Every year, as the construction industry shutdown approaches, many employees wonder whether they can claim employment insurance benefits while construction sites are closed.
The answer is generally no, although it depends on the specific circumstances of each case. The purpose of the Employment Insurance program is to provide temporary financial support to individuals who find themselves involuntarily out of work. Thus, an employee who loses their job or is laid off due to a lack of work may be eligible for benefits, provided they meet the conditions set forth by law. However, the situation is different when it comes to mandatory annual leave in the construction industry. The question is rather whether the employee is truly unemployed within the meaning of the Employment Insurance Act or is simply on paid leave during which their employment relationship is maintained.
Vacation That Does Not Constitute Unemployment
Collective bargaining agreements in the construction industry provide for mandatory vacation periods each year, both in the summer and in the winter. These vacations stem from collective bargaining agreements negotiated between employer and labor associations and apply to the entire industry. During these periods, the employee temporarily stops working, but is normally expected to return once operations resume. The employee’s employment relationship with the employer therefore generally remains in effect.
Employees receive vacation pay administered by the Commission de la construction du Québec (CCQ). This pay comes from funds contributed by employers in accordance with the Act respecting labor relations, vocational training, and workforce management in the construction industry and sector-specific collective bargaining agreements, to finance mandatory annual leave (Act R-20). These funds are specifically intended to provide income to employees during periods of mandatory vacation, even when no work is being performed on construction sites. In such a context, it is generally difficult to conclude that unemployment exists within the meaning of the Employment Insurance Act. This conclusion is also consistent with the eligibility requirements set forth by the program. Indeed, a person claiming benefits must usually demonstrate that they remain available for work and are making reasonable efforts to find employment. However, these requirements are difficult to reconcile with the situation of an employee on vacation whose return to work is already scheduled upon the expiration of the leave period.
The Ruling of the Federal Courts
This interpretation is further supported by recent federal case law. In a 2024 decision, the Federal Court of Appeal ([1] ) upheld the application of section 11(3) of the Employment Insurance Act, which provides that a week falling within a vacation period provided for by a collective bargaining agreement or a work agreement does not constitute a week of unemployment when certain conditions are met. More specifically:
- the employee remains employed by their employer;
- the leave period is provided for by a collective bargaining agreement or a work agreement;
- the employee receives the compensation or the portion of their compensation designated for that period.
In this case, the employees argued that they were unemployed because they were not performing any work during the vacation period in question. This argument was not accepted. Instead, the courts concluded that these employees remained employed by their employer, that the vacation was provided for in the applicable collective bargaining agreement, and that they received the compensation provided for that period. They could not, therefore, be considered unemployed within the meaning of the Employment Insurance Act. This decision reinforces a fundamental principle: a temporary absence from work is not, in and of itself, sufficient to establish unemployment entitling an individual to benefits.
Eligibility remains a matter of fact
It would, however, be incorrect to conclude that employees in the construction industry are automatically excluded from the Employment Insurance program during vacation periods. Eligibility for benefits always depends on the specific facts of each case. Thus, an employee whose employment relationship ends before the start of the vacation period or who is subject to a genuine layoff due to lack of work may, depending on the circumstances, be eligible for benefits. Conversely, when an employee retains their job, receives their vacation pay from the CCQ, and normally returns to work at the end of the mandatory leave, it will generally be difficult to demonstrate the existence of unemployment as defined by law.
Conclusion
It is important to note that mandatory annual vacation in the construction industry generally does not constitute a period of unemployment as defined by the Employment Insurance Act. Thus, when an employee retains their job, receives their vacation pay, and normally returns to work at the end of the leave, they will usually not be eligible for employment insurance benefits.
However, this rule is not absolute. Eligibility for benefits always depends on the specific circumstances of each case. An employee whose employment relationship is terminated before the vacation period or who is subject to a genuine layoff may, depending on the facts, find themselves in a different situation. Ultimately, it is not the temporary absence from work that determines eligibility for benefits, but rather whether or not there is a genuine situation of unemployment as defined by the Act. If you have any questions regarding the application of the Employment Insurance Act or issues specific to the construction industry, please do not hesitate to contact our labor and employment law or construction law teams.
[1] Marquis v. Canada (Attorney General), 2024 CAF 90.
