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Employment Insurance - Appeals. Molchan v. Canada (Attorney General)
In Molchan 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 walks through an example of the EI administrative decision and appeal route, and sets out the appeal jurisdiction of the Appeal Division of the Social Security Tribunal (the highest administrative tribunal, below):[2] In February 2020, Ms. Molchan stopped working because of injuries caused in a car accident. As her sickness benefits were about to expire in June 2020, Ms. Molchan contacted the Canada Employment Insurance Commission to indicate that she had not yet recovered and could not return to work. Believing that she was acting on the advice of the Commission, she made a claim for regular benefits and reported that she was capable of and available for work. The Commission approved her application and she collected regular benefits for an additional 25 weeks.
[3] On March 4, 2021, the Commission contacted Ms. Molchan to discuss her availability for work. She confirmed to the Commission that she was not capable of working during the period she collected regular benefits. When asked why she reported being capable of working, she responded that she had done so on the advice of the two Service Canada agents to whom she had explained her situation in June 2020 (Applicant’s record at 161).
[4] On March 11, 2021, the Commission retroactively reconsidered Ms. Molchan’s entitlement to regular benefits and decided that she was not capable of and available for work, thereby creating an overpayment (Applicant’s record at 172). Ms. Molchan sought reconsideration, but the Commission upheld its decision (Applicant’s record at 183).
[5] Ms. Molchan appealed the Commission’s decision to the General Division of the Social Security Tribunal, arguing that the Commission has no authority to reconsider a decision on availability unless presented with new facts. She maintained that she had been truthful and forthcoming about her situation and availability status from the beginning and that there were no new facts to justify reconsideration of her availability. She insisted that the Service Canada agents had exercised their discretion to determine she was eligible for regular benefits and had told her to declare in her biweekly reports that she was available for work even though she was not. She further argued that the Commission had not followed its reconsideration policy, which provides that the Commission will not retroactively review decisions about availability if the Commission incorrectly paid benefits.
[6] The General Division dismissed Ms. Molchan’s appeal (2022 SST 1625). In its decision dated May 30, 2022, the General Division began by indicating that it believed Ms. Molchan had received misleading advice about how to claim benefits after her sickness benefits ended. It then held that the Commission’s authority under section 52 of the Employment Insurance Act, S.C. 1996, c. 23 (EIA) to retroactively reconsider Ms. Molchan’s entitlement to benefits is a discretionary decision and found that the Commission had exercised its discretion judicially. As it was uncontested that Ms. Molchan was not capable of working during the period she received benefits, the General Division concluded that Ms. Molchan had not demonstrated she was entitled to regular benefits (Applicant’s record at 246-253).
[7] The Appeal Division dismissed Ms. Molchan’s appeal. It agreed with the parties that the General Division erred when it decided that the Commission only had to show that it reconsidered Ms. Molchan’s claim within the statutory time limit to prove it exercised its discretion properly. The Appeal Division then substituted its decision for that of the General Division and found that the Commission had not exercised its discretion judicially because it had failed to consider relevant factors as required by the case law.
[8] The Appeal Division subsequently examined whether discretion should be exercised to reconsider the claim. After noting several factors arguing against reconsideration, the Appeal Division found that Ms. Molchan’s false statements were pivotal to the Commission’s assessment of her availability for work. Noting that the Commission’s reconsideration policy lists false statements as one of the grounds in favour of reconsideration, the Appeal Division considered whether the policy should apply given that the Commission’s agents had directed Ms. Molchan to make the false statements. After considering that a claimant cannot rely on misinformation from the Commission to be relieved of an overpayment, the Appeal Division reached the same conclusion as the Commission and maintained the overpayment.
[9] Before this Court, Ms. Molchan submits that the Appeal Division erred in concluding, first, that the Commission could retroactively reconsider her availability in the absence of new information and, second, that she had made false statements within the meaning of the Commission’s reconsideration policy. In the alternative, she claims that the Appeal Division erred in concluding that the Commission had exercised its discretion judicially.
....
[12] One of the relevant constraints is subsection 58(1) of the Department of Employment and Social Development Act, S.C. 2005, c. 34 (DESDA). The Appeal Division can only intervene if the General Division (a) failed to observe a principle of natural justice or otherwise acted beyond or refused to exercise its jurisdiction; (b) erred in law in making its decision, whether or not the error appears on the face of the record; or (c) based its decision on an erroneous finding of fact that it made in a perverse or capricious manner or without regard for the material before it. Paragraph 58(1)(c) of the DESDA does not allow the Appeal Division to overturn a decision of the General Division on the basis that it would have weighed the evidence differently (Sibbald v. Canada (Attorney General), 2022 FCA 157 at para. 27; Uvaliyev v. Canada (Attorney General), 2021 FCA 222 at para. 7).
[13] Once the Appeal Division finds there is a legitimate reason to intervene, it may proceed to decide questions of fact that are necessary for the disposition of the appeal (Nelson v. Canada (Attorney General), 2019 FCA 222 at para. 17) and give the decision the General Division should have given or refer the matter back for reconsideration in accordance with any directions it considers appropriate (DESDA, subsection 59(1)). . Francis v. Canada (Attorney General)
In Francis v. Canada (Attorney General) (Fed CA, 2023) the Federal Court of Appeal noted the statutory standard of review (regarding fact-findings) in an EI appeal to the Appeal Division of the Social Security Tribunal [under s.58 of the Department of Employment and Social Development Act]:[6] We are all of the view that the Appeal Division’s decision satisfies these standards of review. The Appeal Division grounded its decision on reasonable interpretations of the law and gave appropriate deference to the facts as determined by the General Division. With respect to factual determinations, it is important to note that section 58 of the Department of Employment and Social Development Act, S.C. 2005, c. 34 limits the Appeal Division’s authority to intervene in the General Division’s factual findings to circumstances in which the General Division makes a finding of fact “in a perverse or capricious manner or without regard to the material before it.” In addition, we are satisfied that the applicant’s rights to procedural fairness were not violated. . Francis v. Canada (Attorney General)
In Francis v. Canada (Attorney General) (Fed CA, 2023) the Federal Court of Appeal considered (and upheld) a JR "of a decision of the Appeal Division of the Social Security Tribunal" regarding an employment insurance benefits denial. The material facts were that the employee "refused to comply with the employer’s mandatory policy to obtain a COVID-19 vaccination":[2] The benefits were denied pursuant to s. 30 of the Employment Insurance Act, S.C. 1996, c. 23. This section provides that an employee is disqualified from receiving employment insurance benefits if the employee loses employment due to misconduct.
[3] The applicant was dismissed by his employer on the ground that he refused to comply with the employer’s mandatory policy to obtain a COVID-19 vaccination. The applicant had requested an exemption from the policy based on creed but the employer denied this request. . Page v. Canada (Attorney General)
In Page v. Canada (Attorney General) (Fed CA, 2023) the Federal Court of Appeal heard a JR challenging (and reversing) an EI 'availability for work' ruling of the Appeal Division of the SST (thus reinstating the General Division ruling of the SST).
In these quotes the court briefly summarizes the extended appeal route for EI decisions:[16] In terms of administration, the EIA provides for initial decisions by the Commission, an internal reconsideration by the Commission (section 112 of the EIA), and an appeal to the Social Security Tribunal (section 113 of the EIA).
[17] The Social Security Tribunal is established under the DESDA. It consists of a General Division, which is subdivided into an Income Security Section and an Employment Insurance Section, and an Appeal Division. Under section 54 of the DESDA, the General Division may dismiss an appeal; confirm, rescind or vary a decision of the Commission, in whole or in part; or may give any decision that the Commission or Minister should have given. The General Division therefore conducts a de novo inquiry into a matter and may (and often does) hold hearings during which evidence, including oral testimony, may be tendered.
[18] Subsection 58(1) of the DESDA provides for a limited right of appeal of General Division decisions in employment insurance matters to the Appeal Division and provides as follows:Grounds of appeal — Employment Insurance Section
58 (1) The only grounds of appeal of a decision made by the Employment Insurance Section are that the Section
(a) failed to observe a principle of natural justice or otherwise acted beyond or refused to exercise its jurisdiction;
(b) erred in law in making its decision, whether or not the error appears on the face of the record; or
(c) based its decision on an erroneous finding of fact that it made in a perverse or capricious manner or without regard for the material before it. [19] The limited authority of the Appeal Division to review factual determinations of the General Division in employment insurance matters is of central importance to this application, as will become apparent from the discussion that follows. . Canada (Attorney General) v. Hull
In Canada (Attorney General) v. Hull (Fed CA, 2022) the Federal Court of Appeal explained the employment insurance appeal system:[15] Appeals of the General Division are brought to the Appeal Division, on leave being granted. Subsection 58(1) of the Department of Employment and Social Development Act, S.C. 2005, c. 34 (the DESD Act) sets out the grounds of appeal that allow the Appeal Division to interfere with the decision of the General Division. The Appeal Division must be satisfied that the General Division: (1) failed to observe a principle of natural justice or acted beyond or refused to exercise its jurisdiction; (2) erred in law in making its decision; or (3) based its decision on an erroneous finding of fact that it made in a perverse or capricious manner or without regard for the material before it. The only errors alleged by the Commission before the Appeal Division were that the General Division erred in law or exceeded its jurisdiction. Before this Court, the Commission (represented by the Attorney General of Canada) focuses its argument on errors of law made by the General Division and the Appeal Division, rendering the Appeal Division’s decision unreasonable.
[16] Therefore, this being a reasonableness review of the Appeal Division’s decision, the issue is whether it was reasonable for the Appeal Division to conclude that the General Division had not erred in law in its statutory interpretation of subsections 23(1.1) and 23(1.2) of the EI Act. Here, the question of "“what is the election contemplated by subsection 23(1.1) of the EI Act”" is a question of law.
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