Decision that EI Sickness Benefits are Not Deductible from IRBs Upheld after Appeal

The recent Licence Appeal Tribunal reconsideration decision, Tania Spence v. Aviva Insurance Company of Canada (19-013457/AABS) was dismissed as Adjudicator Boyce found no error of law in the previous decision dated February 16, 2021.

The previous decision concluded that Employment Insurance (“EI”) sickness benefits are not deductible when calculating income replacement benefits (“IRB”) payable.

The respondent (insurer) argued that Adjudicator Boyce committed errors of law that caused the previous decision to be incorrect.  Specifically, the respondent contends that Adjudicator Boyce contravened the wording of the Statutory Accident Benefits Schedule (“SABS”) undermining its purpose.

In the previous decision, Adjudicator Boyce referenced the following Sections of the SABS:

• 7(3)(a) which indicates that insurers can deduct 70% of “gross employment income” from an IRB;
• 4(1) which defines “gross employment income” to include benefits received under the Employment Insurance Act and “other income replacement assistance” to exclude benefits under the Employment Insurance Act; and
• 47(3)(a)(f)(i) which explicitly excludes benefits under the Employment Insurance Act as temporary disability benefits that can be deducted from an IRB payable.

Upon review, Adjudicator Boyce found no error in the conclusion of the previous decision that there is a genuine conflict in the SABS as to whether EI sickness benefits can be deducted from an IRB and that the sections of the SABS that pertain to EI benefit deduction create ambiguity that invites analysis beyond the plain meaning of Sections 7(3)(a) and 4(1).

Adjudicator Boyce also determined that the cases relied on by Aviva in their appeal do not squarely address the unique facts of this case or provide binding direction on the issue that would necessitate rescinding the original decision based on an error of law.

Notwithstanding the fact that the SABS does not expressly state that EI sickness benefits are not deductible as a temporary disability benefit, Adjudicator Boyce reiterates that when there is a genuine conflict between Sections of the SABS, it is well-settled that the SABS is consumer-protection legislation.

Therefore, contrary to the respondent’s assertions, Adjudicator Boyce continued to find that the SABS does not reference EI benefits in a straightforward manner that operates clearly and harmoniously.  Given this, Adjudicator Boyce found no error of law in the previous decision and does not consider it to have led to an absurd or unjust result.

Considering the above, the request for reconsideration was dismissed.

Read the decision in full detail here: Tania Spence v. Aviva Insurance Company of Canada (19-013457/AABS)