CUB 37662

IN THE MATTER OF the Unemployment Insurance Act,

R.S.C. 1985, c. U-1

IN THE MATTER OF a claim for benefit by

IN THE MATTER OF an appeal by the

Claimant from a decision of the Board of Referees given on November 2, 1995 at Scarborough, Ontario

The Commission ruled that Mr. Klunowski was disqualified from receiving benefits because he had voluntarily left his employment without just cause. The Board of Referees dismissed his appeal and he appeals to the Umpire.

Mr. Klunowski had been employed by Oshawa Foods for several years on a part time basis. When he left his job he was a meat clerk at West Side Food City in Etobicoke. His hourly wage was $14.30. The employer was reducing staff and expenses. All part time employees whose wages exceeded $10.75 per hour had their pay reduced to that rate. (Mr. Klunowski said it was $10.50). In Mr. Klunowski's case that was a reduction of 24.8 per cent. He accepted a voluntary leaving/separation package offered by the employer including severance pay of $7,183.56.

The Commission concluded, and there is no evidence in the record to the contrary, that the package offered by the employer was not a workforce reduction process within the meaning of section 56.1 of the Unemployment Insurance Regulations.

The record is not clear as to when the wage reduction was effective. It includes an unsigned, undated note prepared by an insurance officer which includes a statement that

In its representations to the Board of Referees the Commission said the bridging bonus was payable for five months from October 24, 1995 (sic). In its representations to the Umpire the Commission says:

The claimant was given the option of accepting the severance package or continuing to work for an additional five months at his regular salary due to a bridging bonus based on the reduced hourly rate of $10.75 plus the difference of the previous wage rate of $14.30 from the ratification date of October 24, 1994.

The Board finds that the appellant acted too hastily. He should have continued in his part time employment until assured of other work. While the Board has sympathy for the appellant it does not find that he had just cause for voluntarily leaving. The Board noted the appellant's contention that subsection 28(4)(g) of the Unemployment Insurance Act covers his situation. In the view of the Board it does not since the wage reduction was throughout.

Mr. Klunowski, in his representations to the Umpire, says he had 60 days to decide whether to accept the package and, because he was working, it was virtually impossible for him to seek other employment during that time. He, and the Board of Referees, might also have noted that he was also a student until May 1995.

Subsection 28(4) of the Act says that just cause for voluntarily leaving one's employment exists when, having regard to all the circumstances including any of several enumerated circumstances, the claimant had no reasonable alternative to leaving his employment. One of the enumerated circumstances, and the one on which Mr. Klunowski relies, is "significant modification of terms and conditions respecting wages or salary".

During Mr. Klunowski's last 20 weeks of employment he earned $7,119 or an average of $356 weekly. Reduced by 24.8% his earnings would translate to $ 270.56 weekly or $14,069.00 annually.

The word "significant" in the context of subsection 28(4) means "noteworthy, of considerable amount or effect or importance, not insignificant or negligible" (Oxford Concise Dictionary).

The Board and the Commission seem to have been influenced by the fact that all part time employees receiving more than $10.75 per hour were being reduced to that level of income and that the union representing the employees had accepted the decrease. A claimant is entitled to be treated as an individual and it is the claimant's circumstances, not those of his fellow employees, that are to be examined. If an employee's wage reduction is significant, it does not become insignificant because it applies to others or because it is accepted by a union (which may have had to balance the interests of both part- and full-time employees).

The Board's statement that paragraph 28(4)(g) of the Act does not cover the situation because "the wage reduction was throughout', was an error of law. In addition the Board based its decision on an erroneous finding of fact made without regard to the material before it. In particular it failed to consider that Mr. Klunowski was both a student and a part time worker and apparently failed to appreciate that if Mr. Klunowski had continued working he would have lost the severance pay option.

In my view a 24.8 per cent reduction was a significant modification of Mr. Klunowski's wages and, having regard to all the circumstances, Mr. Klunowski had just cause to leave his employment.

CUB 37662

DECISION