Terminated for Cause? Why You Should Still Apply for Employment Insurance

Coronavirus and EI – April 14, 2020 Update
Due to the coronavirus pandemic, changes have been made to the Employment Insurance rules for employees that are required to self-quarantine. Employees can make a claim for sickness benefits when medical reasons are preventing them from working.

Find out more about temporary and longer-term income support government assistance in connection with the COVID-19 emergency in this article Government Support for Employees during the COVID-19 Pandemic: Employment Insurance, Temporary and Long Term Support. We cover:

  • Employment Insurance;
  • EI Sickness Benefit;
  • Emergency Care Benefit;
  • Work Sharing;
  • Emergency Support Benefit;
  • Canada Emergency Wage Subsidy; and
  • Temporary Wage Subsidy.

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When an employee is terminated, the form that the employer provides classifies the termination as “with cause” or “without cause”. 

Without cause implies that the employee has been terminated through no fault of their own (for example, due to a lack of work or restructuring). When terminated “without cause”, you are automatically entitled to employment insurance (“EI”) benefits if you have accumulated the required number of hours of insurable employment. EI is designed to assist with bridging the gap until new employment is found.

On the other hand, if an employee has been terminated “with cause” collecting EI will be more difficult. The Employment Insurance Act states that an employee is ineligible for benefits if terminated for misconduct.  Decisions of federal courts and tribunals have defined this as a “reprehensible act or omission … made ‘wilfully’, i.e. consciously, deliberately or intentionally.” Wilful misconduct occurs when an employee has engaged in serious acts of wrongdoing and/or a breach of trust between the parties. 

Often employers incorrectly classify behaviour such as poor work performance as “cause,” and this complicates the process of obtaining EI. The employer may believe that it is firing the employee for cause if the worker is incompetent.  However, incompetence is not misconduct in the eyes of the law if the worker was doing his or her best. The worker is still eligible for EI in that case.

So when terminated for cause, why should you apply for EI?

Sometimes employers have a fundamental misunderstanding regarding terminations and employee’s rights. Therefore, allegations of cause from your employer may not be sufficient in accordance with the definition of Service Canada or the court system. When your Record of Employment has been marked as “M”, it is likely that Service Canada will require you to fill out a survey relating to your termination. That is your opportunity to provide reasons for your termination. Following which Service Canada will contact the employer to determine if your Record of Employment has been coded correctly. In the event your application is denied you should file a Request for Reconsideration within 30 days. This is another opportunity to outline why your termination does not amount to wilful misconduct.

Service Canada will obtain the reasons for the termination and the employee’s response to similar questions to evaluate the application. If Service Canada determines that the reasons provided do not support a termination for cause, then the employee will likely receive EI. Unfortunately, this does not mean that the employee will be reinstated however, it may support a claim for wrongful dismissal and a severance package.

Similar to EI, the employer must provide sufficient information to rely on cause allegations. Thus, employees in similar circumstances should obtain legal information prior to accepting the allegations put forth from the employer.  For example, employers often attempt to rely on poor performance after only one warning. However, this alone would likely not be accepted by an adjudicator.  Employees who feel that they have been wrongly denied EI may appeal to the Social Security Tribunal of Canada.

As stated above, these benefits can be very helpful in supplementing income until the employee can find new employment. If you have been terminated for cause and you are unsure about your rights, please contact Monkhouse Law today.

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