An adjudicator considering allegations of unjust dismissal under the Canada Labour Code (the "Code"), recently ruled that an employer was prohibited from asserting dismissal for misconduct since the issue had already been decided by an EI officer. The officer had awarded Employment Insurance (EI) benefits to the employee. The decision in Alexander v Huron Commodities Inc. reminds employers to press "hold" and proceed with caution when communicating with EI officers after a termination. One should also consider the potential ramifications of not appealing an EI officer's decision.
On January 24, 2018, the complainant's employment was terminated. The reason for dismissal was not specified in the termination letter. On February 1, 2018, the employee received a Record of Employment (ROE). The stated reason for issuance of the ROE was "dismissal". The employee then applied for EI benefits.
In March 2018, the EI officer assigned to the claim contacted both parties to determine the employee's eligibility for EI benefits. During the telephone conversation, the employer told the EI officer that it dismissed the employee for several reasons. These included the fact that fuel was missing from the company truck he used. But the employer had never investigated or pursued the matter. Following a conversation with the employee, the EI officer determined that the employee was not terminated for misconduct and was therefore entitled to receive EI benefits.
On March 14, 2018, the Canada Employment Insurance Commission (the "Commission") sent the employer a letter communicating the award of EI benefits for reasons that the dismissal was not for misconduct. It said that the employer could either provide additional information, which might vary the Commission's decision, or request a reconsideration. The employer did neither.
The employee filed an unjust dismissal complaint under section 240 of the Code. In response to the complaint, the employer asserted that the employee was dismissed for his misconduct or, in the alternative, his inability to adequately perform his duties.
In a preliminary hearing, the adjudicator ruled that the legal principle of issue estoppel applied. This legal principle is intended to ensure that the same issue is not re-litigated. This precluded the employer from arguing that the complainant had been dismissed for misconduct. In arriving at this conclusion, the adjudicator relied on the three-part test for applying issue estoppel: (1) the same question has been decided; (2) the prior decision was final; and, (3) the parties are the same in both proceedings.
The adjudicator applied the test to the facts and found that all three requirements were met:
- The question of misconduct of the complainant before the adjudicator was the same as the question that was decided by the EI officer. It was fundamental to the decision to award EI benefits.
- The EI officer had the authority to make the decision of "no misconduct". It was a quasi-judicial decision; and it was final.
- The parties in the EI matter were the same as those before the adjudicator.
Relying on his broad discretion to apply the principle of issue estoppel, the adjudicator concluded that doing so would not result in an injustice to the employer. In making this determination, the adjudicator considered the following factors to be of particular relevance:
- the termination letter did not mention any misconduct;
- the evidence suggested that the employer did not look into the issue of missing fuel;
- the Commission had considerable experience in deciding whether misconduct was present; and,
- the employer did not take any action to challenge the Commission's decision.
However, the adjudicator retained jurisdiction to deal with the employer's alternative claim that the dismissal was due to the complainant's poor performance. That issue had not been decided by the EI officer.
Takeaways for Employers
Both federally and provincially-regulated employers should exercise caution when contacted by an EI officer especially when misconduct may be relevant. Employers should seek legal advice in such situations, to evaluate how best to respond. Most importantly, employers should not ignore a call from an EI officer. Ignoring such calls may potentially prevent an employer from asserting cause in future wrongful or unjust dismissal proceedings. This may especially apply if an employer - after being advised of the EI officer's decision to award benefits - does not provide additional information or does not dispute the Commission's findings.