Issue estoppel is a tricky legal concept. Its intended impact is to prevent the same parties from re-litigating a legal question that has already been decided.

The application of this principle arose originally in employment law cases in which the employee applied for statutory termination pay. In such cases where the employer argued “just cause” under the statute successfully, it then relied upon this principle to foreclose a civil lawsuit for wrongful dismissal.

Initially, this idea was successfully used by employers.[1] Ultimately the question was decided by the Supreme Court of Canada[2] which determined that the application of issue estoppel was to be a matter of discretion, even where all the tests had been met. The Court concluded that such discretion should be exercised to avoid the use of issue estoppel in this case where the plaintiff had applied for statutory termination pay initially.

Employment lawyers believed that this issue had been firmly put to rest.

Maybe Not So

A recent decision under the Canada Labour Code[3] raised once again this issue. In this context, the employee had applied for employment insurance benefits. The employer had presented its argument of just cause on one issue to the EI Officer.

In the Unjust Dismissal case, the arbitrator concluded that the employer was foreclosed from arguing this just cause argument as the EI officer had considered the same argument and dismissed it by awarding the employee EI benefits.

The legal test, apart from the discretion issue, is as follows:

  1. The same question has been decided, that is whether the employee had committed any misconduct.
  2. Whether the decision was judicial and whether it was final.
  3. The parties were the same in both proceedings.

The arbitrator found that these conditions were met.

The decision of the EI Officer was based on two phone calls. Neither party knew what the other said. There was no cross-examination. It is difficult to see this as a “judicial” decision.

As to the discretion issue, the adjudicator found firstly that the employer was given the opportunity to present further evidence or seek reconsideration of this decision and did neither.

In addition, he took “judicial notice” that the EI officer had considerable expertise, even though there was no evidence of this.

Precedent Value

Administrative decisions of this nature have no binding precedent value. The case may well be questioned. It nonetheless must be carefully considered as it may have applications to civil employment law cases in the future.

Employers’ View

Most employers pay little heed to phone calls from the EI office following an employee termination. The first reaction should be to contact legal counsel. This issue should not be treated as one unworthy of attention.

Employees’ Take Away

As with the employers’ situation, the application for EI benefits where there is an issue of just cause should be discussed with legal counsel in advance. It is important to be advised about your rights and risks of this application.

Get Advice Before You Act

This question of EI benefits is not straightforward. It is most important to understand all aspects of this question. Contact the offices of Toronto employment and labour lawyers Mallins Law. We regularly advise employees and employers on legal workplace issues. Contact us online or by phone at 647 792 0310 to schedule a consultation.

[1] Rasanen v Rosemount OCA

[2] Danyluk v Ainsworth

[3] Alexander v Huron Commodities