance Regulations provide that a stoppage of work is terminated when both the work force and the production level reach eighty-five percent (85%) of their normal level. The concept of the end of a strike should not be confused with termination of a stoppage of work.
Section 49 Unemployment Insurance Regulations
Section 53 Employment Insurance Regulations
Rasmussen v. Canada (A.G.), A-647-95, October 23, 1996 (F.C.A.)
The work stoppage may also terminate, even where the 85% level is not obtained, where the circumstances described in subsection 49(2) of the Unemployment Insurance Regulations or subsection 53(2) of the Employment Insurance Regulations exist.
Subsection 49(2) Unemployment Insurance Regulations
Subsection 53(2)Employment Insurance Regulations
The question of whether a work stoppage has terminated is a question of fact. It does not terminate simply because the employer has managed to continue or resume its operation by resorting to temporary, exceptional or extraordinary measures.
Canada (A.G.) v. Simoneau, [1982] 1 F.C. 469 (F.C.A.) A-143-80
III. When Claimant "regularly engaged elsewhere"
In accordance with paragraph 31(1)(b) of the Unemployment Insurance Act and paragraph 36(1)(b) of the Employment Insurance Act, a disentitlement may be removed where a claimant becomes "regularly engaged elsewhere in insurable employment".
Paragraph 31(1)(b) Unemployment Insurance Act
Paragraph 36(1)(b) Employment Insurance Act
In order to be regularly engaged, it is not enough that a claimant simply be hired. The claimant must work in the new occupation and do so regularly. Therefore, a claimant who is hired to work in accordance with a regular work schedule and who begins that work, is regularly engaged. The word "regularly" is to be contrasted with "casual" or "intermittent". It requires a fixed pattern, rather than a fixed period, of employment. It is not the duration of the hiring which is relevant but the regularity of the work schedule. Therefore, the employment need not be long-term. It may only be for the duration of the strike provided it is "regular". A regular work schedule "implies that the hours of work were distributed at equal, or more or less equal, intervals and reasonably predictable frequencies".
Canada (A.G.) v. McKenzie, A-1460-92, June 2, 1993 (F.C.A.)
C.E.I.C. v. Roy, [1986] 1 F.C. 193 (F.C.A.) A-1198-84; A-1199-84; A-1201-84
Malo v. C.E.I.C. (1986), 69 N.R. 236 (F.C.A.) A-765-85
Abrahams v. Canada (A.G.), A-872-80, [1983] 1 S.C.R. 2 (S.C.C.) File no. 16698
However, if the employment is for so short a period of time that it is impossible to determine the regularity of the work schedule then it is not regular employment but rather "casual employment".
C.E.I.C. v. Roy, [1986] 1 F.C. 193 (F.C.A.) A-1198-84; A-1199-84; A-1201-84
g. Exemption from Disentitlement
A disentitlement will not apply if a claimant proves that he or she is not participating in, financing or directly interested in the labour dispute that caused the stoppage of work.
Subsection 31(2) of the Unemployment Insurance Act
Subsection 36(4) of the Employment Insurance Act
The onus is on the claimant to show that he or she is not participating in, financing or directly interested in the dispute.
Hills v. Canada (A.G.), A-175-84, [1988] 1 S.C.R. 513 (S.C.C.) File no. 19094
Black v. C.E.I.C, A-552-00, August 30, 2001 (F.C.A.)
I. "not participating in"
In order to be "participating", a claimant must play an active and personal role in the labour dispute.
Hills v. Canada (A.G.), A-175-84, [1988] 1 S.C.R. 513 (S.C.C.) File no. 19094
If a claimant makes a genuine effort to report to work but cannot do so because of violence or threat of violence at a picket line, he or she will not be considered to be participating in the labour dispute. It is not necessary for a claimant to expose him or herself to danger in order to avoid a disentitlement. However, the apprehension of violence at the picket line must be "reasonable", "genuine" or "justifiable".
Valois v. Canada (A.G.), A-879-82, [1986] 2 S.C.R. 439 (S.C.C.) File No. 17814
In order to determine whether a person is participating in a labour dispute or is an innocent bystander swept up in another's dispute, the conduct of the claimant and his or her bargaining agent must be considered. If a union has been actively involved in the labour dispute, its members cannot later claim that they are entitled to employment insurance benefits because they were not personally participating in the dispute, regardless of the degree of the unions's involvement or its interest in the dispute, and of all the other surrounding circumstances.
Black v. C.E.I.C, A-552-00, August 30, 2001 (F.C.A.)
Whether a claimant has demonstrated that he or she was not personally and actively participating in a labour dispute is largely a question of fact to be determined by the Board of Referees.
Black v. C.E.I.C, A-552-00, August 30, 2001 (F.C.A.)
II. "not financing"
"Financing" means an active, direct, voluntary connection between the financing and the strike and a meaningful connection between the payment and the dispute. It requires a voluntary, intentional act of contribution by the claimant. Accordingly, the payment of mandatory union dues, which are placed in a fund from which strike pay is paid to striking employees, does not constitute financing within the meaning of the legislation since a claimant has no choice but to pay the dues to ensure membership in good standing in the union.
Hills v. Canada (A.G.), A-175-84, [1988] 1 S.C.R. 513 (S.C.C.) File no. 19094
III. "not directly interested in"
The term "directly interested" means that a claimant has something to gain or fear from the labour dispute.
Hills v. Canada (A.G.), A-175-84, [1988] 1 S.C.R. 513 (S.C.C.) File no. 19094
However, it is not only employees whose working conditions will be automatically determined or modified by the settlement of the dispute who are "directly interested" in the labour dispute. The issue is much more complex and must be resolved in light of all the facts of each case.
Legare v. Canada (Employment Insurance Commission), A-511-97, A-512-97, February 17, 1998 (F.C.A.)
h. Termination of Employee/Employer Relationship
A claimant who is disentitled to benefits because of a labour dispute, may subsequently fall within the exemption set out in subsection 31(2) of the Unemployment Insurance Act or subsection 36(4) of the Employment Insurance Act, if during the labour dispute, he or she severs the relationship with the employer and resigns from the union.
Hurren v. Canada (A.G.) (1986), 69 N.R. 117 (F.C.A.) A-942-85
This principle also applies to a claimant who can demonstrate that his or her employment contract would have terminated on a certain date regardless of whether the work to be performed was complete.
Canada (A.G.) v. Cole, A-741-87, May 3, 1988 (F.C.A.); affirming CUB 14021
i. Canadian Charter of Rights and Freedoms
The disentitlement imposed under these legislative provisions has been held not to infringe paragraph 2(d) or sections 7 and 15 of theCanadian Charter of Rights and Freedoms.
Zwarich v. Canada (A.G.), [1987] 3 F.C. 253 (F.C.A.) A-521-86
Meredith v. C.E.I.C., A-226-88, December 11, 1989