A-241-82
Dennis Davlut (Applicant)
v.
Attorney General of Canada (Respondent)
Court of Appeal, Urie, Le Dain JJ. and Kelly
D.J.—Toronto, October 20; Ottawa, December 10,
1982.
Unemployment insurance — Applicant fired immediately
after handing bargaining contract proposal to employer —
Applicant disqualified from receiving unemployment insurance
benefits under s. 41(1) of the Unemployment Insurance Act,
1971 for misconduct — Application to set aside Umpire's
decision that applicant's record of continued absenteeism mis
conduct justifying dismissal — Umpire should have decided
whether absenteeism was cause for dismissal, not whether it
merely justified dismissal — S. 41(2) does not prevent dis
qualification where one of reasons for dismissal is lawful
union activity — Application allowed — Unemployment In
surance Act, 1971, S.C. 1970-71-72, c. 48, ss. 41(1),(2), 43(1)
(as am. by S.C. 1974-75-76, c. 80, s. 16), 95(c) (as am. by S.C.
1976-77, c. 54, s. 56), 96 (as am. idem) — Federal Court Act,
R.S.C. 1970 (2nd Supp.), c. 10, s. 28.
This is a section 28 application to set aside the decision of an
Umpire acting under the Unemployment Insurance Act, 1971
confirming the disqualification of the applicant for insurance
benefits. The applicant was fired immediately after handing the
employer a bargaining contract proposal. No reason was given
for his dismissal. He was notified that his unemployment
insurance benefits would be suspended for six weeks in accord
ance with subsection 41(1) and section 43 of the Act because
his dismissal was due to his own misconduct at the workplace,
being his continued absenteeism. The Board of Referees and
the Umpire held there were sufficient instances of absenteeism
to justify the dismissal. However, the period of disqualification
was reduced by two weeks since part of the reason for dismissal
was lawful union activity. The applicant argued that subsection
41(2) wholly prevents disqualification where lawful union ac
tivity was one of the reasons for dismissal.
Held, the application is allowed. The onus lies on the Com
mission to establish that the loss of employment was "by reason
of his own misconduct". The Board of Referees failed to find
under subsection 41(1) that the misconduct was, in fact, the
reason for the dismissal, but it found only that the misconduct
justified dismissal. The matter is referred back to the Umpire
for a finding as to the cause of dismissal. If it is found that the
dismissal was due partly to absenteeism and partly to lawful
union activity, subsection 41(2) does not wholly prevent dis
qualification. Loss of employment on account of lawful union
activity referred to in subsection 41(2) can exist with a loss of
employment by reason of misconduct under subsection 41(1).
The Board of Referees or the Umpire may, in the exercise of
their discretion under subsection 43(1), reduce the period of
disqualification to the extent of factors other than the claim
ant's misconduct. By doing so they maintain the policy that no
one should benefit from a loss of employment if his own
misconduct is to blame and, second, no one should lose his
insurance benefits if union activities are the cause of his
dismissal.
Per Le Dain J.: The matter should be referred back to the
Umpire to consider whether the Board of Referees found as a
fact that the claimant was dismissed for misconduct, or for
both misconduct and union activities. If it was partly for union
activities the claimant would not be protected from disqualifi
cation by subsection 41(2). The effect of that subsection is that
misconduct resulting in loss of employment and loss of benefits,
does not include union activity.
COUNSEL:
D. G. Leitch for applicant.
M. Ciavaglia for respondent.
SOLICITORS:
Sudbury Community Legal Clinic, Sudbury,
for applicant.
Deputy Attorney General of Canada for
respondent.
The following are the reasons for judgment
rendered in English by
URIE J.: This application brought pursuant to
section 28 of the Federal Court Act, R.S.C. 1970
(2nd Supp.), c. 10, seeks to set aside the decision
of an Umpire acting under the provisions of the
Unemployment Insurance Act, 1971, S.C. 1970-
71-72, c. 48, in which the applicant's appeal from
a decision of the Board of Referees was dismissed.
The applicant, who was employed as a mechan
ic, was dismissed by his employer on January 15,
1981. It is common ground that during the six
months of his employment the applicant was fre
quently absent from work although his evidence is
that on each occasion he was granted permission to
do so. Although the applicant disputes it, the
employer claimed that he warned him on two
occasions about his absences.
On January 15, 1981, the applicant delivered to
his employer a document signed by his fellow
employees entitled a "Wage and Benefit Proposal
for Hourly Paid Employees ...". The evidence
discloses that within minutes of the delivery one of
the principals of the employer fired the applicant
at his work place allegedly by saying, "Dennis
you're fired. Get off the property." When the
applicant asked for a reason none was given. The
dismissal took effect immediately and after recov
ering his personal property and pay cheque he was
escorted from the company premises by police
officers summoned by the employer. There is no
evidence on the record that the applicant was late
in reporting to work on that day and it is certainly
evident that he was not, at that time, "absent from
work".
The applicant, having applied for unemployment
insurance benefits on January 19, 1981, by notice
of disqualification dated February 6, 1981, was
informed by the Unemployment Insurance Com
mission that his insurance benefits were suspended
for six weeks in accordance with the provisions of
sections 41 and 43 of the Unemployment Insur
ance Act, 1971, ("the Act").
The applicant appealed this ruling to a Board of
Referees. Neither the applicant nor the employer
appeared in person. The applicant's testimony was
contained in an affidavit which he filed and was
supported by the representations made on his
behalf by counsel. The employer's version of the
events was adduced in the form of notes of conver
sations between officers of the Canada Employ
ment and Immigration Commission and officers of
the employer. The unanimous decision of the
Board of Referees encapsulates the positions taken
by the parties. The material part thereof reads as
follows:
The issue involved is whether or not the claimant lost his
employment with Levert Industries (Northern) by reason of his
own misconduct under Sections 41 and 43 of the Unemploy
ment Insurance Act, 1971.
The claimant did not appear before the Board but was
represented by Ms. Anne Morrison from the Sudbury Commu
nity Legal Clinic.
Ms. Morrison read her submission to the Board of Referees
(Exhibit 13) and also brought in an affidavit signed by the
claimant (Exhibit 14). From the information brought up before
the Board, we have to agree with the employer that Mr. Davlut
had a poor record of attendance on the job (Exhibit 6-2).
According to the affidavit signed by the claimant, he was trying
to form a union and this is the reason why Mr. Levert fired
him. We are of the opinion that the claimant was two thirds
responsible for his dismissal due to his absentism (sic) and that
the employer was a little too prompt in dismissing the claimant.
It is the unanimous decision of the Board that the appeal be
dismissed and that the decision of the Entitlement Determina
tion Officer be upheld but that the six weeks disqualification be
reduced to four weeks due to circumstances mentioned above.
The applicant then appealed to the Umpire
whose decision dated March 3, 1982, reads, in
part, as follows:
The claimant was represented by counsel from the Sudbury
Community Legal Clinic. Written submissions were filed on
behalf of the claimant.
The claimant's alleged misconduct was in the form of regular
lateness and absenteeism during his six months with this
employer. The claimant disputes that contention and argues
that the dismissal was due to the claimant's efforts to form a
collective bargaining unit, an extremely serious allegation
under the labour laws of this country.
Clearly, this claimant was guilty of misconduct which justi
fied his dismissal. The labour laws of our country protect
employees from disciplinary measures or dismissals on account
of Union activities and the employer in this instance was most
unwise in inviting any suspicion that this claimant was dis
missed for such a reason. A perusal of the decision of the Board
of Referees, however, satisfies me that the Board gave careful
consideration to the protection enjoyed by employees in this
regard and to the corresponding responsibility of the employer.
The Board considered all relevant facts and arguments and
reached an entirely reasonable conclusion that, while the
employer's action was unwise, it did not alter the fact that the
employee's record provided ample evidence of misconduct
deserving of dismissal.
There is nothing in the evidence or the argument to persuade
me that the Board's unanimous decision was in any way in
error, and accordingly the appeal is dismissed.
It is this decision which is attacked in these
proceedings. Counsel for the applicant submitted
that the Umpire erred in two respects:
(1) that he failed to make the factual determi
nation required by subsection 41(1), namely,
whether the applicant "lost his employment by
reason of his own misconduct";
(2) that even if he did make the proper factual
determination he erred in failing to apply the
provisions of subsection 41(2) to the facts of the
case so determined.
Subsections 41(1) and (2) of the Act read as
follows:
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) For the purposes of this section, loss of employment
within the meaning of subsection (1) does not include loss of
employment on account of membership in, or lawful activity
connected with any association, organization or union of
workers.
The applicant's counsel argued that, in holding
that "this claimant was guilty of misconduct which
justified his dismissal" and "the employee's record
provided ample evidence of misconduct deserving
of dismissal", the Umpire had clearly asked him
self the wrong question. The question to be asked
did not, in his submission, require a finding as to
whether the dismissal was justified or deserved.
Rather, he had to ascertain whether the Board,
after weighing all the facts, had found that the
dismissal had, in fact, been due to such
misconduct.
It is with some hesitation that I have reached
the conclusion that the Umpire did misconstrue
what the Board of Referees is required to do by
subsection 41(1). It has been frequently held by
umpires, and I think correctly held, that the onus
lies on the Commission to establish that the loss of
employment by a claimant was "by reason of his
own misconduct". To discharge that onus the
Board of Referees must be satisfied that the mis
conduct was the reason for the dismissal not the
excuse for it. This requirement necessitates a fac
tual determination after weighing all of the evi
dence. Notwithstanding what was said by the
Umpire, supra, I am unable to say that the Board
of Referees made the findings of fact necessary to
conclude that the reason for the dismissal which
would form the basis for a disqualification under
subsection 41(1) was by reason of the applicant's
misconduct. By the same token, although by virtue
of section 96 of the Act [as am, by S.C. 1976-77,
c. 54, s. 56] he was entitled to make such a
finding, he failed to do so because of his apparent
failure to appreciate the question to be asked.
For these reasons the matter must, as I see it, be
referred back to the Umpire. By virtue of section
96 of the Act he may make the requisite findings
himself or he may remit the matter to the Board of
Referees to do so. If it is found that the applicant
lost his employment solely due to his own miscon
duct then, of course, subsection 41(1) clearly
applies. Equally clearly, if either the Umpire or
the Board finds that the dismissal was due solely to
the applicant's lawful association or union activity,
subsection 41(2) would apply to prevent disqualifi
cation. On the other hand, it may be found that
the loss of employment occurred partly by reason
of the applicant's own misconduct, as referred to in
subsection 41(1), and partly on account of lawful
activity within the meaning of subsection 41(2). In
that event, it will be necessary for either the
Umpire or the Board of Referees to consider
whether or not it would be appropriate to apply
subsection 43(1) [as am. by S.C. 1974-75-76, c.
80, s. 16] to reduce the period of disqualification
or whether, if it finds that the loss of employment
was in part due to the lawful activity envisaged by
subsection 41(2), the application of that subsection
wholly prevents disqualification by reason of the
finding of dismissal in part due to the applicant's
misconduct.
The wording of the two subsections does not
make the answer to that problem an easy one to
find. In endeavouring to find the answer it should
be noted first that counsel for the respondent
stated that he did not rely on the absence of any
formal association, organization or union as a
ground for holding that subsection 41(2) was inap
plicable in the circumstances of the case at bar.
He argued that findings of loss of employment
on account of lawful activity connected with any
association of workers referred to in subsection
41(2) can exist, as it did in this case, with a loss of
employment by reason of misconduct under sub
section 41(1). In his view, both provisions applied
and were given appropriate weight by the Board in
the exercise of its discretion by its application of
subsection 43 (1) of the Act. It reads:
43. (1) Where a claimant is disqualified under section 40
or 41 from receiving benefits, the disqualification shall be for
such weeks following his waiting period, not exceeding six, for
which benefit would otherwise be payable as are determined by
the Commission.
Counsel for the applicant, on the other hand,
argued that since the Board of Referees had found,
and the Umpire had by his reasons affirmed, that
at least one of the factors which led to the appli
cant's dismissal was his role in presenting the wage
and benefit proposal of his fellow employees to the
employer, and as such was one of the proximate
causes of the dismissal, that was sufficient for the
application of subsection 41(2) regardless of the
fact that the Board also found that one of the
factors leading to the dismissal was the misconduct
of the applicant. Clearly, that interpretation
requires reading into each of the subsections the
word "only" or some other word or phrase of
similar import before the phrase "by reason of
..." in subsection (1) and before "on account of
..." in subsection (2).
There are obvious policy considerations involved
in each of subsections (1) and (2) of section 41. In
the circumstances of a case such as this the poli
cies may be in conflict with one another. It is,
however, necessary to attempt to reconcile them.
That reconciliation can be best effected, it seems
to me, by construing the subsections in the manner
espoused by counsel for the respondent. As he
argued, the subsections can exist together. There is
nothing in the language of subsection (2) which
excludes the application of subsection (1) if the
facts are present requiring its application. To give
effect to the policy considerations embodied in
each is possible by applying subsection 43(1). The
Board of Referees or the Umpire may, in the
exercise of their discretion under that subsection,
reduce the period of disqualification which would
otherwise be imposed in the case of lost employ
ment by reason of a claimant's own misconduct, to
the extent, if any, that they deem advisable. The
purpose of such a reduction would be to reflect
that the loss of employment was due, in part, to
the lawful activity envisaged by subsection 41(2).
Doing so maintains in existence, first, the policy
that no one should benefit fully from a loss of
employment if his own misconduct at the work
place is involved and, second, no one should lose
his insurance benefits if lawful activities are partly
the cause of the loss of employment. Moreover, so
interpreting the subsections avoids reading into
them additional words such as those referred to
supra to give them meaning, and that accords with
the usual principle of statutory interpretation. In
sum, therefore, it is my view that the proper
construction of subsections 41(1) and (2) is to
permit them to operate together so that the pres
ence of facts requiring the application of one of the
subsections does not preclude the application of
the other. The extent to which each is applied is
for the Board of Referees or the Umpire to decide.
Accordingly, I would allow the section 28
application, set aside the decision of the Umpire
and refer the matter back to him to dispose of the
applicant's appeal in a manner not inconsistent
with these reasons.
KELLY D.J.: I concur.
* * *
The following are the reasons for judgment
rendered in English by
LE DAIN J.: I agree that the section 28 applica
tion must be allowed and the matter referred back
to the Umpire.
The first question the Umpire had to consider,
and which he did not consider, is whether the
Board of Referees found as a fact that the claim
ant was dismissed for misconduct (not whether
there were circumstances justifying dismissal for
misconduct), or partly for misconduct and partly
for lawful conduct of the kind described in subsec
tion 41(2) of the Act. If the Umpire were to find
that the Board did make such a finding then he
must consider whether it was a finding for which
there was some evidence or whether it was a
finding of the kind described in paragraph 95(c)
[as am. by S.C. 1976-77, c. 54, s. 56]—"the board
of referees based its decision or order on an errone
ous finding of fact that it made in a perverse and
capricious manner or without regard for the ma
terial before it"—which defines the scope of an
appeal to an umpire on a non-jurisdictional error
of fact. If the Umpire were to find that the Board
did not make the required finding of fact or made
an error of the kind described in paragraph 95(c)
then he is empowered by section 96 of the Act to
make the necessary finding of fact himself and to
render the decision that the Board should have
rendered, or to refer the matter back to the Board.
If the finding of fact by the Board or the
Umpire was that the complainant was dismissed
partly for misconduct and partly for lawful con
duct of the kind described in subsection 41(2), I
am of the opinion that the claimant would be
disqualified by reason of subsection 41(1) and not
protected from disqualification by reason of sub
section 41(2). The effect of subsection 41(2) is
that in so far as a claimant's loss of employment is
on account of activity described in subsection
41(2) it is not loss of employment by reason of
misconduct within the meaning of subsection
41(1). But where a claimant is dismissed also for
misconduct there remains a loss of employment by
reason of misconduct within the meaning of sub
section 41(1), which must result in disqualifica
tion. Important as is the policy underlying subsec
tion 41(2) I do not think it could have been
intended to prevent a loss of employment by
reason of misconduct from having the effect of
disqualification merely because the claimant was
also dismissed for activity within the meaning of
subsection 41(2). There would have to be, in my
opinion, a clearer indication that this is the neces
sary relationship of the two subsections. Whether,
in a case where activity of the kind described in
subsection 41(2) is clearly one of the reasons for a
dismissal, it is reasonable to find that misconduct
was also a reason is, of course, another question
that depends on the particular evidence. The
extent of the disqualification, given all the circum
stances, is a matter for the discretion of the Com
mission under subsection 43 (1) of the Act. It is not
necessary to express an opinion as to whether that
discretion may be exercised by a board of referees
or an umpire since the Crown did not challenge its
exercise by the Board of Referees in this case.
For these reasons I would allow the section 28
application, set aside the decision of the Umpire
and refer the matter back to the Umpire for
hearing and disposition consistent with these
reasons.
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