Federal Court Decision #A-1458-84 - TANGUAY, MAURICE, ET AL v. COMMISSION, DENAULT

JUDGMENT OF THE FEDERAL COURT OF APPEAL

Date:
October 2, 1985

Docket:
A-1458-84

Umpire's Decision:
CUB 9653

"TRANSLATION"

CORAM :

PRATTE
HUGESSEN
MacGUIGAN

BETWEEN :

TANGUAY, Maurice et al,
(see schedule)

applicants,

v.

UNEMPLOYMENT INSURANCE COMMISSION,

-and-

respondent.

DENAUTL, JFC, in his
capacity as an Umpire,

mis-en-cause.

Hearing held at Québec on September 30 and October 2, 1985.

REASONS FOR JUDGMENT
(Delivered from the Bench at Québec
on Wednesday, October 2, 1985)

PRATTE J:

This appeal based on s. 28 of the Federal Court Act is from a decision of an umpire acting pursuant to the Unemployment Insurance Act, 1971. By that decision the umpire, allowing an appeal by the respondent Commission, reversed the decision of a board of referees and restored the decision of the Commission in the first instance that the applicants had left their employment without just cause within the meaning of s. 41(1) of the Unemployment Insurance Act, 1971 ¹

It was common ground that the applicants had all deliberately left their employment on grounds identical to those stated by the applicant Tanguay in a statement signed on October 30, 1983. In that statement to the Commission, Tanguay said he had left his employment for the following reasons:

"1. he wanted to turn over his place to someone younger;

2. after working in the mines for forty years, his health was not as good and the work was becoming more difficult;

3. it was hard for him to keep to an irregular work schedule;

4. his employer often had work stop-pages;

5. the fact of leaving his employment entitled him to receive a lump sum of $15,000 and enable him to claim labour adjustment benefits."

Based on this information, the Commission found that the applicants had left their employment without just cause and were therefore disqualified from receiving benefits for two weeks.

The Board of Referees reversed this decision on grounds which it stated as follows:

"In fact, as explained at the hearing, as the result of an agreement between the employer and the union and following pressure from employee who were junior to the claimant either in age or experience, it was decided on both sides that the latter would consider early retirement because of this pressure.

It can easily be seen that as the result of the emergence of new facts in society, social pressures because of the economic climate, people are much junior in age or employment would exert pressure to take over from those who are close to retirement.

As a result of all these circumstances, and earlier and similar decisions, it can be readily be concluded that the claimant did not leave his employment with his employer without just cause."

This is a decision of the board of referees that was quashed by the umpire.

Counsel for the applicants submitted only one argument in support of this appeal. He maintained that the question of whether the applicants had left their employment without just cause was purely one of fact which the umpire, in view of the limits placed on his jurisdiction by s. 95 of the Unemployment Insurance Act, 1971, could not decide unless the board of referees had "based its decision or order on erroneous finding of fact it made in a perverse or capricious manner or without regard for the material before it", and that is not the case here.

It is true that it is sometimes said that the question of whether an employee was justified in leaving his employment is one of fact. However, it is clear that where the question is as to the definition that must be given to the words "just cause" in s. 41(1), this is purely a question of law. It follows that if a decision is made which cannot be reconciled with this definition, the decision is vitiated by an error of law. ²

In the case at bar it seems clear that the board of referees made an error of law in deciding that the applicants had not left their employment without just cause.

The board's decision refers to the "social pressure" to which the applicants gave way. However, the record does not indicate that the applicants were ever the victims of harassment by more junior employees who wanted to see them give up their employment. The phrase "social pressure" used by the board thus refers simply to the wish among the junior employees that the older ones would give way to them.

This being the case, it seems clear that the board decided as it did because it was of the view that the applicants had acted reasonably in leaving their employment. This indicates a complete misunderstanding of the words "just cause" in s. 41(1). In the context in which they are used these words are not synonymous with "reasons" or "motive". An employee who has won a lottery or inherited a fortune may have an excellent reason for leaving his employment: he does not thereby have just cause within the meaning of s. 41(1). This subsection is an important provision in an Act which creates a system of insurance against unemployment, and its language must be interpreted in accordance with the duty that ordinarily applies to any insured, not to deliberately cause the risk to occur. To be more precise, I would say that an employee who has, voluntarily left his employment and has not found another has deliberately placed himself in a situation which enables him to compel third parties to pay him unemployment insurance benefits. He is only justified in acting in this way if, at the time he left, circumstances existed which excused him for thus taking the risk of causing others to bear the burden of his unemployment. Sometimes an employee may legitimately have believed at the time that he left his employment that he would not be unemployed: this will suffice to excuse his conduct. In other cases, the employee will have left knowing that he could not find other employment: even then his conduct will be excusable in certain circumstances. One might think, for example, of the case of an employee whose spouse is ill and cannot withstand the climate of the area he works in, and who has to move elsewhere because of this. What seems clear is that the fact that an employee may have thought that he had or would have enough money to live on without working is not a circumstance which justifies him in putting himself in a position where he risks having to go back on unemployment. I would say the same for an employee who leaves his employment for the purpose of gaining some monetary advantage.

In my view, s. 41(1) of the Unemployment Insurance Act, 1971 must be interpreted in the same way as the English Court of Appeal interpreted s. 20(1)(a) of the Social Security Act, 1975 in Crewe and others v Social Security Commissioner, ([1982]) 2 All E.R. 745. That case raised exactly the same problem as the one at bar, and I can do no better than to cite part of the reasons given by Lord Denning and by Donaldson L.J., in support of their decision. After citing several decisions of the "Social Security Commissioners", Lord Denning concluded:

"That line of approach explains, I think, all the previous decisions. They warrant the following propositions. (1) When a man voluntarily leaves his employment, he is disqualified from receiving unemployment benefit for six weeks, unless he proves (and the burden is on him to prove) that he had "just cause" for leaving his employment. (2) It is not sufficient for him to prove that he was quite reasonable in leaving his employment. Reasonableness may be "good cause", but it is not necessarily "just cause". (3) "Without just cause" means without any just cause for throwing on to the unemployment fund the payment of unemployment benefit. If he voluntarily retires on pension, he is getting a substantial financial benefit for himself, and it is not fair or just to the unemployment fund that he should also get unemployment benefit for the six weeks."

Donaldson, L.J., said the following:

"In my judgment it is crucial to reaching a decision on this appeal to remember that this is an insurance scheme, however, it may be funded, and that it is an insurance against unemployment. It is of the essence of insurance that the assured shall not deliberately create or increase the risk. Prima facie an employee has not done so if he loses his employment involuntarily, that is to say by the action of the employer in terminating the contract of employment. But this is subject to one obvious exception, namely that the employer was moved to take this action through the misconduct of the employee. This is reflected in the first part of s. 20(1)(a).

The converse is true where the employee voluntarily leaves his employment. The risk that he will be unemployed is prima facie that of the employee's own creation. But this presumption is rebuttable. There may be circumstances which leave him no reasonable alternative to leaving his employment. Thus his wife or family may have an overriding need for his attendance and the place of his employment may be such that he cannot provide it. Again, although the risk of unemployment may arise from his voluntary act in terminating his employment, he may have taken such steps to minimise that risk, by obtaining a promise of immediate fresh employment or by taking steps which may reasonably be expected to lead to such employment, as to make it right and reasonable to leave his employment. "Just cause" means no more than "right" or "right and reasonable" in the context of the risk of unemployment. Any change of employment is likely to involve some risk of temporary or interim unemployment and the question is whether the voluntary conduct of the claimant has been such as to create an unreasonable risk of such unemployment. If it has, the claimant has acted without just cause."

For these reasons, I would dismiss the application.

Louis Pratte
JFCC

¹ Section 41(1) reads as follows:

"Sec. 41(1) A claimant is disqualified from receiving benefits under this Part if he lost his employment by reason of his own misconduct or if he voluntarily left his employment without just cause."

² However, as the definition attributable to the words "just cause" 2 However, as the definition attributable to the words in s. 4(1) is not so exact that it is always possible to say with certainty whether the employee has left his employment without just cause, cases may arise which may be decided one way or the other without doing injury to the legal concept of "just cause". The question is then said to be one of fact: it would be more correct to say that is is a matter of opinion."

SCHEDULE