Committee on Economic Security (CES)

"Social Security In America"

 

APPENDIXES

APPENDIX VI

UNEMPLOYMENT INSURANCE PROVISIONS OF THE CANADIAN EMPLOYMENT AND SOCIAL INSURANCE ACT {1}

[Assented to June 28, 1935; 25-26 George V, Chap. 38]

I. TYPE OF LAW

A national {2} pooled system of unemployment compensation in conjunction with a national system of public employment offices. Contributions are to be collected by the Dominion to be used for the direct payment of benefits to the unemployed. Effective date to be set by the administrative authority.

II. SCOPE OF LAW

The law is limited mainly to compensation of total unemployment; partial unemployment is compensated only when the insured contributor is unemployed three or more days in a week, and no benefits are payable for fractional days of unemployment. Seasonal employment is in the main excluded from coverage by the requirement of 24 weeks of employment in a year. In addition the administrative authority may make regulations regarding contributions and benefits for persons who are normally employed in seasonal occupations. Regulations may also be made by the administrative authority regarding contributions, the amount and duration of benefits, and the definition of continuous unemployment for part-time workers, married women, and piece workers.

III. COVERAGE

A. Persons included.

Employment of any person in Canada 16 years of age and over is covered by the act, whether the employed person is paid by one or more employers, by time, or by the piece, or otherwise.

Employment outside of Canada or partly outside is included if the purpose is the execution of some particular work by persons who were insured con-

{1} This act also contains provisions entitled "National Health" which empower the administrative authority to cooperate with any governmental units or other organizations on the problem of health and to collect information and report from time to time on the subject of health insurance.

{2} The preamble of the act asserts that under the provisions of the Treaty of Versailles, to which Canada was signatory, Canada agreed that it would endeavor to secure and maintain fair and humane conditions of labor and that the well-being of industrial wage earners is of supreme international importance. In order to discharge these obligations and for the purpose of maintaining interprovincial and international trade, the unemployment insurance measure was enacted. This law was declared unconstitutional by the Supreme Court of Canada on July 17, 1936, in a decision entitled: "In the Matter of a Reference as to Whether the Parliament of Canada Had Legislative Jurisdiction to Enact the Employment and Social Insurance Act, Being Chapter 36 of the Statutes of Canada, 1935." On July 29, 1936, the Judicial Committee of the Privy Council granted the Dominion Government leave to appeal this decision, The Privy Council, on Jan. 28, 1937, declared the act invalid.

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tributors immediately before leaving Canada for an employer resident of Canada or having business in Canada, being employment which, if it were employment in Canada, would make the person covered by the act, subject to any prescribed conditions, modifications, or exceptions.

Unless excluded by the act or by special order of the administrative authority, employment by the Dominion Government or by provincial or municipal governments is covered by the act.

B. Employment exclusions.

(1) Agriculture, horticulture, and forestry.

(2) Fishing.

(3) Lumbering and logging, exclusive of such saw, planing, and shingle mills, as are reasonably continuous in their operations.

(4) Hunting and trapping.

(5) Transportation by water or by air, and stevedoring.

(6) Domestic service, exclusive of employment in profit enterprises.

(7) Professional nurse or probationer undergoing training as a nurse.

(8) Teacher, including teachers of music and dancing in schools or private capacity.

(9) Royal Canadian Mounted Police, Navy, air force, and permanent active militia.

(10) Dominion, provincial, or municipal police.

(11) Civil-service employment, and employment in public service certified as permanent by the administrative authority of the act.

(12) Agent employed on commission, fee, or profit-sharing basis.

(13) Casual employment otherwise than for the purpose of the employer's trade or business.

(14) Employment defined by the administrative authority as subsidiary only and not as the principal means of livelihood.

(15) Employment by husband or wife.

(16) Employment for which no wages are paid where the person employed is the child of, or is maintained by, the employer.

(17) Employment in which persons are employed and paid for playing any game.

C. Wage exclusions.

Employment other than by why of manual labor and at a remuneration exceeding in value $2,000 a year is excluded from both contributions and benefits; provided that any person in respect of whom contributions have been paid as an insured contributor for not less than 500 weeks may continue as an insured contributor.

IV. CONTRIBUTIONS

Contributions are flat rates payable weekly by the employer and employee which vary in accordance with the age and sex of the employee, as follows:

Age and sex of employed person	Employer contribution	Employee contribution	Age and sex of employed person	Employer contribution	Employee contribution
21 years and over:			18-17 years:
Men	$0.25	$0.25	Boys	$0.11	$0.11
Women	.21	.21	Girls	.09	.09
21-18 years:			17-16 years:
Men	.18	.18	Boys	.07	.07
Women	.15	.15	Girls	.06	.06

The Dominion Government contributes to the unemployment fund one-fifth of the aggregate deposits of employers and employees and also bears the cost of administering the system and of maintaining the public employment offices. Exclusive of administrative expenses, the costs of the system are borne in the following proportions: Employer, five-twelfths; employee, five-twelfths; Government, two-twelfths,

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The employer pays the total of his own and his employees' contributions. The portion due from the employee may be recovered by the employer by wage deduction.

A weekly contribution is due if the individual is wholly or partly employed in any calendar week, but is not due if no remuneration has been received and no services rendered during any such week. An employee is entitled to a refund of contributions paid by him for any days of any such week (exclusive of any fraction of a day) in respect of which he proves that he was unemployed within the period of 5 years immediately preceding the date on which he makes application for unemployment benefit, and the whole of the refund to which he may be so entitled shall be payable to him at the same time as the first payment of unemployment benefit is payable to him on that application.

V. BENEFITS

A. Amount of benefits.

Benefits are flat rates which vary in accordance with the age and sex of the insured and with the number and class of the dependents, as follows:

Age and sex of insured person	Daily rate	Weekly rate	Age and sex of insured person	Daily rate	Weekly rate
21 years and over:			17-18 years:
Men	$1.00	$6.00	Boys	$0.30	$1.80
Women	.85	5.10	Girls	.25	1.50
21-18 years:			Dependents' benefit:
Men	.70	4.20	Adult	.45	2.70
Women	.00	3.60	Child	.15	.90
18-17 years:
Boys	.45	2.70
Girls	.36	2.10

Benefits paid to insured contributor with dependents cannot exceed 80 percent of wages.

B. Duration of benefits.

(1) Normal benefits.- Normal benefits are paid for a maximum of 78 days (or 13 weeks of 6 days) of continuous unemployment.

(2) Additional benefits.-Additional benefits beyond the 78-day period are allowed if the insured contributor has made not less than 100 contributions during the preceding 5 insurance years. One day of additional benefit is allowed for each weekly contribution during the 5-year period (maximum 260), and from this total is subtracted 1 day for each 3 days of benefit received during the same 5-year period.

Fractions of a day are disregarded in the above computation, and every two contributions paid for a contributor under the age of 18 years are counted as one contribution. The number of additional days so computed is in no case to continue the benefit rights of the insured beyond the end of his benefit year. The benefit year is a period of 12 months beginning on the date on which the insured, in making his application for benefits, proves for the first time that he fulfills statutory conditions for benefits.

C. Statutory conditions for the receipt of benefits.

(1) Contribution period.-Not less than 40 full weeks of contributions during the 2 years preceding the claim for benefit. The insured cannot credit to this period any days of unemployment for which he received a refund of contributions paid by him, but if the insured can prove, for a period, physical or mental disability, noninsured or self employment, such period shall extend the

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2-year qualification period to a period not to exceed 4 years in all. The insured must have had bona fide employment in insurable employment for such weeks which are credited toward the qualification period.

A person who has exhausted his benefit rights must have paid 13 weekly contributions since the Sunday last before the last day for which he received benefits in order to qualify for benefits in his succeeding benefit year.

(2) Application for benefits.- Application for unemployment benefit must be made in the prescribed manner and proof given that unemployment has been continuous since the date of application.

(3) Bona fide unemployment.-The applicant for benefits must prove that he is capable of and available for work but unable to find suitable employment.

Refusal of employment offered in consequence of a shortage of work due to a trade dispute; or at wages lower, or under conditions less favorable, than those habitual to the individual in his usual occupation, or less favorable than those observed by agreements between employers and employees; and refusal of employment if by acceptance thereof the insured contributor world lose the right to membership in organizations of workers shall not be considered as disqualifying the applicant for eligibility for benefits.

D. Waiting period.

Nine days of continuous unemployment must elapse before the commencement of benefit.

Any 3 days of unemployment, whether consecutive or not, within a period of 6 consecutive days shall be treated as a continuous period of unemployment, and any two such continuous periods separated by a period of not more than 6 weeks shall be treated as one continuous period of unemployment. No payment of benefits is made for any fraction of a day.

E. Disqualifications from benefits.

(1) Statutory disqualification.- Persons who fail to meet the three statutory conditions (40 weeks of contribution within the past 2 years; prescribed method of application for benefits; bona fide unemployment) are completely disqualified from receiving benefits.

(2) Trade disputes.- If an insured contributor has lost his employment by reason of a trade dispute he is disqualified from receiving benefits so long as the stoppage continues. This disqualification does not apply in any case where the insured person proves that he is not participating in, financing, or directly interested in the trade dispute and does not belong to a grade or class of workers of which immediately before the commencement of the stoppage there were members employed at the premises at which the stoppage is taking place any of whom are participating. in or financing or directly interested in the dispute.

Where separate branches of work which are commonly carried on as separate businesses in separate premises are carried on in separate departments on the same premises, each of these departments shall be deemed to be a separate factory.

(3) Temporary disqualification for other causes.-An insured person may be temporarily disqualified from receiving benefits for not more than 6 weeks, beginning with such date as may be determined by the court of referees or the umpire, as the case may be, in the following instances:

(a) Misconduct.- If he has been discharged from his employment by reason of his own misconduct.

(b) Voluntary leaving.-If he has voluntarily left his employment without just cause.

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(c) Failure to comply with instructions for finding suitable employment. If he neglects to avail himself of an opportunity for suitable employment or refuses or fails to carry out written instructions of the employment office to find suitable employment. Employment arising out of a trade dispute, employment at wages or under conditions less favorable than his usual occupation, or employment less favorable than that observed by agreements between employers and employees is not deemed suitable employment except that after a reasonable interval of unemployment any employment shall not be deemed unsuitable if it is not the usual occupation of the insured, so long as such employment is at wages not lower and under conditions not less favorable than those observed by agreements, or failing such agreements those recognized by reasonable and fair employers. No insured person is to be disqualified, however, for refusal to accept employment if such acceptance would make him lose the right to become a member, continue to be a member and observe the lawful rules of, or to refrain from becoming a member of any association, organization, or union of workers.

(4) Other disqualifications.-Individuals who are inmates of any prison or public institution, permanently or temporarily not in Canada, or in receipt of an old-age pension, are disqualified from the receipt of benefits.

VI. ADMINISTRATION

A. Employment and Social Insurance Commission.

(1) Commissioners.-The act is to be administered by an employment and social insurance commission, consisting of a chief commissioner and two other commissioners appointed by the governor in council. One of the commissioners is to be appointed after consultation with organizations representative of workers, and the other after consultation with organizations representative of employers. The term of office is 10 years, and the commissioners are eligible for reappointment if they are under 70 years of age at the expiration of their terms. Retirement is automatic at the age of 70. The salaries of the commissioners are fixed by the governor in council.

(2) Other employees.-Employees of the commission are subject to civil service and are to be employed subject to the approval of the governor in council. Technical and professional persons may be employed by the commission subject to the approval of the governor in council.

(3) Powers of the commission.-The commission is given wide powers to make regulations. It is authorized to appoint insurance officers and panels of employer representatives for the courts of referees, to organize and operate a national employment service, and to prescribe procedures, penalties, and the manner and methods of paying contributions and benefits. It is also directed to make investigations for the purpose of proposing to the governor provisions for (a) insurance for those excluded from coverage, (b) assistance during unemployment to insured and noninsured not entitled to benefits, (c) vocational training and rehabilitation.

(4) Administrative expenses.-The administrative costs of unemployment insurance are to be borne by the Dominion Government.

B. Employment service.

(1) Establishment, maintenance, and control.-The act provides for the organization, management, maintenance, and control of a national employment

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service under the supervision of the commission. The governor in council may repeal by proclamation the Employment Offices Coordination Act of 1927, under which the Dominion Department of Labour cooperated with provincial governments in maintaining free public employment offices.

(2) Location.-The commission is directed to establish regional divisions with a central office for each division and such employment offices as are necessary.

(3) Local advisory committees.-The commission may establish local advisory committees for the offices which shall include equal numbers of members chosen after consultation with local organizations representative of workers and employers, respectively.

C. Advisory committee.

(1) Functions.- The governor in council appoints the unemployment insurance advisory committee to give advice and assistance to the commission and to make recommendations for amendments of the act. The committee is directed to study the financial conditions of the unemployment insurance fund and to make recommendations for its solvency.

(2) Membership.-The committee is to consist of a chairman and not fewer than four nor more than six other members. The regular term of office is to be 5 years. Other than the chairman, one or two members are to be appointed after consultation with organizations representative of workers and an equal number after consultation with employers.

D. The unemployment insurance fund.

(1) Deposit of revenue.-All revenue received from the sale of unemployment insurance stamps or other means, if any, is to be deposited by the minister of finance in the Bank of Canada to the credit of the commission. The fund is to be used solely to pay insurance benefits. The minister of finance is also to deposit one-fifth of the aggregate deposits from funds provided by Parliament.

(2) Investment of funds.- The funds are to be invested only on the authorization of an investment committee of three members, one nominated by the commission, one by the minister of finance, and one by the governor of the Bank of Canada. The commission may pledge any of the securities of the fund to borrow money to pay unemployment benefits.

E. Claims and appeals.

(1) Insurance officers.-These officers are employed by the commission in each regional division. All claims for benefits and all questions arising in connection with claims are to be submitted to an insurance officer who may allow a claim; but who cannot disallow a claim on the following grounds:

(a) That the claimant has failed to fulfill the qualification of being capable of and available for work but unable to obtain suitable employment;

(b) That the claimant is disqualified by reason of discharge for misconduct, voluntary leaving without just cause, or for having refused or failed to apply for suitable employment;

(c) That the claimant does not fulfill one or more of the additional conditions for the receipt of benefits or is subject to restrictions on the amount or period of benefits imposed by such regulations.

The insurance officers refer to the court of referees all claims in which there is any question whether the claimant's benefits are to be reduced.

(2) Courts of referees.-The courts of referees are to be composed of a chairman appointed by the governor in council and one or more members

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chosen to represent employers with an equal number of members chosen to represent insured contributors, chosen from panels set up by the commission. Courts may be set up in such a manner and in such numbers as the governor in council finds necessary for each regional division.

When a claim is disallowed by an insurance officer the claimant, at any time within 21 days after the decision of the insurance officer is communicated to him, or as the commission may allow, may appeal to the court of referees.

(3) Umpire.-The umpire is designated by the governor in council from among the judges of the exchequer court of Canada and of the superior courts of the Provinces of Canada. Such deputy umpires as may be deemed necessary may also be appointed.

An appeal to the umpire can be made from a decision of the court of referees at the instance of:

(a) An insurance officer;

(b) An association of employed persons of which the claimant is a member;

(c) The claimant, where the decision is not unanimous or with the permission of the chairman.

Such appeals must be made within 6 months from the date of decision of the court of referees or such longer period as the umpire may allow.