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Sources of Employment Laws in Canada
Canada's employment laws play a critical role in maintaining both a business friendly and and equitable work environment. As an employer in Canada, it is essential to understand these laws to ensure compliance and protect your business from liability. This comprehensive guide to Canadian employment laws will help you navigate the intricacies of Canadian employment law, covering everything from hiring practices to workplace safety and termination.
1. Federal and Provincial Jurisdiction
Employment law in Canada is split between federal and provincial jurisdictions. Approximately 90% of Canadian employees fall under provincial jurisdiction, while the remaining 10% are federally regulated. Federally regulated industries include banking, telecommunications, and inter-provincial transportation, among others. Chances are, unless you are a telecom or a bank or an airline, your business is provincially regulated.
2. Employment Standards Legislation
Employment standards legislation outlines the basic rights and responsibilities of both employers and employees. Each province has its own employment standards legislation, which outlines minimum standards for:
- Wages and overtime pay
- Hours of work
- Vacation time and pay
- Statutory holidays
- Leaves of absence
- Minimum termination and severance pay
3. Employment Common Law
Employment common law is concerned with the implied contractual rights of employees and employers. For example, it is implied in Canadian employment relationships that employers owe employees "reasonable notice of termination". If an employer does not terminate an employee with enough reasonable notice, then it is a common law breach of contract called "wrongful dismissal".
Employers may contract out of the common law, but not below minimum standards, using employment contracts.
4. Hiring Practices
Canadian employers should follow applicable guidelines when hiring employees, including:
- Ensuring equal opportunity and non-discrimination
- Collecting and managing personal information in compliance with privacy laws
- Complying with human rights laws regarding accommodation and accessibility
- Developing clear and legally compliant employment contracts
5. Employment Contracts
Employment contracts establish the explicit terms and conditions of the employment relationship. They may be written, oral, or implied in actions or common law. It is best for the employer if they use written employment contracts.
It is essential to draft employment contracts carefully. Any language in the contract that is void can make the whole contract unenforceable. Moreover, even if there is nothing unenforceable in the contract, any ambiguities in the contract can lead to disputes and will be interpreted in favour of the employee.
6. Human Rights Legislation
Human rights legislation in Canada prohibits discrimination based on protected grounds, such as race, gender, disability, and sexual orientation. Employers must ensure that their hiring practices, workplace policies, and employment decisions comply with applicable human rights laws.
7. Workplace Harassment and Violence
Canadian employers have a duty to maintain a safe work environment free from harassment and violence. Employers should implement policies to address and prevent workplace harassment, provide training to employees, and promptly investigate and address any complaints.
8. Occupational Health and Safety
Occupational health and safety (OHSA) legislation outlines the responsibilities of employers and employees in maintaining a safe work environment. Employers must take reasonable precautions to protect employee health and safety, including:
- Developing and implementing health and safety policies and programs
- Providing appropriate training and supervision
- Ensuring that equipment and machinery are safe and well-maintained
- Establishing procedures for reporting and investigating workplace accidents and incidents
Employees also have a responsibility to follow workplace safety rules, report unsafe conditions, and wear required personal protective equipment.
9. Workers' Compensation
Workers' compensation is a no-fault insurance system that provides financial and medical benefits to employees who suffer work-related injuries or illnesses. Each province has its own workers' compensation board, which administers the program and sets premiums for employers. Employers must register with their provincial workers' compensation board and comply with reporting requirements for workplace accidents and injuries.
10. Privacy in the Workplace
Employers must adhere to federal and provincial privacy legislation when collecting, using, and disclosing employee personal information. This includes ensuring that employees are informed of the purposes for which their personal information is collected and obtaining their consent when necessary. Employers should have a privacy policy in place that outlines the organization's practices regarding personal information management, including how information is collected, stored, and protected. As well, some provinces have a new "right to disconnect".
11. Employment Termination
Employment termination in Canada can be initiated by either the employer or the employee. There are two types of termination: with cause and without cause.
- With cause termination: Employers can terminate an employee for just cause, such as misconduct, insubordination, or incompetence. In such cases, employers are not required to provide notice or severance pay per the common law. However, minimum employment standards have a higher burden of just cause, generally consisting of "wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer."
- Without cause termination: Employers can terminate an employee without cause but must provide notice or severance pay, as required by the applicable employment standards legislation.
The required notice period and severance pay depends on the employee's length of service and the terms of their employment contract. Employers must also be cautious not to engage in constructive dismissal, which occurs when an employer unilaterally changes a fundamental term of the employment contract, forcing the employee to resign.
12. Restrictive Covenants
Restrictive covenants, such as confidentiality and non-solicitation clauses, are often included in employment contracts to protect an employer's business interests after an employee's departure. Canadian courts tend to view restrictive covenants as restraints of trade and will enforce them only if they are reasonable in scope, duration, and geographic reach. Indeed, some provinces, including economic leader Ontario, have outright banned non-competes.
13. Unionized Workplaces
Unionized workplaces in Canada are governed by collective bargaining agreements and labour law legislation, not employment law common law or legislation. Thus, labour law and specific collective bargaining agreements outline the terms and conditions of employment for unionized employees. Disputes between employers and unions are typically resolved through grievance procedures, mediation, or arbitration.
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