The Downfalls of EI and Maternity Leaves
In Ontario, women who have the bad luck to be terminated from their employment just before they start or during their maternity leave are unwillingly increasing the surplus of money in the Employment Insurance bank. Call it an involuntary gift and an undeserved one at that.
The Employment Insurance Act states that if a person receives a payment from an employer as a result of their loss of employment and that payment is for a period during which the employee collected Employment Insurance, the employee has to pay the government back the money it received.
Let’s imagine that you’ve worked for a company for 14 years having started just after high school.
You are 8-months pregnant and you arrive at work one day and a staff meeting is held. It is announced that 4 weeks later the company will be shutting down and everyone is terminated.
You were in a lower management position and the company is fair about the severance package. You work the 4 weeks until shutdown and then you are given 11 months pay in lieu of notice.
A week later you give birth and soon after, apply for your Employment Insurance. You know that you are entitled to up to 50 weeks of E.I. for your maternity and parental leave. Somewhere in the questionnaire you fill out, it is disclosed to Employment Insurance that you coincidentally were terminated a week before the birth and received 11 months pay in lieu of notice.
Somebody from E.I. will contact you and apologetically explain to you that you are only going to be eligible for 2 weeks of the Employment Insurance at the very end of your leave. Since there is a 2-week waiting period, that only will start to run once you’ve used up your 11 months pay in lieu of notice. There are 2 more weeks before the end of the 52-week period in which you can collect E.I.
You can protest the injustice of the situation until the cows come home but the person on the other end of the line has no ability to give you the full entitlement. The Act says what the Act says and they are just the people that administer it.
You are receiving pay in lieu of notice for that 11-month period and you cannot receive leave benefits. This is the case even though you’ve never collected Employment Insurance in your life and you’ve been filling the government’s coffers with your premium deductions for 14 years without fail.
All of the above would also be true if the plant shut down their operations during your leave. You would have to disclose the pay in lieu of notice and the government would stop sending you E.I. cheques until your pay in lieu of notice ran out.
If the plant closed down during your leave and you lived in British Columbia this would not be a problem. The British Columbia Employment Standards Act has a provision that says that you cannot terminate somebody during their maternity leave. As a result, any termination is deemed to happen after the leave is over and you are therefore not receiving any payment that overlaps with the period during which you were receiving E.I. Unfortunately, Ontario doesn’t have such a provision. Of course, even if you lived in B.C., if you were terminated before the leave began, you would be no better off since the provision above only deals with terminations during the leave.
All of this would apply to a man taking a parental leave. Men can get caught in this same catch-22.
There is one thing some people do to avoid the draconian consequences of being terminated before or during their leave. At the moment they are told of the termination and before they sign anything, they ask, or beg if they have to, the employer to agree that their termination will be effective at the end of the leave and the pay in lieu of notice forwarded then. It is unfortunate that people are put in the position where they feel the need to request this somewhat artificial and perhaps illegal arrangement.
Of course, the better result would be to talk to your local member of parliament and get them to add a provision to the Act which simply indicates that pay in lieu of notice is not deemed to be earnings if it is for a period that overlaps with a maternity or parental leave. After that, call your member of provincial parliament and ask them to add a provision to the Employment Standards Act indicating that employees cannot be terminated during maternity leave or parental leave.
Finally, I should note that if you can’t fix this problem, you will be eligible for regular E.I. benefits after your pay in lieu of notice runs out and your maternity leave period is over if you have not been able to find work. The problem, of course, is that those regular benefits usually run for far less than the 50 weeks maternity and parental leave benefits you could have received. Which would you rather have? 50 weeks of E.I. and then your 11 months pay in lieu of notice or 11 months pay in lieu of notice and somewhere between, usually, 30 to 40 weeks of E.I. depending on where you live?
If you are lucky enough to find new employment when your leave is over but you only got 2 weeks of E.I. during that year off, the government will have saved approximately $21,000 if you would have collected at the maximum rate. I shouldn’t say saved $21,000. I should say they will have kept $21,000 of your money
As published in The Hamilton Spectator, February 2, 2008.