Sunday, 2 February 2014

Opinion: It's Time for Service Canada to Pay Legal Fees

If Service Canada wants its money back from wrongfully dismissed employees, then it should pay legal fees. At least, that's my opinion.

As is explained in this blog’s post E.I. E.I. Oh!, pursuant to the provisions of the Employment Insurance Act (sections 45 and 46 in particular,) if a wrongfully dismissed employee receives EI benefits and later receives money as compensation for wrongful dismissal, then that employee can have an obligation to repay Service Canada the amount received in EI. Essentially, two things happen: (1) legally, Service Canada’s interest becomes “subrogated” to that of the wrongfully dismissed employee; and (2) the employee chases his or her former employer for money that he or she may never actually receive.

While I appreciate that an employee should not be permitted to ‘double dip,’ i.e. receive wages and EI benefits at the same time, something seems amiss when it’s the employee taking all the risk and footing the bill for legal fees. There has got to be a more equitable way.

The Ontario Health Insurance Plan Experience

In Ontario, health care is generally paid for by the Ontario Health Insurance Plan (“OHIP.”) OHIP is a government-run insurance company and operates, on many levels, like all insurance companies.

Pursuant to Ontario law, if an insured person:

  1. gets injured by a third party;
  2. uses health-care services for which OHIP pays; and
  3. advances a claim for personal injury damages (‘pain and suffering’ and/or other losses)

then OHIP has the legal right to advanced a subrogated claim with respect to the amount of money it paid.

Put another way, if you’re an Ontarian covered by OHIP and you get injured, if you sue for pain and suffering, OHIP is going to ask your lawyer to recover the amount of money it spent on doctors treating you. Information about the OHIP subrogation plan can be found on the Ontario Ministry of Health’s website at: http://www.health.gov.on.ca/en/public/publ ications/ohip/injury.aspx

Pursuant to the same laws that allow OHIP to recover its subrogated interest are provisions that allow lawyers and paralegals that advance such interests to be paid for their services. Thus, while the injured party receives nothing on account of recovering OHIP’s money, at the same time that injured party is not expected to pay his or her lawyer to do work for someone else.

The Employment Insurance Experience

The EI experience is different. As mentioned, pursuant to the EI Act, if a dismissed employee draws EI while waiting for his or her case with the dismissing employer to be resolved, then once the employee becomes entitled to wrongful dismissal damages that employee can have a legal obligation to repay Service Canada all or a portion of those benefits. In some cases the employee effectively pays his or her lawyer to pursue Service Canada’s money.

Unlike the OHIP experience, however, Service Canada does not contribute towards the dismissed employee’s legal fees. The obligation to repay exists absent any contribution towards the cost of recovery.

Suggestion

My suggestion would be for Service Canada to contribute towards the dismissed employee’s legal fees. Paying the representative 15% - 20% of the amount recovered would do at least three things:

  • It would lessen the burden on the suddenly unemployed;
  • It would encourage more employees to take up cases against stubborn employers; and
  • It would enable employees to settle their cases for less money, reducing the burden on employers.

Alternatives

As mentioned by a number of others who practice in this area, the alternative to engaging in this process is to allocate damages for wrongful dismissal to claims for damages other than wages. In those cases it is always best to seek professional legal advice as to options and risks.

Takeaways for Employees

The takeaway for employees from this post is that if you have been wrongfully dismissed and have received EI benefits while waiting for your case to settle, you may not receive all that you are claiming. You may end up paying your lawyer to obtain money for someone else. If you think this is unfair, speak to the Federal Government. The Honourable Jason Kenney is the Minister responsible for Employment and Social Development. He may be contacted via this link: Contact the Minister.

If you believe that you have been wrongfully dismissed and are looking for legal representation in Ontario, the professional, experienced and cost-effective employment lawyers for employees at Ottawa's Kelly Santini LLP would be happy to be of service to you. To reach the author of this blog, Sean Bawden, email sbawden@kellysantin i.com or call 613.238.6321 x260.

Takeaways for Employers

For employers, the takeaway is that pursuant to the provisions of the Employment Insurance Act, you have a legal obligation, when resolving a claim of wrongful dismissal, to ask the former employee if he or she has received EI benefits. If the dismissed employee has, then you have a legal obligation to confirm how much money Service Canada expects in repayment and to make that payment directly to the Receiver General (see section 46 of the EI Act.)

If you are an employer and a former employee has made a claim of wrongful dismissal, the professional, experienced and cost-effective employment lawyers for employers at Ottawa's Kelly Santini LLP would be happy to be of service to your business or organization. To reach the author of this blog, Sean Bawden, email sbawden@kellysantin i.com or call 613.238.6321 x260.

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As always, everyone’s situation is different. The above is not intended to be legal advice for any particular situation and it is always prudent to seek professional legal advice before taking any decisions on one’s own case.

Sean Bawden, publisher of the law blog for the suddenly unemployed, can be reached by email at sbawden@kellysantin i.com or by phone at 613.238.6321.

Sean P. Bawden is an Ottawa, Ontario employment lawyer and wrongful dismissal lawyer practicing with Kelly Santini LLP, and part-time professor at Algonquin College teaching Trial Advocacy for Paralegals and Small Claims Court Practice. He is a trustee of the County of Carleton Law Association.



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