Paying the price for ROE errors

Not complying with record of employment rules can be costly, ruling shows
By Sheila Brawn
|Canadian Payroll Reporter|Last Updated: 10/09/2018
Court House
Making mistakes or being careless with records of employment can cause problems not only for individuals claiming employment insurance benefits, but also for employers, as a recent court case shows. Shutterstock

Records of employment (ROEs) can be a headache for employers to complete, but submitting them accurately and on time is crucial.

Making mistakes or being careless can cause problems not only for individuals claiming employment insurance (EI) benefits, but also for employers, as a recent court case shows.

A ruling last year by Ontario’s Superior Court of Justice, Toronto Small Claims Court, highlights what can happen to employees and employers when the rules for issuing ROEs are ignored.

In the case, Lynette Ellis v. Artsmarketing Services Inc., the court ordered the employer to pay $1,000 in “inconvenience damages” for not issuing an ROE within the required time frame.

The case centred on whether Ellis quit her job or whether Artsmarketing constructively dismissed her. Ellis had worked for Artsmarketing as a telesales representative from Feb. 7, 2007 to April 1, 2016.

For the last eight years of her employment, Ellis worked on campaigns for Mirvish Productions, selling tickets for various shows. During that time, Artsmarketing had awarded her high sales achievement certificates.

However, about two months into a new Mirvish campaign in early 2016, Artsmarketing removed her, citing poor sales performance. On April 1, her manager verbally told her that the company was terminating her from the campaign.

Ellis sued Artsmarketing for $25,000 in damages for wrongful dismissal, harassment, and discrimination under Ontario’s Human Rights Code, and aggravated and punitive damages.

During the hearing, Artsmarketing contended that it only terminated Ellis from the Mirvish campaign and not from employment with the company. It said she resigned when she did not accept another job on a different campaign.

However, Deputy Judge J. Prattas, who heard the case, ruled that the company constructively dismissed her without cause, adding that its sales goals may have been unrealistic.

The judge stated that, based on the evidence, when Artsmarketing terminated Ellis from the Mirvish campaign, it did not immediately assign her to another one.

Instead, it took almost two weeks for Ellis’ manager to contact her, and when she did, it was not with a specific job offer, but with suggestions about possible opportunities.

Judge Prattas said it was clear that Ellis thought the company terminated her employment on April 1, as she asked for a letter of termination that day. The company did not provide one until sometime later.

The judge ordered Artsmarketing to pay Ellis approximately $10,000 for wrongful dismissal, as well as applicable vacation pay, court costs and interest charges. The judge did not find that Ellis suffered discrimination under the Human Rights Code or that she was entitled to aggravated or punitive damages.

In addition to the wrongful dismissal costs, Judge Prattas ruled that the company owed Ellis $1,000 in “inconvenience damages” for taking months to issue her ROE.

Ellis testified that she asked for the ROE in early April, but did not receive it until mid-August. Artsmarketing said it did not issue one in early April because it had not terminated Ellis’ employment, but just removed her from the Mirvish campaign.

The judge called the long delay in issuing the ROE “inexcusable.”

“Even if the defendant felt that it had not terminated the plaintiff from the company on April 1, 2016, it certainly knew by June 2016 when it was served with the plaintiff’s claim, which had been commenced on May 31, 2016. Yet despite this, the defendant did not issue a(n) ROE until Aug. 12, 2016,” said Prattas.

“It is trite to repeat that an employer must promptly submit the ROE whenever there is an interruption of earnings,” he said.

Service Canada requires employers who issue paper ROEs to do so within five calendar days of the first day an employee has an interruption of earnings or the day the employer becomes aware of it.

If employers use electronic ROEs and they have weekly, biweekly or semi-monthly payroll cycles, they have up to five calendar days after the end of the pay period in which an employee has an interruption of earnings to issue the ROE.

Employers with payrolls that are monthly or every four weeks must issue electronic ROEs either up to five calendar days after the end of the pay period in which the employee has an interruption of earnings or up to 15 calendar days after the first day of the interruption of earnings, whichever comes first.

The judge also criticized Artsmarketing for reporting on the ROE that Ellis had “quit.”

“If the plaintiff had ‘quit’ as alleged by the defendant, then, why didn’t the defendant issue the ROE much earlier than August?” said Prattas.

“This intentional act of the employer in inordinately delaying issuing the ROE and the declaration of ‘quit’ resulted in the plaintiff being denied employment benefits, which in turn resulted in financial hardship,” he said.

“Taking into consideration what the plaintiff went through as a result of the defendant’s deliberate act of not promptly submitting the ROE and the initial rejection of the plaintiff’s application for employment benefits, I think that the sum of $1,000 is an appropriate, fair and proper amount under these circumstances for inconvenience damages to be paid by the defendant to the plaintiff,” said Prattas.

Problems can also arise when employers make mistakes on ROEs. Although the errors may not necessarily lead to a court case, they can cause delays for EI claimants awaiting benefits and extra work for employers who have to answer Service Canada questions.

The following ROE blocks cause the most problems, according to Service Canada:

Block 12 Final pay period end date: The date reported must match the pay period type entered in block 6.

Block 15B Total insurable earnings: The amount reported in block 15B must be larger than the amount entered in block 17, which is where employers report payments, other than regular pay, made because of an interruption of earnings. To calculate the amount to enter, Service Canada advised that employers first determine the number of consecutive pay periods and then which earnings are insurable. It also suggested that employers complete block 15C (insurable earnings by pay period) first. 

Block 15C Insurable earnings by pay period: The number of consecutive pay periods reported must match the period the employee worked, up to the maximum number of pay periods based on pay period type. Service Canada’s guide How to Complete the Record of Employment Form provides a chart showing the required maximum number of most recent consecutive pay periods to report, based on pay period type, with differences depending on whether the ROE is paper or electronic.

Block 17 Separation payments: Report all amounts paid or payable on separation (for example, severance pay, vacation pay) in this block, whether or not they are insurable. Insurable payments must also be reported in blocks 15B and C, if necessary.

Block 18 Comments: Employers should only use this block to report details about “exceptional circumstances” to clarify information reported on the form. Service Canada said employers should not use it to explain why there was an interruption of earnings or why it is paying certain payments, such as those for sick leave, wage loss insurance, or maternity/parental leave. Comments entered in block 18 require Service Canada to remove the ROE from its automated processing system and do a manual review. This slows down the process and may lead to Service Canada calling the employer to clarify information

Other situations that cause problems include:

Overlapping ROEs: When an employer issues an ROE for an employee, Service Canada said it must ensure that the dates entered in the blocks for “first day worked” and “last day paid” do not overlap with dates entered on a previous ROE issued for that employee under the same employer business number.

Non-standard work schedules: If employees work on a schedule that allows them to alternate between periods of work and time off — such as working long hours one week and taking off all of the following week — Service Canada said employers should not issue an ROE for the days they are off because they do not have an interruption of earnings.

For more information on the rules for completing an ROE, refer to Service Canada’s website:

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