Social Security Tribunal Overturns Commission's Reconsideration of Employment Insurance Benefits

[TRANSLATION] Citation: [NAME] .  v  Canada Employment Insurance Commission , 2026  SST  191 Social Security Tribunal of Canada Appeal Division Decision Appellant: [redacted] Representative: [NAME] Respondent: [redacted] Representative: [NAME] Decision under appeal: General Division decisions dated January 16 and 19, 2026 (GE-25-2841, GE-25-2842, GE-25-2843, GE-25-2849) Tribunal member: [NAME] of hearing: Videoconference Hearing date: May 12, 2026 Hearing participants: Appellants Appellants’ representative Respondent’s representative Decision date: May 22, 2026 File numbers: AD-26-68, AD-26-69, AD-26-70, AD-26-90 On this page Decision Overview Issues Analysis Remedy Conclusion Decision [ 1 ] The appeal is allowed. [ 2 ] The Respondent (Commission) didn’t use its discretion judicially when it decided to reconsider the Appellants’ (Claimants’) claims for benefits. [ 3 ] The Commission’s initial decision to pay the Claimants benefits, without allocation of earnings, remains in effect. Overview [ 4 ] The Claimants received money from their [NAME]. For each Claimant, the employer entered the total amount paid in Block 15C PP1 of the Record of Employment ( ROE ), but not in detail in Block 17C. [ 5 ] The Commission considered this amount when calculating the Employment Insurance benefit rate. But it didn’t allocate this amount and didn’t consider that it was vacation pay and severance pay. [ 6 ] Then, between March and June 2025, after a conversation with the employer, the Commission decided that this amount was “earnings” under the law, paid in the form of severance pay and vacation pay. It told the Claimants that their vacation pay had to be allocated. The severance pay also had to be allocated. The allocation of vacation pay and severance pay resulted in an overpayment. The Claimants disagreed and appealed to the Tribunal’s General Division. [ 7 ] Before the General Division, the Claimants disputed having to repay the overpayment caused by the Commission’s retroactive decision. They argued that the Commission had all the necessary information to make the decisions it had made. They disputed the Commission’s reconsideration and the related overpayment. [ 8 ] The General Division found that the Claimants knew or should have known that they could not get benefits while receiving vacation pay and severance pay. It found that the Commission followed its own guidelines for reconsideration. The General Division found that the Commission had used its discretion judicially. [ 9 ] The Claimants got permission to appeal the Tribunal’s General Division decision to the Appeal Division. They say that the General Division made two errors in its decision that would justify the Appeal Division’s intervention. [ 10 ] The Claimants’ appeal is allowed. Issues [ 11 ] (1) Has the General Division reached a conclusion that is so contradictory and ambiguous that it makes the decision incomprehensible and ineffective? [ 12 ] (2) Did the General Division make an error in its analysis of the Commission’s use of its discretion? Analysis Facts [ 13 ] The Claimants, who work as drivers for a delivery company, are among the thousands of workers laid off after the closure of X warehouses and sorting centres in Quebec between late January and mid-February 2025. [ 14 ] After their lay-off, the Claimants received a lump sum payment covering both their vacation pay and pay in lieu of notice as required by law. [ 15 ] When they were laid off, the Claimants were told by their employer that their ROE s would be sent directly to the Commission and that they would have nothing else to declare. The employer sent the ROE s to the Commission electronically, and the Claimants were never aware of their contents. [ 16 ] The Claimants’ separation monies were entered by the employer in Block 15c PP1 of the ROE , but not in detail in Block 17C. This error led to an increase in the Claimants’ benefit rate, but also and most importantly, to a payment that was earlier than if the earnings had been qualified and allocated from the start. [ 17 ] It wasn’t until a few months later that the Commission learned about the error and issued decisions that created an overpayment for each of the Claimants. General Division decision [ 18 ] Before the General Division, the Claimants didn’t dispute that the amounts received were earnings under the law and that they had to be allocated. They also didn’t question the part of the overpayment that resulted from the decrease in benefit rate. [ 19 ] On reconsideration, like before the General Division, the Claimants disputed the part of the overpayment that resulted from the allocation of severance pay because the Commission hadn’t used its power to reconsider judicially. [ 20 ] When it reviewed the Commission’s Reconsideration policy, the General Division found that the allocation of earnings wasn’t part of the Structure of the Act. Footnote 1 It noted the Commission’s position that the allocation of earnings may not fall within the definition of Structure of the Act. Footnote 2 [ 21 ] The General Division didn’t accept the Commission’s position that the Claimants had made false or misleading statements because it was up to them to declare the earnings received from their employer. It found that the amounts they had received were entered on their ROE , and they could not have known that their employer had made an error when it entered them. [ 22 ] But the General Division found that the Claimants knew or should have known that they could not get benefits while receiving vacation pay and severance pay. It found that the Commission had followed its own guidelines for reconsideration. The General Division found that the Commission had used its discretion judicially. Has the General Division reached a conclusion that is so contradictory and ambiguous that it makes the decision incomprehensible and ineffective? Did the General Division make an error in its analysis of the Commission’s use of its discretion? [ 23 ] In this case, the General Division found that the Commission could reconsider because the Claimants “ought to have known” that they weren’t entitled to benefits. [ 24 ] The Claimants argue that the General Division made a finding so contradictory and ambiguous that it makes the decision incomprehensible and ineffective. Namely, that the Claimants could assume that the Commission knew they had received these amounts and would consider them, but also that the Claimants knew or should have known that they could not get benefits for a few weeks. [ 25 ] The Commission agrees that there seems to be a contradiction between certain paragraphs. But the Commission respectfully says that this doesn’t make the decision ambiguous to the point of making it incomprehensible and ineffective. Footnote 3 [ 26 ] The Commission argues that the contradictions raised concern two different sections of the decision that describe two situations in the Commission’s Reconsideration policy in which it will reconsider [a claim]. [ 27 ] After reviewing the General Division decision, I agree with the Claimants. [ 28 ] On the one hand, the General Division found that the Claimants hadn’t made false or misleading statements because they could assume that the Commission knew they had received those amounts and that it would consider them . On the other hand, it found that the Claimants were responsible for notifying the Commission of these amounts and making sure they were considered . [ 29 ] In my view, these findings are irreconcilable, even if they involve analyzing two different criteria from the Reconsideration policy. This contradiction makes the analysis of the “Knowledge that there is no entitlement” element of the Reconsideration policy the General Division decision was based on flawed. Footnote 4 [ 30 ] I am also of the view that the General Division made an error in finding that the Commission used its discretion judicially based on the “Knowledge that there is no entitlement” element. [ 31 ] The Commission’s written submissions before the General Division show that the General Division justified the reconsideration based on the following elements of its policy: “Contrary to the structure of the act” and “False or misleading statement.” Footnote 5 So, the General Division could not, as it did in this case, substitute its discretion for that of the Commission. Footnote 6 [ 32 ] Finally, I am of the view that the General Division made an error in its interpretation of the “Contrary to the structure of the act” element. [ 33 ] Given these errors, I am justified in intervening. Remedy There are two ways to fix the General Division’s errors [ 34 ] When the General Division makes an error, there are two ways the Appeal Division can fix it: (1) It can send the matter back to the [NAME] ( EI  Board of Appeal) for a new hearing; or (2) It can give the decision that the General Division should have given. The record is complete and I can decide this matter on the merits [ 35 ] Considering that the parties had the opportunity to present their case before the General Division, I will give the decision that the General Division should have given. Elements the Commission considered when it reconsidered the Claimants’ claims [ 36 ] The Commission’s powers to reconsider are set out in section 52 of the Employment Insurance Act ( EI  Act). This section says that the Commission may reconsider a claim for benefits within 36 months, or 72 months if the Commission is of the opinion that a false or misleading statement or representation has been made. [ 37 ] Case law has established that the only limitation on the Commission’s power to reconsider under section 52 of the EI  Act is time. As a result, the Commission can reconsider a claim under section 52 even if there are no new facts. In other words, it can withdraw its earlier approval and require claimants to repay benefits paid under that approval. [ 38 ] The decision to reconsider a claim under section 52 is discretionary. This means that, even though the Commission has the power to reconsider a claim, it isn’t required to do so. [ 39 ] The law says that discretionary powers must be used judicially. This means that, when the Commission decides to reconsider a claim, it can’t act in bad faith or for an improper purpose or motive, consider an irrelevant factor, ignore a relevant factor, or act in a discriminatory manner. [ 40 ] The Commission has developed a policy to help guide how it uses its discretion to reconsider decisions made under the EI  Act. [ 41 ] The Commission says that the rationale for this policy is “to ensure a consistent and fair application of section 52 of the [ EI  Act] and to prevent creating debt when the claimant was overpaid through no fault of their own.” [ 42 ] The Reconsideration policy says that a claim will only be reconsidered when: benefits have been underpaid benefits were paid contrary to the structure of the EI  Act benefits were paid as a result of a false or misleading statement the claimant ought to have known there was no entitlement to the benefits received [ 43 ] Before the General Division, the Claimants didn’t dispute that the amounts received were earnings under the law and that they had to be allocated. They also didn’t question the part of the overpayment that resulted from the decrease in benefit rate. [ 44 ] On reconsideration, like before the General Division, the Claimants disputed the part of the overpayment that resulted from the allocation of severance pay because the Commission hadn’t used its power to reconsider judicially. [ 45 ] On reconsideration, and in its arguments to the General Division, the Commission indicated that, even though everything might fall outside the definition of Structure of the Act, the claims could be reconsidered because there was another condition applicable under the policy, namely that the Claimants had made false or misleading statements. Footnote 7 [ 46 ] So, I accept that the elements of the policy that the Commission considered to use its discretion and reconsider the claims were that the Claimants had received benefits contrary to the structure of the EI  Act and that it considered that the Claimants had made false or misleading statements. [ 47 ] I don’t agree with the Commission that the Claimants made false or misleading statements because it was their responsibility to declare the earnings received from their employer. [ 48 ] The employer reassured the Claimants that there was nothing to declare and that it would share all relevant information with the Commission. The employer sent the ROE s to the Commission electronically, without the Claimants knowing their contents. The amounts received were entered on the ROE s, and the Claimants could not have known that their employer had made an error when it entered them. [ 49 ] This raises the question of whether benefits were paid to the Claimants contrary to the structure of the EI  Act. [ 50 ] In reviewing the Commission’s Reconsideration policy, I find that the allocation of earnings isn’t normally part of the Structure of the Act. [ 51 ] The Commission says that this is because the allocation of earnings represents a situation that may affect whether benefits can be paid in any given week, but would not prevent the establishment of a benefit period, the determination of the number of weeks of payment, or the calculation of a benefit rate. Footnote 8 [ 52 ] But, and this shows the particular nature of the present cases, the failure to allocate had the effect of changing the benefit rate initially established. [ 53 ] This is because the amounts paid after the Claimants lost their jobs were entered by the employer in Block 15C PP1 of the ROE , but not in Block 17C. This error led to an increase in the Claimants’ benefit rate. [ 54 ] So, I find that exceptionally, given the circumstances, the Commission could consider that the allocation of earnings fell within the definition of Structure of the Act and reconsider the claims. The Commission didn’t consider all relevant factors in the use of its discretion [ 55 ] Before me, the Commission seemed to suggest that the only relevant factor was whether benefits had been paid contrary to the law. But Parliament didn’t direct the Commission to reconsider all claims for benefits that might have been overpaid. Instead, it gave the Commission the power to decide whether to reconsider a claim for benefits. [ 56 ] In MS , the Appeal Division accepted that what is described in the Commission’s policy, found in its Digest of Benefit Entitlement Principles, was relevant to the use of its discretion. But the Appeal Division found that there may be other relevant factors, in addition to those set out in the Reconsideration policy, that must also be considered. Footnote 9 [ 57 ] The Appeal Division noted that the use of discretion reflects the tension between claimants being able to rely on the finality of decisions and the Commission’s interest in ensuring accuracy. It found that the factors that helped resolve the tension between finality and accuracy were relevant to the Commission’s use of discretion. [ 58 ] The Claimants argue that the Commission ignored some relevant factors in the use of its judicial discretion, including the following: The employer reassured the Claimants that there was nothing to declare and that it would share all relevant information with the Commission. The Claimants could reasonably conclude that the Commission would consider it. The relevant information, although not detailed, was on the ROE s. The employer didn’t share the information with the Claimants. The employer sent the ROE s to the Commission electronically, and they all contained the same error. The error was plain and obvious and should have been discovered by the Commission from the start of the benefit period. The Claimants were acting in good faith and, if they were overpaid, it happened through no fault of their own. [ 59 ] I agree with the Claimants that the Commission didn’t consider these relevant factors in the use of its judicial discretion. [ 60 ] In my view, the Commission didn’t consider all the relevant factors. So, it didn’t use its discretion judicially. The claims for benefits won’t be reconsidered [ 61 ] Since I have found that the Commission didn’t use its discretion judicially, I will give the decision that the General Division should have given. The General Division has the power to give the discretionary decision that the Commission should have given. Footnote 10 [ 62 ] The Claimants received money from their [NAME]. The employer entered the total amount paid in Block 15C PP1 of the ROE s, but not in detail in Block 17C. [ 63 ] I agree with the Commission that it is relevant that the allocation of vacation pay and severance pay results in an overpayment. [ 64 ] It is also relevant to note that the ROE s, submitted to the Commission by the employer from the outset, all contained the same obvious error. [ 65 ] In the absence of details in Block 17C, Block 15C PP1 of the ROE s contains an error that appears at first glance. It shows a pay period of $13,291.55 for 24.75 hours of work. Footnote 11 [ 66 ] A simple calculation of the different boxes in Block 15C shows that the Claimants’ hourly rate was approximately $23/hour, while box 1 of Block 15c of the ROE s shows a pay period of $13,291.55 for 24.75 hours of work, which is an hourly rate of $537/hour. Footnote 12 Checking with the employer would have easily revealed the exact nature of the error from the start of the claim. [ 67 ] The Commission argues that it has to process more than 2 million claims per year. This means that it can’t both verify the information on all ROE s and pay benefits in a timely manner. I fully understand that the Commission has to process a large number of claims per year, but in my view, it isn’t the Claimants’ responsibility to bear the burden of this obvious error. Footnote 13 [ 68 ] It is also relevant to note that the employer reassured the Claimants that they had nothing to declare and that it would share all relevant information with the Commission. They could reasonably conclude that the Commission would consider it. [ 69 ] It is also relevant to note that the Claimants were acting in good faith and that, if they were overpaid, it happened through no fault of their own. [ 70 ] After considering the relevant factors that help resolve the tension between the finality and accuracy of a decision, I find that the Claimants’ claims for benefits should not be reconsidered. This means that the Commission’s initial decision to pay benefits, without allocation, remains in effect. Conclusion [ 71 ] The appeal is allowed. [ 72 ] The Commission’s initial decision to pay the Claimants benefits, without allocation, remains in effect. Footnotes Footnote 1 See section 17.3.3.2 of the Digest of Benefit Entitlement Principles (Digest). Return to footnote 1 [NAME] 2 See the General Division decision at para 49. Return to footnote 2 [NAME] 3 See AD4-4. Return to footnote 3 [NAME] 4 See section 17.3.3.4 of the Digest. Return to footnote 4 [NAME] 5 See GD4-3. Return to footnote 5 [NAME] 6 See, for example, Canada Employment Insurance Commission  v  SF , 2016 CanLII 70627 ( SST ). Return to footnote 6 [NAME] 7 GD3-29, GD4-3. For this reason, I don’t accept the Commission’s arguments to the Appeal Division that the employer made a false or misleading statement justifying the reconsideration. It isn’t open to the Commission to choose one ground before the General Division and then refer to another during a claimant’s appeal. See CUB 21648, CUB 15223, CUB 11076. Return to footnote 7 [NAME] 8 See section 17.3.3.2 of the Digest. Return to footnote 8 [NAME] 9 See MS  v  Canada Employment Insurance Commission , 2022  SST  933. Return to footnote 9 [NAME] 10 See section 59(1) of the DESD  Act for the Appeal Division’s authority. This approach was adopted by the Appeal Division in MS  v  Canada Employment Insurance Commission , 2022  SST  933. Return to footnote 10 [NAME] 11 It seems unlikely that an agent, or the Commission's computer system, could not detect such an error in each of the files. Return to footnote 11 [NAME] 12 This is the information in file AD-26-68, but the same disparity is found in the other files on appeal. Return to footnote 12 [NAME] 13 See fact sheets: A manifest error is a mistake so obvious that it isn’t open to debate. Its coarse nature implies that it should not have occurred and that it can be easily identified without complex analysis. Return to footnote 13 [NAME]