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    Disclaimer:
    *This asterisk denotes recent case law.

    Questions to Answer



    1. Was the statement false or misleading?
    2. Was it made knowingly?
    3. Did the Commission exercise its discretion properly with respect to the penalty amount? If not, what would the appropriate amount be and why (mitigating circumstances)?
    4. Time limit met to impose penalty?


    References


     
    Act: sections 7.1 Employment Insurance Act, 38 Employment Insurance Act, 39 Employment Insurance Act, 40 Employment Insurance Act, 41 Employment Insurance Act, 41.1 Employment Insurance Act, subsection 52(5) Employment Insurance Act. Repayment: sections 42 Employment Insurance Act, 46.1 Employment Insurance Act, 47 Employment Insurance Act
    Regulations: section 56 Employment Insurance Regulations 

    Legal test


     
    Violations:


    Onus of proof


     
    1. Commission must show that the claimant, or other person, knowingly made a false or misleading statement or representation.
    2. Claimant, or other person, must provide a reasonable explanation to show that the statement was not knowingly made.


    Key Case Law


     
    PENALTIES 

    Was the statement false or misleading: 

    GATES A-600-94 Judgment Of The Federal Court Of Appeal, McDONALD A-897-90 Judgment Of The Federal Court Of Appeal, ANTONIO A-743-97 Judgment Of The Federal Court Of Appeal: The onus of proof that rests on the Commission is to establish on a balance of probabilities, not beyond a reasonable doubt, that the claimant made a statement or representation that he or she knew to be false or misleading.

    LAVOIE A-83-04 Judgment Of The Federal Court Of Appeal: Evidence presented by the Commission concerning Teledec reporting cards is acceptable, CAVERLY A-211-01 Judgment Of The Federal Court Of Appeal:  Commission must provide evidence of the actual Teledec reporting system questions asked and the answers given to discharge the onus of proof.

    Was the false or misleading statement made knowingly:

    FTERGIOTIS A-526-05 Judgment Of The Federal Court Of Appeal: Subjective test applied. DEMERS A-171-98 Judgment Of The Federal Court Of AppealANTONIO A-743-97 Judgment Of The Federal Court Of Appeal, MORETTO A-667-96 Judgment Of The Federal Court Of AppealGRAHAM A-784-95 Judgment Of The Federal Court Of Appeal, GATES A-600-94 Judgment Of The Federal Court Of Appeal: MOOTOO A-438-02 Judgment Of The Federal Court Of Appeal: It is not enough for the representation to be false or misleading, for a penalty to apply it must be made by the claimant with the knowledge that it is false or misleading.

    CHILDS A-418-97 Judgment Of The Federal Court Of Appeal: In assessing the claimant's credibility the Board misapplied Gates. It is not sufficient for a Board of Referees to simply state a claimant's credibility is "in question".

    PURCELL A-694-94 Judgment Of The Federal Court Of Appeal: The Board possesses the jurisdiction to assess, de novo, whether a claimant has knowingly made a false or misleading statement. It is the role of the Board to determine whether the claimant subjectively knew that he or she was making a false or misleading statement.

    MIAZGA A-698-95 Judgment Of The Federal Court Of Appeal: Upholds the Umpire's decision in CUB 29518. The Commission proved the statements were false. The burden shifts to the claimant to demonstrate that they were not made knowingly - to provide a reasonable explanation to this end. None was provided. Counsel stated the claimant was acting on the advice of an accountant. If so, the Umpire concluded that the advice was given with the knowledge of the claimant that it was for the purpose of attempting to avoid the requirements of the UI Act. The Umpire was not convinced that the claimant's statements on his cards were not made knowingly.

    ZYSMAN A-27-94 Judgment Of The Federal Court Of Appeal: The Board and the Umpire were aware of the necessity of knowledge. Their reasons indicate that they simply inferred from the facts that the applicant could not honestly believe that he was not working all those weeks while he was busy setting up his business.

    Did the Commission exercise its discretionary power to impose a penalty judicially: 

    COU LAI A-525-97 Judgment Of The Federal Court Of Appeal : LONGSWORTH (WALLIS) A-769-96 Judgment Of The Federal Court Of Appeal: One must first conclude that the Commission exercised its discretionary power in a non-judicial manner when it imposed a penalty upon the claimant. In this instance, not only did the Umpire neglect to indicate any factor the Commission ought to have considered when it imposed the penalty, but he specifically found that the Board had made no reversible error. In fact, he merely substituted his own opinion for that of the Commission and the Board of Referees. That he could not do.

    UPPAL  A-341-08 Jugement de la cour d'appel fédérale, TONG A-412-02 Judgment Of The Federal Court Of Appeal, McLEAN A-549-99 Judgment Of The Federal Court Of Appeal, RUMBOLT A-387-99 Judgment Of The Federal Court Of Appeal, DUNHAM A-708-95 Judgment Of The Federal Court Of Appeal: As long as the Commission exercises its discretion judicially, that is, takes into account all relevant considerations and ignores irrelevant factors, its decisions are unassailable. The Board of Referees is not limited to the facts that were before the Commission. In assessing the manner in which the discretion was exercised, it may have regard to facts that come to its own attention.

    MORIN A-453-95 Judgment Of The Federal Court Of Appeal: If the Commission fails to exercise its discretion judicially, the Board and the Umpire may exercise that discretion itself and vary the amount of the penalty.

    GAGNON A-52-04 Judgment Of The Federal Court Of Appeal:There was no new fact to warrant the intervention of the Board of Referees, as there must be, and the Board could not substitute its opinion for that of the Commission. HUDON A-34-03 Judgment Of The Federal Court Of Appeal: There was no new fact brought before the Board of Referees that would warrant its intervention. Under these circumstances, it did not have the authority to substitute its opinion for that of the Commission.

    DEEN A-45-03 Judgment Of The Federal Court Of Appeal:The Commission is entitled to test apparent discrepancies by seeking timely information from claimants; and it should and does afford claimants a timely opportunity to present relevant information, including information relevant to the question of penalty. In the absence of a response, the Commission is entitled to make its penalty assessment on the existing record.

    SCHEMBRI A-578-02 Judgment Of The Federal Court Of Appeal: The Umpire was correct to conclude that financial difficulties at the time that he misrepresented his earnings do not exonerate him from any penalty for knowingly misrepresenting his income. Assessing an appropriate penalty is very much a matter for the exercise of the Commission's discretion. The Commission may not accept that payment would cause the claimant real hardship, or it may conclude that, in all the circumstances, a reduced penalty would be an insufficient deterrent.

    GAULEY A-353-01 Judgment Of The Federal Court Of Appeal: A penalty imposed by the Commission that is reduced to zero by the Board of Referees amounts to no penalty at all and, in realty, is a usurpation of power that resides exclusively in the Commission under subsection 38(1). Where, however, mitigating circumstances are shown to the Board of Referees, the Board may reduce the quantum of the penalty to an amount that it considers commensurate with those circumstances.

    GRAY A-46-03 Judgment Of The Federal Court Of Appeal: HUDON A-34-03 Judgment Of The Federal Court Of Appeal, McLEAN A-549-99 Judgment Of The Federal Court Of Appeal: PAWCHUK  A-504-06 Judgment Of The Federal Court Of Appeal : MORIN A-681-96 Judgment Of The Federal Court Of Appeal All factors existing before or at the time a penalty is imposed that may affect its appropriateness are relevant to determining its amount.

    Violations


    GILL A-483-09 Judgment Of The Federal Court Of Appeal: The Court concluded that the Commission does have discretion to determine whether or not to issue a notice of violation. A notice of violation is not mandatory or automatic under subsection 7.1(4). The Court also corrected its previous decisions in Geoffroy Judgment Of The Federal Court Of Appeal, Limosi Judgment Of The Federal Court Of Appeal, Piovesan Judgment Of The Federal Court Of Appeal, Kaur Judgment Of The Federal Court Of Appeal and Patry Judgment Of The Federal Court Of Appeal, they should not be followed on this point of law and concludes that the Board of Referees do have the jurisdiction to set aside the notice of violation.

    MAXWELL  A-463-05 Judgment Of The Federal Court Of Appeal, PIOVESAN A-559-05 Judgment Of The Federal Court Of Appeal: The issuance of a warning is a “penalty” for the purposes of the invoking of a violation pursuant to paragraph 7.1(4)(a) of the EI Act   Employment Insurance Act.

    SAVARD A-546-05 Judgment Of The Federal Court Of Appeal: The increase in insured hours provided for in subsection 7.1(1) is based on the claimant's liability for the violation and not on the knowledge of having a notice of violation.

    PETRYNA A-773-00 Judgment Of The Federal Court Of Appeal: The EI Act has no provision to suspend or stay a violation pending the final disposition of any outstanding appeal.

    LINGAM A-396-04 Judgment Of The Federal Court Of Appeal, SOMMERVILLE A-336-04 Judgment Of The Federal Court Of Appeal: The classification of a violation is based on the amount of the overpayment.



    2012-02-13