Laid Off Without Cause, But the ROE Says Code M for Dismissal: Am I Still Eligible for EI in Ontario?

You were told the role was eliminated, or that it was a layoff, or that the company was going in a different direction. Nobody accused you of anything. Then the Record of Employment came through with M in Block 16, "Dismissal or suspension," and suddenly it reads like a charge sheet. Three different people asked us a version of this question this year, and the answer is the same each time.

Does code M on my ROE disqualify me from EI?

No. Code M is a description, not a decision. Service Canada decides eligibility itself, and it refuses regular benefits in only two main separation scenarios: you lost your job because of misconduct, or you voluntarily left without just cause. A without cause termination is neither. The code may trigger questions; it does not decide the answer.

The word that trips people up is "dismissal." In everyday speech, being dismissed sounds like being fired for something. In the ROE code list it just means the employer ended the employment relationship for a reason other than shortage of work, quitting, retirement, or a leave. That covers a restructuring where your specific position was cut, a "not a good fit" conversation, a performance based termination with a package, and a termination for genuine cause. All four can land on the same code.

Misconduct in the EI sense is a demanding standard. It is not poor performance, not incompatibility, not being too expensive, not failing to hit targets, and not a personality clash with a new manager. It means conduct that was wilful or so reckless as to be close to wilful, and that you knew or ought to have known could result in dismissal. If your employer handed you a package and a release, that alone tells Service Canada a great deal: employers do not usually pay out people they believe committed misconduct.

• Not misconduct: the position was eliminated, budget cuts, restructuring, "not the right fit," missed sales targets, ordinary performance problems, a failed PIP, or a manager who wanted a change.
• Possibly misconduct: theft, falsifying records, a deliberate breach of a known policy after warnings, refusing lawful and reasonable direction, working while intoxicated.
• Tells against misconduct: you were offered a severance package, you were given working notice, you were paid out ESA termination pay, or the letter says "without cause."
• Worth knowing: a disqualification for misconduct is not a fixed number of weeks off your claim; it is indefinite for regular benefits, which is exactly why you want this decided correctly the first time.

Why would my employer use code M if they called it a layoff?

Usually because the other codes fit worse, or because payroll software chose it. Code A is for shortage of work and end of contract or season. If your employer permanently ended your job for reasons personal to the role rather than a downturn, its payroll team may see A as inaccurate and pick M as the catch all. That is a bookkeeping judgment, not an accusation.

If your job really did disappear for business reasons, code A is the accurate one, and you are entitled to ask for an amended ROE. Employers can and do issue amendments. Put the request in writing to HR or payroll, quote the termination letter back to them ("the letter states the termination is without cause and that the position has been eliminated"), and ask for the ROE to be amended to code A. Keep the email. If they refuse, that is not fatal; it just means Service Canada resolves it. You can pull every ROE filed for you through My Service Canada Account, so you do not need the employer to hand you a paper copy. There is more detail in our guide to the Record of Employment.

What does Service Canada actually do when it sees code M?

It investigates the reason for separation before paying. Expect a questionnaire, a phone call, or both, asking you to describe in your own words why the employment ended. Service Canada contacts the employer with the same question. If the two accounts conflict, it weighs them. Practically, an employer alleging misconduct has to substantiate it; a vague code does not.

That review takes time, and it is the real cost of the M code: delay, not denial. Keep filing your biweekly reports throughout. Do not stop reporting because a decision is pending, and do not stop your job search, because availability for work is a separate condition of every week you claim.

If Service Canada does deny or disqualify you, you are not finished. You can ask for a reconsideration of the decision, and the deadline is short, generally 30 days from the day you are notified. If reconsideration goes against you, the next step is an appeal to the Social Security Tribunal, General Division, and after that the Appeal Division. Put the request in writing, attach the termination letter, and attach any severance offer. A package offered on a without cause basis is powerful evidence against a misconduct finding.

What should I put on my EI application, and when?

Apply immediately, ideally within four weeks of your last day worked, and do not wait for the ROE to be fixed or even to arrive. Employers file ROEs electronically straight to Service Canada, so your claim can be processed without your copy. Delay can cost you weeks of benefits, and there is normally a one week unpaid waiting period on top.

On the application you will be asked the reason your job ended. Answer truthfully in the category that matches, then use the comment box, which exists precisely for this. Keep it short, factual and unemotional. Something like: "My employment was terminated by the employer on a without cause basis effective [date]. The termination letter states the decision was not for cause and no misconduct was alleged. I was offered a severance package. I believe the ROE should be coded A, and I have asked my employer to amend it."

• Do not describe yourself as having quit, even loosely ("I saw it coming so I stepped away"). A quit puts you in an entirely different and much harder category.
• Do not guess at the employer's reasons or speculate about motives you cannot prove.
• Do report every dollar you receive from the employer on separation, including vacation pay, termination pay, severance pay and settlement funds, and tell them if a lump sum arrives later.
• Do upload or keep ready your termination letter, the severance offer, and any email where a manager used the words "layoff," "restructuring" or "position eliminated."

Under the ESA, was I laid off or terminated?

If your employer told Service Canada it dismissed you, you were terminated, and the layoff rules never get off the ground. Section 56(1)(a) of the Employment Standards Act, 2000 says an employer terminates the employment "if the employer dismisses the employee or otherwise refuses or is unable to continue employing him or her." That is limb (a), and it applies the moment your job ends.

Section 56(1) has three limbs, and it is worth knowing which one you are on. Limb (b) covers constructive dismissal, where "the employer constructively dismisses the employee and the employee resigns from his or her employment in response to that within a reasonable period." That is not you: you did not resign, so (b) does not apply. Limb (c) covers a lay off "for a period longer than the period of a temporary lay-off," which is the clock based route. You do not need it if (a) already applies, but here is how it works if your employer later argues this was only a layoff.

Counting weeks has its own rules. Under s. 56(3.1), if you have a regular work week you are "laid off for a week" if you earn "less than one-half the amount he or she would earn at his or her regular rate in a regular work week" and the week is not an excluded week. Section 56(3) defines an excluded week as one where, for one or more days, you were "not able to work, is not available for work, is subject to a disciplinary suspension or is not provided with work because of a strike or lock-out." Under s. 56(3.2), excluded weeks still count toward the 20, 52 and 78 week windows even though they do not count as layoff weeks. Subsections 56(3.3) to 56(3.8) run the same arithmetic for employees without a regular work week, comparing each week to "one-half the average amount he or she earned per week in the period of 12 consecutive weeks" before the relevant window. If you had steady hours, only 56(3.1) and 56(3.2) matter to you; 56(3.3) through 56(3.8) do not apply.

Two more subsections decide the practical fight. Section 56(4) is the employer's shield: "An employer who lays an employee off without specifying a recall date shall not be considered to terminate the employment of the employee, unless the period of the lay-off exceeds that of a temporary lay-off." It only protects a genuine layoff, and it does nothing where the employer has dismissed you under 56(1)(a). Section 56(5) is the employee's clock: where the employer terminates under limb (c), "the employment shall be deemed to be terminated on the first day of the lay-off." So your entitlements are calculated from day one of the layoff, not from the day the 13 weeks ran out.

Does the M code change what my employer owes me?

Not at all. The ROE is a federal EI form. It has no power to change your Ontario termination entitlements, and an employer cannot convert a without cause termination into a for cause one by ticking a box on it. Section 54 of the ESA still applies to you if you have been "continuously employed for three months or more."

Section 54 gives the employer exactly two lawful routes: "(a) has given to the employee written notice of termination in accordance with section 57 or 58 and the notice has expired; or (b) has complied with section 61." Section 57 sets the notice ladder, and it is one week per year of service capped at eight.

If they gave you working notice, s. 60(1) says that during the notice period the employer "shall not reduce the employee's wage rate or alter any other term or condition of employment," "shall in each week pay the employee the wages the employee is entitled to receive, which in no case shall be less than his or her regular wages for a regular work week," and "shall continue to make whatever benefit plan contributions would be required" to maintain your benefits to the end of the notice period. Section 60(3) turns missed benefit contributions into deemed unpaid wages, and s. 60(4) preserves whatever you can claim under the plan itself. If they paid you out instead, s. 61(1) requires "termination pay in a lump sum equal to the amount the employee would have been entitled to receive under section 60 had notice been given," plus continued benefit plan contributions through what would have been the notice period. Benefits are the part employers most often get wrong; see benefits after termination.

Severance pay is a separate entitlement with its own trigger. Section 63(1) lists five ways employment is severed: (a) the employer "dismisses the employee or otherwise refuses or is unable to continue employing the employee"; (b) constructive dismissal followed by resignation within a reasonable period; (c) a lay off of "35 or more weeks in any period of 52 consecutive weeks"; (d) a lay off "because of a permanent discontinuance of all of the employer's business at an establishment"; and (e) where the employer gives notice and you resign on two weeks' written notice effective during the statutory notice period. On these facts limb (a) applies directly. Limb (c) uses a stricter weekly test than the termination rules: under s. 63(2.1) a week counts only if you earn "less than one-quarter" of your regular week, versus one-half for termination, and ss. 63(2.2) to 63(2.4) handle excluded weeks and employees without a regular work week the same way s. 56 does. The eligibility threshold for severance pay (years of service and employer payroll) and the calculation live in later sections of Part XV that are not reproduced here, so confirm those before you assume a number. Our plain English breakdown is at termination pay vs. severance pay.

One caution on the word "dismissal." Section 55 says "Prescribed employees are not entitled to notice of termination or termination pay under this Part," and the list of prescribed exemptions, including the narrow one for wilful misconduct, sits in a regulation made under the Act rather than in the Act itself. That exemption is much harder to meet than an employer's say so. Even where an employer proves just cause at common law, the ESA minimums can survive: in Render v. ThyssenKrupp Elevator (Canada) Limited, 2022 ONCA 310, the Court of Appeal upheld cause at common law and still found the employee entitled to his ESA pay. And whether conduct justifies dismissal at all is contextual and proportionate, not automatic, following McKinley v. BC Tel, 2001 SCC 38.

Above the ESA floor sits common law reasonable notice, which is usually far larger. The factors come from Bardal v. Globe & Mail Ltd., 1960 CanLII 294 (ON SC): the character of the employment, length of service, age, and the availability of similar employment given experience, training and qualifications. If your contract contains a termination clause, read it hard before you accept its number. In Waksdale v. Swegon North America Inc., 2020 ONCA 391, the Court of Appeal held that one offside limb voids the termination provisions as a whole, and where the clause fails, common law notice revives under Machtinger v. HOJ Industries Ltd., [1992] 1 SCR 986. Start with signs your termination clause is unenforceable.

Will my severance package delay my EI or create a repayment?

Yes, most likely it will delay it. Money paid because your employment ended, including termination pay, severance pay, pay in lieu of notice and most settlement funds, is generally treated as earnings and allocated to the weeks following your separation at your normal weekly rate. You are not denied benefits; the start is pushed back by roughly the number of weeks the payout represents.

• Report it, always. Report the offer, the amount, and the date you receive it. Report it again if a settlement arrives months later.
• A later settlement can create an overpayment. If EI paid you for weeks that severance is later allocated to, Service Canada will normally ask for the overlap back. This is routine and it is not an accusation of fraud.
• Legal fees matter. Fees you incurred to obtain a separation payment can generally reduce the amount allocated against your benefits. Keep the invoice.
• Not every dollar is earnings. Amounts that genuinely compensate something other than lost wages, such as human rights damages, are treated differently from wage replacement. How a settlement is characterized and documented matters, so do not let it be papered carelessly.
• Structure has consequences. Lump sum versus salary continuance changes cash flow, benefits continuation and the allocation picture.

This is the single most common expensive mistake we see: someone signs a release early because they need EI to start, without knowing what the claim was worth. EI is a floor, not a settlement. Before you sign, read should you sign a severance offer and severance release, should I sign.

What if I am unionized or federally regulated?

The EI analysis is the same for everyone, because EI is federal and applies regardless of who regulates your employer. What changes is where you enforce your termination rights, and for some readers the ESA sections above do not apply at all.

If you are covered by a collective agreement, your layoff, recall and seniority rights come from that agreement, and disputes arising from it fall within the exclusive jurisdiction of labour arbitration under Weber v. Ontario Hydro, [1995] 2 SCR 929. You generally cannot sue for wrongful dismissal, and the Employment Standards Act complaint route is also closed for matters your agreement covers. Your first call is your union steward, and grievance timelines are short, often days. See unionized employee fired.

If you work for a federally regulated employer (banks, airlines, railways, interprovincial trucking, telecom, broadcasting, most ports), the Employment Standards Act, 2000 does not apply to you at all. The Canada Labour Code does, and non managerial employees with the required service can bring an unjust dismissal complaint, a remedy the Supreme Court in Wilson v. Atomic Energy of Canada Ltd., 2016 SCC 29 held displaces dismissal on notice alone. Those filing deadlines are also short. See federally regulated employee rights.

What should I do this week?

Move on EI first, because the deadlines there are the tightest, then deal with the ROE code, then deal with the package. In that order. Do not trade away a severance claim to make an EI problem go away; they are separate systems and both can be won.

1. 1.Apply for EI today if you have not. Do not wait for a corrected ROE or for the severance to be resolved. Late applications cost weeks.
2. 2.Use the comment box to state that the termination was without cause and that no misconduct was alleged, and that you have asked for the ROE to be amended to code A.
3. 3.Email HR in writing asking for an amended ROE, quoting the termination letter's own words back to them. Save the email whether or not they agree.
4. 4.Pull your ROE yourself through My Service Canada Account so you can see exactly what was filed, including Block 16, Block 17 separation payments and Block 18 comments.
5. 5.Gather the paper: termination letter, severance offer, employment contract and any signed amendments, recent pay stubs, benefits booklet, and the emails around your last day.
6. 6.Answer the Service Canada questionnaire quickly and factually, and attach the termination letter. If a decision goes against you, request reconsideration in writing within the deadline, generally 30 days.
7. 7.Keep reporting biweekly and keep a job search log, even while a decision is pending. Availability and job search are separate conditions from the reason you left.
8. 8.Do not sign the release yet. Get the offer reviewed while the ESA and common law numbers are still on the table.

About the Author

Daniel Carter

Legal Writer, Mirza Law

Daniel Carter is a legal writer at Mirza Law in Toronto. He writes about layoffs, employment contracts, and the steps to take before you sign anything from your employer.

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