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Employment Insurance - Interruption of Earnings. Canada (Attorney General) v. Bacile
In Canada (Attorney General) v. Bacile (Fed CA, 2023) the Federal Court of Appeal considered when an 'interruption of earnings' had occured for EI purposes where a terminated employee had a "continued salary as well as health and dental insurance benefits to October 7, 2021, inclusive (health coverage)" as a severance package. The date mattered as a later 'interrupted earnings' resulted in a shorter benefit period, and here all of the General and Appeal Divisions of the Social Security Tribunal, and the Federal Court of Appeal (on a JR), held that the manner of payment of the severance did not interfere with the common sense (and earlier) termination date:[1] Mr. Bacile was a truck driver. After the company he worked for was restructured, he lost his job effective July 15, 2021. This date was also his last day on the company’s payroll.
[2] On July 29, 2021, Mr. Bacile signed a notice of termination letter that gave details of the severance package provided to him. The package included, among other things, severance pay in the form of continued salary as well as health and dental insurance benefits to October 7, 2021, inclusive (health coverage).
[3] On August 24, 2021, Mr. Bacile filed a claim for employment insurance benefits (EI) pursuant to the Employment Insurance Act, S.C. 1996, c. 23 (the Act). However, the Canada Employment Insurance Commission (“Commission”) notified Mr. Bacile that, because of his continued salary, his EI benefit period would only start on October 10, 2021. According to the Commission, since Mr. Bacile’s EI benefit period fell outside of the period beginning on September 27, 2020, and ending on September 25, 2021, he was entitled to EI for only 20 weeks—not 50: for reference, see s. 9, ss. 12(1) and (2.1) of the Act.
[4] The Social Security Tribunal of Canada’s General Division (“General Division”), in DB v. Canada Employment Insurance Commission, 2022 SST 1451 (per A. Mitchell), dated April 6, 2022, accepted Mr. Bacile’s argument that his interruption of earnings occurred on July 15, 2021, the day on which his employment was terminated. It found that neither the continued salary nor the health coverage included in his severance package could change the effective date of the termination of his employment: General Division Decision at paras. 17-18. Because of this, the General Division held that Mr. Bacile was entitled to 50 weeks of EI: General Division Decision at para. 21.
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