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Employment Insurance Decisions Can Bar a Just Cause Defence

2 minute read

Issue estoppel is a legal doctrine which may apply where an issue in a cause of action was decided in a previous proceeding. In Alexander v Huron Commodities Inc., an adjudicator considered whether an employer was entitled to plead employee misconduct in an unjust dismissal proceeding after the issue had been considered earlier in a matter under the Employment Insurance Act. The case illustrates the potential risks created where an employer gets involved in an employee’s employment insurance (EI) application due to issue estoppel.

In this case, following his dismissal, Mr. Alexander sought EI benefits. He would not have been entitled to benefits if his dismissal had been for misconduct. An employment insurance officer obtained information from both the employer and Mr. Alexander to determine whether his termination had been for misconduct. The officer concluded that Mr. Alexander had not engaged in any misconduct and awarded him EI benefits.

Since the officer decided the dismissal was not for misconduct, Mr. Alexander submitted that the employer was now prevented from arguing the same issue to the adjudicator in the unjust dismissal proceeding.

Adjudicator Howard Snow reviewed a number of decisions by the Court of Appeal for Ontario, and the Supreme Court of Canada, in determining whether to exercise his discretion and apply the doctrine of issue estoppel.

In the result, Adjudicator Snow found that the requirements for the application of issue estoppel had been met, and found no reason that the doctrine should not be applied in Mr. Alexander’s case. Accordingly, the adjudicator concluded that the employer was precluded from arguing that Mr. Alexander was dismissed for misconduct.

The decision shows once again that employers should be wary when trying to decide whether and to what extent to participate in an employee’s application for EI benefits.

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