What you should know about employing people in...Canada
Employment in Canada is not "at will".
1. Termination of employment requires reasonable noticeThere is an implied term of the employment contract (absent stipulated termination provisions) that employment will only be terminated without cause by an employer on reasonable notice or pay in lieu. Failure to give reasonable notice results in statutory and common law entitlement to compensation. The period of notice and attendant compensation depends upon several factors including: length of employment, age, position, availability of alternate employment and whether the employee was recruited from other employment.2. Discrimination lawsBoth federally and provincially Canada has enacted human rights safeguards to ensure the prohibition of discrimination in hiring, promoting, compensating, and terminating employment. Additionally, employers are required to ensure their workplace is free from harassment (sexual or other), and discrimination on the basis of prohibited grounds including race, age, sex, marital and family status and disability. Human rights complaints and violations are subject to review by courts and administrative tribunals.3. Employee benefitsCanada provides substantial medical benefits through a publicly funded health care system. There is a nationwide unemployment insurance system. Unions secure substantial additional benefits for unionized workers. Most non-unionized companies provide augmented health and dental coverage and may additionally provide defined pensions or contributions to Registered Retirement Savings Plans.
Parental and maternity leave legislation varies provincially but generally provides for one year of unpaid leave (with unemployment insurance benefits) for each pregnancy with mandatory reemployment at the same or equivalent position following return to the workforce.
Employment standards legislation provides minimum conditions of employment including hours of work, minimum wages, public holidays, vacation pay and prescribed minimum termination payments.4. Provincial v. Federal RegulationIt is important to know whether your company is federally or provincially regulated. Industries that are inter provincial by nature such as airlines, banks, radio and television broadcasting, telecommunications and inter-provincial transportation companies are generally speaking regulated by the federal government, while most other industries (accounting for over 90% of employers in Canada) fall under provincial jurisdiction. While many provisions in the federal and provincial statutes are similar there are also some significant differences. Notably federally regulated businesses can be ordered to reinstate discharged employees while this remedy is not found in provincial employment legislation.5. Union Certification and labour relationsApproximately one third of the Canadian labour force in unionized. Employees are free to join a union of their own choice and participate in its lawful activities. Rules for certifying unions vary between jurisdictions. Employers faced with a union organizing campaign may not make threats or promises intended to influence the employee's decision and contravention of these prohibitions may result in immediate certification. Following certification the parties must bargain in good faith in an attempt to reach a collective agreement. Strikes and lockouts are not permitted during the term of a collective agreement.6. Intellectual propertyThrough federal legislation and international conventions Canada protects duly registered patents, trademarks and industrial designs as well as affording copyright protection for original works. Companies doing business in Canada are well advised to do an intellectual property audit to ensure protection of all intellectual property. Agreements with employees stipulating that all intellectual property created or developed during the course of employment is owned by the company are recommended to avoid ownership disputes.7. Employees' fiduciary obligationsSenior employees in the management of the company are precluded by common law from misappropriating corporate opportunities and setting up competing operations. In such circumstances they may be restrained by injunctive relief and may be subject to damage awards. The courts will generally enforce agreements prohibiting the misuse of confidential information and the solicitation of former employees by departing employees. Restrictive covenants, which are generally considered in restraint of trade, will only be enforced if, in all the circumstances of the case, their scope is appropriate.8. AccommodationAll jurisdictions require that employees with physical and mental disabilities be accommodated in their working conditions (including premises and modified duties) so that they are enabled to acquire and continue meaningful employment. Employers have a duty to accommodate disabled employees to the point of "undue hardship". Accommodation can extend to providing counselling and time off for treatment of alcohol, drug and mental health-related disabilities.
Ontario has recently enacted legislation prescribing accessibility through the removal of physical and other barriers and requires all services, in both public and private sector businesses in the province, to become fully accessible for disabled persons. It is expected that other jurisdictions will follow suit.9. Protection of information and privacySeveral provinces and the federal government have enacted privacy legislation regulating the collection, use, dissemination, maintenance and destruction of personal information including information in employee's personnel files.
Employers are advised to establish policies regarding the protection of personal information clearly denoting information in their possession that may not be private (e.g. certain e-mail communications on company computers).
In addition to safeguarding personal information employees have additional privacy rights, which have been addressed, in a number of employment cases. A frequently raised issue is substance abuse testing. The "Canadian model" for such testing can generally be summarized as follows:(a) It is an invasion of the individual's privacy rights to subject her/him to random drug or alcohol tests in the absence of reasonable cause;(b) Reasonable cause can include a serious accident or a "near miss" which raise a reasonable apprehension that such testing may be warranted;(c) Random testing can be appropriate when dealing with those who are being accommodated due to substance abuse problems provided an agreement authorizing such testing has been entered into as a condition of accommodation.10. Useful policies & agreements
Employers operating in Canada should consider developing the following policies and agreements to ensure compliance with statutory requirements and to facilitate operations: