An adjudicator considering allegations of unjust dismissal under the Canada Labour Code recently ruled that an employer was prohibited from asserting dismissal for misconduct since the issue had already been decided by an employment insurance officer. The officer had awarded employment insurance benefits to the employee. The decision in Alexander v Huron Commodities Inc(1) reminds employers to proceed with caution when communicating with employment insurance officers after a termination. They should also consider the potential ramifications of not appealing an officer's decision.
On 24 January 2018 the complainant's employment was terminated. The reason for dismissal was not specified in the termination letter. On 1 February 2018 the employee received a record of employment. The stated reason for issuance of the record of employment was dismissal. The employee then applied for employment insurance benefits.
In March 2018 the officer assigned to the claim contacted both parties to determine the employee's eligibility for employment insurance benefits. During the telephone conversation, the employer told the officer that it had dismissed the employee for several reasons, including the fact that fuel was missing from the company truck that he had used. The employer never investigated or pursued this matter. Following a conversation with the employee, the officer determined that the employee had not been terminated for misconduct and was therefore entitled to receive employment insurance benefits.
On 14 March 2018 the Canada Employment Insurance Commission sent the employer a letter communicating the award of employment insurance benefits because the dismissal had not been 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 had been dismissed for his misconduct or, alternatively, 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:
- the same question was being decided;
- the prior decision was final; and
- the parties were the same in both proceedings.(2)
The adjudicator applied the test to the facts and found that all three requirements had been met:
- The question of the complainant's misconduct before the adjudicator was the same as the question that had been decided by the employment insurance officer. It was fundamental to the decision to award employment insurance benefits.
- The 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 employment insurance 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.(3) In making this determination, the adjudicator considered the following factors to be of particular relevance:
- The termination letter mentioned no misconduct.
- The evidence suggested that the employer did not investigate the issue of missing fuel.
- The commission had considerable experience in deciding whether misconduct was present.
- 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 employment insurance officer.
Both federally and provincially regulated employers should exercise caution when contacted by an employment insurance officer, especially when misconduct may be relevant. In such situations, employers should seek legal advice to evaluate how best to respond. Most importantly, employers should not ignore an employment insurance officer's call. Ignoring such calls may potentially prevent an employer from asserting cause in future wrongful or unjust dismissal proceedings. This may apply if an employer – after being advised of the employment insurance officer's decision to award benefits – does not provide additional information or dispute the commission's findings.
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