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EI - Non-Tribunal Reconsiderations. Molchan v. Canada (Attorney General)
In Molchan v. Canada (Attorney General) (Fed CA, 2024) the Federal Court of Appeal considered the authority of the EI Commission to reconsider an initial grant of eligibility, here in a purely administrative (ie. non-tribunal) context:(2) Absence of New Information
[21] Ms. Molchan submits that the Appeal Division erred in finding that the Commission could reconsider her availability in the absence of any new information. She argues that allowing retroactive reconsideration in the absence of new information undermines the central object and purpose of the employment insurance scheme, which is to provide financial security to those put out of work through no fault of their own. She further argues that the power to retroactively reconsider a claim is an exceptional one and should be construed strictly.
[22] Ms. Molchan has failed to persuade me that the Appeal Division erred in this regard.
[23] The Appeal Division concluded that the Commission had the authority to reconsider Ms. Molchan’s claim for benefits, even in the absence of new information. In reaching this conclusion, the Appeal Division compared the Commission’s authority to reconsider a claim for benefits under section 52 of the EIA with its authority to rescind or amend a decision under section 111 of the EIA. The Appeal Division noted that, under section 111, the Commission has the authority to rescind or amend a decision given in any particular claim if new facts are presented, or if it is satisfied that the decision was given without the knowledge of, or was based on a mistake as to, some material facts. In contrast, section 52 applies despite section 111 and is not limited to situations of new facts or mistakes of material facts. On this basis, the Appeal Division held that the reconsideration authority under section 52 was much broader than what Ms. Molchan advanced (AD Decision at paras. 67-69).
[24] While finding that new facts are not required for the Commission to exercise its reconsideration authority under section 52 of the EIA, the Appeal Division nonetheless agreed with Ms. Molchan that the absence of new facts is a relevant factor for the Commission to consider, as it goes to the finality of a decision. However, it added that other factors are equally relevant. One such factor, under the Commission’s reconsideration policy, is false statements (AD Decision at paras. 75-76).
[25] The Appeal Division went on to add that, if it was wrong and new facts are indeed required for the Commission to exercise its authority under section 52 of the EIA, reconsideration of Ms. Molchan’s claim was appropriate given that the overpayment did not arise because the Commission changed its mind on the same facts. While the Commission may have mistakenly decided that Ms. Molchan was initially entitled to benefits, her ongoing entitlement was assessed based on the information she provided in her bi-weekly reports, which was different from that initially reported verbally to the Commission.
[26] The Appeal Division explained that, starting the week of June 21, 2020, Ms. Molchan consistently answered "“yes”" in her biweekly reports when asked whether she was "“ready, willing and capable of working each day, Monday through Friday, during each week of this report”". The Appeal Division found that this information was different from the information that she had previously provided to the Commission (AD Decision at paras. 79-81).
[27] Indeed, the record shows that, on June 19, 2020, the Commission formed the view that Ms. Molchan could transition to regular benefits on the premise that she was available for and capable of working, but not capable of doing the same work as in her previous employment because she could not sit for an extended period (Applicant’s record at 152). This information is different from the information she gave to the Commission on March 4, 2021 when she confirmed to the agent that she could not work at all (Applicant’s record at 161). On this basis, I am satisfied that the Appeal Division could reasonably conclude that there was new information justifying reconsideration of the claim.
[28] In any event, I find that the Appeal Division’s conclusion that new facts or information are not required under section 52 of the EIA for the Commission to reconsider a claimant’s entitlement is reasonable. First, subsection 52(1) of the EIA begins with the words "“Despite section 111”" ("“Malgré l’article 111”"). These words clearly suggest that the scope of subsection 52(1) is much broader than the power of rescission or amendment found in section 111 of the EIA, which is limited to the presentation of new facts. Second, the Appeal Division’s interpretation is also consistent with this Court’s decision in Brière v. Canada (Employment and Immigration Commission), 1988 CanLII 9339 (FCA), [1989] 3 F.C. 88, 57 D.L.R. (4th) 402 (F.C.A.), where the Court found that the equivalent of these provisions served different purposes (Brière at 112-114).
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[51] In my view, this Court’s findings in Schembri do not extend to the reconsideration of a claimant’s entitlement to benefits. The overpayment in Schembri was not in dispute, only the amount of penalty the claimant would have to pay. Subsection 38(1) of the EIA specifies the acts or omissions for which a claimant may be subject to a penalty and subsection 38(2) sets the maximum penalties the Commission may impose. Under section 41 of the EIA, the Commission may rescind the imposition of a penalty or reduce it, on the presentation of new facts or on being satisfied that the penalty was imposed without knowledge of, or on the basis of a mistake as to, some material fact. Furthermore the Commission may issue, under section 41.1, a warning instead of setting the amount of a penalty for an act or omission under subsections 38(2) and 39(2) of the EIA. The Commission thus enjoys a wide discretion in assessing the amount of penalty and may consider financial hardship to the claimant as a mitigating factor.
[52] This is consistent with the Commission’s policy regarding penalties, which mentions financial hardship as a possible mitigating circumstance when determining penalties (Digest of Benefit Entitlement Principles, section 18.5.2.2). It appears from the record that the Commission did not apply a penalty in Ms. Molchan’s case despite her false statements (Applicant’s record at 130, 173, 178).
[53] In contrast, the Commission’s exercise of discretion under section 52 of the EIA is tied to a claimant’s qualification for, or entitlement to, benefits and is guided by the factors set out in the Commission’s reconsideration policy and those that relate to finality and accuracy. The Commission’s policy does not list financial hardship as a factor. While the Appeal Division acknowledged that there may be other relevant factors, I have not been persuaded that financial hardship goes directly to either finality or accuracy.
[54] When the Commission finds, upon reconsideration, that the claimant was not entitled to receive benefits, it is required under subsection 52(2) to calculate the amount to which the claimant was not entitled and notify the claimant. Pursuant to subsection 52(3), the amount calculated is repayable under section 43 of the EIA, which provides that a claimant is liable to repay an amount paid by the Commission as benefits and to which the claimant was not entitled. An amount payable under this provision becomes a debt due to His Majesty under subsection 47(1) of the EIA. Although the Commission has the discretion to reconsider the claim within a specified period, the Commission enjoys no discretion in setting the amount to be repaid since liability arises directly from a determination that the claimant was disentitled from receiving benefits (Canada (Attorney General) v. Lévesque, 2001 FCA 304 at para. 2). This is different from the Commission setting the amount of penalty a claimant should pay. . Puig v. Canada (Attorney General)
In Puig v. Canada (Attorney General) (Fed CA, 2024) the Federal Court of Appeal dismisses a judicial review of "a decision of the Appeal Division of the Social Security Tribunal" regarding EI.
Here the court considers the Commission's administrative reconsideration authority:(2) Absence of New Information
[22] Mr. Puig argues that section 153.161 of the EIA does not give the Commission the power to retroactively reconsider a claimant’s availability absent new information. He contends that the purpose of verification is to confirm or supplement the facts and information upon which the original decision was based, not to render a second decision based on the exact same information that was originally provided.
[23] I disagree.
[24] The Appeal Division considered the text of section 153.161 of the EIA, the context in which it was adopted, and its purpose. As in T-Giorgis, the Appeal Division found that section 153.161 of the EIA allows the Commission to make an initial entitlement decision based on statements made by a claimant in the application for benefits and the ongoing claimant reports, but to postpone its verification of entitlement to a later date. It further found that the Commission has the discretionary authority under subsection 153.161(2) to seek verification of entitlement after benefits were paid. If verification is sought and the Commission decides that the claimant has not proven their availability, the Commission then has the discretion under section 52 of the EIA to determine whether it is going to reconsider the claim (AD Decision at paras. 71-90).
[25] The Appeal Division noted that section 153.161 does not refer to verification of the accuracy of information, but rather to verification of entitlement. This means, in the Appeal Division’s view, that Parliament had specifically contemplated the possibility of the Commission reconsidering claims for students in non-referred training after benefits were paid, even if the claimant had provided accurate information (AD Decision at paras. 111-112).
[26] A comparable argument was raised and dismissed in T-Giorgis at paragraphs 37 to 52. I see no reason to depart from those findings. . T-Giorgis v. Canada (Attorney General)
In T-Giorgis v. Canada (Attorney General) (Fed CA, 2024) the Federal Court of Appeal dismisses a judicial review of "a decision of the Appeal Division of the Social Security Tribunal" regarding EI.
Here the court considers statutory provisions regarding EI non-tribunal 'reconsiderations':[25] Subsection 52(1) of the EIA provides that the Commission may reconsider a claim for benefits within 36 months after benefits have been paid or would have been payable. If the Commission decides that a person has received money by way of benefits for which the person was not qualified or to which the person was not entitled, the Commission may seek repayment of the monies overpaid under subsections 52(2) and 52(3) of the EIA.
[26] The Commission’s Digest of Benefit Entitlement Principles also contains a number of principles that the Commission applies, including when it makes decisions relating to availability and the reconsideration of claims. Sections 10.12.2, 17.3.2.2, 17.3.3 and 17.3.3.2 are relevant to this application.
[27] Section 10.12.2 of the Digest, found in Chapter 10 – Availability, is directed at persons attending courses on their own initiative. It provides that, before rendering a decision regarding the availability of a claimant who is attending a course on their own initiative, the agent of the Commission will consider whether the claimant could be referred to a similar course, pursuant to subsection 25(1) of the EIA. If so, and a referral is made, the claimant will not be required to show that they were unemployed, capable of, and available for work. If not, the agent will document the file by indicating that the option was reviewed and the reasons it is not available. The agent will then make a determination as to the claimant’s availability for work while taking the course.
[28] Chapter 17 of the Digest addresses among other things, error correction and reconsideration. Section 17.3.2.2 states that a Commission error will occur when the Commission has all the relevant information needed to make a decision, but the information does not support the final decision. If the benefits were incorrectly paid, the Commission will correct the error currently and no overpayment will be created. However, if the error resulted in a decision that is contrary to the structure of the EIA, the Commission will correct the error retroactively and an overpayment will occur.
[29] Additionally, section 17.3.3, entitled "“Reconsideration policy”", provides that the Commission has developed a policy to ensure a consistent and fair application of section 52 of the EIA and to prevent creating debt when a claimant was overpaid through no fault of their own. It further states that a claim will only be reconsidered when (1) benefits have been underpaid, (2) benefits were paid contrary to the structure of the EIA, (3) benefits were paid as a result of a false or misleading statement, and (4) the claimant ought to have known there was no entitlement to the benefits received. Section 17.3.3.2 specifies that decisions on availability are not decisions that run contrary to the structure of the EIA.
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[55] The Appeal Division concluded that the reconsideration provisions in the Digest are not applicable to the verification of entitlement under subsection 153.161(2) of the EIA. It noted that the Commission’s policy was developed prior to the addition of section 153.161 to the EIA and does not provide guidance on how section 153.161 should inform the Commission’s exercise of discretion under section 52 of the EIA (AD Decision at para. 118). It also considered the extraordinary circumstances under which section 153.161 was added to the EIA. The Appeal Division reasoned that Parliament therefore specifically contemplated the possibility of the Commission reconsidering claims for students in non-referred training where verification is sought and the student cannot prove their entitlement (AD Decision at paras. 118-121, 160-161). The Appeal Division determined that the policy was relevant for the period from September 28, 2020 to December 15, 2020 because the Commission had verified Ms. T-Giorgis’ entitlement. It was not relevant for the following period because verification of entitlement did not occur until January 2022.
[56] I have not been persuaded that the Appeal Division made a reviewable error in finding that the Commission’s reconsideration policy does not apply to Ms. T-Giorgis’ circumstances after December 15, 2020. When the Commission verified her entitlement in January 2022, it did so pursuant to subsection 153.161(2) of the EIA. The Commission determined that she was not entitled to benefits because she had not proven her availability for work while attending non-referred training. The Commission then exercised its discretion to reconsider the claim under section 52 of the EIA and assessed the overpayment. The Commission’s authority was exercised under the joint application of subsection 153.161(2) and section 52 of the EIA.
[57] This is different from the Commission’s decision to reconsider entitlement for the period before December 16, 2020. The Commission had already verified Ms. T-Giorgis’ availability and decided that she was entitled to receive benefits. When it decided to assess an overpayment for this period, the Commission derived its authority to reconsider the claim from section 52 only, as it had already verified Ms. T-Giorgis’ entitlement to the benefits.
[58] Given the Appeal Division’s finding that the Commission was exercising its authority to verify entitlement and reconsider the claim under the joint application of subsection 153.161(2) and section 52 of the EIA, I am satisfied that it was reasonable for the Appeal Division to conclude that the reconsideration policy does not apply. In giving the Commission the authority to verify entitlement after the payment of benefits, Parliament had to have in mind the possibility of assessing and recovering overpayments where claimants were not entitled to receive benefits. If the reconsideration policy applied, I fail to see under what circumstances the Commission would exercise its discretion to verify entitlement since decisions on non-availability do not run contrary to the structure of the EIA and argue against reconsideration.
[59] Moreover, the Digest is an administrative document that outlines different scenarios in which the Commission should reconsider a claim and is meant to ensure consistency in decisions and to avoid arbitrary decisions. While the Digest is an important tool to the Commission, it is not binding. Given the unique context in which section 153.161 was adopted, its purpose and the period during which it was in effect, the Appeal Division could reasonably find that the reconsideration policy does not apply.
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