Digest of Benefit Entitlement Principles Chapter 2 - Section 2

2.2.0 General clause

For the purposes of the general clause of the regulation ^{Footnote 1} , the requirement for an interruption of earnings to occur may be broken down into three distinct parts: (1) a lay-off or separation from employment; (2) seven days without work; and (3) seven days without earnings ^{Footnote 2} .

These three parts, although expressed in clear language, may not be as explicit as might appear in the first place when applied to a person's particular situation. Hence the need to set forth the most frequent situations encountered.

2.2.1 Lay-off or separation defined

A lay-off or separation occurs when the employee is in fact laid off or dismissed or when the employee resigns from employment. A lay-off or separation is also considered to occur when an employee:

• is temporarily suspended without pay from employment by reason of misconduct ^{Footnote 3} ;
• temporarily ceases to work, voluntarily or not, by reason of a labour dispute;
• goes on leave of absence without pay while remaining under contract ^{Footnote 4} ;
• ceases to work by reason of a general vacation period but only from the last day to which vacation pay is applicable ^{Footnote 5} ;
• ceases to be employed by an employer by reason of the business being sold notwithstanding the fact that the new owners may have retained the worker's services without interruption;
• has a lay-off or separation from one of two jobs with different employers; in cases of doubt, whether these two jobs were with the same or different employers is a question that must be referred to Canada Revenue Agency for decision ^{Footnote 6} .

The question was also asked as to whether it was the one and same employer in the case where the person performed the same duties under identical employment contracts for two franchises which were separately incorporated while being part of a same group. In that case they were judged to be independent employers ^{Footnote 7} . Similarly, starting with the idea that the periods of employment of a claimant who works at two distinct jobs at the same time for the same employer, constitute two separate periods of employment ^{Footnote 8} , we may say that an interruption of earnings occurs, when there are seven days of no work and no pay from one of these employments. It does not matter whether these two employments, held at the same time, are located at the same or different premises.

However, a renewal of an expired contract, promotion to a new job, transfer to a new job or from one plant to other premises operated by the same employer would not provide a lay-off or separation from employment. A similar judgement was made by the Federal Court of Appeal in the case of a reduction of hours in a given week. Such a reduction in hours, and consequently in earnings, cannot equate to a lay-off or to any other reason provided in the wording of the regulation ^{Footnote 9} .

The initial finding that there was a lay-off or separation from employment may be later revoked where retroactive reinstatement with full pay has been effected.

Moreover, it had been found that there was no cessation of work when the claimant's contract of services continued, albeit for very little in the way of pecuniary consideration. The fact is the claimant continued to provide the same services as when he was fully paid ^{Footnote 10} .

2.2.2 Seven day requirement

The seven days without work and without earnings are not fulfilled where the lay-off is in fact for less than seven-calendar days ^{Footnote 11} . An exception is made where an employer issued the Record of Employment, the claim has already been finalized, and it was reasonably sure at the outset that the lay-off would be for seven or more days ^{Footnote 12} . Work performed for another employer during the seven-day period does not preclude the occurrence of the interruption of earnings ^{Footnote 13} .

A change from full-time to part-time employment is not enough to meet the seven-day requirement ^{Footnote 14} unless it results in a gap of seven or more consecutive days without work and without earnings or unless it is effected under a work sharing agreement ^{Footnote 15} . Continuous part-time employment with duties performed every week will preclude the occurrence of the interruption of earnings ^{Footnote 16} , unless of course a gap of seven or more days occurs in the work pattern. Equally, there was no interruption of earnings in the case where the claimant continued to work on the weekends for the same employer, after being laid-off from full-time employment ^{Footnote 17} .

Where the part-time employment is such that the employer only requires and hires the services of a worker for alternate weeks, one full working week followed by one week of no work, it is considered that an interruption of earnings occurs at the end of every week worked.

An interruption of earnings did not occur in the case of a claimant who ceased to be paid wages for the off-season but nevertheless continued to perform certain work and to receive the use of living quarters ^{Footnote 18} or board ^{Footnote 19} that amounted to earnings.

The concept of hours relates to very specific areas such as insurability, entitlement conditions, and number of weeks of benefits payable but does not apply to interruption of earnings ^{Footnote 20} . The definition of days is that of seven complete and consecutive days (from 12 a.m. to 11:59 p.m.) with no work and no earnings.

[ February 2004 ]

2.2.3 Work without earnings

Where services continue to be provided but without remuneration either in cash, kind or room and board, the question is whether this amounts to employment. If this is not employment, an interruption of earnings does occur; otherwise, it cannot be said that the condition of seven days without work has been met.

Where the room and board was freely provided by the father without any obligation to help out with the normal daily chores required on a farm in the off-season, an interruption of earnings was considered to have occurred ^{Footnote 21} . It was ruled otherwise when a farmer's son continued with his usual duties on the farm, without remuneration but with free room and board. The absence of remuneration in this case did not mean that the claimant was no longer an employee of his father. The employer-employee relationship continued while the son continued in his work ^{Footnote 22} . However, it was not employment where the claimant continued to participate a few hours a week in the family business without any remuneration.

Although an individual did not have any hope of receiving the wages payable for the weeks of work as a result of the employer declaring bankruptcy, the fact remained that, in the absence of a seven day period without work, no interruption of earnings had occurred during those two weeks ^{Footnote 23} . Whatever recourse an individual may have in such a situation must be sought under legislation other than employment insurance.

A similar judgement was made where, in order to be recalled for services in the active season, one of the conditions was to occasionally work without pay during the off-season ^{Footnote 24} .

So long as the claimant is considered as working when he or she receives pay, then this continues to be the case when he or she continues to provide the same services without remuneration. It had been found that there was no cessation of work, and therefore no interruption of earnings, when the contract of service continued, even though for much less monetary considerations. The claimant continued to provide the same services as had been provided when fully remunerated ^{Footnote 25} .

2.2.4 Earnings without work

Generally, it can be said that even though a period of seven days lapsed since the last day of work, there is no interruption of earnings if the claimant receives earnings for any of those seven days; nor will there be until there is a period of seven days which are not remunerated. The earnings to be taken into account for the determination of interruption of earnings are those specified in the text of the regulation ^{Footnote 26} .

Pay received in respect of a holiday or non-working day or attendant upon a holiday or non-working day will not prevent an interruption of earnings ^{Footnote 27} . The same is true in regard of earnings from work performed for another employer ^{Footnote 28} .

2.2.5 Date of the interruption

For the purposes of the general clause of the regulation ^{Footnote 29} , the day on which the interruption of earnings occurs is the day on which the employee is laid off or separates from employment provided that day is followed by seven days without work and without earnings, including Saturdays and Sundays.

Even though an employee is only laid off on a Friday after working a full working week, the interruption of earnings occurs on the Friday ^{Footnote 30} .