Difference between revisions of "Penalties, Violations, and Offences with Employment Insurance (8:VIII)"

{{REVIEWED LSLAP | date= August 15, 2022}}

The court applies a subjective knowledge test to decide whether the claimant intended to make false statements to the commission. Following ''Canada v Gates'' (1995), 125 D.L.R. (4th) 348, the Court in ''David Moretto v AG Canada'', [1998] F.C.J. No. 438, confirmed that even if a claimant’s statement is found to be false, no penalty should be levied unless the finder of fact is satisfied that the claimant “subjectively knew” the statement was false. It is not enough to say that they should have known, or should have asked someone, or that a reasonable person would have known.

Alternatively, a claimant could be prosecuted criminally (summarily). Section 135(3) of the ''EI Act'' sets the minimum fine at $200 for fraud relating to a person’s employment and Record of Employment. The maximum fine is $5,000 and where appropriate, twice the amount of benefits falsely obtained, or the fine plus imprisonment for a term of up to six months (s 135(3)). The Commission need only write a decision letter to the claimant to impose a very large penalty, which is much simpler than proceeding with a court case, and the standard of proof is much higher in a criminal court than for the Commission

:'''NOTE:''' The Commission cannot impose a penalty under ss 38 or 39 if 36 months have elapsed since the act or omission. For a case that discusses when time limits start to run see ''Attorney General of Canada v Kos'', 2005 FCA 319. The key issue here was whether file notes by an insurance officer constituted a “decision” that triggered the time limit. The court ruled that it did not, in part because the notes were not communicated to the claimant.

The SST has jurisdiction over the amount of the penalty assigned. While the amount of the penalty can also be appealed, a penalty cannot be reduced simply because the SST considers it a bit too high. However, they can reduce a penalty if the decision is unreasonable, e.g. where Commission has erred by ignoring relevant circumstances such as the claimant's ability to pay, or health problems, or where it took irrelevant circumstances into account. It is not necessary to prove that the Commission was unfair, just that it was not made aware ofall the relevant circumstances.

Section 7.1 of the ''EI Act'' outlines the increased qualifying requirements for claimants who are found to have committed fraud after June 30, 1996. These requirements increase depending on how the violation is classified (minor, serious, or very serious). If the Commission  chooses to simply issue a warning letter (possibly accompanied by a fine), then as per s 7.1(5), no such classification is made.

Section 7.1(1) provides that an insured claimant must have a greater number of hours to qualify if that person has accumulated one or more violations in the 260 weeks before making their claim. This adds a significant barrier to receiving benefits. The increased hours required to qualify after a violation are outlined in the '''s 7.1(1) Table''', on the following page:  

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*one or more penalties imposed under ss 38, 39, 41.1 or 65.1 as a result of acts or omissions mentioned in ss 38, 39 or 65.1;  

*a finding of guilt for an offence under ss 135 or 136; or

*a finding of guilt of one or more offences under the ''Criminal Code'' as a result of acts or omissions relating to the application of the ''EI Act''.

:a) Minor violation: if the value of the violation is less than $1,000;  

:b) Serious violation: if the value of the violation is less than $5,000 (but more than $1,000), it is a serious violation;  

:c) Very serious violation: if the value of the violation is over $5,000, it is a very serious violation.  

Under s 7.1(6), the value of a violation for purposes of classification is the amount of overpayment of benefits resulting from acts on which the violation is based. If the claimant is disqualified or disentitled, the value is the total amount of benefits they would have collected, divided by two.