Generally, Service Canada uses the information on a Record of Employment (“ROE”) to asses eligibility for Employment Insurance (“EI”) benefits. Employers are required to issue an ROE when an employee’s earnings are interrupted and may face damages or penalties if they fail to do so in a timely manner. This blog highlights potential liability for failure to comply with statutory requirements, summarizes requirements for employers with respect to issuing an ROE and provides information on ROE codes and dealing with Service Canada.

Penalties and Court Awarded Damages

Failure to provide an accurate ROE on time may result in a fine of up to $2,000 or prosecution, or both, under section 137 of the Employment Insurance Act.

Furthermore, courts and tribunals are mindful that a delay in issuing an ROE may prevent an employee from accessing EI benefits. Accordingly, in certain circumstances, courts have held that a delay in issuing an ROE is an example of a breach of an employer’s obligation of good faith and fair dealing in the manner of dismissal and have taken delayed or incorrect ROEs into consideration when determining damages.

For example, the Ontario Superior Court of Justice found that a two month delay in providing an ROE, coupled with the employer’s assertion of cause when there was no reasonable basis for such an assertion and significant delays in paying the employee the amounts owing, warranted punitive damages of $50,000.^[1] In another case, The Ontario Superior Court of Justice, awarded $1,000 for “inconvenience damages” when an employer delayed issuing an ROE for five months and failed to use the proper ROE code.^[2] 

These decisions serve as a reminder of the importance of issuing timely and accurate ROEs.

When an ROE is Required

 Employers are reminded that an ROE must generally be completed when:

1. An employee has had or is anticipated to have seven consecutive calendar days with no work and no insurable earnings; or
2. An employee’s salary falls below 60% of regular weekly earnings because of illness, injury, quarantine, pregnancy, the need to care for a newborn or a child placed for the purposes of adoption, or the need to provide care or support to a family member who is critically ill.

For part-time, on-call or casual workers, employers are required to issue an ROE when an employee has not received insurable earnings for 30 days.

Deadline for filing an ROE

The deadline for filing an ROE depends on the method that the employer chooses:

• Paper ROEs must be issued within five calendar days of:
  • The first day of an interruption of earnings; or
  • The day the employer becomes aware of an interruption of earnings.
• Electronic ROEs must be issued:
  • Within five calendar days after the end of the pay period in which an employee’s interruption of earnings occurs (if the pay period is weekly, biweekly, or semi-monthly); or
  • If the pay period is monthly or every four weeks, by the earlier of:
    • Five calendar days after the end of the pay period in which an employee experiences and interruption of earnings; or
    • Fifteen calendar days after the first day of an interruption of earnings.

Reasons for Termination

As we previously discussed, it is not uncommon for Service Canada to reach out with questions or demands respecting reasons for termination. If an employee is denied employment insurance benefits, he or she can appeal that decision. Case law suggests that it is very risky for an employer to voluntarily participate in this process as an employer’s participation in this process coupled with a finding in favour of the employee, may later prohibit an employer from arguing in a wrongful dismissal lawsuit that it had just cause to terminate the employee’s employment. As such, we strongly encourage employers to seek appropriate legal advice in such situations.

In an effort to streamline EI claims and reduce the need to contact employers for clarification, Service Canada recently added new codes for issuing ROEs in the ROE Secure Automated Transfer system. The complete list of codes that can be used in Block 16, “Reason for Issuing this ROE” is outlined below. For reference, new codes have been indicated.

If you have any questions regarding compliance with Employment Insurance obligations or dealings with Service Canada, please contact a member of our Labour & Employment Law Group.

[1] Morison v Ergo-Industrial Seating Systems Inc., 2016 ONSC 6725 at paras. 47 to 59.

[2] Ellis v Artsmarketing Services Inc., 2017 CanLII 51563 (ON SCSM).