Canadian Employment Law 101 for U.S. Legal & HR includes Key differences U.S. vs. Canadian Employment Law, Background Checking, Education/Professional Certification Checks and Credit Checks.

1. Canadian Employment Law 101
for U.S. Legal & HR
July 2011
Presented by: Kristin Taylor
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2. Key differences
U.S. vs. Canadian Employment Law:
1. The Fundamental Difference: the employment
contract
2. Statutory Requirements (minimum wage, hours of work,
protected leaves, vacation pay)
3. Termination Obligations: no “at‐will” employment
4. Human Rights and AODA:
5. Privacy
6. Unions
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3. 1. The Employment Contract
• In Canadian common law jurisdictions, every employee has a
“contract” of employment as soon as an employment offer has
been accepted.
• Important to note this can be verbal and that written terms
may not be valid if new consideration is not offered.
• The employment contract is a compilation of:
– express terms from formal agreements, offer letters, policies, plans
and handbooks; and
– implied terms from statutes and regulations and common law terms
that are implied by the courts.
• Employers cannot contract out of statutory requirements.
Employers can contract out of terms that would be implied by
the courts under common law – and are well advised to do so.
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4. 1. The Employment Contract
• Duties of confidentiality, fidelity and good faith are implied on the part of
employees. Senior, high echelon managers may have fiduciary duties – a
heightened duty to avoid conflicts of interest, a duty not to compete
unfairly post‐termination – as well.
• Non‐solicitation and non‐competition clauses must be set out in writing as
they will not be implied. Non‐competition clauses are only enforced in
“exceptional” circumstances – shareholders, senior managers who
personify the business to the public. Reasonableness of geography,
duration and activity required for both non‐solicitation and non‐
competition covenants.
• Employment contracts, like commercial contracts, cannot be terminated
without “reasonable notice”, unless a termination provision is included.
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5. 1. The Employment Contract
• Benefits to the Employment Contract:
– Can contract to limit liability and protect employer’s interests.
– Punitive damages awards are rare. Two part test: (a) commission of
an independently actionable wrong (e.g., defamation, conspiracy), and
(b) employer’s conduct warrants the condemnation of the court.
Awards do not exceed $100,000.
• Disadvantages to the Employment Contract:
– Individual termination awards are more expensive.
– Plaintiff lawyers look for torts to circumvent the contract. Misconduct
by employer must be egregious though.
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6. 2. Statutory Requirements
• Under Canada’s constitution, jurisdiction over employment
law is given to the provinces, except with respect to the
federal government and certain industries with national
implications (inter‐provincial transportation, banks, telecom
companies). Presumption is that employers are regulated by
the province in which they are operating.
• Each province has its own web of statutes and regulations that
apply – including minimum employment standards; labour
relations; human rights; workers’ compensation; health and
safety and, in some jurisdictions, pay equity. Certain provinces
also have privacy legislation.
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7. 2. Statutory Requirements
• Employment Standards Minimums –similar to FLSA, but slightly
different in each Canadian jurisdiction.
• Any attempt or agreement to contract out of an employment
standards minimum is deemed to be void.
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8. 2. Statutory Requirements
a. Minimum Wage
• $10.25 / hour
• $9.60 / hour for students under 18, if weekly hours are not
more than 28 hours or if employed during a school holiday
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9. 2. Statutory Requirements
b. Leaves of Absence
• Leaves are job‐protected. The employee must be reinstated
in the position most recently performed, if it exists. If it does
not exist, a comparable position is required. Exception for
termination solely for reasons unrelated to the leave.
• Service is deemed to be active, seniority is protected and
benefits must continue during these leaves.
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10. 2. Statutory Requirements
Pregnancy and Parental Leaves
• Birth mothers are entitled to 17 weeks of pregnancy leave
and 35 weeks of parental leave that runs consecutively up to
52 weeks in duration.
• Birth fathers and adoptive parents are entitled to 37 weeks
of parental / childcare leave.
• Six weeks’ post‐miscarriage or still birth.
• Two weeks’ notice required to take either leave. Two weeks’
notice required to change end date of pregnancy leave. Four
weeks’ notice required to change end date of parental leave.
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11. 2. Statutory Requirements
Pregnancy and Parental Leaves
• Employment Insurance provides for 17 weeks of pregnancy
benefits and 35 weeks of child care benefits – less a 2 week
waiting period. Child care benefits may be split between
parents.
• The current rate of E.I. benefits is 55% of earnings to a
maximum of $457/week.
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12. 2. Statutory Requirements
Personal Emergency Leave
• For Ontario employers with 50 or more employees: 10 days
per calendar year per employee for
– personal injury, illness or medical emergency, or
– death, injury, illness, medical emergency or urgent matter relating to
a family member.
• Family member is broadly defined.
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13. 2. Statutory Requirements
Family Medical Leave
• Up to 8 weeks in a 26 week period to provide care and
support to a family member at significant risk of death in the
next 26 weeks. EI benefits provided ‐ less a 2 week waiting
period.
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14. 2. Statutory Requirements
Other Leaves of Absence
• Organ Donor Leave – up to 13 weeks, unless medically
extended for another 13 weeks.
• Declared Emergency Leave
• Reservist Leave – for deployment with Canadian Forces –
unlike other leaves, no entitlement to benefits continuation.
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15. 2. Statutory Requirements
c. Public Holidays
• Nine in Ontario: New Year’s Day, Family Day (3rd Monday in
February), Good Friday, Victoria Day (3rd Monday in May),
Canada Day (July 1), Labour Day, Thanksgiving (2nd Monday
in October), Christmas and Boxing Day (December 26).
• The Civic Holiday (1st Monday in August) is also commonly
provided by employers.
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16. 2. Statutory Requirements
c. Public Holidays
• Public holiday pay = wages earned in the four work weeks
prior to the work week in which the public holiday occurs
divided by 20.
• Employees who work the public holiday are entitled to
regular pay and a substitute holiday or, if the employee
agrees, regular wages + public holiday pay plus premium pay
(1.5) for hours worked on the public holiday.
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17. 2. Statutory Requirements
d. Vacations and Vacation Pay
• Employees accrue vacation time: 2 weeks every 12 months
of service and vacation pay. Vacation pay is calculated at the
rate of 4% of total wages. Wages is defined as including not
just salary, but bonus, commission, incentive pay and any
other monetary payment payable by an employer to an
employee under a contract of employment.
• Two problems arise with correlating to U.S. practices: (1)
wages vs. base salary, and (2) accrual during leaves of paid
vs. unpaid time.
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18. 2. Statutory Requirements
e. Hours of Work and Overtime
• In Ontario, employees cannot work more than (a) 8 hours
per day or their regularly scheduled hours and (b) 48 hours
per week, without Ministry approval. Ministry approval
requires application and the employee’s written agreement.
• Overtime is payable after 44 hours per week at the rate of
time and a half.
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19. 3. Termination Obligations
a. Cause: High standard. No notice or payment in lieu thereof required.
b. Term contracts less than one year: no statutory notice required.
c. Termination Without Cause:
i. Statutory: notice or pay and benefits in lieu equal to:
– 3 months to 1 year of service 1 week
– 1 to less than 3 years’ service 2 weeks
– 3 to less than 4 years’ service 3 weeks
– 4 to less than 5 years’ service 4 weeks
– 5 to less than 6 years’ service 5 weeks
– 6 to less than 7 years’ service 6 weeks
– 7 to less than 8 years’ service 7 weeks
– 8 years’ service or more 8 weeks
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20. 1. Statutory Requirements
c. Termination Without Cause
i. Statutory: mass termination obligations where 50 or more
employees terminated within any period 4 weeks or less –
automatic entitlements + Form 1 filing with MOL
Severance pay = an additional entitlement for employees
who have 5 years of service or more and whose employers
have an annual Ontario payroll of $2.5M or more. Severance
pay equates to an additional week or part thereof per
completed year of service or part thereof to a maximum of
26 weeks. Severance pay cannot be worked out and is to be
paid as a lump sum, unless the employee agrees otherwise.
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21. 3. Termination Obligations
c. Termination Without Cause:
ii. Common law: Courts imply that the term of employment
is indefinite and may only be terminated with “reasonable
notice”. Reasonable notice invariably exceeds the
employment standards minimum. Reasonable notice is a
function of:
a. age
b. length of service
c. character of employment (position, comp)
d. prospects for alternate employment
e. if applicable, enticement.
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22. 3. Termination Obligations
c. Termination Without Cause:
ii. Common law:
Reasonable notice is based on total compensation – i.e.,
salary, bonus, commission, stock options, benefits, etc.
Unless they have specific Canadian language, the
termination dates in bonus and stock option plans are read
as meaning the “lawful” termination date – i.e., the end of
reasonable notice, not the date on which notice is provided
to the employee.
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23. 4. Human Rights Differences
• No over‐arching federal laws. No affirmative action legislation,
except for federally‐regulated employers. Each jurisdiction has
its own human rights statute that addresses all prohibited
grounds of discrimination and provides administrative remedy.
• Grounds under the Ontario Human Rights Code upon which
discrimination and harassment are prohibited are as follows:
race, ancestry, place of origin, colour, ethnic origin, citizenship,
creed, sex, sexual orientation, age, record of offences, marital
status, family status and disability.
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24. 4. Human Rights Differences
• Now have a direct access model. Two forums:
– (1) Human Rights Tribunal of Ontario where complaints proceed
directly to mediation and then hearing. No discovery process.
– (2) Civil suit IF claiming discrimination or harassment in conjunction
with another cause of action.
• Until 2008, had a cap on damages for mental anguish at
$10,000. Now removed and although mental anguish damage
awards are creeping up, do not exceed $50,000.
• Punitive damages = atypical. Power = to put person in the
position would have been but for the discrimination – i.e.,
compensatory.
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25. 4. Human Rights Differences
• Duty to accommodate = to the point of undue hardship, considering
health and safety and cost as well as outside sources of funding.
• 3‐step test for determining whether an employer has established, on a
balance of probabilities, that a prima facie discriminatory standard is a
bona fide occupational requirement (BFOR).
1. it adopted the standard for a purpose rationally connected to the
performance of the job.
2. it adopted the particular standard in an honest and good faith belief that it
was necessary to the fulfilment of that legitimate work‐related purpose.
3. the standard is reasonably necessary to the accomplishment of that legitimate
work‐related purpose – i.e., it is impossible to accommodate without
imposing undue hardship upon the employer.
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26. 4. Human Rights Differences
Definition of Disability:
a. any degree of physical disability, infirmity, malformation or
disfigurement that is caused by bodily injury, birth defect or
illness and, without limiting the generality of the foregoing,
includes diabetes mellitus, epilepsy, a brain injury, any
degree of paralysis, amputation, lack of physical co‐
ordination, blindness or visual impediment, deafness or
hearing impediment, muteness or speech impediment, or
physical reliance on a guide dog or other animal or on a
wheel chair or other remedial appliance or device,
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27. 4. Human Rights Differences
Definition of Disability:
b. a condition of mental impairment or a developmental
disability,
c. a learning disability or a dysfunction in one or more of the
processes involved in understanding or using symbols or
spoken language,
d. a mental disorder, or
e. an injury or disability for which benefits were claimed or
received under the insurance plan established by the
Workplace Safety and Insurance Act, 1997
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28. 4. Human Rights Differences
Definition of Disability:
• Ever expanding to include:
– migraines
– addictions: drugs and alcohol, nicotine, pornography (!) – perceived as
well as actual
– stress
– Obesity
• Pre‐employment testing for drugs or alcohol is prohibited
except, in very limited circumstances and for safety‐sensitive
positions as part of an overall policy. No automatic
withdrawals of offers are allowed, in any event.
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29. 4. Human Rights Differences
Definition of Age:
• No heightened protections after age 40. Older employees
generally are entitled to more notice / severance.
• Since December 2006, mandatory retirement at age 65 has
been prohibited.
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30. 4. Human Rights Differences
Definition of Family Status:
• Employer’s decisions ‐ even if based on legitimate business
reasons ‐ can constitute family status discrimination if they
interfere with an impacted employee’s “substantial”,
parenting obligation.
• The case that set the standard involved a parent with a son
with severe behavioural problems that required her care and
justified her refusal to adjust her working hours.
• There is a duty to accommodate to the point of undue
hardship.
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31. 4. AODA
• Accessibility for Ontarians with Disabilities Act, 2005
– Customer service standards = required as of January 1, 2012
– Emergency response = required as of January 1, 2012
– Employment standards = required as of January 1, 2014
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32. 5. Privacy
• Federally‐regulated employers and employers in British
Columbia, Alberta and Quebec have heightened obligations in
connection with their collection, use, disclosure and retention
of their employees’ “personal” information. For example,
consent must be secured to use personal information for any
purpose not originally identified, proper safeguards must be in
place, etc.
• In Ontario, employees’ personal health information is so
protected by statute and the tort of invasion of privacy has
been recognized.
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33. 5. Privacy
• Adjudicators have imposed limits on the ability of employers
to use surveillance both within and outside the workplace.
• Privacy garners a great deal of media coverage. For example,
medical records used on a film set to mimic 9/11 and faxes
from a major bank with visa information intended to be sent
internally but inadvertently forwarded to a scrap yard in
Virginia have grabbed national headlines.
• Employees believe that they have rights, even if they
technically don’t.
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34. 6. Unions
• 30.3% of non‐agricultural paid workers are unionized in Canada.
Approximately 17% of employees in the private sector in Ontario are
unionized. Quebec is the most heavily unionized province, Alberta the
least.
• CAW‐Canada is the largest private sector union in Canada followed by
UFCW, CEP and Teamsters.
• Ontario unions are “closed‐shops”. Once a union is certified, employees
must pay union dues whether or not they are or wish to be members as a
condition of employment, except where the employee has a religious
objection in which case that employee’s dues are donated to a charity.
• Decertification is difficult and usually only an option in the last three
months of the term of a collective agreement.
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35. 6. Unions
How Unions Get Certified ‐ the Process
• Pre‐Application / Union Organizing:
‐ A union requires signatures on membership cards of 40% of the
members of its proposed bargaining unit in order to apply for certification
to the Ontario Labour Relations Board (OLRB).
• Day 0: Receipt of Application for Certification:
‐ The application for certification is delivered by the union to the
employer and to the OLRB. This triggers a working conditions “freeze”.
The application for certification identifies the bargaining unit sought as well
as where the vote should take place, when the vote should take place, who
should act as scrutineer at the ballot box and who should act as the union’s
agent at the counting of the ballots.
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36. 6. Unions
• Day 1: Contact from the OLRB:
‐ The OLRB typically contacts the employer on either day 1
or day 2 to advise of its receipt of the application for
certification and to require the employer to post the
application for certification and a notice to employees
identifying that an application has been filed and a vote will be
held. The employer then is required to fax a confirmation of
posting form back to the OLRB.
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37. 6. Unions
• Day 2: Response to Application for Certification:
‐ The employer must file its formal response to the application for
certification with the OLRB by 5:00 p.m. The response identifies challenges
to the union’s bargaining unit description, identifies the # of employees in
the unit, sets out the employer’s position on where and when the vote
should be held and who should be the employer’s representative at the
vote and the counting of the ballots. Of particular importance is that the
employer is required to provide the voter’s list for both the union’s
proposed bargaining unit as well as its own – i.e., name and classification of
each employee and if absent from work on Day 0, the expected return to
work date.
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38. 6. Unions
• Day 3 or 4: OLRB Decision Ordering the Vote:
‐ The OLRB will release its decision ordering the vote and
advising of the date, time and location. In almost all cases, the
OLRB defines the voter’s list as broadly as possible. Employees
whose entitlement to vote is disputed will have their ballots
segregated. The employer must post the OLRB’s decision and
notice to employees and to fax confirmation. In the
meantime, if there are issues regarding voter status, an OLRB
officer will contact counsel in an attempt to resolve these
issues as part of the pre‐vote consultation process.
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39. 6. Unions
• Day 5: Vote
‐ A secret ballot vote is conducted by an officer from the Ministry of
Labour. 2 scrutineers: one for the union and one for the employer sit on
either side of the officer during the vote with the voter’s list.
‐ To vote “yes” is to vote for the union; to vote “no” is to vote for the
employer / to remain union‐free. Employees whose status to vote remains
in dispute do vote and their ballots are segregated – i.e., placed in a sealed
envelope.
‐ At the conclusion of the vote, a worksheet is completed and the
non‐segregated ballots typically are counted immediately. The union
requires 50% plus one of the employees who actually vote to be certified.
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40. 6. Unions
• Post‐vote: Meetings and Hearing
‐ If necessary – i.e., the vote results have not determined
the issue – due to outstanding issues such as status disputes or
unfair labour practice allegations, these meetings are held in
the weeks following the vote.
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41. 6. Unions
Employee Communication Guidelines:
• Threats, intimidation, coercion and promises by employer representatives
are prohibited by the Labour Relations Act. The OLRB has the remedial
power to automatically certify a union, irrespective of the outcome of the
vote, where it finds employer misconduct that it otherwise cannot remedy.
• Employers are able to exercise their right to free speech, as long as it is not
found to be threatening or coercive. Employee communication, from an
employer, generally addresses the following:
‐ Provides information regarding the process and the importance of voting;
‐ Stands by its record and treatment of employees without a union;
‐ Identifies some of the negative consequences of unionization that the
union may not have disclosed such as the cost of dues, strikes, how
collective bargaining works – i.e., that nothing is guaranteed, that unions
do not preclude layoffs or provide job security;
‐ States its preference to deal directly with employees / hope that
employees will vote “NO”.
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42. Presented by:
Kristin Taylor
kristin.taylor@fmc‐law.com

43. The preceding presentation contains examples of the kinds of
issues companies dealing with employment law issues could face.
If you are faced with one of these issues, please retain professional
assistance as each situation is unique.