Digest of Benefit Entitlement Principles Chapter 2 - Section 2

2.2.0 Requirements for an interruption of earnings

The requirement that an interruption of earnings 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, (FCA-A-679-95, CUB 74576, CUB 72841, CUB 45876).

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
• temporarily ceases to work, voluntarily or not, by reason of a labour dispute
• takes a leave of absence without pay while remaining under contract
• ceases to work by reason of a general vacation period but only from the last day for which vacation pay is paid (EI Regulation 36(8)(a))
• ceases to be employed by an employer by reason of the business being sold despite 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

There may be situations where a person performed the same duties under identical employment contracts for two separately incorporated franchises of the same company. What must be determined is whether or not the separate franchises are considered the same employer as they may be considered two independent employers. Similarly, where a claimant works at two distinct jobs at the same time for the same employer, this constitutes two separate employments. As such, an interruption of earnings occurs when there is a separation from one of these employments, followed by seven days of no work and no pay. It is not relevant 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 be considered a lay-off or separation from employment. A judgement on a similar case was found in FCA A-516-88 which dealt with a reduction of hours in a given week. Such a reduction in hours, and consequently in earnings, does not constitute a lay-off or separation pursuant to the regulation.

The initial finding that there was a lay-off or separation from employment may be later revoked in the case of a claimant who is retroactively reinstated with full pay.

There is no cessation of work when a claimant's contract of service continues, regardless of the amount of compensation received. If the claimant continues to provide essentially the same services as when they were being fully paid, there is no interruption of earnings (FCA A-559-89, CUB 17293).

2.2.2 Seven day requirement

The seven days without work and without earnings referred to in the regulations are not fulfilled when the lay-off is intended to be less than seven calendar days (FCA A-625-90, CUB 18250, CUB 16277). As previously mentioned, there is an exception where an employer issued the ROE based on a reasonable expectation that the lay-off would be for seven or more days, even if the claimant returned to work before the seven days (Digest 2.1.3). Work performed for a different employer during the seven-day period does not prevent the interruption of earnings.

A change from full-time to part-time employment is not enough to meet the seven-day requirement (CUB 66921), unless it results in a break of seven or more consecutive days without work and without earnings. Continuous part-time employment with duties performed every week will prevent an interruption of earnings (FCA A-475-05, CUB 72923 CUB 49383), unless of course there is a period of no work or earnings for seven or more consecutive days . Equally, there is no interruption of earnings in the case where a claimant continues to work on the weekends for the same employer, after being laid-off from full-time employment (CUB 66921).

Where the part-time employment is such that the employer only hires the services of a worker for alternate weeks; that is, one week of normal fulltime work followed by a week of no work, it is considered that an interruption of earnings occurs at the end of every week worked. The determination of whether a claimant in this situation will in fact receive benefits may be considered under other provisions of the act.

An interruption of earnings does not occur where a claimant is no longer being paid wages for the off-season but nevertheless continues to perform certain work, or to have the use of living quarters or board that amount to earnings (FCA A-307-06, CUB 65896; FCA A-963-88, CUB 15703, FCA A-559-89; CUB 17293).

The concept of the number of hours worked is relevant for specific provisions of the act and regulations, such as insurability, entitlement conditions, and the number of weeks of benefits payable. It is not, however, relevant to determining if an interruption of earnings occurs. The definition of days, for the purpose of determining whether an interruption of earnings occurs is seven complete and consecutive days (from 12 a.m. to 11:59 p.m.) with no work and no earnings.

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 occurs; otherwise, it cannot be said that the condition of seven days without work has been met (FCA A-559-89, CUB 17293; FCA A-475-05, CUB 64220).

In a case where a claimant continued to have use of the employer’s truck, the claimant did not experience an interruption of earnings as it was considered that he continued to receive benefits from his employer. It was concluded that the use of the truck was linked to the work done by the claimant for the employer (CUB 35521). In a separate case, it was ruled that a farmer's son who continued with his usual duties on the farm, without pay but with free room and board did not have an interruption of earnings. The absence of the payment of wages in this case did not mean that the claimant was no longer an employee of his father. The employer-employee relationship continued while the claimant continued in his work (CUB 61718B, CUB 51153).

When wages have not been paid for days worked as a result of an employer declaring bankruptcy, no interruption of earnings occurs until there is a period of seven days without work (CUB 19081). Whatever recourse an individual may have in such a situation must be sought under legislation other than the EI program (Provincial Employment Standards Act).

An interruption of earnings was considered not to have occurred in a situation where, in order for a seasonal employee to be recalled in the active season, one of the conditions was to occasionally work without pay during the off-season (CUB 14230A). Other situations where it was found an interruption of earnings did not occur include a grandmother who continued to provide the same level of day care to her grandchild, while no longer being paid (FCA A-475-05, CUB 64220); a claimant who was laid off but continued to work for her husband for approximately ten hours a week, without pay (CUB 49383), and a claimant who worked for a non-profit organization for which he was paid, then continued to work 35 hours per week, without pay, when the organization could no longer support his salary (CUB 47937).

Generally, employees must work to earn their wages. Regardless of whether they may at some point, no longer receive wages while continuing to perform the same work, they are still considered to be working. There is no stoppage of work, and therefore no interruption of earnings, when a contract of service continues, even if it is for little or no pay. These workers continue to provide the same services as had been provided when receiving full wages, therefore cannot prove an interruption of earnings (FCA A-559-89).

2.2.4 Earnings without work

Generally, it can be said that even though a period of seven days has 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 one until there is a period of seven consecutive days without earnings. The earnings to be taken into account for the determination of whether there is an interruption of earnings are those specified in EI Regulation 35(2).

Pay received in respect of a holiday or non-working day or an observed holiday or non-working day will not prevent an interruption of earnings (EI Regulation 14(1) and 36(13)).

2.2.5 Date of the interruption

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. In other words, once a lay off or other stoppage of work occurs, the interruption of earnings does not occur at the end of the seven day break in work and earnings, but rather at the beginning. For example, where an employee is laid off from work on a Friday after working a full week, the interruption of earnings occurs on the Friday, as the assumption is that there will be a seven day break. A benefit period may be reconsidered if it is later determined that there was not, in fact, seven days without work or earnings (Digest 2.1.3).

[ February 2019 ]