EI rules stripping new mother of job-loss benefits discriminate

A veteran Toronto litigator believes a recent Federal Court of Appeal decision could force the federal government to redesign the country’s employment insurance scheme. 

“Parliament will have to revisit certain provisions in the legislation to make them non-discriminatory against women,” says Stephen Moreau, a labour and employment lawyer at Toronto’s Cavalluzzo LLP. “The decision cites significant problems with the current regime as disproportionately affecting women.” 

The unanimous 80-page decision of the three-judge panel in Chalifour-Racine v. Attorney General of Canada centred on employees who receive pregnancy (maternity) and parental benefits under the federal Employment Insurance Act. 

At issue were six provisions that disentitle employees to receive some or all their regular employment insurance (EI) benefits when they lose their jobs shortly before, during, or shortly after their maternity and parental leaves. 

The six women applicants received benefits under the Quebec Parental Insurance Plan. The Employment Insurance Act regulations deem these benefits to have been received under the EI legislation. The women all testified to financial hardship, causing them to rely on savings, partners, or family.

Regular benefits depend on hours worked in a 52-week qualifying period and are paid within a 52-week benefit period, with combined regular and special benefits capped at 50 weeks. The Act extends those periods for certain interruptions, including illness, incarceration followed by acquittal, workers' compensation and severance, but not for time on maternity or parental benefits. 

The upshot is that a worker laid off before or early in her leave can use up her maternity and parental benefits, leaving no regular benefits when the leave ends. A worker laid off at or after the end of her leave may find that her qualifying period consists mostly of leave, leaving too few insurable hours to qualify. Co-workers who were laid off at the same time keep full coverage. 

The impugned provisions appeared neutral on their face, the court noted. But unchallenged expert evidence had demonstrated that they affected women disproportionately: women took 94.1 percent of maternity and parental benefits nationally, and 28 percent of female claimants compared to 9.8 percent of men combined types of benefits.  

“Maternity benefits are available only to women, and it is predominantly women who claim parental benefits under the EI Act and the Parental Insurance Act,” noted Justice Mary Gleason, who wrote the reasons for a panel composed also of Justices René LeBlanc and Nathalie Goyette.  

The fact that fathers were also affected was no answer, the court said. Saying all claimants faced the same cap “merely restates the facial neutrality.” 

Pregnant and caregiving women’s historical labour-market disadvantages have been well established by the evidence and Supreme Court of Canada jurisprudence. 

 “In short, the price the legislation exacts for granting maternity and parental benefits is the loss of job loss benefits, and this price is disproportionately paid by women,” Gleason wrote. 

That was discriminatory, as this was not a case of “minimal impairment.” 

“The price of more generous maternity and parental benefits cannot be the forfeiture of regular EI benefits,” Gleason wrote. “Parliament’s decision to expand support for pregnancy and childbirth cannot, at the same time, operate to diminish the income protection otherwise available under the employment insurance scheme.” 

Both parties agreed that if a breach were found, the proper remedy was a declaration of unconstitutionality. The court granted the attorney general’s request for a one-year suspension. 

Moreau says Chalifour-Racine is a landmark decision. 

“Different aspects of the EI scheme have been challenged over decades, but they have been largely unsuccessful. Perhaps the most significant example is rejection of the argument that because women were overrepresented in part-time work, they were less likely to qualify for benefits.” 

While the Federal Court of Appeal declared only six provisions invalid, Gleason noted that they were intertwined with the rest of the legislation, which is primarily why the court agreed to a one-year suspension of its declaration. 

Among the provisions Moreau cites as susceptible to adjustment are those that make the number of weeks of regular benefits dependent on hours worked in the qualifying period.  

“If women could count hours worked before their leave, their week counts could change,” he said.  

Other provisions that may require adjustment: 

• The 104-week limit for the qualifying period: when the government looks back to count a worker's hours, it can't look back more than two years. If Parliament allows new mothers to count hours worked before their leave, the look-back period must fit within that limit, or the limit has to change. 

• The stacking rules that already let people combine maternity, parental and sickness benefits, but not regular benefits in addition; 

• The amount of the benefits, which are based on earnings in a qualifying period. If pre-leave earnings can be counted, the calculation might require adjustment;  

• The EI Regulation treating Quebec parental benefits as if they were paid under the EI Act: Parliament must deal with this, failing which any adjustments might exclude Quebec applicants.