Month: June 2024

When leaving work for any reason, an employer must provide workers with an accurate Record of Employment in a timely manner. The Record of Employment is a crucial document for accessing Employment Insurance entitlements under the Employment Insurance Act. The Record provides Service Canada with the information necessary to determine appropriate Employment Insurance benefits and entitlements, especially concerning the amount and duration of any benefits. For workers who have been wrongfully dismissed, it is especially important to have an accurate Record of Employment issued in a timely manner to ensure adequate access to any Employment Insurance benefits.

Pursuant to the Employment Insurance Regulations, Records of Employment must be issued for a worker within a specified timeframe, which varies based on whether the Record of Employment is issued on paper or electronically. If the Record of Employment is issued on paper, it must be provided within five calendar days of either:

• The first day of an interruption of earnings; or
• The day the employer becomes aware of an interruption of earnings.

If the Record of Employment is issued electronically, it must be provided to the worker within 5 calendar days after the end of the pay period during which the worker’s interruption of earnings occurs. However, if a worker’s pay period is monthly, then the electronic Record of Employment must be issued by the earlier of either:

• 5 calendar days after the end of the pay period in which the worker experiences an interruption in earnings; or
• 15 calendar days after the first day of an interruption of earnings.

Employers can submit the ROE to Service Canada electronically. Records of Employment must be issued in a timely manner, in accordance with the rules outlined by the Employment Insurance Regulations.

Record of Employment Must Accurately Describe the Reason for Interrupted Earnings for Service Canada

In addition to the timely issuance of the Record of Employment, the Record itself must accurately describe the reason for the interruption in earnings for employees receiving insurable earnings. Service Canada indicates codes used to describe the reason for the interruption in earnings. The codes are as follows:

• Code A: Shortage of Work (Layoff) – For use when the employee is laid off due to a shortage of or the end of a contract or season.
• Code B: Strike or Lockout – Used when an employee is on strike or has been locked out of the workplace.
• Code C: Return to School – Used when an employee leaves a job to return to school. However, Service Canada is phasing out this code and recommends replacing Code with Code E if returning to School or Code J if leaving to participate in a government-approved apprenticeship program. Code A can also be used if a student is hired on a summer term, co-op term, or other fixed term and they fulfill their term.
• Code D: Illness or Injury – Used when the employee is leaving work because of illness or injury.
• Code E: Quit – Used when the employee voluntarily leaves their work.
• Code F: Maternity – Used only when the employee is pregnant or has recently given birth.
• Code G: Retirement – Used when the employee leaves work because of mandatory retirement or through a workforce reduction approved by Service Canada.
• Code H: Work Sharing – Used when the employee is participating in the Service Canada Work-Sharing program.
• Code J: Apprentice Training – Used when the employee is leaving the workplace temporarily to participate in a government-approved apprenticeship training program.
• Code M: Dismissal or Suspension – Used when the employee has been dismissed or suspended from employment.
• Code N: Leave of Absence – Used when the employee takes a leave of absence.
• Code P: Parental – Used when the employee is leaving the workplace to temporarily take parental or adoption leave.
• Code Z: Compassionate Care/Family Caregiver – Used when the employee is leaving the workplace to temporarily claim compassionate care benefits or family caregiver benefits.
• Code K: Other – Used for reasons other than those listed above that need a deeper explanation which is to be provided in Block 18 within the Record of Employment.

An interruption of earnings occurs when an employee’s salary falls below 60% of their regular weekly earnings due to reasons such as illness, injury, pregnancy, or the need to care for a family member.

Failure to Provide Accurate or Timely Record of Employment for Employment Insurance

If workers have been dismissed from employment and do not receive an accurate or timely Record of Employment, they may not be able to access their entitlements to EI benefits. Without an accurate ROE, workers may not be able to receive EI benefits. Consequently, Courts have held that workers can recover aggravated and punitive damages from employers who fail to provide an accurate and timely Record of Employment.

In a recent case at the Ontario Superior Court, Pohl v. Hudson’s Bay Company, the employer failed to provide an accurate and timely Record of Employment to the worker after he had been dismissed. The Court held that this, among other things, justified an award of damages for the breach of the implied obligation of good faith and fair dealing in the manner of dismissal. Rather than accurately reporting the reason for the worker’s interruption of earnings, the employer provided a Record of Employment stating the worker had been laid off for shortage of work. Additionally, the Record of Employment was provided well beyond the timeframe required. In addition to moral damages, the Court also awarded punitive damages for the very same failure to provide an accurate or timely Record of Employment. Given the consequences for the worker in pursuing their entitlements to Employment Insurance benefits, Courts take a serious approach when employers fail to provide an accurate and timely Record of Employment. The Canada Revenue Agency may also be involved in certain cases related to ROE issuance.

Cost awards have often been an area of controversy for federal employees who have been unjustly dismissed. Under the Canada Labour Code, federal employees who have been terminated after working at their job for a year can exercise their statutory rights to file an unjust dismissal complaint. This statutory right can provide federal employees with significant job protections, including the possibility of being reinstated if the dismissal is found to be unjust. In circumstances where reinstatement is ordered, federal employees can also receive the benefits of “back pay”. In other words, in addition to getting their job back, federal employees can also receive payment for the period they were unjustly dismissed from their jobs, which can help mitigate employee turnover costs. Employee retention is crucial in reducing these turnover costs by avoiding the expenses associated with recruiting and training new employees. While this has the potential to be a very significant remedy for unjustly dismissed federal employees, there have been some concerns around cost awards under the unjust dismissal provision of the Canada Labour Code. Thankfully, some of those concerns have been recently addressed by a decision at the Federal Court of Appeal.

A Case of Wrongful Dismissal: Amer v. Shaw Communications Inc.

The Federal Court of Appeal in Amer v. Shaw Communications Inc. provided some clarity to the issue of costs under a wrongful dismissal complaint. There had long been arbitration cases wherein cost awards were limited, or even refused of federal employees who had been found to be unjustly dismissed. Consulting with an employment lawyer is crucial in wrongful dismissal cases to navigate the legal complexities and secure fair compensation. However, the Federal Court of Appeal’s recent ruling provides a more fulsome approach to unjust dismissal cases under the Canada Labour Code, particularly in the context of employment contracts. The Court of Appeal overturned the Federal Court’s ruling that an order of substantial indemnity costs was inappropriate in the circumstances. The Federal Court refused to award substantial indemnity costs, relying on an older case suggesting that substantial indemnity costs are only to be awarded in cases where the employer engaged in objectionable conduct during litigation.

The Federal Court of Appeal dispelled this presumption in its ruling, holding instead that substantial indemnity costs can be awarded to make the unjustly dismissed federal employee whole. The Employment Standards Act is also relevant in such cases, as it establishes minimum notice periods and severance pay entitlements. This is especially important in the context of an unjustly dismissed federal employee who has engaged in no wrongdoing. Such an employee should not be punished for having to pursue their legal rights by forcing them to expend significant sums of money on legal fees. Given the financial costs of pursuing an unjust dismissal case, employees may be substantively unable to pursue their rights, even if they have them formally under the Canada Labour Code. In order to rectify this issue, the Federal Court of Appeal acknowledged that to ensure the rights under the Canada Labour Code are meaningful, it makes practical sense to provide federal employees with the ability to recover costs upon litigation, even to the degree of substantial indemnity costs. The Court of Appeal indicated that this is especially important in circumstances where unjustly dismissed federal employees are of limited financial means and the employer has substantial resources and highly experienced counsel.

The Federal Court of Appeal also indicated that another significant element of the Canada Labour Code’s unjust dismissal provisions is that it is supposed to provide federal employees with similar protections to those enjoyed by unionized workers. The notice period and reasonable notice are critical factors in determining fair compensation for unjust dismissal. The Court of Appeal indicated that in unionized contexts, workers typically do not have to pay out-of-pocket expenses for legal representation, as such representation is typically provided to them via their union and funded through union dues. In order to ensure that non-unionized federal employees are not in a substantially worse position as compared with their unionized counterparts, it makes sense that unjustly dismissed federal employees have the opportunity to recover their legal costs. Without this opportunity, the purpose of the Canada Labour Code’s unjust dismissal provisions would be substantively thwarted. The Federal Court of Appeal aptly recognized this difficulty, hence overturned the decision of the Federal Court, and upheld the initial arbitrator’s award. In the end, the Court of Appeal’s decision provided Ms Amer with an award of substantial indemnity costs, ensuring that she was able to meaningfully pursue her rights under the Canada Labour Code, including severance pay.

The Employment Insurance Act provides an account of what circumstances can result in disentitlement to collect employment insurance (EI). Disentitlement can occur when a worker voluntarily leaves their job. According to the Employment Insurance Act, voluntarily leaving employment includes situations where:

• Workers refuse employment offered as an alternative to an anticipated loss of employment;
• Workers refuse to resume employment; and
• Workers refuse to continue their employment after the employer’s work, undertaking, or business has been transferred to another employer.

To qualify for regular EI benefits after quitting, an individual must demonstrate ‘just cause’ and provide evidence that all reasonable alternatives were considered before leaving.

Service Canada assesses EI applications, including reasons for quitting, evidence gathering, and approval for special situations.

There are some circumstances where a worker who has voluntarily quit their job may not be disentitled to collect regular EI benefits. If, after leaving their employment voluntarily, a worker has since been employed in insurable employment for the requisite number of hours based on their regional unemployment rate, the worker could still access Employment Insurance. In addition to this circumstance, workers who voluntarily quit their jobs may still be entitled to receive EI benefits if they have established just cause for quitting their employment.

According to the Employment Insurance Act, workers may have just cause for quitting their job if the worker had no reasonable alternative to leaving their employment regarding the following circumstances:

1. Sexual or other harassment;
2. Obligation to accompany a spouse, common-law partner or dependent child to another residence;
3. Discrimination on a prohibited ground of discrimination within the meaning of the Canadian Human Rights Act;
   • Prohibited grounds under the Canadian Human Rights Act include race, national or ethnic origin, colour, religion, age, sex, sexual orientation, gender identity or expression, marital status, family status, genetic characteristics, disability, and conviction for an offence for which a pardon has been granted or a suspension has been ordered.
4. Working conditions that constitute a danger to health and safety;
5. Obligation to care for a child or a member of the immediate family;
6. Reasonable assurance of another employment in the immediate future;
7. Significant modification of the terms and conditions respecting wages or salary;
8. Excessive overtime work or refusal to pay for overtime work;
9. Significant changes in work duties;
10. Antagonism with a supervisor if the claimant is not primarily responsible for the antagonism;
11. Practices of an employer that are contrary to law;
12. Discrimination with regard to employment because of membership in an association, organization, or union of workers;
13. Undue pressure by an employer on the claimant to leave their employment;
14. Eligibility for compassionate care benefits;
15. Any other reasonable circumstances that are prescribed;
16. Eligibility for EI benefits, including justifying the reasons for quitting.

Only Reasonable Alternative to Leaving Employment

The Federal Court of Appeal has provided some assistance in understanding the requirement for reasonable alternatives to leaving employment. The Court of Appeal in Canada (Attorney General) v. Murugaiah indicated that the primary question to consider, even before getting into the possibility of just cause for leaving employment, is whether the employee had a reasonable alternative they could exercise. Reviewing the collective agreement or employment contract to understand the protocol for handling workplace issues is crucial before considering quitting. When the circumstances exist for quitting with just cause, workers still have an obligation to pursue any reasonable alternatives to quitting. Quitting must be the only reasonable alternative considering the circumstances. In Canada (Attorney General) v. Hernandez, the Federal Court of Appeal did not allow Mr. Hernandez to collect Employment Insurance because he did not explore the possibility of changing the nature or conditions of his employment with his employer. In other words, failure to raise the concerns associated with leaving for just cause with the employer can undermine a worker’s entitlement to collect Employment Insurance. After addressing the question of whether the worker had a reasonable alternative, whether with an employment lawyer or not, the adjudicator will consider the substantive elements of the alleged just cause for leaving employment.

It is incumbent upon the employee to canvass alternatives before making the decision to quit their job if they seek to remain entitled to Employment Insurance. This can include, among other things, speaking with managers about concerns, contacting union representatives to file a grievance, communicating with a joint health and safety committee or health and safety representative, requesting transfers or accommodations, and potentially taking medical leaves. Failure to adequately pursue reasonable alternatives to leaving employment can result in disentitlement of Employment Insurance.