Penalty Imposition and Employment Insurance Act Decision

Citation: AH  v  Canada Employment Insurance Commission , 2026  SST  349 Social Security Tribunal of Canada Appeal Division Decision Appellant: [redacted] Respondent: [redacted] Representative: [NAME] Decision under appeal: General Division decision dated February 6, 2026 (GE-26-162) Tribunal member: [NAME] of hearing: Videoconference Hearing date: June 18, 2026 Hearing participants: Appellant Respondent’s representative Decision date: June 23, 2026 File number: AD-26-145 On this page Decision Overview Issues Preliminary observations Analysis Remedy Conclusion Decision [ 1 ] The appeal is allowed in part. I am referring the case back to the Board of Appeal to rule on the remaining issues, namely the imposition of a penalty and section 52 of the Employment Insurance Act ( EI Act). Overview [ 2 ] The Appellant (Claimant) received wages and vacation pay from his former employer. The Commission decided the money was “earnings” under the law because it was wages and vacation pay. The earnings were allocated to the weeks during which the services were performed and the monies earned. The Commission also imposed a penalty for making nine false statements knowingly from June 5, 2022, to October 1, 2022. [ 3 ] The Claimant disagreed with the reconsideration decision and appealed to the General Division of the Tribunal. He said his general manager with the employer filed his claimant reports and he didn’t knowingly misrepresent himself. [ 4 ] The General Division concluded that the earnings were correctly allocated by the Commission. It also concluded that the penalty had been rightly imposed by the Commission because the Claimant knew or ought to have known that the reports being submitted by the third party were false or misleading. The General Division accepted the concession of the Commission on the issue of notice of violation. [ 5 ] The Appeal Division granted the Claimant leave to appeal. The Claimant submits that the General Division misapplied the legal test for imposing a penalty. He submits that he testified that he did not personally complete or submit the claimant reports. They were submitted by a third party (his general manager), whom he trusted. He did not review the reports before they were filed. [ 6 ] I am allowing in part the Claimant’s appeal. Issues [ 7 ] Did the General Division misapply the legal test for imposing a penalty? [ 8 ] Did the General Division fail to decide an issue that it should have decided? Preliminary observations [ 9 ] In deciding the present appeal, I must look at the evidence that was before the General Division. The Appeal Division doesn’t accept new evidence—except in rare circumstances that don’t apply in this case. Footnote 1 Analysis Did the General Division misapply the legal test for imposing a penalty? [ 10 ] In his application for leave to appeal, the Claimant indicated that he was only appealing the issue of penalty. Before me, the Commission accepted the General Division’s conclusion to remove the notice of violation. [ 11 ] The Claimant submits that the General Division misapplied the legal test for imposing a penalty. He submits that he testified that he did not personally complete or submit the claimant reports. They were submitted by a third party (his general manager), whom he trusted. He did not review the reports before they were filed. [ 12 ] The Federal Court of Appeal has established that when it comes to the interpretation of the word “knew”, a subjective test should be used to determine whether the required knowledge exists. The issue is therefore not whether the claimant ought to have known that his representation was false or misleading; a false but innocent representation does not give rise to penalties. Footnote 2 [ 13 ] I am of the view that the General Division did misapply the legal test on the issue of penalty when it found that the Claimant “knew or ought to have known” that the claimant reports being submitted by the third party were false or misleading. By acting as it did, the General Division seems to have applied an objective test. [ 14 ] A penalty may be imposed where a statement is made by a third party on behalf of a claimant, where the claimant knows or acquiesces in the misrepresentation. Did the General Division fail to decide an issue that it should have decided? [ 15 ] The Commission points out that the General Division made an error of jurisdiction because it failed to address whether the Commission acted judicially under section 52 of the EI Act when it reconsidered the claim. [ 16 ] I note that the Commission addressed this issue in its written observations, but that it was ignored by the General Division. [ 17 ] I find that the General Division did not decide an issue that it should have decided when it did not address whether the Commission acted judicially when it reconsidered the Claimant’s claim under section 52 of the EI Act. Remedy There are two ways to fix the General Division’s error [ 18 ] When the General Division makes an error, the Appeal Division can fix it in one of two ways:

1) It can send the matter back to the Board of Arbitrators for a new hearing.

2) It can give the decision that the General Division should have given. The record is incomplete, and I can’t decide this case on its merits [ 19 ] I am of the view that the existing evidence is insufficient for me to decide the remaining issues. [ 20 ] I am therefore referring the case back to the Board of Appeal to rule on the remaining issues, namely the question of the imposition of a penalty and section 52 of the EI Act. Conclusion [ 21 ] The appeal is allowed in part. I am referring the case back to the Board of Appeal to rule on the remaining issues, namely the imposition of a penalty and section 52 of the EI Act. Footnotes Footnote 1 [NAME]  v  Canada (Attorney General) , 2022  FCA  157. Return to footnote 1 referrer Footnote 2 Canada (Attorney General)  v.  [NAME] , 2017  FCA  104, para.

11. It is however permissible to consider common sense and objective factors to decide whether a claimant had subjective knowledge of the falsity of his or her representations. Return to footnote 2 referrer