Social Security Tribunal Rules Vacation Pay Not Exempt Under EI Regulations

[TRANSLATION] Citation: Canada Employment Insurance Commission  v  SB , 2026  SST  282 Social Security Tribunal of Canada Appeal Division Decision Appellant: [redacted] Representative: [NAME] Respondent: [redacted] Decision under appeal: General Division decision dated December 19, 2025 (GE-25-3100) Tribunal member: [NAME] of hearing: Teleconference Hearing date: March 24, 2026 Hearing participants: Appellant’s representative Respondent Decision date: April 8, 2026 File number: AD-26-18 On this page Decision Overview Issue Analysis Conclusion Decision [ 1 ] The appeal is allowed. The earnings have to be allocated under section 36(8)(b) of the Employment Insurance Regulations  ( EI  Regulations), over the period from August 4 to 30, 2025, based on the Claimant’s normal weekly earnings. Overview [ 2 ] The Respondent (Claimant) has been working for over 20 years as a childcare educator for a [COMPANY]. She was laid off on June 24, 2025. [ 3 ] Before the Claimant was separated from her job, the employer had agreed with her to pay her accumulated annual leave, that is, her vacation pay. It was to be paid over three weeks that were part of the period she was laid off. [ 4 ] The Appellant (Commission) allocated the vacation pay starting the week of leave on August 4, 2025. The Claimant disagreed and appealed to the Tribunal’s General Division. [ 5 ] The General Division decided that the Claimant got the amount because she was laid off, not because she had planned to take vacation. It found that she could benefit from the exemption set out in section 77.997 of the EI  Regulations, created under a pilot project. That section says that, under certain conditions, earnings paid because of a layoff don’t constitute earnings. The General Division allowed the Claimant’s appeal. [ 6 ] The Appeal Division gave the Commission permission to appeal. The Commission argues that the General Division made an error of law by finding that the Claimant could benefit from the exemption set out in section 77.997 of the EI  Regulations. That section says that, under certain conditions, earnings paid because of a layoff don’t constitute earnings. [ 7 ] I have to decide whether the General Division made an error of law by finding that the Claimant could benefit from the exemption set out in section 77.997 of the EI  Regulations. [ 8 ] I am allowing the Commission’s appeal. Issue [ 9 ] Did the General Division make an error of law by finding that the Claimant could benefit from the exemption set out in section 77.997 of the EI  Regulations? Analysis Did the General Division make an error of law by finding that the Claimant could benefit from the exemption set out in section 77.997 of the EI  Regulations? [ 10 ] On September 10, 2025, the Claimant stated that she got $3,455 from her employer as vacation pay for the planned leave period from August 4 to 26, 2025. Footnote 1 [ 11 ] I am of the view that the General Division overlooked the evidence before it when it found that the Claimant could have asked to have her vacation pay issued earlier after she was laid off on June 24, 2025. The evidence clearly shows that she didn’t have that choice because it was a period of paid leave that the employer imposed. [ 12 ] I am also of the view that the General Division made an error of law in interpreting section 77.997 of the EI  Regulations. For this section to apply, it has to be shown that the earnings would be allocated under section 36(9) of the EI  Regulations. Footnote 2 [ 13 ] The Federal Court of Appeal has established that section 36(9) is meant to cover any part of the earnings that becomes due and payable when the employment contract ends and unemployment starts. This makes sure that the earnings the claimant is entitled to at the time of separation are considered before the claimant is eligible to get unemployment benefits. Footnote 3 [ 14 ] The evidence shows that the Claimant’s earnings became due and payable only during the planned leave period, from August 4 to 26, 2025, not when she was separated from her job. In other words, the employer’s obligation to pay those earnings became clear only when the planned leave period started. [ 15 ] For these reasons, I am of the view that the General Division overlooked the material before it and made an error of law in interpreting section 77.997 of the EI  Regulations. [ 16 ] Considering the General Division’s errors, I am justified in intervening. Remedy [ 17 ] Since the parties had the chance to present their own positions before the General Division, I am of the view that the file is complete. So, I will give the decision that the General Division should have given. Footnote 4 [ 18 ] The Claimant stated that she got $3,455 from her employer as vacation pay for the planned leave period from August 4 to 26, 2025. The employer imposed this period of paid leave. [ 19 ] The earnings became due and payable only during the planned leave period, from August 4 to 26, 2025, not when she was separated from her job. [ 20 ] In other words, the employer’s obligation to pay the earnings became clear only when the planned leave period started. The Claimant acknowledged that she could not claim the vacation pay when she was separated from her job on June 24, 2025. [ 21 ] For these reasons, I am of the view that the exemption set out in section 77.997 of the EI  Regulations doesn’t apply to the Claimant. [ 22 ] The earnings have to be allocated under section 36(8)(b) of the EI  Regulations. That is excluded from the temporary measures set out in section 77.997. [ 23 ] I want to point out that I believe the Claimant when she says that two Commission agents told her that the earnings would not be allocated because of the temporary exemption. [ 24 ] But the Supreme Court of Canada held in [NAME] that “the Commission and its representatives have no power to amend the law, and ... therefore the interpretations which they may give of that law do not themselves have the force of law ... any commitment which [they] may give, whether in good or bad faith, to act in a way other than that prescribed by the law would be absolutely void and contrary to public order.” Footnote 5 [ 25 ] For these reasons, I have no choice but to allow the Commission’s appeal. Conclusion [ 26 ] The appeal is allowed. The earnings have to be allocated under section 36(8)(b) of the Employment Insurance Regulations  ( EI  Regulations), over the period from August 4 to 30, 2025, based on the Claimant’s normal weekly earnings. Footnotes Footnote 1 See GD3-39. Return to footnote 1 referrer Footnote 2 Sections 36(10) and (11) of the Employment Insurance Regulations also don’t apply in this case. Return to footnote 2 referrer Footnote 3 See Canada (Attorney General)  v  [NAME] , 1996 CanLII 11882 ( FCA ). Return to footnote 3 referrer Footnote 4 See section 59(1) of the Department of Employment and Social Development Act . Return to footnote 4 referrer Footnote 5 [NAME]  v  Canada (Employment and Immigration Commission) , 1986 CanLII 7610 ( FCA ), [1986] 3  FC  70. Return to footnote 5 referrer