Digest of Benefit Entitlement Principles Chapter 2 - Section 3
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2.3.0 Exceptions to the general clause
The regulation provides for certain exceptions to the general clause mentioned aboveFootnote 1. These will be considered in the context of their individual circumstances.
2.3.1 Special benefits
When an insured person ceases to work because of an illness, injury, quarantine, pregnancy, to care for a new born or a child placed for the purpose of adoption, to provide care or support to a family member with a serious medical condition and a significant risk of death within 26 weeks or to provide care or support to a critically ill or injured family member, there may be an interruption of earnings even if the claimant only has a partial reduction in remuneration. An interruption of earnings occurs in respect of an insured person at the beginning of the week in which a reduction in earnings occurs, of more than 40 percent in the insured person's normal weekly earnings, because he or she ceases to work in that employment for one of the reasons mentionedFootnote 2.
In this context, the normal weekly earnings are calculated on the basis of the regular hourly rate multiplied by the regular hours in a week, including overtime worked on a regular basisFootnote 3.
The interruption of earnings in the circumstances occurs when the individual's allocatable earningsFootnote 4, including in particular wages or salary, falls below 60 percent of normal weekly earnings.
The amounts of payments a claimant has received or, on application, is entitled to receive under a group sickness or disability wage-loss indemnity plan or workers' compensation plan, are not earnings to be taken into account hereFootnote 5. What is taken into account, however, are payments a claimant has received or, on application, is entitled to receive under a paid leave plan for sickness, maternity, for the care of a new born or a child placed for the purpose of adoption or for the care or support of a seriously ill or critically ill or injured family memberFootnote 6.
What is taken into account also, are the payments a claimant has received or, on application, is entitled to receive from motor vehicle accident insurance provided under or pursuant to a provincial law in respect of the actual or presumed loss of income from employmentFootnote 7 as well as the indemnity payments a claimant has received or, on application, is entitled to receive pursuant to a provincial law in case of preventive withdrawal of workFootnote 8.
Moneys received as borrowed sick leave against future credits are earnings; thus, a person who requested and obtained an advanced sick leave payment was held not to have an interruption of earnings upon exhausting already earned creditsFootnote 9.
[ October 2013 ]
[ October 2006 ]
2.3.2 Lay days or periods of leave
In some workplaces, employees will regularly work more hours, days or shifts than what other individuals working full-time elsewhere, normally work. This could include workers in isolated worksites such as mines, ocean platform drilling rigs and vessels on the St. Lawrence or Great Lakes, or work in various processing plants.
Other workplaces whose operations are continuous may also have similar uninterrupted work patterns. Quite often in these cases employees will have a work pattern where they work for 6, 7 or more continuous days, followed by a period of leave.
Another pattern of work that is common is one in which the employee, according to a schedule with their employer, works more hours in a week than is normally considered full-time employment, and accumulates a period of leave to compensate for the extra hours worked, within an established calendar period. The days covering the period of leave are often referred to as lay days.
Generally, employees who have these types of work patterns do not have an interruption of earnings, for the purposes of establishing a benefit period, until the end of the period of leave. Even if specific provisions under a verbal or written agreement of employment or a collective agreement provide the method for determining the period of leave, these provisions would not supersede the EI Act.
There is no formal definition of "full-time employment" in the EI Act or Regulations. What constitutes full-time employment is a factual determination that should be based on evidence. It is the responsibility of the adjudicator to conduct the necessary fact finding to determine on a case by case basis, whether the hours worked constitute full-time employment. A review of local labour market information and terms of the Employment Standards Act in the claimant's province or territory of employment should be reviewed to assist with that determination.
There are two basic methods for determining a period of leave when an individual works under one of the above work patterns: one is based on a credit system whereby credits are earned and accumulated based on the number of hours or days worked (one or two days off for each consecutive day worked (not necessarily regular or fixed), while the other method is based on an established schedule alternating periods of work and leave during a period of employment (for example: seven days on (greater than normal) followed by seven days off (regular schedule)). Whichever method is used, this period of leave does not constitute an interruption of earnings regardless of whether the employee is compensated for that periodFootnote 10. Where a person has had a previous interruption of earnings in their qualifying period, the issue to be considered is whether or not the person can be considered unemployed. Generally, the person would not be considered unemployed during any week in which the period of leave fallsFootnote 11. The issue of "Not Unemployed" is covered in detail, in chapter four of this Digest.
However should the employer's activities cease, or for some reason the employees have a lay-off or separation from employment, the period of leave may be treated differently.
With respect to the accumulated days of leave, what needs to be determined when activities cease or a lay-off or separation occurs is whether, according to the contract of employment or collective agreement, the insured person has a right to use up the lay days or accumulated leave credits. If such is the case, then the interruption of earnings would only occur after the expiration of the period of leave which the lay days or accumulated credits compensateFootnote 12.
However, if the collective agreement or the employment contract stipulates that the claimant loses those lay days or accumulated leave credits when their employment terminates or when the employer's activities cease, the interruption of earnings occurs at the time the employment stops, as there is no longer an entitlement to a period of leave, unless the claimant is entitled to be compensated for those daysFootnote 13. Where the claimant is only entitled to monetary payment, those earningsFootnote 14 would prevent an interruption of earnings,Footnote 15 but would not prevent the claimant from being considered unemployed in the weeks for which the lay days are paid.
With regard to the pattern of alternating periods of work and leave, it is considered that the employment is interrupted for the duration of any period during which the employer's activities stop, or when the employee's employment is terminated. An interruption of earnings is therefore deemed to occur during the week of the stoppage of activities or the cessation of employment, provided that, during that week, no lay days were taken (accumulated leave days) prior to the date the employer's activities stopped or the employment was terminated; if there were lay days taken in that week, the interruption of earnings will be deemed to occur only as of the following week.
2.3.3 Compensatory leave
When the contract of employment provides a period of paid leave to compensate for additional hours worked from time to time during a period of employment, there is no interruption of earnings. As an example, an employee works from time to time additional hours over and above regular hours and has paid leave for a given week.
Those situations where employees regularly work more hours, days or periods than normally worked in a week by those who are employed full-time elsewhere are covered in another section of this chapterFootnote 16.
In some cases, a claimant may have already had an interruption of earnings before the compensatory leave, or from other employment held during the qualifying period. In that case, the question will be the status of being unemployed and the determination of earnings.
2.3.4 Guaranteed income
A claimant's contract of employment may provide for the payment of the usual remuneration for a period beyond a week, independent of the amount of work completed during that period. No matter how or when the remuneration is paid there is no interruption of earnings during this periodFootnote 17. An example of this is a stevedore who is guaranteed an income equivalent to forty weeks of work during the year.
The same principle applies in the case of a claimant who has an agreement with the employer to embark upon a self-funded leave program. For example, the claimant works and defers a portion of his or her salary for four years in order to finance and be on leave for the fifth year. The claimant does not have an interruption of earnings during the self-financed leave periodFootnote 18. Unless the agreement concerning the self-funded leave is broken, for example, by the claimant who definitively terminates this employment; the claimant, in principle, cannot establish a benefit period during such a leave period. This is so, regardless of the type of benefits that are claimed.
A claimant could establish a benefit period because of an earlier interruption of earnings from this employment before the self-funded leave, or from other employment obtained during the leave. In such a case, the issues to be examined are whether the claimant is unemployedFootnote 19 and the determination of earnings.
[ July 2003 ]
2.3.5 Real estate salespersons
In the case of an insured person who holds a license issued by a provincial authority to work in the sale or purchase of real estate on a commission basis, the interruption of earnings occurs only when the license of the insured person is surrendered, suspended or revoked or when the insured person ceases to work in that employment due to illness, injury, quarantine, pregnancy, for the care of a new born or a child placed for the purpose of adoption, to provide care or support to a seriously ill or critically ill family memberFootnote 20.
If the claimant ceases to work for any other reason, there will be no interruption of earnings while he or she is the holder of such a licenceFootnote 21. Simply returning the license to the broker while the office is closed for the winter, is not sufficient to prove that the claimant's actions are irrevocable, and that he or she no longer possesses such a licenceFootnote 22.
Like employees paid by commissionFootnote 23, a benefit period can be established for a real estate salesperson on the basis of an interruption of earnings that occurred from other employment during the qualifying period, even if that person is still in possession of a license. The proper questions to decide will be, whether the pertinent weeks are weeks of unemployment, and what are the applicable earnings.
[ October 2013 ]
2.3.6 Employees paid by commission
For persons whose earnings consist mainly of commission, an interruption of earnings occurs only when the contract of employment is terminated; unless the claimant ceases to work due to illness, injury, quarantine, pregnancy, to care for a new born or a child placed for the purpose of adoption, to care for a seriously ill family member or to provide care or support for a critically ill childFootnote 24. In other words, if the claimant ceases to work for any other reason, there will be no interruption of earnings while the contract continues.
If an interruption of earnings occurred with respect to some other employment during the qualifying period, a benefit period can be established even if the person is under contract from the employment remunerated by commissionFootnote 25.
[ October 2013 ]
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