CUB 67496

GUY GOULARD, Umpire

The claimant filed an initial claim for benefits effective October 30, 2005. The claimant then filed a complaint with Quebec labour standards. An agreement was reached between the claimant and her employer under which the claimant received $3,557.00. The Commission found that the amount received by the claimant constituted earnings within the meaning of section 35(2) of the Employment Insurance Regulations and it allocated those earnings in accordance with section 36(9) of the Regulations. This decision resulted in a potential overpayment of $1,995.00.

The claimant appealed from the Commission's decision to a Board of Referees, which dismissed the appeal. The claimant then appealed from the Board's decision, and the hearing took place in Montreal, Quebec, on November 24, 2006. The claimant attended the hearing and was represented by her father, Serge Coulombe.

The facts in the docket, as summarized above, were not disputed.

The claimant told the Board of Referees that the amount she received from her employer, under an agreement reached following her complaint to Quebec labour standards, was to compensate her for waiving her right to reinstatement. The Board recognized that this was the position and argument of the claimant in the following two paragraphs, which are found in the Board's decision:

When the claimant filed a complaint with Normes du Travail for psychologic her objective was to be reinstated in her job.

. . .

The claimant explained to us that the amount of the settlement of $3,557.70 was granted to her as compensation for her waiving her right to reintegrate her position.

(Emphasis added)

The Board examined the evidence and dismissed the claimant's appeal for the following reasons:

Having analyzed all of the evidence in the docket and listened to the articulate and credible testimony of the claimant, the members of the Board of Referees noted that the claimant was poorly informed about all of the implications of the document "Receipt, release, waiver and transaction".

According to section 36(9) of the Regulations, sums of moneys paid by an employer because of a dismissal or work termination must be allocated pursuant to that provision. This allocation had been foreseen in the agreement that the claimant signed.

The members of the Board of Referees, although sympathetic to the claimant's cause, unanimously disallow the claimant's appeal.

At the hearing, the claimant's representative reiterated that the claimant filed a complaint against her employer in order to obtain compensation for psychological harassment, and that, following the mediation, the claimant agreed to accept compensation in exchange for waiving her right to reinstatement. The claimant's representative stated that the amount received was not sought nor paid to compensate for a loss of wages.

The following paragraphs are included in the agreement between the claimant and her employer, entitled "Receipt, release, waiver and transaction" (Exhibit 4):

[Translation]

GIVEN THAT on November 1, 2005, Suzanne Coulombe filed a complaint with Quebec labour standards for psychological harassment and a complaint concerning a prohibited practice;

In return for the payment by Financière Manuvie in the amount of THREE THOUSAND FIVE HUNDRED AND FIFTY-SEVEN DOLLARS AND SEVENTY CENTS ( $3557.70), which payment is made in consideration of the RELEASOR waiving any right to reinstatement that she would have been entitled to, which right was not supported by the RELEASEE, . . .

The Federal Court of Appeal clearly established in Meechan (A-140-03) that an amount received in return for waiving the right to reinstatement does not constitute earnings within the meaning of the Employment Insurance Regulations. Sexton J. wrote:

We recognize that the Board of Referees was not bound in any way by the decision of the Arbitrators and we also acknowledge that the fact that the parties have attached a particular label to a given damage settlement is not conclusive. However, it appears oral evidence was given before the Board and we are unable to conclude that it was unreasonable for the Board to accept the evidence by the Applicant to the effect that the damages represented compensation for the relinquishment of the right to reinstatement. Indeed, there seems to have been little evidence, if any, that the award could represent anything else. In particular, there does not seem to be evidence before the Board of Referees to the effect that the damages represented loss of earnings.

This Court in Canada v. Plasse [2000] F.C.J. 1671 at paragraph 18, decided that a payment received for renunciation of a right to reinstatement does not constitute earnings under the Employment Insurance Regulations.

As in Meechan, there was no evidence to show that Ms. Coulombe was compensated for anything other than waiving her right to reinstatement.

The agreement between the claimant and her employer stipulates that the amount of the overpayment was to be deducted from the amount set out in the agreement. It is erroneous to conclude that this stipulation constituted a determination on the issue of whether the amount paid constituted earnings within the meaning of the Regulations. The signatories to the agreement could not determine this issue contrary to the legal interpretation of the relevant legislation.

Therefore, I must conclude that the Board of Referees erred in fact and in law by finding that the amount received by the claimant for waiving her right to reinstatement constituted earnings within the meaning of the Regulations.

Consequently, the Board of Referees' decision is rescinded. The undisputed evidence in this case enables me to render the decision that the Board should have rendered. The evidence showed that the $3,557.00 received by the claimant did not constitute earnings within the meaning of the Regulations and, therefore, did not have to be allocated.

The Board of Referees' decision is rescinded and the claimant's appeal is allowed.

Guy Goulard

UMPIRE

OTTAWA, Ontario
December 15, 2006