Bill C-395 (Historical)

An Act to amend the Employment Insurance Act (labour dispute)

This enactment amends the Employment Insurance Act to change the way in which the qualifying period is calculated in the case of a stoppage of work attributable to a labour dispute.

Fairness for Military Families (Employment Insurance) Act

[Josée Beaudin, Bloc, Saint-Lambert, QC]

Madam Speaker, Bill C-13 before us today proposes a necessary change to the employment insurance system, and for that reason, we will support it.

It fixes one of the countless injustices in the employment insurance system, which stopped long ago providing real insurance in case of job loss. With this bill, military personnel will be able to get the parental leave to which they would otherwise have been entitled if they had not been summoned to leave on a mission.

The work our military personnel do takes great bravery and they should be congratulated on their spirit of sacrifice, their courage and all that they accomplish for their fellow citizens.

Their work requires them to constantly put their lives on the line. For this, they deserve our respect of course, but most of all, they deserve to be treated fairly and equitably. Justice cannot be blind. Different or exceptional cases cannot be treated in the same way as all the rest. Canadian Forces members inevitably find themselves in an exceptional situation when asked to leave on a mission.

The current Employment Insurance Act provides for a 52-week benefit period, that is, the time that someone who is entitled to benefits has to claim them. There are some exceptions to this rule, for example when a child is hospitalized or in the case of extended benefits for long-tenured workers. However, Canadian Forces members were not included.

We have excellent news for them, therefore, because once the bill passes, they will know that serving in the Canadian Forces will not, paradoxically, cause them undue harm and they will get the benefits to which they are entitled and for which they pay employment insurance premiums, like virtually all workers. They deserve these benefits.

In regard to all the various bills proposing improvements to employment insurance, we basically feel that we say the same thing over and over. We repeat the same old refrain because we are always confronted with the same old problem: the inability to access benefits.

The same problem is tackled, for example, in Bill C-395, introduced by my colleague from Berthier—Maskinongé, which proposes that the qualifying period, that is the period taken into account to determine the number of insurable hours, is considered to be the 52 weeks preceding the outbreak of a labour dispute. In other words, the period during which a labour dispute is underway and the workers are therefore not accumulating very many insurable hours would not be included. This means that if they lose their jobs at the end of the dispute—something that is not very frequent but does happen sometimes—they are not left without any resources.

The same logic prevails here as in the government bill. Benefits would be provided to workers who, through no individual fault of their own, find themselves cut off from employment insurance. There are always two parties to a labour dispute, the employers and the employees. Employees do not just decide to have a labour dispute. There is usually a period of negotiations during which they hope to arrive at a settlement and the dialogue with their employer is maintained. Most of all, though, they hope that the 25 years they spent working for the company and contributing to the employment insurance system will count for something and they will receive benefits, if and when needed.

In this case, if the business shuts down just before the labour dispute, the workers would be entitled to benefits. We want the weeks preceding a labour dispute to be taken into account. But according to the Employment Insurance Act, if a business shuts down after a labour dispute that lasts more than one year, these workers are left with nothing. They are financially destitute because they would have had to make do on meagre strike pay, which usually covers the bare minimum needed to survive.

That is another example of the injustices currently found within the system, and it is very similar to the cases of soldiers who did not have access to the parental benefits they should have been entitled to.

In both cases, the legislative solution is quite simple, and does not involve massive amounts of money from EI. On the contrary, the amounts required are quite insignificant. Of course, they are not insignificant to the claimants involved, for whom this represents a lot of money. For some, it means the difference between bankruptcy and financial survival, between the anxiety of losing everything and the hope of having a chance to start over.

That is why there has been so much criticism of the employment insurance system for several years now: this system no longer does what it was designed to do.

I would like to quote Michel Ducharme, the president of the Montreal branch of the FTQ, who recently testified before the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities regarding Bill C-395.

We are all paying into that system, both workers and employers, and these contributions are intended to protect us in cases of plant or company closures. That is part of what makes them legitimate. When a labour dispute arises when a collective agreement is to be renewed, the idea is to save jobs. Some unions provide strike pay, but the whole idea is not to be off the job, but rather to save that job, preserve working conditions and reach an agreement. If that turns out not to work, that is something the worker has no control over [which is what I was saying earlier]. The workers pay into the system for 25 or 30 years, and are working for a company that has always operated and has never had layoffs. Then, from one day to the next, the company shuts down. It is illogical for people not to be eligible for employment insurance benefits in those cases. That is precisely the whole purpose of these benefits.

Like the employment insurance system, the veterans charter seems to have also lost its original function, and today, it is also the subject of fierce criticism, notably from the veterans ombudsman. Passing the New Veterans Charter means that, from now on, veterans with psychological problems or physical disabilities resulting from their service in the armed forces will no longer receive an annuity, which guaranteed them some financial security. Instead, they will receive a single lump sum payment.

It was soon noticed that this amount was clearly inadequate and that, in the end, it was much less than the sum they would have received if the compensation had been paid out monthly. That is one more example of the Conservative government's lack of compassion for people in need and who, on the contrary, can use the help.

The numbers speak for themselves. Upon their return from Kandahar, 4% of soldiers have suicidal thoughts, 4.6% of them have symptoms of major depression and 15% suffer from mental health issues. Those numbers are huge.

That is why it does not make sense to give a single large sum of money to people who are, by definition, unstable and likely to squander the money in no time. Veterans with PTSD often have alcohol or drug problems.

I want to point out that the member for Québec very recently presented a petition urging the government to end this practice, which can cause major problems for some injured soldiers. All we can do now is hope that the government will heed the soldiers' call for more humane treatment. This government seems to have a tendency to take a clear-cut business approach to all services provided to the people.

For example, the Minister of Human Resources and Skills Development recently compared the employment insurance waiting period to the deductible associated with, say, car or home insurance. That kind of cynicism conflicts with the role of the state.

When the Veterans Ombudsman, Colonel Patrick Stogran, appeared before the Committee on National Defence and Veterans Affairs on April 22, he had this to say about the administrative culture that prevails in the Department of Veterans Affairs: “It's very much an insurance company approach to doing business.”

He went on to say that:

I feel very strongly that the culture has to change. I feel very strongly that to do that it has to go towards a needs-based approach. I also feel very strongly that in order to satisfy that needs-based approach, case managers on the front lines have to be empowered to offer veterans what they really need. I think that's the principle upon which this program is based.

He could have said the same thing about the employment insurance system as it is currently managed. His comments would have been just as relevant. In both cases, a major overhaul is critical to restoring and respecting the intent behind the creation of both programs: meeting people's needs so that they can maintain a sense of dignity in hard times. Right now, they are forced to fight to get anything over and above the often ridiculously low lump sum the army gives them.

In the January 9 edition of Le Soleil, Francine Matteau, the Quebec woman who started the petition presented by the member for Québec, said this about the compensation her son received, and I quote:

“The first offer the army made him was ridiculous, so he appealed and they offered him just over $100,000. He has to appeal again now, because that is not enough,” she complained, pointing out that her son, who has learned to walk again but struggles to get around, no longer meets the army's standards and cannot easily hold another job. “Medals and commendations are great, but they don't pay the mortgage or buy groceries!”...

The article goes on:

Mrs. Matteau says that the UK is much more generous to veterans and in December 2008 increased the maximum benefit for British soldiers wounded in Iraq or Afghanistan from $470,000 to $940,000.

“In addition to this benefit, wounded British soldiers receive a monthly pension that can increase the total lifetime benefits to more than $1.5 million,” states Mrs. Matteau, who now hopes to make the public aware of the fate of Canadian soldiers wounded in action.

Knowing that the maximum benefit in Canada is $276,000, we have a better understanding of why our soldiers are frustrated. To continue the comparison with employment insurance, the government runs these two programs with the same twisted logic, forcing potential benefit recipients to fight the government machine for their rights.

Is this how the Conservative government thinks we should thank workers and members of the military, who work extremely hard for their families, their fellow citizens and their society?

In another article that appeared in La Presse, the veterans ombudsman did not mince words:

“Soldiers should not have to worry about their standard of living. They should be confident that, regardless of their injuries, they will be able to support their families and themselves...They should not have to worry about the rest of their lives when they are trying to recover from physical and psychological injuries.”

I do not want to downplay the importance of the legislative amendment the Conservative government is proposing with Bill C-13, but I believe that we can safely say that there may be more important issues to deal with when it comes to the treatment of Canadian soldiers.

Reforming the Veterans Charter is something the government could do that would really prove that it supports our troops—as it claims to do. It is not enough to say it in the House. Once again, they need to follow through on their fine words and listen to the veterans who are speaking out by the thousands against a program that treats them like beggars, when on the contrary, that program should evince some sign of the gratitude we own them for the sacrifices they have made.

As legislators, we cannot be insensitive to the difficulties facing our veterans, who are often affected by their war injuries, whether physical or psychological, for the rest of their lives. These are people who face difficulties right away, from the very fact of joining the armed forces, because they are separated from their families and loved ones. Injured or not, they deserve recognition for the extraordinary work that they do.

In closing, I would like to reiterate the Bloc's support for the bill currently before the House, that is, Bill C-13. As I was saying, it will redress the injustices committed against CF members, and we should feel good about that. However, in that context, I cannot help but see and draw some parallels between the situation facing other workers who are also being deprived of the EI benefits they are entitled to, and the situation facing our wounded veterans.

Since justice requires that everyone get what they deserve, we cannot remain silent when the issue is before us. We must speak out against all injustices.

Human Resources, Skills and Social Development and the Status of Persons with Disabilities

[Candice Bergen, Conservative, Portage—Lisgar, MB]

Mr. Speaker, I have the honour to present, in both official languages, the second and third reports of the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities in relation to Bill C-395, An Act to amend the Employment Insurance Act (labour dispute) and Bill C-308, An Act to amend the Employment Insurance Act (improvement of the employment insurance system).

The committee has studied both bills and has decided to report Bill C-395 back to the House with an amendment, and Bill C-308 without amendment.

I wish to thank all the committee members for their hard work and collaboration in getting these bills through.

[Yves Lessard, Bloc, Chambly—Borduas, QC]

I understand that Mr. Komarnicki is talking about Bill C-308, which will cost money, but my question about the royal recommendation had to do with Bill C-395. Since he mentioned Bill C-308, I will use this opportunity to remind Mr. Komarnicki that he was among those members who voted with us in 2005, in favour of the 28 recommendations, and that the provisions in Bill C-308 reflect some of the 28 recommendations that he supported.

[Yves Lessard, Bloc, Chambly—Borduas, QC]

Yes. Are we talking about the same thing? I am also talking about Bill C-395.

[The Chair, Conservative, Candice Bergen]

Mr. Lessard, I think you have the wrong one. We're looking at Bill C-395. Is that the bill you want to amend?

[The Chair, Conservative, Candice Bergen]

Okay. So you don't want to amend clause 1 in Bill C-395; that's what you're saying.

[Yves Lessard, Bloc, Chambly—Borduas, QC]

Bill C-395, right?

[The Chair, Conservative, Candice Bergen]

Bill C-395, yes.

[Yves Lessard, Bloc, Chambly—Borduas, QC]

Madam Chair, we already discussed it. Further to remarks made by witnesses, namely representatives of the Conseil national des chômeurs et chômeuses and the FTQ, we examined clause 1 carefully. These witnesses were concerned about the benefits workers would receive during the period following the dispute. Initially, we thought it was obvious that the provision was included.

To be safe, though, it may be preferable to move an amendment that makes the intent of the bill perfectly clear.

I will hand out an amendment. We have begun discussing Bill C-395, An Act to amend the Employment Insurance Act (labour dispute), is that right?

[The Chair (Ms. Candice Hoeppner (Portage—Lisgar, CPC)), Conservative, Candice Bergen]

Good afternoon, everyone. I would like to call to order meeting 15 of the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities.

Pursuant to the order of reference of Wednesday, March 3, 2010, we have before us Bill C-395, An Act to amend the Employment Insurance Act (labour dispute), and we will now be going through clause-by-clause consideration.

(On clause 1)

Shall clause 1 carry?

Yes, Mr. Lessard.

[Josée Beaudin, Bloc, Saint-Lambert, QC]

Right. I don't want to go into the description of the two things any further, but it seemed odd to me to think that employees go on strike without good reason, for example. I think that employees do have good reason to go on strike to exercise their rights.

You know that Bill C-395 aims to do one very simple thing: make it possible for workers who lose their job because they are laid off after a labour dispute to receive the employment insurance benefits that they are entitled to and that they have paid into their whole lives. That is essentially what Bill C-395 is.

Do you not think it is unfair that workers are deprived of insurance they are entitled to and to which they have contributed for 25 years of their lives, because they are laid off after a labour dispute? Do you not think that is unfair?

[John Farrell]

Good afternoon. I have provided the clerk with a copy of my remarks and I had one given to the person who is doing the translation.

I apologize for being late. I had several family issues I had to deal with today.

In any event, I am John Farrell, executive director of Federally Regulated Employers--Transportation and Communications. I thank you for allowing me to appear before the committee.

FETCO is an organization consisting of a number of major employers and employers associations in the federal jurisdiction in the transportation and communications sectors.

A list of FETCO members appears in appendix A of our document, which you don't have, so for the record, the companies that are represented by FETCO include: Air Canada; the BC Maritime Employers Association; Bell Canada; Canada Post Corporation; Canadian Airports Council; Canadian Association of Broadcasters; Canadian Broadcasting Corporation; Canadian National Railway; Canadian Pacific Railway; Canadian Trucking Alliance; FedEx; Maritime Employers Association; Nav Canada; Purolator; Telus; Western Grain Elevator Association; WestJet; and VIA Rail Canada.

FETCO has approximately 586,000 employees, of which 212,000 are union members.

Bill C-395 proposes to extend the qualifying period for employment insurance benefits by the period of time that a labour dispute, either a strike or lockout, is in progress. Currently, the Employment Insurance Act does not permit employees to count this time, which is indefinite, as part of the qualifying period.

Strikes and lockouts are permitted by the labour laws in all jurisdictions in Canada as a means for parties in collective bargaining to exercise economic leverage to achieve their collective bargaining objectives and determine the terms and conditions of employment. When a strike or lockout occurs, one party or the other is not willing to accept the proposed terms and conditions of employment. The strike is considered a fundamental right by unions.

Strikes are far more prevalent than walkouts. According to data I have secured from HRSDC, 83% of work stoppages over the last 15 years have been strikes and 17% were lockouts. Lockouts are seldom used by employers because, fundamentally, employers are interested in continuing to operate their businesses, not shutting them down.

Employees engaged in a strike do so of their own free will. They withdraw their services in order to inflict economic leverage over their employer to accomplish their collective bargaining objectives. Union members have choices. They vote to provide their union with a strike mandate. They vote to reject or accept a company proposal for a settlement. They vote on whether or not to engage in strike activity.

In a strike situation, union members exercise discretion to remove their services and not to engage in gainful employment with a particular employer. While on strike or lockout, employees are usually entitled to receive strike pay, and this strike pay is not taxable. Contributions as employee union dues are tax deductible, and when employees receive strike pay they're not required to pay tax on that strike pay, so in a sense they are receiving tax-free income while they're receiving strike pay.

In some cases, employees are entitled to receive as much as $400 or $500 a week in strike pay, which, on a tax-free basis, is quite extensive. This doesn't happen in all cases, but with certain unions that have a habit of subsidizing strike activity from one bargaining unit to another, such as the Communications, Energy and Paperworkers Union, sometimes the strike pay can be as high as $400 or $500 per week.

Employees are also free to seek gainful employment with other employers while they're on strike or lockout.

In the case of a lockout, it is clear that the company initiates the action. Usually a lockout occurs because the employer has economic or operating imperatives that must be met for the good of the business, and unions and employees are unwilling to accept the terms and conditions of employment.

In some cases, lockouts are required to counteract disruptive union tactics, such as costly rotating strikes, or threats to the business if a strike is likely to occur at an inopportune time and could cause severe economic harm to the business. In other words, lockouts are generally used by employers in response to potential strike activity as a tactical defence to manage the business in a way that is most appropriate for the company.

Lockouts, like strikes, are also discretionary. There's no doubt about that. Lockouts are part of the process permitted by the labour laws, just as strikes are.

Permitting employees on strike or lockout to extend their entitlement to employment insurance benefits will substantially reduce the incentive for employees to seek a compromise in the case of lengthy strikes.

There are situations covered by the Employment Insurance Act where the current qualifying period may be extended. They include, as you probably know: illness; injury; quarantine; pregnancy; confinement to a prison or jail; and when someone is receiving certain assistance under employment benefits programs or is receiving benefits under provincial law on the basis of having to cease working because continuing to work would result in danger to a person, unborn child, or a child that is breastfeeding.

These situations are not discretionary, unlike the situation with respect to strikes, and it makes sense for the legislature to extend the qualifying period in these non-discretionary circumstances.

Furthermore, employment insurance is a program supported by employers and employees, both union and non-union. Employers pay 58% of the premiums. EI provides benefits to employees who are temporarily unemployed through no fault of their own, not because they are engaged in a labour dispute over the terms and conditions of employment. This is unfair to employers and non-union employees, both of whom are contributing premiums to the employment insurance fund.

It is appropriate for the qualifying period to be 52 weeks and it is appropriate to have reasonable proximity in timing between gainful employment and the receipt of benefits. Striking or locked-out employees are out of the labour market because of a labour dispute, not because they are unemployed and actively seeking employment. Furthermore, employees on strike or lockout are free to seek alternate employment and are also entitled to receive tax-free strike pay while on strike or lockout.

Extending the qualifying period indefinitely for the period of a strike or lockout is unfair to employers. It is contrary to the long-standing principle that employment insurance should remain neutral when it comes to labour disputes.

Madam Chair, that is the extent of my remarks to the committee.

[The Chair, Conservative, Candice Bergen]

For the record, we are continuing our study of Bill C-395. We welcome John Farrell, executive director, Federally Regulated Employers--Transportation and Communications, also known as FETCO.

Mr. Farrell, you'll have 10 minutes to make a presentation, and then we'll begin questions.

Thank you.

[Pierre Céré]

I have discussed this with others who have expertise as regards the application of the Employment Insurance Act. Based on the current wording, Bill C-395 would not provide for an extension longer than 104 weeks, because the qualifying period has not been redefined. In our opinion, there is a difference between adding a new reason, under subsection 8(2), whereby the qualifying period could be extended—in this case, a labour dispute—and going so far as to redefine the qualifying period in exceptional cases. This makes it possible to include workers who become injured, are involved in industrial accidents, become ill, or are affected by labour disputes or situations of considerable length.

[Pierre Céré, Spokesperson, Conseil national des chômeurs et chômeuses]

Madam Chair, I am going to take over now, as this is a brief presented jointly by the FTQ and the Conseil national des chômeurs et chômeuses.

I would like to draw your attention to the second paragraph of Bill C-395. In our opinion, this second provision, which is intended to provide for an extension greater than the current maximum of 104 weeks, cannot apply unless “qualifying period” is redefined. Under this bill, the definition remains the same—namely the 52-week period immediately before the beginning of the benefit period.

I would like to refer you to page 3 of our brief—there you have the French and English versions. These are excerpts from the relevant sections of the Employment Insurance Act—subsection 8(1), which defines the qualifying period, and subsections 8(2), 8(3), 8(4), and so on, which define the exceptions which could give rise to a potential extension of the qualifying period. You will see that, if you compare that wording with the one found in the bill, the latter only refers to subsection 8(2), relating to the reasons for granting an extension of the qualifying period, without actually amending the definition of “qualifying period”, which remains at 52 weeks.

Madam Chair, we clearly understand the intent of this bill: to bring the entire labour dispute period into the qualifying period and extend it by 52 additional weeks, to include the year prior to the labour dispute, so as to qualify workers laid off at the end of the labour dispute. I must admit that, during the first hour of your hearings, I sometimes could not believe my ears. It was said that the purpose of the bill was to allow workers to receive Employment Insurance benefits for the duration of the labour dispute. But that is not at all what this bill is about. And, if people believe that labour dispute period would entitle workers to hours of work that would allow them to qualify, once again, they are mistaken. It is important to understand what is meant by the qualifying period and potentially extending that qualifying period.

Not only do we understand the bill, but we support its intent, which is to extend the qualifying period, in some cases, beyond the 104 weeks. Furthermore, it is our view that an extension of the qualifying period beyond the current maximum of 104 weeks should also be permitted for other reasons. Here we are thinking of workers deemed to be—and I am quoting from subparagraph 8(2)(a)—“incapable of work because of a prescribed illness, injury…”.

The fact is that people who are injured at work will be covered by the provincial health and safety regime. Other people may become seriously ill and will sometimes be covered by a wage insurance plan. However, if someone spends the last two years under a WCB or wage insurance plan, upon return to work, that person will not be able to receive Employment Insurance if there have been job losses, because the qualifying period is 52 weeks and can only be extended by another 52 weeks. Again, I would refer you to subsection 8(2) on page 3. In other words, in spite of the reasons stated for a possible extension of the qualifying period—which include illness, injury, inmate status, receipt of severance pay, and so on—the maximum is 104 weeks. It would be possible, however, in the spirit of this bill—and understanding the intention behind this—to provide for exceptional situations where the 104 weeks could be somewhat exceeded.

I would also like to draw your attention to the Quebec Act respecting Parental Insurance. This is not the first time that I have been here, and it is not the first time either, ladies and gentlemen, that I have talked about the Quebec Act respecting Parental Insurance. This Act is an extension of the Employment Insurance Act. Starting in 1998—and this came into force on January 1, 2006— Quebec repatriated part of the Employment Insurance Act—the part of the Act that deals with maternity and parental benefits. When that legislation was introduced in 1998, and finally passed in 2006, it was based on the Employment Insurance Act.

However, we looked at it and tried to modernize it. We tried to modernize it with respect to the eligibility criteria, the calculation of the benefit rate and the benefit period claimants are entitled to. Again, I would refer you to our brief. I hope you have it. On page 5, you have excerpts from the Act respecting Parental Insurance that relates to the qualifying period and the extension of that period. I repeat: the Act respecting Parental Insurance that has been implemented in Quebec is an extension of the Employment Insurance Act. In Quebec and at the federal level, it is considered to provide the equivalent of Employment Insurance benefits.

When I say that we have modernized that part of the Act, what that means is that the Quebec government met with a wide variety of civil society representatives. People like myself, people from union organizations, employer associations and government institutions all contributed to the Act respecting Parental Insurance. The purpose of this long preamble is to ask you to look at page 5 of the brief that we tabled, and specifically subparagraph 31.2(1)(d) of the Regulation respecting parental insurance plan premiums. There you will find the provisions that mimic subsection 8(2) of the Employment Insurance Act with respect to the reasons that can give rise to an extension of the qualifying period. In that regard, Quebec has added a strike or lockout as a potential reason for extending the qualifying period.

We believe that the federal Employment Insurance Act should take its inspiration from that statute. It is our view that the very minimum provision the House of Commons should consider would be to make labour disputes—which were completely forgotten, as we mentioned a little earlier—a reason for extending the qualifying period, along the same lines as the other reasons set out in subsection 8(2) of the Employment Insurance Act. It is simply a matter of adding labour disputes, strikes and lockouts to the list of reasons.

Madam Chair—and I will end on this—this is not a partisan matter. There really is no partisanship involved here. It is our humble opinion that the Standing Committee on Human Resources could easily and unanimously propose that the Parliament of Canada pass this legislative measure. What do you think?