A-358-83
Gilles Goulet (Applicant)
v.
Canada Employment and Immigration Commis
sion, Léo Lavigne, Chairman of the Board of
Referees, Denise Gagnon, Member of the Board of
Referees and Madeleine Brosseau, Member of the
Board of Referees (Respondents)
and
Deputy Attorney General of Canada (Mis -en-
cause)
Court of Appeal, Pratte, Marceau and Hugessen
JJ.—Montreal, October 4; Ottawa, October 26,
1983.
Unemployment insurance — Application to review decision
of Board of Referees upholding Unemployment Insurance
Commission's imposition of six-week disqualification period
— Applicant locked out in June — Work stoppage ending
November — Applicant not recalled because of alleged mis
conduct during dispute against employer — S. 41 Unemploy
ment Insurance Act, 1971 providing claimant disqualified
from receiving benefits if losing employment by reason of own
misconduct — S. 43(1) imposing maximum disqualification
period of six weeks — Applicant alleging lost employment
when work stoppage began — Applicant also submitting s. 59
Unemployment Insurance Regulations barring application of s.
41 — S. 59 providing employment terminating more than 13
weeks prior to claim for benefits not employment for purposes
of s. 41 of Act — Application allowed — S. 41(1) imposing
exception to general rule and must be strictly interpreted —
Cannot lose what do not have — Applicant losing employment
as result of work stoppage attributable to labour dispute — S.
44(1) providing "claimant who has lost his employment by
reason of a stoppage of work attributable to a labour dispute"
applies — Dissenting opinion that "lost his employment"
having different meanings in ss. 41 and 44 and application
should be dismissed — Unemployment Insurance Act, 1971,
S.C. 1970-71-72, c. 48, ss. 2(1)(n) (as am. by S.C. 1976-77, c.
54, s. 26(7)), 17 (as am. by S.C. 1978-79, c. 7, s. 4), 41(1),(2),
43 (as am. by S.C. 1974-75-76, c. 80, s. 16; S.0 1976-77, c.
54, s. 42), 44(1), 94 — Federal Court Act, R.S.C. 1970 (2nd
Supp.), c. 10, s. 28 — Unemployment Insurance Regulations,
C.R.C., c. 1576, s. 59(1).
COUNSEL:
R. Cousineau and G. Campeau for applicant.
G. Leblanc and C. Bureau for respondents.
SOLICITORS:
Campeau & Cousineau, Montreal, for appli
cant.
Department of Justice, Montreal, for
respondents.
The following is the English version of the
reasons for judgment rendered by
MARCEAU J. (dissenting): This application
made in accordance with section 28 of the Federal
Court Act [R.S.C. 1970 (2nd Supp.), c. 10] seeks
to set aside a decision rendered by a Board of
Referees sitting pursuant to section 94 of the
Unemployment Insurance Act, 1971, S.C. 1970-
71-72, c. 48.
The facts which gave rise to the decision a quo
are straightforward and clear. On June 19, 1982
the directors of David Biscuits Inc. of Montreal,
when negotiations for the conclusion of a new
collective agreement with their employees broke
down, ordered that their plant be closed, and thus
ordered a lock-out which the employees quickly
followed by a strike vote. The work stoppage con
tinued for over five months, as it was not until
November 22 that the parties were finally able to
arrive at a settlement. The plant immediately reo
pened and work gradually resumed. There was no
question of continuing operations at the same pace
as before the work stoppage, first because of the
time of year, traditionally less active, and second
because of an adverse economic climate; recall lists
accordingly had to be prepared in accordance with
the plant's needs and the seniority rights of
employees, and in the end several employees were
not recalled. However, of the employees not
recalled once operations were back to normal, five
had been disqualified by the company's managers
on a ground other than the lack of work. They
were laid off for good and dismissed because of
their actions during the dispute (they had appar
ently thrown "Molotov cocktails" at the company's
building). Applicant was one of the five employees.
The Commission officer responsible for consid
ering applicant's application for benefits felt that
this was a case to which section 41 of the Act
applied, and he issued a six-week disqualification
notice in respect of applicant. Subsection (1) of
section 41 of the Act provides that: "A claimant is
disqualified from receiving benefits under this Part
if he lost his employment by reason of his own
misconduct or if he voluntarily left his employ
ment without just cause", a disqualification which
subsection 43(1) [as am. by S.C. 1974-75-76, c.
SO, s. 16] fixes at a maximum of six weeks.
Applicant objected to imposition of this dis
qualification and appealed to a Board of Referees.
His position was that, as he had ceased to work
when the plant was closed down on June 18, and
his application for benefits was not submitted by
him until November 3, subsection 59(1) of the
[Unemployment Insurance] Regulations [C.R.C.,
c. 1576] adopted pursuant to the Act was a bar to
any application of subsection 41(1) of the Act,
since the provision which it contains reads as
follows:
59. (I) Employment of a claimant that terminates more than
13 weeks prior to the time his claim for benefit is made is not
employment for the purposes of section 41 of the Act.
The Board refused to accept applicant's argu
ments, and this is the decision a quo.
Applicant maintained that the Board erred in its
interpretation of subsection 59(1) of the Regula
tions as well as in its [TRANSLATION] "interpreta-
tion of the concept of 'loss of employment' used in
section 41 of the Act". His argument was still that
over thirteen weeks had elapsed between the time
when he ceased working (June 17, 1982) and that
when he filed his application for benefits (Novem-
ber 3, 1982). Besides, he added he [TRANSLA-
TION] "could not lose his employment with David
Biscuits in November 1982, since he had been
unemployed since June 17, 1982 as the result of a
labour dispute", a statement which he said he
based directly on the wording of subsection (1) of
section 44 of the Act, which states:
44. (1) A claimant who has lost his employment by reason of
a stoppage of work attributable to a labour dispute at the
factory, workshop or other premises at which he was employed
is not entitled to receive benefit until
(a) the termination of the stoppage of work,
(b) he becomes bona fide employed elsewhere in the occupa
tion that he usually follows, or
(c) he has become regularly engaged in some other
occupation,
whichever event first occurs.
As may be seen, applicant challenges the validi
ty of the Board's decision by appealing to the
actual wording used in the provisions of the Act
and Regulations which, in his opinion, are at issue,
namely those of subsections 41(1) and 44(1) of the
Act and 59 (1) of the Regulations.
I think that subsection 59(1) of the Regulations
must quickly be eliminated from the discussion.
Applicant started with the proposition that, within
the meaning of the Act, he lost his employment on
June 17 and could not lose it again. If he is right,
he has no need to rely on any exceptional provision
to protect himself from the application of
section 41 of the Act. In fact, applicant weakens
his case by citing 59(1), since this leads to an
admission on his part that his being laid off was in
some way connected with his misconduct, which
would necessarily mean that he would have to use
a date subsequent to June 15, and this is in direct
contradiction with the starting point of his argu
ment, unless the consequences of his misconduct
are to be given retroactive effect, which is quite
inconceivable.
In fact, it is only the use of this very expression
"lost his employment" in sections 41 and 44 that
enables applicant to give his argument a strong
appearance of plausibility, by proclaiming that he
could not lose what he had already lost. How is it
that these provisions lend plausibility to applicant's
arguments? Because, of course, one is inclined to
assume that the expression "lost his employment"
is used in the same way in both subsections 41(1)
and 44(1). This is a normal reaction, but with
respect for those who take a different view, I feel it
must be revised, for I think the expression clearly
has not been used in the same way in the two
subsections.
Two points indicate that the words "lost his
employment" do not have the same meaning in
both provisions. The first is straightforward.
Section 41 expressly distinguishes someone who
has "lost his employment" from someone who has
"voluntarily left", thereby limiting the scope of the
phrase to a forced departure, a lay-off. Section 44
speaks of someone who loses his employment by
reason of a work stoppage attributable to a labour
dispute, covering both the case of a strike voted on
by employees and of a lock-out ordered by the
employer.
The second point is less easy, because it requires
some analysis of the provision, but in my opinion it
is still conclusive. The loss of employment involved
in section 41 is loss of employment which "quali-
fied" the insured to receive benefits, since the
section imposes a disqualification: the insured will
be denied benefits to which he would otherwise
have been entitled. As we know, in order to be
entitled to benefits, an insured must have had "an
interruption of earnings from employment" (sec-
tion 17 of the Act [as am. by S.C. 1978-79, c. 7, s.
4] ), an expression which refers essentially (para-
graph 2(1)(n)) to: "that interruption that occurs in
the earnings of an insured person when after a
period of employment with an employer the
insured person has a lay-off or separation from
that employment". In 1977 the words "or a reduc
tion in his hours of work for that employer result
ing in a prescribed reduction in earnings" (S.C.
1976-77, c. 54, s. 26(7)) were added to this basic
definition, but the principle that an interruption of
earnings, complete or partial, must be final in
order to qualify an insured remains the same. It
follows from this that the loss of employment
under section 41 is necessarily a final loss of
employment. On the other hand, the loss of
employment referred to in section 44 is essentially
a temporary loss of employment, since it results
strictly from a work stoppage attributable to a
labour dispute, and will end as such at the end of
the work stoppage at the latest. The section does
not speak of a disqualification but of the individual
being not entitled, because it concerns a loss which
in itself does not qualify him for benefits: the
employee does not cease to be employed by the
employer and the employer-employee relationship
has not been dissolved. Furthermore, while section
44 clearly states that one of the conditions of
eligibility for benefits is not being unemployed
because of a labour dispute, it should be noted that
it was adopted, judging from its structure, solely in
order to determine the extent of the disentitlement
period, that is, the period during which the insured
will be presumed to be unemployed because of a
labour dispute for the purposes of the Act.
Thus, the phrase "lost his employment" is not
used in the same sense in sections 44 and 41, and it
cannot be said, solely on the basis of the legisla
tion, that section 44 automatically excludes any
possible application of section 41. Why would this
be the case? What could rationally support the
argument that someone who has lost his employ
ment temporarily because of a labour dispute
could then no longer finally lose it at the end of the
dispute as a result of his own misconduct? Clearly,
there would not seem to be any reason. If an
employee who is on strike acts in such a way as to
authorize the employer to prohibit him from
returning to work, once the dispute is at an end,
why would he be exempt from the penalty imposed
on anyone who becomes unemployed, not despite
his best efforts, but on the contrary through his
own fault?
I cannot think that for the purposes of giving
effect to the Unemployment Insurance Act, 1971,
applicant and his four companions, who were
struck from the recall lists because of reprehen
sible behaviour, should be treated exactly the same
way as individuals who were not recalled to work
solely because there was no longer any work for
them to do. I consider that for both groups, the
end of the work stoppage was the starting point for
the final loss of employment that caused the inter
ruption of earnings on which the qualification for
benefits is based under the Act, and this is the
relevant time for the application, if appropriate, of
section 41.
Accordingly, I do not feel that the Board of
Referees erred in maintaining the six-week dis
qualification imposed on applicant under sections
41 and 43 of the Act. This application for review
made against their decision is without foundation
and I would dismiss it.
* * *
The following is the English version of the
reasons for judgment rendered by
HUGESSEN J.: This is an application in accord
ance with section 28, from a decision of a board of
referees established pursuant to the Unemploy
ment Insurance Act, 1971.
Applicant was employed by the company David
Biscuits. On June 19, 1982, the employer ordered
a lock-out, so that applicant's last working day was
June 17, 1982. The dispute dragged on and
employees only began returning to work gradually
between November 22 and 29, 1982. However,
applicant was not called back: the employer
refused to re-hire him because of certain allega
tions of criminal offences committed by him
against the employer and its property during the
dispute. He applied for unemployment insurance
benefits, but respondent Commission imposed on
him a six-week disqualification pursuant to section
41 and section 43 of the Act. His appeal to the
Board of Referees was dismissed: hence this
application in accordance with section 28 of the
Federal Court Act.
Subsection 41(1) of the Unemployment Insur
ance Act, 1971 reads as follows:
41. (1) A claimant is disqualified from receiving benefits
under this Part if he lost his employment by reason of his own
misconduct or if he voluntarily left his employment without just
cause. [My emphasis.]
This subsection, which by its very wording
imposes an exception to the general rule, must be
strictly interpreted.
With respect, it appears to me that the Commis
sion and the Board of Referees erred in law. In
their view, applicant lost his employment by
reason of his own misconduct. This loss allegedly
occurred in November, when his employer refused
to re-hire him. You cannot lose what you do not
have. At the time that employees returned to work
in November 1982, applicant had already lost his
employment within the meaning of the Act as a
result of the lock-out. This can be seen merely by
reading the introductory portion of subsection
44(1):
44. (1) A claimant who has lost his employment by reason of
a stoppage of work attributable to a labour dispute .... [My
emphasis.]
There is no doubt in the case at bar that there
was a labour dispute at David Biscuits from June
19, 1982 onwards. That accordingly is when appli
cant lost his employment; as he did not resume it
when the dispute was over, in November, he then
became eligible within the meaning of the Act,
without having to undergo a disqualification
period.
At the hearing, respondents cited subsection (2)
of section 41, which reads as follows:
41....
(2) For the purposes of this section, loss of employment
within the meaning of subsection (1) does not include loss of
employment on account of membership in, or lawful activity
connected with any association, organization or union of work
ers. [My emphasis.]
This subsection does not help in solving the case
at bar. The wording itself indicates that it only
applies to the loss of employment mentioned in
subsection (1) of the section, that is a loss of
employment by reason of the employee's miscon
duct. In other words, all that subsection 41(2)
provides is that participation in a lawful activity of
a union cannot constitute misconduct within the
meaning of the Act. In the case of applicant, he
lost his employment at the time of the lock-out in
June 1982, and there was no question of miscon
duct on his part at that time. Once it had been
lost, this employment was never recovered and
applicant could not lose it a second time, for
misconduct or any other cause.
I would accordingly allow the application, set
aside the decision of the Board of Referees and
refer the case back to it to be again decided on the
assumption that applicant did not lose his employ
ment by reason of his own misconduct.
PRATTE J.: I concur.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.