Executive Summary: Key Legal and Evidentiary Issues

• Ms. Pagano's Employment Insurance benefits were denied after she was suspended from Air Canada for failing to comply with the company's mandatory COVID-19 vaccination policy, constituting misconduct under subsection 30(1) of the Employment Insurance Act.

• Her religious exemption request, submitted on or around October 30, 2021 — the eve of the compliance deadline — was deemed too late, and the Appeal Division reasonably found that merely requesting an accommodation did not equate to compliance with the Policy.

• Consistent Federal Court of Appeal jurisprudence, comprising no less than 16 decisions, confirms that knowingly breaching an employer's vaccination policy amounts to misconduct regardless of the employee's personal or religious beliefs.

• The applicant's argument that the Appeal Division misinterpreted the Policy by ignoring its exemption clause was rejected, as the specific Policy sentence relied upon was never explicitly raised in her submissions before either the General Division or the Appeal Division.

• An assertion that the Appeal Division should have assessed whether Ms. Pagano left employment for "just cause" under section 29 of the Act failed because her disqualification was grounded in misconduct — a distinct and separate basis from voluntary departure without just cause.

• Judicial review applied the reasonableness standard per Canada v Vavilov, and the Court found the Appeal Division's decision based on internally coherent reasoning, justified in light of the relevant legal and factual constraints, and aligned with binding appellate authority.

The facts of the case
In 2021, Tatiana-Alex Pagano was employed by Air Canada. Amid the COVID-19 pandemic, Air Canada issued a mandatory vaccination policy on August 25, 2021, requiring all employees to be vaccinated against COVID-19 within set deadlines. Employees had to report their vaccination status through an internal reporting tool and receive their first dose by September 8 and their second dose by October 16, such that they would be fully vaccinated by October 30. The Policy explicitly warned that failure to comply could result in consequences "up to and including unpaid leave or termination." Air Canada also provided a process for employees to seek exemption from the vaccination requirement, including on the basis of religious beliefs.
Ms. Pagano did not get vaccinated. Instead, she submitted a request for exemption on religious grounds on or around October 30, 2021 — the Court assumed the request was made on October 30, noting the evidence did not reveal clearly whether it was October 30 or 31. She completed her request by submitting supporting documentation on November 12. Air Canada denied the exemption request on November 15. As a result of her non-compliance with the Policy, Ms. Pagano was placed on leave of absence effective October 31, 2021.
The Employment Insurance claim and tribunal proceedings
Following her suspension, Ms. Pagano claimed Employment Insurance benefits. The General Division of the Social Security Tribunal found that she was disqualified from EI benefits under subsection 30(1) of the Employment Insurance Act because she lost her employment due to misconduct. The General Division noted that Ms. Pagano was aware of the Policy and of the consequences of non-compliance. It also rejected Ms. Pagano's submission that she complied with the Policy by requesting a religious exemption, because it was submitted late.
Ms. Pagano then sought leave to appeal from the Appeal Division of the SST. The Appeal Division denied leave to appeal, finding no arguable case that the General Division adopted an unfair process, misinterpreted the concept of misconduct, or made important factual errors. Among other things, the Appeal Division reviewed the Policy and found that merely asking for an accommodation was insufficient to comply. Rather, the employee must obtain the accommodation to be relieved from the vaccination requirement.
The Policy terms and clauses at issue
Central to Ms. Pagano's argument on judicial review was a specific sentence in the Policy: "Until Air Canada directs otherwise, employees requesting accommodation do not need to be vaccinated or record their status via our Vaccination Status Reporting Tool." Ms. Pagano contended that this clause meant her exemption request alone was sufficient to place her in compliance with the Policy. She argued that the Appeal Division failed to interpret the Policy as a whole and read it in a way that rendered the exception meaningless. The Court disagreed. Justice Grammond found that the Policy, properly read, required either full vaccination by October 31 or an approved exemption. A mere request for accommodation did not amount to compliance with the Policy. Furthermore, the Court held that this interpretation does not render the exemption clause meaningless — an employee may request an exemption but must do so sufficiently ahead of time to be able to receive the vaccine if the exemption is denied. Ms. Pagano was aware of the Policy as early as August 25 but did not request an exemption until October 30, leaving little time for her employer to assess the request before the compliance deadline the following day. Even on her own interpretation of the Policy, she would have been in breach until October 30.
The judicial review grounds and the Court's analysis
Ms. Pagano advanced two principal grounds before the Federal Court. First, she submitted that the Appeal Division failed to appreciate that she complied with the Policy by filing her accommodation request before the October 31 deadline. The Court noted that Ms. Pagano acknowledged at the hearing that the specific Policy sentence she relied upon was not explicitly raised in her submissions before either the General Division or the Appeal Division. Citing established law, including Alberta Teachers' Association and Tan v Canada, the Court held that a decision-maker is not required to address arguments that were not squarely put before them, and the failure to do so does not render a decision unreasonable. In any event, the Appeal Division's reasoning was consistent with the Federal Court of Appeal's extensive and binding jurisprudence — no less than 16 decisions over the last three years — uniformly upholding the denial of EI benefits to persons who failed to comply with their employers' vaccination policies. Leave to appeal to the Supreme Court of Canada was denied in Cecchetto and Zagol.
Second, Ms. Pagano argued that the Appeal Division should have assessed whether she had just cause for leaving her employment in light of section 29 of the Act, claiming that several circumstances listed in paragraph 29(c) applied to her situation. The Court rejected this argument. Subsection 30(1) establishes two disjunctive grounds for disqualification: loss of employment because of misconduct, and voluntarily leaving employment without just cause. Because Ms. Pagano did not resign nor take leave but was suspended from her employment due to misconduct, the "just cause" analysis was not engaged. Ms. Pagano also did not squarely raise this issue before the Appeal Division. The Court further observed that the end result of Ms. Pagano's submission would be to empower the SST to review the merits of the employer's vaccination policy, which is contrary to the Federal Court of Appeal's caselaw.
The ruling and outcome
Having found neither of Ms. Pagano's grounds persuasive under the reasonableness standard from Canada v Vavilov, Justice Sébastien Grammond dismissed the application for judicial review on May 1, 2026. The Attorney General of Canada, as the successful respondent, was awarded costs in accordance with the usual rule. The exact amount of costs was not specified in the judgment.