EI and Displaced Older Workers
The Task Force on Older Workers appointed by HRSDC Minister Solberg did endorse – in a limited way- labour’s call for severance pay to be ignored for EI purposes – but only for long tenure workers with a record of no prior EI claims in the previous 5 years. (My earlier post on this isÂ http://www.progressive-economics.ca/2008/04/09/employment-insurance-and-severance-pay/
Similarly, they endorsed our call for improved EI benefits – including mobility assistance – for displaced long tenure workers – but only for those who have not beenÂ EI claimants in the past 5 years.
It seems highly problematic to condition improved EI benefits on not having used EIÂ in the past given that many displaced workers may not pass this test even after spending years with a single employer. Layoffs are hardly an infrequent event in, for example, the auto industry. The recommednations ignore the fact that becoming unemployed and filing an EI claim is involuntary – workers do not choose to be laid off.
EI Recommendations and link to Executive Summary follow:
That the regulations under the existing EI program be changed so that severance payments made to workers who become unemployed after a period of long tenure in the workplace and who have not been EI recipients on a regular basis, are no longer considered earnings for purposes of EI. This would enable those claimants to collect EI Part I benefits after the 2-week waiting period.
For the purpose of the recommendation, the operational definitions of “long tenure” and “regular basis” need to be determined. As guidelines, the Panel suggests that these benefits be available to unemployed workers who had been employed for at least 10 years and had not collected benefits in the last five years.
That the federal government, under the existing EI program, initiate through EI Part II (innovation and research capacity) a demonstration project to test the viability and cost effectiveness of a wage insurance plan that would help to mitigate the income losses faced by displaced older workers and thereby encourage these workers to more rapidly return to employment.
That the Employment Insurance Act be modified such that workers who become unemployed after a period of long tenure in the workplace, and who have not been EI recipients on a regular basis:
– be eligible to receive benefits for longer than they are eligible to receive them under the current program; and
– that the extended duration of benefits and mobility assistance (see Recommendation 11) for these long-tenured employees not depend on the unemployment rate in the region, as is the case for special benefits such as maternity, parental, compassionate and sickness benefits.
For the purpose of the recommendation, the operational definitions of “long tenure” and “regular basis” need to be determined. As guidelines, the Panel again suggests that these extended benefits be available to unemployed workers who had been employed for at least 10 years and had not collected benefits in the last five years.
That the Employment Insurance Act be modified such that the suite of measures under EI Part II be expanded to include a specific mobility assistance measure with a commensurate adjustment to the budget allocated to EI Part II.
The Panel strongly recommends that the federal government engage in a fundamental review of the Employment Insurance Act.
That the termination date of the current TIOW program be extended until the government has modified the EI program to provide improved benefits to long-tenured displaced older workers (see Recommendation 10); that mobility assistance measures and commensurate funding be added to any new TIOW agreements being extended or negotiated; and that the TIOW program be modified to provide for financial mobility assistance as an eligible program activity.
Here is the Executive Summary