The end of summer is (unfortunately) just around the corner,
which for many employers means saying goodbye to student employees
and seasonal workers. Most employers know that they need to
complete a record of employment (ROE) when an employee terminates,
but there are a number of other circumstances that require an ROE.
Now is as good a time as any for a quick refresher on when
employers need to complete a record of employment (ROE) for an
employee and why it is important to do so correctly. My goal is not
to give detailed instructions about completing ROEs; but to
highlight the importance of properly issuing them and the potential
liability from failing to do so.
The ROE is the form employers complete when an employee
receiving insurable earnings stops working such that he/she
experiences an interruption of earnings. Service Canada considers
ROEs to be the single most important documents in the Employment
Insurance (EI) program.
When to Complete an ROE
You may have noticed I used the term "interruption of
earnings" above and not "termination of employment"
when describing when an ROE is required. That is because, as
mentioned, ROEs are required in a wider range of circumstances (I
will not get into the technical definition of "insurable
earnings", but suffice to say it includes most employees'
salary or wages).
An interruption of earnings occurs in the following
when an employee has had or is anticipated to have seven
consecutive calendar days with no work and no insurable earnings
from the employer (the "seven-day rule");
when an employee's salary falls below 60% of his/her
regular weekly earnings because of certain absences (illness,
injury, quarantine, pregnancy, parental leave, compassionate care
leave or family responsibility leave); or
when an employee starts receiving wage loss insurance
In addition to the above interruptions of service, employers
must also complete ROEs in the following instances:
when Service Canada requests an ROE for an employee;
when an employee's pay period type changes (e.g., weekly to
when an employee is transferred to another Canada Revenue
Agency (CRA) payroll number;
when there is a change in ownership leading to a change in the
when the employer declares bankruptcy;
when a part-time, on-call or casual worker is no longer on the
employer's active employment list or has not done any work or
earned any insurable earnings for 30 days; or
when an employee is on a self-funded leave of absence.
The Importance of ROEs
There is not a great deal of litigation relating to ROEs, but
incorrectly completing (or failing to complete) an ROE has
attracted common law liability for employers.
One type of case occurs when an employer intentionally
misrepresents the reason for the interruption of service or
withholds an ROE from a departing employee. Allegations of
misconduct on an ROE can disqualify an employee from eligibility
for EI. If the allegations are untrue, or if an ROE is withheld,
the employer can be liable to the employee for the resulting loss
of EI payments and potentially for additional damages for bad faith
conduct towards the employee.
Liability may also arise in cases where an ROE is used as
evidence that a seasonal or fixed-term employee is in fact a
permanent employee and therefore entitled to common law
notice. Courts have found that using the word
"unknown" instead of "not returning" on an ROE
for a seasonal worker indicated that the employment was permanent
and that the seasonal return date was simply unknown at the time.
Similarly, failing to issue an ROE at the end of each of a series
of fixed-term contracts has been evidence that an employee was a
ROEs may be a hassle to complete, but it is important that
employers keep track not only of when they need to be issued, but
to ensure that they are completed correctly and accurately. For
more information about completing ROEs, the CRA provides a helpful
guide (Guide) and, of course, you may get in touch
with a member of Dentons' Labour and Employment group.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances. Specific Questions relating to
this article should be addressed directly to the author.
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