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Employer should not lie to Employer Insurance

Employers should be wary of fiddling with the truth in order to help a former employee receive Employment Insurance benefits.
 
People are not entitled to Employment Insurance if they resign their employment without just cause or are terminated as a result of willful misconduct. I have too often seen situations where employers were so relieved that a problem employee had finally resigned that they documented that resignation as a termination just to help the employee get EI benefits and hopefully be rid of the problem. But that piece of paper, whether it is a letter or the Record of Employment, which is a statutory declaration where lying is punishable at law, can come back to bite an employer in the butt.
 
Jack had been a car salesman for a dealership in New Brunswick for seven years. While Jack had always been an excellent salesman, meeting or beating targets constantly, he also had a big attitude.
 
Jack was forever telling the owner of the small dealership that he didn’t like the owner’s management style, didn’t like the fact that the owner himself sold cars and took away from his potential sales and found almost weekly irritants in the way things were run.
 
In December of 1996, just before he went on vacation, Jack met with the owner and repeated all these complaints. He also mentioned that the week before he had run into a customer of the dealership’s in a mall that had irritated him. He confessed how he wanted to “take his head off and get rid of it” and said the mall wasn’t big enough for both of them.
 
Other employees had been complaining about Jack’s volatile behaviour for years but the owner had always put up with it because of Jack’s great sales results. The day after Christmas vacations were over, the owner met with Jack again and told Jack that he had been thinking about Jack’s complaints over the holidays. He told Jack clearly that he was not going to meet his demands with respect to how the business was run and he would not stop selling cars himself. He told Jack that he was not going to change his management style. He told Jack that if he wanted to take a few days off to think about his plans and future he was free to.
 
Jack understood from those comments that he was no longer welcome by the dealership and it was time for him to leave. He came back a few days later, returned his company vehicle and picked up his personal belongings. A few weeks later, he phoned up the owner and asked him to give him a letter of dismissal to forward to Services Canada so that he could get employment insurance benefits. The owner was at first reluctant but eventually complied.
 
After having obtained the letter of dismissal, Jack promptly sued his employer for wrongful dismissal.
 
On reading the decision in this case, there really was no debate about what happened in that last meeting. Jack was not terminated. Jack did not come anywhere close to being terminated.
 
Obviously the judge liked the owner and had some sympathy for him but he appeared to be caught in a tight spot. If he found that Jack quit, he would also be finding that the owner had misled the Employment Insurance people and contradict what the owner had said in a letter he signed. So instead, the judge found that Jack had in fact been terminated but found that there was just cause for his termination and he was not entitled to pay in lieu of notice. The culminating incident, the judge decided, was the owner becoming aware of Jack’s irritation and anger at the client he met at the mall. Let’s be clear, Jack didn’t speak to the client or say anything to him. He was just telling the owner how he felt about the client.
 
This has got to be the first case in Canadian employment law where telling your boss how you felt about a person as opposed to actually doing something inappropriate, contributed to just cause for your termination without notice. After seven years of excellent performance, it was not anything close to just cause.
 
At the end of the day, justice was done. Jack lost his case although he never should have received Employment Insurance benefits.
 
But as an employment lawyer who likes to believe that the law is somewhat consistent and sensible, this decision makes me shiver. The decision of Jack’s boss to write that letter for Employment Insurance purposes cost him legal fees in defending the action and time and anxiety that he will never get back. When the Employment Insurance people call an employer to get an explanation for an employee’s departure, they have two choices; say nothing or tell the truth. Despite what any Employment Insurance rep may say or imply, there is no legal obligation for an employer to answer any questions whatsoever. If they do, however, they should be honest.
 
The employer has no economic interest in whether or not the employee receives Employment Insurance benefits.   The Employment Insurance Act states that in the absence of any evidence from the employer, they are to give the benefit of the doubt to the employee. Silence can be golden for the employer. Calling a resignation a termination is beyond the pale and is not only unethical and illegal, it can be quite costly.
 
As published in the Hamilton Spectator, November 16, 2009
 
Ed Canning
Ed Canning
P: 905.572.5809
ecanning@rossmcbride.com