In recent weeks the COVID-19 Coronavirus pandemic caused numerous employers to take swift action in the layoff or dismissal of many of their employees. Businesses have experienced a major downturn in operations and cuts in staff followed as an inevitable outcome of the foregoing.

Employees, on their part, have applied in droves for the Canada Emergency Response Benefit (“CERB”) and Employment Insurance (“EI”) to obtain some form of financial relief during this trying time. The government assured Canadians that support would be provided even in the absence of the filling of a Record of Employment (“ROE”).  However, in this blog I would like to briefly outline in very general terms what an ROE is and discuss some of the most commonly used codes on it.

Issuing an ROE is an important statutory requirement for employers.  Broadly speaking, this requirement is triggered when the employer stops paying the employee their wages. This is also know as “an interruption of earnings.” The purpose of a ROE is to advise Service Canada whether the individual employee is entitled to receive EI. Failure to do so may result in adverse consequences against the employer.

The employer’s accountant normally completes the ROE.   The ROE is also expected to be filed with Service Canada within five days the employee experienced an interruption of earnings or five days of the end of the pay period when the employee’s interruption of earnings occurs.  This timeline may slightly change depending on the employer’s method of filing the ROE and frequency of payroll.

The ROE contains numerous codes within it with the purpose of setting out why there was an interruption of earnings. The ROE codes are as follows:

Code A – Shortage of work (layoff)
Code B – Strike or lockout
Code C – Return to school
Code D – Illness or injury
Code E – Quit
Code F – Maternity
Code G – Retirement
Code H – Work-Sharing
Code J – Apprentice training
Code M – Dismissal
Code N – Leave of absence
Code P – Parental
Code Z – Compassionate care / Family Caregiver
Code K – Other

The most commonly used code is Code A. It is normally used when there is a shortage of work and the company is laying off its employees for the season or if a contract has ended. It can also be used when employment has ended if the reason why it ended was that the position became redundant or was eliminated or when the company is restructuring or if there is a temporary or permanent shutdown of operations.

Code D is used when the employee is unable to work due to an illness. In such a case, and upon a doctor’s confirmation of the medical condition, the employee is entitled to receive EI sickness benefits or employment insurance sickness benefits. These normally last up to 15 weeks.

Code E is to be invoked when the employee resigns their employment. An employer has to be careful when using Code E as doing so will deprive the employee from obtaining employment insurance.

Code M is to be used when the employee is being terminated for any reason other than layoff or mandatory retirement. Code M is to be used when the employee is terminated, for instance, for cause. Employers seeking to use Code M have to be careful because Ontario courts have expressed on numerous occasions that actions leading to a dismissal with cause have to be of a serious nature and frivolously alleging cause may result in additional damages in the event of a lawsuit. At the same time, an employer has to complete the ROE form truthfully and if cause allegations are well-founded the ROE should indicate that the dismissal was for cause.  Alternatively, if there is no cause and Code M is the appropriate code, Block 18 should clearly state “no cause” or “without cause” in the comments box.

Code K is a “catch all” code and is to be used in exceptional circumstances to be assessed on a case-by-case basis.