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Job Termination

Am I entitled to employment insurance? Will I be penalized for leaving voluntarily? How much will I get?

Access to employment insurance

So, a cheque from the government is now your only hope of survival for the next few months. In case you have not already dealt with the employment insurance system, you should know that it can be a harrowing experience.

[ 2007-03-28 ]

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Am I entitled to employment insurance? Will I be penalized for leaving voluntarily? How much will I get? Using the federal government's employment insurance system is similar to playing the lottery -- there are many people who buy tickets but very few who win the jackpot!

According to Statistics Canada, only 40.9% of unemployed people were entitled to employment insurance benefits in 2004. In 1989, this figure was 74%. What has happened since then to explain the decrease? The 1997 reform tightened up the eligibility criteria considerably, and "unemployment insurance" became "employment insurance."

Prior to the reform, an unemployed person could access the system with only 12 weeks of employment, and a minimum of 15 hours worked each week. Now, entitlement is no longer assessed based on weeks, but on hours. Part-time workers were hit hard by this requirement.

WHO IS ENTITLED TO BENEFITS?

In order to receive benefits, three conditions must be met:

- You should not be employed and the interruption of earnings must be for at least seven consecutive days with the same employer.

- You would have contributed to employment insurance while working. In the majority of cases, these contributions are deducted directly from your salary.

- Over the previous year, accumulated between 420 and 700 hours of work during the 52 weeks preceding the end of employment. The number of hours required depends on the unemployment rate in the region. The rate for your region is available at the local Human Resources and Social Development office. New entrants to the labour market who are in their first job and those re-entering the labour market after two years require at least 910 hours of work.

WATCH FOR MISCALCULATIONS

The employer is responsible for calculating insurable hours worked. It is a complex process and the risk of error is high. For example, an hour of work paid at double time only counts for one insurable hour while overtime converted into time off is worth nothing. Workers are advised to carefully check their Records of Employment, particularly boxes 15A (number of insurable hours worked in the year) and 15B (total compensation in the preceding six months).

HOW MUCH DO I GET?

Once all the conditions have been met and the application for benefits has been submitted, how much can a person expect to receive? The basic rate for calculating benefits is 55% of wages, to a maximum of $413 per week. In certain exceptional cases -- low income, dependent children -- this rate can reach 80%.

Wage earners who are still employed can receive unemployment benefits in the event of illness or to care for a seriously ill family member.

ACCEPTABLE REASONS FOR LEAVING

Claimants who lose their employment for incompetence, owing to a personality conflict or because they did not meet the requirements of the position, are entitled to benefits; however, resignation without just cause or dismissal for gross negligence automatically closes the door on employment insurance.

Refusing to accept a change of employment in the case of a contract extension, for example, and refusing a transfer of one's job to another employer are considered to be voluntary leaving. Accordingly, under the Employment Insurance Act, claimants unable to provide proof that there was just cause to leave their employment are not entitled to benefits. As a rule, with the support of an unemployment action committee or similar advocacy group, most cases of voluntary leaving can be justified. With a lot of patience, it is possible to exercise one's rights.

THE BURDEN OF PROOF

In the event of a dispute, you have to prove that leaving was the only reasonable alternative in order to receive benefits. This also applies to sexual harassment, discrimination, and antagonistic relations with the employer or moving to another place to follow one's spouse, for example. The onus of proof is on the Employment Insurance Commission, but in fact, it is often up to workers to justify their actions. To have their rights recognized and respected, claimants must make a good case.

A telephone call to one of the offices of an unemployment action committee or any other not-for-profit organization that advocates for the unemployed can be very helpful, especially since there is always the possibility of appealing a decision by Human Resources and Social Development. The appeal process is efficient and fast, but not all that simple. Without representation, the chances of winning are 25%, but they climb to 90% with the assistance of an organization such as an unemployment action group.

AVAILABILITY FOR WORK

Once the claim for benefits has been accepted, you still have to be ready to work. To better your chances, you should be well prepared when you go to see an employment officer. It is important to show availability and to be ready to take any employment that the officer considers to be suitable.

Your goal is to prove to the officer that you are actively seeking employment. This means three to five job searches a week and can include sending out CVs, making job applications, having interviews, and so on.

Some unemployed persons want to upgrade their skills. Caution is advised here: although claimants are entitled to take suitable training courses while receiving employment insurance benefits, they must still prove that they are actively looking for work. The situation becomes even more complicated when a job opportunity comes up. Turning down employment results in an interruption in employment insurance for seven to 12 weeks. That is why it is recommended to start looking for training programs as early as possible -- as soon as the benefit period begins -- so that the course of studies is completed before a job opportunity comes up.

Is self-employment a viable option for someone waiting to find a "real" job? In principle, no, because then the claimant becomes an entrepreneur and cannot receive benefits.

One thing is certain: unemployment action or advocacy groups provide invaluable assistance to those who have to deal with employment insurance, particularly in difficult situations (such as people who are going back to school, operating a small business, wanting to re-train and work in a different field). Of course, this assistance is only available to those who have worked the requisite number of hours to qualify for employment insurance.

WHO'S WHO

Canadian Labour Congress
Three million workers are represented by the Canadian Labour Congress, which describes itself as the national voice of the labour movement.

Department of Human Resources and Social Development
The department provides assistance to many workers through the Employment Insurance Program.

Employment Insurance Commission of Canada
The Employment Insurance Commission of Canada comes under HRSDC. Its primary function is to help Human Resources and Social Development to run the Employment Insurance Program.