The Connection Between CERB Repayments & Employment Law

In 2020, the government implemented the Canadian Emergency Response Benefit (CERB) plan to assist Canadians coping with employment loss caused by the global pandemic. Now in 2022, many Canadians are facing repayment due to erroneously made applications. A recent Alberta Court decision dealt with CERB repayment in the context of a wrongful dismissal dispute between an employer and employee.

In Oostlander v Cervus Equipment Corporation, the plaintiff sued the defendant for wrongful dismissal and sought pay in lieu of notice of termination.[1] The defendant and plaintiff disagreed on how the CERB benefit should have been calculated in the total damages awarded.

The courts note that CERB repayments have been treated differently across Canadian jurisdictions in the context of wrongful dismissal damages. The nuance lies in the potential that the benefit will ultimately be repayable by the plaintiff to the government.

In Alberta, EI benefits have not been treated as mitigative income that is deductible from damages. In Crisall v Western Pontiac Buick (1999) Ltd., the Court of Queen’s Bench of Alberta held that an employee’s obligation to repay employment insurance benefits to the federal government did not generally make the benefit deductible.

Applying this reasoning to CERB, the court held that the rationale that repayment may be required was not compelling enough. In this case, there was no communication between the plaintiff and government concerning repayment, or other evidence to suggest that repayment would be required by the plaintiff in the future. In the absence of any proven obligation, the courts assumed that the plaintiff would retain the CERB benefit. As a result, the benefit was deducted from the plaintiff’s total awarded damages.[2]

While CERB repayment was only a portion of the dispute at issue, the Oostlander judgement provides greater clarity on how the benefit and its repayment functions in the context of wrongful dismissal disputes. For further detail on the court’s reasoning and opinion, read the full judgment here.

[1] Oostlander v Cervus Equipment Corporation, 2022 ABQB 200 at para 6.

[2] Ibid at para 41 – 44.

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