Digest of Benefit Entitlement Principles Chapter 8 - Section 13

8.13.0 Termination of employment during a work stoppage

No matter what time of the year or what the field of activities, it is inevitable that most firms do experience some movement on the part of their work force. The same is true during a labour dispute, and even more so when the stoppage of work lasts a long time. There are many reasons why employees, who were part of the work force when the stoppage of work began or who would have resumed their employment during the stoppage of work, may not return to work once the dispute is over. For example, because the employment was temporary or about to terminate, or there has been a lay-off, dismissal, resignation or retirement, during the stoppage of work.

The question to be asked in this regard is why the claimant is not returning to their place of employment and not, why is the claimant unemployed at the present time. Once a claimant has lost or is unable to resume employment for reasons related to a labour dispute, they are disentitled from benefits (EI Act 36(1)).

An exemption is possible only when one of the two circumstances set forth in the legislation apply (EI Act 36(1)). This is so even if, were it not for the stoppage of work, the claimant would have lost employment for another reason (FCA A-181-83, CUB 7842 and FCA A-209-04, CUB 59992).

However, the claimant may still satisfy the exempting conditions (EI Act 36(4) and Digest 8.1.4), in which case a disentitlement may not be imposed, even though the claimant has lost an employment or is unable to resume a previous employment, due to the stoppage of work. It is possible for the disentitlement to no longer apply if the claimant subsequently proves the existence of these exempting conditions during the stoppage of work. In this case the disentitlement would be terminated on the day prior to the fulfillment of these conditions (FCA A-942-85, CUB 11403 and FCA A-814-91, CUB 20138). It is also important to note that if the claimant does meet the criteria to be exempt from a disentitlement, they must also meet all other entitlement provisions to receive benefits. These other entitlement provisions include, but are not limited to, having the required number of hours to establish a claim, having a valid reason for separation, meeting availability criteria.

8.13.1 Complete and final severance of the employer-employee relationship

When a claimant is disentitled from benefits pursuant to the labour dispute provisions (EI Act 36(1)), there is no automatic re-entitlement simply because the employer-employee relationship has been completely and finally severed (FCA A-814-91, CUB 20138, FCA A-270-91, CUB 19037, FCA A-942-85, CUB 11403 and FCA A-741-87, CUB 14021).

While there may be a complete and definitive severance of the employer-employee relationship, it is not the rupture itself that is the deciding factor leading to entitlement, but rather it is the absence of direct interest, participation, and financing in the labour dispute, on the part of the claimant (EI Act 36(4) and Digest 8.1.4).

Moreover, such a separation is not necessary when the claimant otherwise meets the exempting conditions, even while still maintaining, to some degree, the employer-employee ties. On the other hand, there could be a complete and definitive separation, but the direct interest, participation or financing continue to be present. One of the questions to determine is whether the severance is complete and final. This may not always be the case, even if the employee has in fact informed the employer of their intention to resign, or if the employer has notified the employee of a dismissal. The severance may only be temporary and may last only until the dispute is resolved and operations resume.

A number of indicators may confirm whether the severance is final:

  • termination of individual employment,
  • payment of amounts due on termination of employment,
  • loss of all rights of recall and employment-related benefits,
  • the employee's status in the company,
  • the reasons for severance given by the employer (e.g. incompetence, misconduct not related to the dispute) or by the claimant (ill health, relocation).

The separation must not be the result of actions or intimidation practices that often occur in labour disputes, or actions whose sole purpose is to create entitlement to benefits.

Other indicators may also cast doubt on the complete and final nature of the severance, such as:

  • the simultaneous resignation or lay-off of several workers,
  • a long period of employment tied in with substantial benefits (such as a pension),
  • the fact that neither the employer nor the employee have taken appropriate steps to make the termination of employment final, or,
  • the claimant is still a member of the union in dispute with the employer (FCA A-139-88, CUB 14613).

Even if the termination of employment appears to be a final severance, it can happen that the claimant remains directly interested in the outcome of the dispute or continues to be involved. For example, an employee who used all avenues of recourse to ensure that their return to work is possible, or where, because of the reasons giving rise to the separation, it is highly likely that this worker's return forms part of the back-to-work agreement (FCA A-209-04, CUB 59992).

It cannot be said that a claimant who was dismissed during a stoppage of work is not directly interested in the labour dispute, as long as there is the possibility that they will subsequently return to work as a result of a return to work protocol, or as a result of a grievance filed against the dismissal. The fact that, following either the termination of the stoppage of work or a judgment issued on a grievance, a worker will not be reinstated, does not change the direct interest that the claimant had in the labour dispute, before the final decision concerning their employment, was made. In such a case, the disentitlement will not be retroactively terminated to the date of the dismissal.

It may happen, in the case of a dispute impacting such industries as construction or logging, that an employee, who has been principally employed in this occupation by several employers in the course of a year, and whose working conditions are usually subject to general rather than to local agreements, decides to quit employment with a specific employer, in the course of a generalized stoppage of work in the industry. Even though such a termination of employment may prove to be final, the employee nonetheless remains directly interested in the outcome of the dispute affecting the industry and may also continue to finance and participate in the dispute. Unless the employee has also decided to no longer work in this industry (such as for reasons of retirement, health or career change), it cannot be concluded that all the exempting conditions are met.

Participating or financing, like direct interest, do not necessarily cease with the termination of employment, even where the severance proves to be final. A claimant may for one reason or another continue to participate in the dispute or finance it. In either case the exempting conditions are deemed not to be met (EI Act 36(4), Digest 8.1.4; FCA A-209-04, CUB 59992).

8.13.2 Temporary employment or employment about to terminate

Even when the employment in question is strictly temporary, with its duration known in advance, it must not be taken for granted that the claimant meets the requirements of the exempting conditions on the predetermined date where the employment would have ended (EI Act 36(4); Digest 8.5.10). Depending on the circumstances, there are many factors at play, including the fact that there is an ongoing stoppage of work attributable to a labour dispute. These factors may modify the situation, thereby advancing or postponing the originally set date of departure.

Due to operational delays caused by the stoppage of work, it is possible that the employer will attempt to extend an individual's period of employment, or to postpone the planned lay-off date because of the anticipated need for the employee's services when operations resume. It is not uncommon for the temporary employment to be extended because the employer needs staff to replace an employee who was supposed to return from leave but was unable to do so, or because the employer feels that this is a skilled worker whom they wish to retain, with a view to a permanent position in the future.

On occasion, temporary employees retain a right of recall under the provisions of a collective agreement, or an agreement or contract of service, despite the stoppage of work. This is often the situation in the case of seasonal workers.

This means that the mere possibility or a simple statement that the employment would have terminated in the near future, is not by itself sufficient to conclude that the employment would have terminated during the stoppage, and that there would have been a complete and definitive severance of the employer-employee relationship (FCA A-942-85, CUB 11403, and FCA A-139-88, CUB 14613Digest 8.13.0 and Digest 8.13.1).

A worker in this situation cannot gain relief from disentitlement on these grounds alone (Digest 8.13.0 and Digest 8.13.1; FCA -181-83, CUB 7842). Nor can they be exempted from it unless it is proven that at a precise date there is, on their part, an absence of direct interest, participation and financing (EI Act 36(4) and Digest 8.1.4).

Finally, term employees discharged on the eve of a stoppage of work attributable to a labour dispute could be exempted from disentitlement to benefits, if they suffered a complete severance of the employee-employer relationship (FCA A-594-91, CUB 19771). Such an eventuality implies that the severance is complete and final, not of a temporary nature, that there exist no recall rights, and there is no promise or pattern of employment that guarantees they will be rehired once the dispute is settled (FCA A-1198-82, CUB 7454).

8.13.3 Dismissal

Unless it is for reasons that have absolutely nothing to do with the dispute (such as incompetence or misconduct), it is rare for a final notice of dismissal to be issued by an employer during a labour dispute. Dismissals often form part of pressure tactics designed to expedite the settlement of the dispute by deliberately targeting certain groups of workers.

Apart from special instances or where there is a discontinuance of business or permanent restructuring (Digest 8.11.4), it cannot be determined prior to the resumption of operations whether a dismissal is permanent and whether the employer-employee relationship has been completely and definitively severed in the way required by the labour dispute provisions (EI Act 36(4); Digest 8.1.4 and Digest 8.13.1). This is also true when a worker who has been dismissed lodges a grievance or takes advantage of other avenues of appeal against the dismissal (FCA A-209-04, CUB 59992; CUB 71732).

A disentitlement must be maintained unless the complete and definitive severance of the employer-employee relationship has occurred (FCA A-181-83, CUB 7842 and Digest Chapter 7), and the worker no longer has a direct interest in the dispute, is no longer participating in it, or financing it (FCA A-942-85, CUB 11403 and Digest 8.13.1).

8.13.4 Resignation

It is to be expected that some employees choose not to return to work following a stoppage for many reasons; they may have found other employment, decided to go back to school, or to change their career. Regardless of the reason, the result is that the worker has submitted a resignation to the employer during the stoppage, or one that will take effect during the stoppage.

The intent to resign is not by itself sufficient, nor is resigning for personal reasons, or as a mass movement to exert pressure on an employer and affect the outcome of the dispute. If, on the other hand, the resignation is genuine and is formally submitted to the employer, it may result in a complete and definitive severance of the employer-employee relationship (FCA A-942-85 and FCA A-181-83, CUB 7842, CUB 11403; Digest 8.13.1). Consideration can then be given to terminating the disentitlement from the date the resignation becomes effective, provided that the claimant proves there is no longer a direct interest, participation or financing of the dispute (EI Act 36(4); and Digest 8.1.4).

For industries in which negotiations are conducted centrally and the results are applied to the entire industry, the fact that the worker submits a resignation to the employer during a stoppage of work which is having a substantial impact on the industry, is not sufficient to cancel the disentitlement. The worker must also prove that they have left the industry in question (Digest 8.13.1).

8.13.5 Retirement

When an employee takes retirement during a stoppage of work, a disentitlement terminates on the day before the claimant officially retires. It is not relevant whether the retirement is voluntary or not, as long as it is determined that the relationship between employer and employee has been definitively severed (Digest 8.13.1 and FCA A-942-85, CUB 11403), so that the claimant has no further direct interest, participation or financing in the labour dispute (EI Act 36(4) and Digest 8.1.4).

As previously mentioned, the fact that a claimant meets the conditions to have a disentitlement under the labour dispute provisions terminated, does not mean that they will be paid benefits. All other conditions under the act must be met before benefits may be paid.

[April 2019]

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