Executive Summary: Key Legal and Evidentiary Issues

• Subsection 10(4) of the Employment Insurance Act required Ms. Musani to show both that she was qualified for benefits on the earlier date sought and that she had good cause for the delay throughout the entire period before she applied.
• Her evidence relied on a difficult and high-risk pregnancy, an emergency C-section, the newborn’s stay in the neonatal intensive care unit, and the challenges of caring for a first child while posted outside Canada.
• The Tribunal considered whether she had acted as a reasonable and prudent person would have acted by making prompt inquiries about her EI rights and obligations.
• Another issue was whether her reliance on her employer, compensation advisors, and the mistaken payment of top-up benefits explained the late EI application.
• The Appeal Division found good cause only from August 23, 2023 onward, but held that this did not change the result because she still likely lacked sufficient insurable hours.
• On judicial review, the Federal Court of Appeal refused to consider new Charter arguments because they had not been raised before the General Division or the Appeal Division.

Facts of the case.

Farrah Musani and her husband are Canadian foreign service officers who were posted in Berlin at the relevant time. In February 2022, she informed her human resources advisor that she was pregnant, expected to give birth in May 2022, and planned to take 26 weeks of maternal/parental leave and receive 26 weeks of maternal/parental benefits. The judgment states that these employer-provided top-up benefits are payable in addition to EI benefits and bring a claimant’s total remuneration up to 93 percent of its ordinary level, but only if the claimant is eligible for and applies for EI benefits. After what she described as a difficult and high-risk pregnancy, she gave birth in Berlin by emergency C-section on May 19, 2022, and her newborn spent several days in the neonatal intensive care unit before going home.

The policy and clause at issue.

On May 25, 2022, shortly after the birth, her human resources advisor sent her an application package of documents to complete and submit in order to obtain top-up benefits. Those documents included an “Employment Insurance (EI) statement.” The cover email also suggested that she consult her collective agreement. The judgment specifically refers to section 26.02 of the collective agreement, which included, as one of the requirements for receiving top-up benefits, that the employee provide the employer with proof that they had applied for and were in receipt of benefits under the Employment Insurance Act in respect of insurable employment with the employer.

What happened after the leave began.

Ms. Musani did not apply for EI benefits during her leave and did not receive them. Despite that failure, she was paid top-up benefits in error. The judgment records her position that she was not aware at that time that she needed to apply for EI benefits in order to receive the top-up benefits, and that she did not realize that the top-up benefits were being paid into her bank account. She states that in July 2023, through discussions with another compensation advisor, she learned that she should have applied for EI benefits. She then applied on September 24, 2023, about 16 months after the birth of her child.

The Commission and General Division decisions.

The EI Commission refused her application on the basis that she did not have sufficient hours of insurable employment during her qualifying period, which the judgment identifies as September 25, 2022 to September 23, 2023. The judgment also states that the Commission did not address her request to antedate her qualifying period to May 22, 2022. On reconsideration, she maintained that request and submitted, among other things, that neither she nor her husband had previously applied for EI benefits, that they understood there was only one application process and assumed her employer would handle it, that they did not notice she was not receiving regular EI benefits, that there had been delay by her advisor in completing paperwork, that she remained in Berlin during and after her pregnancy, that the time difference made it difficult to obtain information, and that having a new baby left her with little sleep and virtually no time to attend to personal matters. The General Division dismissed the appeal, holding that although there can be challenges for parents with a first child and those challenges may be greater with a birth outside Canada, there were no exceptional circumstances preventing her from applying or making it exceptionally difficult to claim benefits. The General Division also found that she had a duty to inquire about her rights and obligations and the steps needed to protect her claim, but had made no effort to find out her rights and obligations under the Act.

The legal test applied by the Tribunal.

The judgment states that subsection 10(4) of the Employment Insurance Act provides that a claim may be regarded as having been made on an earlier day if the claimant shows that they were qualified to receive benefits on the earlier day and that there was good cause for the delay throughout the period from the earlier day to the day the claim was made. Referring to prior case law, the General Division held that, to show good cause, an appellant must prove that they acted as a reasonable and prudent person would have acted in similar circumstances and did so for the entire period of delay. They must also show either that they took reasonably prompt steps to ascertain their entitlement to benefits and their obligations under the law, or that there were exceptional circumstances explaining why they failed to do so. The judgment further states that these requirements are “both demanding and strict,” and that ignorance of the law, even if coupled with good faith, is not sufficient to establish good cause.

The Appeal Division decision.

Ms. Musani obtained leave to appeal to the Appeal Division. The Appeal Division dismissed the appeal, but found that the General Division had erred in one respect. The judgment states that the Appeal Division found the evidence supported a finding that Ms. Musani engaged with her compensation advisor to clarify next steps and pursue her EI application from August 23, 2023 forward, so that she had good cause from that date. The Appeal Division nevertheless concluded that this did not assist her in the end, because based on an August 23, 2023 good-cause date, her qualifying period would have begun in August 2022, when she was on leave, and even if she had worked full-time during that additional month, it was doubtful that she could have accumulated sufficient hours to qualify for EI benefits.

The Federal Court of Appeal decision.

In the Federal Court of Appeal, the Court identified three preliminary issues. First, it corrected the style of cause because the proper respondent was the Attorney General of Canada, not the Canada Employment Insurance Commission. Second, it noted that the parties agreed the standard of review was reasonableness. Third, it held that Ms. Musani’s Charter arguments would not be considered because she had not raised the Charter or Charter values before either the General Division or the Appeal Division. Turning to the merits, the Court held that the Appeal Division had squarely addressed her physical and mental state and her reliance on her employer and compensation advisor, and had concluded that although she had challenges, they were not so severe as to absolve her of the basic duty to make inquiries about her rights and obligations with respect to EI. The Court also held that the Appeal Division considered in detail her interactions with and reliance on her employer and compensation advisor, and reasonably concluded that the General Division could find her situation was not “exceptional.” The Court found no basis to intervene and dismissed the application.

Outcome.

The final result was that Ms. Musani did not obtain the antedate needed to qualify for EI benefits. The successful party in the Federal Court of Appeal was the Attorney General of Canada. No monetary amount was ordered in favor of the successful party. The Court expressly stated that the Attorney General did not seek costs, and none were awarded. Although the judgment notes that the employer was clawing back top-up benefits that had been paid in error, no amount for that clawback is stated in the judgment.