Q&A: Labour & Employment Law in Canada

Legislation and Agencies

What are the main statutes and regulations relating to employment?

Canada is a federation comprising a central federal government, 10 provinces (Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Prince Edward Island, Quebec and Saskatchewan) and three northern territories (the Northwest Territories, Nunavut and the Yukon).

The Constitution Act confers broad powers on the federal government; however, the provinces retain jurisdiction in many fields, including property and civil rights, which encompasses labour and employment law in most sectors. Consequently, all provinces and the three territories have enacted employment standards legislation governing such issues as the minimum wage, hours of work, overtime, vacation and public holidays, pregnancy and parental leave, and notice or pay in lieu of notice upon dismissal:

• the Employment Standards Act in British Columbia, New Brunswick, Ontario, Prince Edward Island, the Yukon Territory and the Northwest Territories;
• the Employment Standards Code in Alberta and Manitoba;
• the Employment Act in Saskatchewan;
• the Labour Standards Act in Newfoundland and Labrador, Quebec and Nunavut Territory; and
• the Labour Standards Code in Nova Scotia.

Each province has also enacted legislation governing labour relations and collective bargaining in unionised workplaces:

• the Labour Relations Code in Alberta and British Columbia;
• the Labour Relations Act in Manitoba, Newfoundland and Labrador and Ontario;
• the Industrial Relations Act in New Brunswick;
• the Trade Union Act in Nova Scotia and Saskatchewan;
• the Labour Act in Prince Edward Island; and
• the Labour Code in Quebec.

Most employers fall under provincial jurisdiction. Companies operating in certain sectors are recognised under the Constitution Act as federal works, undertakings or businesses. These include federal Crown corporations, the postal service, banks, airlines, radio, television and telecommunications companies, railways, shipping companies and trucking companies providing inter-provincial services. Federally regulated companies represent about 10 per cent of the workforce and are subject to the application of the Canada Labour Code, which governs employment standards, labour relations, collective bargaining and occupational health and safety. The northern territories have limited autonomy and, for the most part, fall under federal jurisdiction.

In addition to these statutory regimes, the common law or, in the case of Quebec, the Civil Code, applies to all individual contracts of employment.

Is there any law prohibiting discrimination or harassment in employment? If so, what categories are regulated under the law?

All jurisdictions have enacted human rights legislation designed to ensure that workplaces are free from discrimination and harassment:

• the Human Rights Code in British Columbia, Manitoba, Ontario and Saskatchewan;
• the Human Rights Act in Alberta, New Brunswick, Newfoundland and Labrador, Nova Scotia, Prince Edward Island, the Northwest Territories, Nunavut Territory and the Yukon Territory;
• the Charter of Human Rights and Freedoms in Quebec; and
• the Canadian Human Rights Act in the federal jurisdiction.

Some jurisdictions also address workplace harassment in occupational health and safety legislation. In addition, at the federal level the Canadian Charter of Rights and Freedoms and the Canadian Bill of Rights apply to protect the fundamental rights and freedoms of Canadian citizens in all jurisdictions.

The prohibited grounds of discrimination vary to some extent according to jurisdiction and can include age, race, colour, ethnic or national origin, social condition, language, religion, creed or political conviction, gender, sexual orientation, pregnancy, disability, marital status, family status and record of offences. This list is by no means exhaustive. For example, Alberta, British Columbia, Prince Edward Island, Nova Scotia, Newfoundland and Ontario have amended their human rights legislation to add both gender identity and gender expression as prohibited grounds, while Manitoba, Saskatchewan and the Northwest Territories did the same for gender identity. Employers are precluded from directly discriminating against employees on these grounds and from implementing standards that, while ostensibly neutral, have an adverse effect on members of a protected group. An employer may defend an allegation of discrimination by demonstrating that the job standard or requirement at issue was adopted in the good faith belief that it is a bona fide occupational requirement and that it is impossible to accommodate the individual without incurring undue hardship.

What are the primary government agencies or other entities responsible for the enforcement of employment statutes and regulations?

The federal government and the provincial governments have established ministries and departments to administer employment statutes, regulations and policies:

• the Department of Employment and Social Development Canada in the federal jurisdiction;
• the Alberta Ministry of Labour;
• the British Columbia Ministry of Jobs, Trade and Technology and Ministry of Labour;
• the Manitoba Ministry of Growth, Enterprise and Trade;
• the New Brunswick Department of Post-Secondary Education, Training and Labour;
• the Newfoundland and Labrador Labour Relations Agency;
• the Nova Scotia Department of Labour and Advanced Education;
• the Ontario Ministry of Labour;
• the Prince Edward Island Department of Workforce and Advanced Learning;
• the Ministère du Travail in Quebec;
• the Saskatchewan Ministry of Labour Relations and Work-place Safety;
• the Northwest Territories Department of Education, Culture and Employment;
• the Nunavut Department of Justice (Labour Standards Office); and
• the Yukon Department of Community Services (Labour Services Office).

It is also within the jurisdiction of the common law courts and, in Quebec, the civil law courts, to hear and rule on contractual employment law matters.

Worker representation

Is there any legislation mandating or allowing the establishment of employees’ representatives in the workplace?

In Canada, the Charter of Rights and Freedoms provides everyone with the constitutional right to associate and meet peacefully. The Supreme Court of Canada has held that this Charter right requires that employee associations be able to participate in a meaningful process of collective bargaining with an employer, which includes the right to make representations to the employer and have those representations considered by the employer in good faith.

Provincial and federal labour legislation establishes the right to join a union and bargain collectively. In addition to the collective bargaining regime established pursuant to labour legislation, occupational health and safety legislation often requires an employer to form a workplace health and safety committee, comprising management personnel and employees.

The Charter right does not require the enactment of a particular industrial relations model or a particular method of collective bargaining. However, legislation that substantially interferes with a meaningful process of collective bargaining will violate the Charter.

Provided the requisite number of employees desire to be represented by a union (generally a simple majority), an employer will be obliged to negotiate with the union to create a collective agreement that governs the terms and conditions of employment for all employees in the unit and the rights and obligations of the parties.

Workplace health and safety committees have the power to address and respond to workplace hazards.

What are their powers?

As the authorised bargaining representative for its members, a union has the exclusive authority to negotiate the terms and conditions of employment for the employees it represents, to pursue grievances, and to file complaints to statutory labour relations authorities. A union also has, subject to statutory fair representation duties, the ability to enforce its internal constitution and to discipline and fine its members with potential consequences up to and including the loss an employee’s employment with the employer. At the permissible time during collective bargaining, a union (usually with a vote of its members in the bargaining unit) has the power to commence a work stoppage or other strike action (such as overtime bans, etc).

Background information on applicants

Are there any restrictions or prohibitions against background checks on applicants? Does it make a difference if an employer conducts its own checks or hires a third party?

In all Canadian jurisdictions there are statutory provisions that limit the extent to which an employer may use information obtained through a comprehensive background check.

Personal information statutes in Canada impose restrictions on employers that would apply to the collection, use and disclosure of personal information in the context of a pre-employment background check. British Columbia, Alberta, Ontario, Nova Scotia and Quebec have provincial privacy legislation. In the remaining provinces, the federal privacy legislation is applicable.

Human rights legislation is also relevant to pre-employment background checks, given that the information disclosed may include details related to a prohibited ground of discrimination. While some information, such as age or marital status, could directly relate to a prohibited ground, other information, such as particulars of education, could indirectly relate to a prohibited ground by revealing information about the individual’s religion, place of origin or age. If an employer obtains such information inadvertently, it should ensure that it does not consider it in making an employment decision unless the information is relevant to the decision and its use would not be discriminatory. Employers in British Columbia, Ontario, Prince Edward Island, Quebec and the federal jurisdiction face various restrictions with respect to criminal background checks. For example, an employer in Ontario cannot discriminate against an individual who has received a pardon for a criminal conviction. Generally, to deny an applicant employment on the basis of an unsatisfactory background check in these jurisdictions, the employer would have to establish that a clean criminal record is a bona fide occupational requirement.

In all jurisdictions, comprehensive background checks, whether conducted by the employer or a third party acting on the employer’s behalf, should not be conducted until after a conditional offer of employment has been made.

Are there any restrictions or prohibitions against requiring a medical examination as a condition of employment?

Consistent with human rights and privacy legislation, medical testing of job applicants is permissible only after a conditional offer of employment has been made and only to determine the applicant’s ability to perform the essential job duties. The conditional offer may not be revoked on the basis of the test results unless the applicant’s limitation is directly related to his or her ability to do the job and accommodation is not possible in the circumstances. Where a certain level of fitness is a bona fide occupational requirement and an applicant refuses to undergo a test or provide other appropriate medical evidence to establish that he or she meets the required level of fitness, then the employer will be justified in revoking a conditional offer of employment. It does not make a difference to the application of the human rights or privacy legislation whether the employer conducts its own checks or hires a third party.

Are there any restrictions or prohibitions against drug and alcohol testing of applicants?

There is a considerable amount of jurisprudence addressing the legitimacy of pre-employment drug and alcohol tests. Drug and alcohol addiction constitutes a disability throughout Canada and is evaluated under the rubric of human rights and privacy law. Pre-employment drug or alcohol tests that provide no meaningful evidence of likely impairment on the job and that cannot be relied upon as an accurate predictor of future job performance are generally not permitted, although this area of the law is receiving considerable attention in the courts and tribunals at this time and there may be further changes. If drug and alcohol testing will be a valid requirement in the job (for example, in connection with a safety-sensitive position), the applicant should be so notified when an offer of employment is made. An employer may refuse to hire an applicant who refuses to submit to a drug and alcohol test only if that test is a valid requirement for the job. In October 2018, Canada legalised the possession and use of limited amounts of cannabis. This legislative change will not, however, generally affect the application of drug testing.

Hiring of employees

Are there any legal requirements to give preference in hiring to, or not to discriminate against, particular people or groups of people?

Human rights legislation in Canada generally permits employers to implement affirmative action programmes designed to assist members of the protected groups or otherwise attempt to achieve equal opportunity and contribute to the elimination of discrimination in employment. The federal jurisdiction has also legislated mandatory affirmative action under the federal Employment Equity Act. This statute requires federally regulated employers to develop an employment equity plan with the aim of achieving a workforce that reflects the representation of four designated groups: aboriginal people, visible minorities, persons with disabilities and women. The Canadian Human Rights Commission is responsible for enforcing this statutory programme. As stated above, human rights legislation in all jurisdictions prohibits discrimination in employment, including during the hiring process, on a wide variety of prohibited grounds. However, some human rights statutes contain exemptions from such restrictions in the case of certain charitable or religious organisations or institutions, particularly where it can be shown that the preferential hiring policy is integrally linked to the mission or mandate of the institution.

Must there be a written employment contract? If yes, what essential terms are required to be evidenced in writing?

There is no requirement to enter into a written employment contract with non-unionised employees. Some employees, commonly more senior members of an organisation, have written contracts of employment that define the full extent of the employer’s obligations to that particular employee. Such contracts are generally enforceable, subject to two qualifications: the contractual terms cannot be inferior to statutory minimum employment standards; and the employee must not have signed the contract under a degree of duress. Where no written employment contract exists, or where the contract does not fully address the terms and conditions of employment, individual employment relationships are governed by employment standards legislation and implied terms under the common law or, in the case of Quebec, set out in the Civil Code.

To what extent are fixed-term employment contracts permissible?

Fixed-term contracts are permissible in all Canadian jurisdictions and generally reflect the parties’ intention to utilise an employee’s services for a relatively short term to fulfil a specific need. The statutory obligation to give notice of termination, as discussed below, can be excluded by hiring on a fixed-term basis. However, unless the written contract includes an early termination provision or the entire contract becomes frustrated or impossible to perform, the fixed-term employee is entitled to be employed for the entire term in the absence of ‘just cause’ for dismissal. In addition, where an employee is repeatedly, routinely or habitually rehired for a number of consecutive ‘fixed terms’, courts may in effect treat such employees as long-term or indefinite employees for certain purposes, such as for the purposes of calculating notice periods.

What is the maximum probationary period permitted by law?

Although the term ‘probationary period’ is generally not used in employment standards legislation, employers may impose a probationary period on employees during which the employment contract specifies that the employee’s contract can be terminated without notice. Under employment standards legislation in all jurisdictions, employees are not entitled to statutory notice of termination until they have completed a set period of employment. The relevant statutory period is 30 days in Newfoundland and Labrador, six months in New Brunswick and three months in all other jurisdictions. An employer may not extend the period of time during which the employee is not entitled to statutory notice.

Probationary periods are more common among the unionised workforce. Collective agreements often provide for an initial period of 60 to 90 days during which the employer is permitted the opportunity to assess the suitability of new hires and release unsatisfactory employees without having to meet the standard of ‘just cause’ that otherwise applies; however, this must be negotiated in each collective agreement. Any extension to the probationary period in the collective agreement must also be negotiated.

What are the primary factors that distinguish an independent contractor from an employee?

There is no precise legal definition of ‘independent contractor’ and it can be difficult to distinguish this relationship from an employment relationship. Although Canadian courts and tribunals tend to analyse the facts on a case-by-case basis, there are a number of significant factors that are generally considered, including:

• the control the company exerts over the individual worker;
• the extent to which the individual controls his or her work schedule and number of working hours;
• whether the individual owns his or her own tools;
• whether the company provides equipment and services, such as computers, administrative support, stationery and business cards;
• whether the individual must work exclusively for the company or is permitted to provide services to others at the same time;
• the individual’s chance of profit and risk of loss; and
• the existence of a written agreement defining the individual’s status and stating that the individual is responsible for paying all self-employment and income-related taxes and expenses.

The Supreme Court of Canada has affirmed that the inquiry is context-driven and that no single factor is universally determinative. Courts have also clearly stated that merely labelling the arrangement as a contract for services between a client and an independent contractor is insufficient. The parties’ total relationship transcends what is formally set out in the written contract.

Certain provinces, including BC and Ontario, recognise ‘dependent contractor’ as an intermediate status between employee and independent contractor, and entitled to reasonable notice upon termination. The intermediate category of dependent contractor consists, at least, of non-employment relationships that exhibit a certain minimum economic dependency, which may be demonstrated by complete or near-complete exclusivity. The legal principles applicable to distinguishing employees from independent contractors apply equally between employees and dependent contractors. Therefore, the dependent contractor category arises as a ‘carveout’ from the non-employment category and does not affect the range of relationships captured by the employment category.

Is there any legislation governing temporary staffing through recruitment agencies?

Employment standards legislation may provide specific rules relating to temporary help or employment agencies; however, the scope of their application and protections varies considerably across Canadian jurisdictions. For instance, in British Columbia, the Employment Standards Act (ESA) includes provisions requiring the registration of employment agencies, prohibitions on the demand of payment from prospective employees for the purposes of obtaining employment or information about employers, and restrictions on fees for obtaining or assisting in obtaining employment.

In the Saskatchewan ESA, equivalents to the latter two provisions are found, but there is no general requirement for registering or licensing. In Ontario, there is a more comprehensive range of relevant provisions, set out in Part XVIII.1 of the Ontario ESA, including the stipulations that workers staffed by temporary help agencies are the employees of those agencies, as well as provisions relating to when a work assignment has occurred or commenced, record-keeping and disclosure obligations, and a range of specific prohibitions that apply to temporary help agencies (eg, relating to the fees that can be charged by such agencies and circumstances under which employment can be terminated).

Other provinces regulate employment agencies primarily through regulations, such as the Alberta Employment Agency Business Licensing Regulation, Alta Reg 45/2012, which is enacted under the province’s consumer protection legislation. Given the variety of legislative measures employed in different jurisdictions, close attention to the specific rules in each jurisdiction is required.

Foreign workers

Are there any numerical limitations on short-term visas? Are visas available for employees transferring from one corporate entity in one jurisdiction to a related entity in another jurisdiction?

There are no numerical limitations on the number of temporary work permits that are issued by Canadian immigration authorities.

Canada grants work permits to foreign nationals on a temporary basis to allow them to work in Canada for limited periods when an employee transfers from a foreign company to a related company in Canada. These intra-company transfers of employees are available where there is a clear corporate relationship between the employee’s foreign employer and the company in Canada where the employee will be working. To qualify for an intra-company transfer work permit, the transferring employee must work in one of three positions: as a manager, an executive or a specialised knowledge employee of the company. The employee must also have worked at the related company’s foreign corporate office for at least one year in the previous three years and be currently working for that entity. There are three different provisions under which intra-company employees may obtain a Canadian work permit: under the North American Free Trade Agreement (NAFTA); under the General Agreement on Trade in Services (GATS); or under the Significant Benefit to Canada provisions in the Regulations to the Canada Immigration and Refugee Protection Act (the Regulations). Each of these work permit categories of intra-company transfer is slightly different.

The NAFTA intra-company transfer work permit exemption is open only to US and Mexican citizens. Intra-company work permits issued under GATS may be issued to individuals who are citizens of one of the member countries in accordance with the general provisions in the Regulations. Under the Significant Benefit to Canada provisions in the Regulations, intra-company transfer work permits may be granted to employees of any country. Generally, a senior manager or executive may have a work permit granted for up to three years and renewed to a total of seven years, whereas a specialised knowledge transferee may have a work permit granted for up to three years at a time, and renewed to a total of up to five years.

There are circumstances under which foreign nationals may enter Canada on a short-term basis without the need for a work permit. This applies where a foreign national seeks to enter Canada to engage in international business activities without directly entering the local labour market. In such circumstances, an individual can enter Canada as a ‘business visitor’. To qualify as a business visitor, the primary source of remuneration for the individual must be outside Canada and the principal place of business, residence and the place of accrual of profit must be outside Canada. Examples of the types of activities that may qualify individuals as business visitors in the context of employees working for an affiliated corporate entity outside Canada include foreign nationals engaging in discussions and negotiations in respect of the sale, purchase, marketing, transmission or packaging of goods or services, and foreign nationals providing intra-company training of employees in Canada.

Are spouses of authorised workers entitled to work?

Spouses and common law partners accompanying foreign workers who have obtained a work permit under National Occupation Codes classified as an O, A or B level (skilled workers) are generally eligible for open work permits. Further, spouses and common law partners of work permit holders who have been nominated for permanent residence by a province may be entitled to an open work permit irrespective of the skill level of the principal applicant’s occupation. An open work permit allows the spouse of the intra-company transferee to work for any Canadian employer during the term of the intra-company transferee’s work permit. For occupations in the medical, healthcare or childcare professions, a medical examination will be required for a foreign national to work in those occupations.

Under Canadian laws, a common law partner is also entitled to an open work permit. A common law partner is a person of the opposite or same sex who is currently cohabiting with the foreign employee and has cohabited in a conjugal relationship with him or her for a period of at least one year.

What are the rules for employing foreign workers and what are the sanctions for employing a foreign worker that does not have a right to work in the jurisdiction?

An employer that employs a foreign national who is not authorised to work in Canada is liable for fines of up to C$50,000, as well as imprisonment for up to two years. Further, any persons, including any employers, could be liable for higher penalties in the event that they are found to have misrepresented to Citizenship and Immigration Canada. Specifically, employers or individuals that make a misrepresentation to the immigration authorities could be fined up to C$100,000 and be subject to imprisonment for up to five years.

Under the immigration legislation, employers are deemed to know that an employee is not authorised to work in Canada. This means that employers must always exercise due diligence to determine whether its employees are legally authorised to work in Canada.

Is a labour market test required as a precursor to a short or long-term visa?

In order to hire a temporary foreign worker, an employer will often need to obtain a labour market opinion (LMO) from Human Resources and Skills Development Canada (Service Canada) unless otherwise specifically exempted. The LMO assesses how the employment of the foreign worker would likely affect the Canadian labour market. When applying for an LMO, the employer almost always needs to show that sufficient efforts have been made to recruit Canadian citizens or permanent residents; that wages offered are consistent with the prevailing rate paid to Canadians in the same occupation and region; and that working conditions meet the applicable labour standards of the region in which the foreign worker will be working. The employer must also articulate to the satisfaction of Service Canada the potential benefits that hiring the foreign worker could bring to the Canadian labour market - for example, the creation of new jobs or the transfer of skills and knowledge.

Assuming that Service Canada concurs with an employer’s submission that there is a need in the Canadian labour market to hire a foreign worker, it will issue a positive LMO. The foreign worker must then submit the positive LMO with his or her application for a work permit.

There are some exceptions to the LMO requirement. Generally, an LMO will not be required for professionals and business people coming to work temporarily in Canada under certain international agreements such as NAFTA, intra-company transferees or participants in reciprocal exchange programmes (eg, international teacher exchange programmes).

Immigration officers, border services officers and Service Canada have the right to assess the genuineness of employment offers to foreign workers, and for employers to be subject to an employer compliance review (ECR). If it is determined through an ECR that an employer has not previously complied with the terms of an offer of employment to a foreign worker (ie, wages, conditions of employment, duties, location), and the terms are not substantially the same as indicated on previous LMO applications, the employer may be ineligible to make LMO applications for a two-year period. This would also apply to LMO-exempt work permit applications, whereby Citizenship and Immigration Canada, together with the Canada Border Services Agency, could ensure past compliance by reviewing the terms of an employer’s past engagement of foreign workers to verify that the terms set out in a previous work permit application are substantially the same as the actual terms of employment.

The ECR period is the work period for any temporary foreign worker in the previous six years. Therefore, although there is a process for employers to provide reasonable justification for past non-compliance, it is very important for employers to ensure that the terms and conditions in offers of employment made to foreign workers are fulfilled, and to provide substantially the same terms of employment to foreign workers as set out in LMO applications and work permit applications.

Terms of employment

Are there any restrictions or limitations on working hours and may an employee opt out of such restrictions or limitations?

Statutory minimum standards governing hours of work vary by jurisdiction. Employers and employees may not opt out of these standards unless the applicable statute expressly permits this. The standard workday is generally eight hours and the standard working week is generally 40 hours. Legislation in some jurisdictions sets limits on the number of hours that may be worked in a week without a permit. For example, although the weekly maximum in Ontario is 48 hours, upon entering into a written agreement with the employee or trade union and obtaining permission of the director of employment standards, the employer may exceed this limit up to a maximum of 60 hours per week. In other jurisdictions, such as British Columbia, the legislation allows employees to work hours in excess of the standard daily or weekly hours provided that an employee is paid the appropriate overtime rates and the hours worked are not detrimental to the employee’s health and safety. Employment standards in some jurisdictions also prescribe the number of consecutive hours an employee must have free from work daily, weekly, fortnightly and between shifts. Although restrictions on hours of work generally do not apply to managerial employees, professionals (doctors, lawyers, accountants, etc) and teachers, each jurisdiction has its own excluded categories. Special regulations, which also vary by jurisdiction, govern hours of work in specific industries.

What categories of workers are entitled to overtime pay and how is it calculated?

Although statutory minimum standards vary, in most jurisdictions overtime is triggered at 40 hours a week (44 hours in Alberta and Ontario and 48 hours in Nova Scotia and Prince Edward Island). Overtime pay is generally calculated at one and a half times the employee’s regular hourly rate. Parties cannot opt out of these minimum standards absent an express statutory provision to the contrary. In some jurisdictions, notably British Columbia, Ontario and the federal jurisdiction, parties may enter into a written agreement to average hours of work over a specified number of weeks for the purpose of calculating the overtime entitlement. In Ontario, the employer must also obtain the approval of the director of employment standards to enter into an overtime averaging agreement. Statutory overtime provisions vary by jurisdiction but generally do not apply to managerial employees, professionals and teachers. Special regulations in each jurisdiction also govern the statutory overtime entitlement in specific industries.

Can employees contractually waive the right to overtime pay?

Employers and employees in non-union settings are not able to contractually waive the statutory requirement to provide overtime pay, other than to vary this requirement at times under the applicable statutes.

Unions and employers have the ability in some jurisdictions to provide in their collective agreement for different (and even inferior in the case of British Columbia) overtime requirements; however, it would be rare, if ever, that collective agreements would provide for overtime pay that is less than the statutory requirements.

Is there any legislation establishing the right to annual vacation and holidays?

In each jurisdiction, employees are entitled to an annual paid vacation of at least two weeks per year upon completing one full year of employment, although some jurisdictions provide for increased vacation time as the length of employment increases. Employers have significant control over when the vacation may be taken. Employees, however, must be provided with their vacation time within a fixed period after the end of the vacation entitlement year (VEY). This fixed time ranges from four months after the VEY in New Brunswick to 12 months after the VEY in Manitoba.

Vacation pay accrues on wages earned in the VEY. For example, in Ontario, employees are entitled to vacation pay of 4 per cent of their total wages in the VEY (excluding previous vacation pay) during the first five years of employment, and 6 per cent thereafter. In most jurisdictions, employers may not provide pay in lieu of vacation without entering into a special arrangement. For example, to forgo holiday time in Ontario, an employee and the employer must enter into a written agreement and obtain the approval of the director of employment standards. In British Columbia, vacation pay can be paid on the employee’s regularly scheduled pay days with written agreement from the employee. However, the employee is still entitled to unpaid vacation time off work as required by the legislation.

Employment standards legislation also entitles eligible employees to paid public holidays. Eligibility requirements vary by jurisdiction. Designated public holidays also vary by jurisdiction but generally include New Year’s Day, Good Friday, Canada Day (1 July), Labour Day, Thanksgiving Day, Christmas Day and Boxing Day (26 December), plus Victoria Day (the third Monday in May) in the common law provinces and Quebec National Day/St Jean Baptiste Day (24 June) in Quebec. Some provinces, including Alberta, British Columbia and Ontario, have also designated a Family Day holiday on a date determined by the province. Although most employees are not required to work on public holidays, if they do, local legislation generally entitles them to regular pay plus premium pay for the holiday or the right to take an alternative paid holiday within a specified time thereafter.

Is there any legislation establishing the right to sick leave or sick pay?

Employees are entitled to unpaid sick leave under employment standards legislation in Newfoundland and Labrador, New Brunswick, Quebec, the Yukon and the federal jurisdiction. In Ontario, statutory personal emergency leave provisions permit employees to take a job-protected leave of absence of up to 10 days per calendar year for various reasons including personal illness and injury, with the first two days paid by the employer. The length of the sick leave entitlement and the eligibility requirements vary widely by jurisdiction. Compensation for employees who suffer a work-related illness or injury may be available under the statutory workers’ compensation system administered in each province. Provincial and federal human rights legislation provides protection for employees who are off work owing to physical or mental disability.

In what circumstances may an employee take a leave of absence? What is the maximum duration of such leave and does an employee receive pay during the leave?

Employment standards legislation in Canada provides for several types of unpaid leave, including pregnancy leave (17 or 18 weeks), parental or adoptive leave (35 to 37 weeks in most jurisdictions (including the federal government legislation, which governs federal employers), although BC recently extended parental leave to 61 or 62 weeks, and Prince Edward Island and Alberta have extended parental leave to 62 weeks), sick leave (as above), bereavement leave, compassionate care or family medical leave, reservist leave and child loss or death leave. As stated above, the types of leave available and eligibility requirements vary by jurisdiction. Although the statutory periods of leave are generally unpaid (with the partial exception of Ontario, as set out above), employees may be eligible for compensation during the leave through the federal Employment Insurance (EI) programme.

What employee benefits are prescribed by law?

Canadians have universal access to medical and hospital care funded primarily by general tax revenues. Beyond this, most employers offer some form of extended medical and dental plans and other insurance benefits to supplement the public health insurance system. Employees may also be eligible to collect EI benefits during periods of unemployment or when on pregnancy, parental, disability or family care leave. The federal government administers the Canada Pension Plan (CPP) for workers in all jurisdictions except Quebec, which administers its own provincial programme. Employees and employers make CPP and EI contributions through payroll deductions. CPP benefits include retirement pensions, death benefits and surviving spousal pensions. The Old Age Security Pension, which is funded from general tax revenues, pays benefits to individuals who reach the age of 65 (now 67 for those born after 1962), with the amount depending on the length of the person’s residence in Canada from the age of 18. Most workers supplement government pension benefits with individual savings or participation in employer-provided pension and retirement savings plans. Employers are not required to provide supplemental benefit plans. Where an employer elects to do so, however, the plan must be formulated and administered in accordance with the applicable human rights and anti-discrimination legislation.

Are there any special rules relating to part-time or fixed-term employees?

In general, part-time and fixed-term employees are entitled to the same minimum types of statutory leave and benefits as full-time employees, provided they meet the applicable statutory eligibility requirements. As long as part-time or fixed-term employees receive the statutory minimums and there is no adverse-effect discrimination operating, it is generally not a discriminatory practice to offer these employees a different benefit package to full-time employees.

Must employers publish information on pay or other details about employees or the general workforce?

Private (non-public or government) employers are not required to publish information on pay or other details about employees. Public employers, such as governments and certain organisations that receive government funding, in some provinces and the federal jurisdiction, have an obligation to publish the wages paid to their employees, usually if those employees receive pay over a certain amount.

Post-employment restrictive covenants

To what extent are post-termination covenants not to compete, solicit or deal valid and enforceable?

A post-termination covenant not to solicit customers, suppliers or employees is permissible and generally enforceable, as long as its scope is not unreasonable. In contrast, although non-compete covenants are permissible, they are enforceable only in exceptional circumstances. At common law, a non-compete clause is considered a restraint of trade and will be enforceable only if it is a reasonable agreement between the parties and it is in the public’s interest to uphold and enforce it. To meet the ‘reasonableness’ requirement, the employer must have a proprietary interest entitled to protection; the clause must be reasonably limited in scope both temporally and geographically; and the nature of the employer’s business must be such that the protection of a non-compete clause is required - that is, the more limited protection of a clause prohibiting the solicitation of customers, suppliers and employees would not suffice.

In Quebec, the Civil Code provides that a non-compete clause is enforceable but must be limited as to time, place and type of employment to whatever is necessary for the protection of the employer’s legitimate interests. An employer may not take advantage of a non-compete clause if the employer has resiled (pulled out) from the contract without serious reason or given the employee such a reason to resile from the contract.

Must an employer continue to pay the former employee while they are subject to post-employment restrictive covenants?

Following the end of the employment relationship, an employer does not need to continue paying a former employee in order to maintain the validity of a post-employment restrictive covenant. Rather, courts accept that the consideration provided at signing is in exchange for restrictions intended to survive the lawful termination of the employment relationship. Generally speaking, a lawful termination occurs when an employee is provided with proper notice of his or her termination.

That said, employers must continue paying employees they place on what is sometimes called ‘garden leave’, namely, leave of absence from active employment within the duration of the restrictive covenant. This is because any attempt to place employees on unpaid leave of absence in the course of their employment may be considered a constructive dismissal, which in turn may affect an employer’s ability to enforce an employee’s post-employment restrictive covenants.

Liability for acts of employees

In which circumstances may an employer be held liable for the acts or conduct of its employees?

An employer will be liable for the wrongful or negligent acts of any employee who is considered a ‘directing mind’ of the corporation. Further, an employer may be found vicariously liable for the wrongful or negligent acts of an employee who is not a directing mind in circumstances where there is a significant connection between the conduct at issue and the scope of the employment, or where the conduct has been expressly or implicitly authorised, approved or condoned by the employer.

Taxation of employees

What employment-related taxes are prescribed by law?

Federal and provincial legislation requires employers in all jurisdictions to deduct, remit and report income tax, government pension plan premiums and employment insurance premiums. In British Columbia, a new Employer Health Tax has been implemented, which requires employers with total annual pay roll higher than C$500,000 to pay an additional tax instead of medical service plan premiums, which were previously paid by individuals.

Employee-created IP

Is there any legislation addressing the parties’ rights with respect to employee inventions?

There is a presumption that an employee owns his or her invention, pursuant to the provisions of the federal Patent Act, unless the parties have an express contract to the contrary or the employee is expressly employed for the purpose of inventing or innovating. By contrast, the federal Copyright Act states that the employer is the first owner of copyright for any work created by an employee in the course of his or her employment. This statutory provision may be varied by contract, however. In the case of works protected by copyright, a written waiver of moral rights should be secured. The Copyright Act does not permit moral rights to be assigned.

Is there any legislation protecting trade secrets and other confidential business information?

Although the Uniform Law Conference of Canada proposed draft legislation to protect trade secrets in 1989, no comprehensive legislation has been adopted by a Canadian jurisdiction to date. In common law provinces, trade secrets are subject to various forms of legal protection through equitable and common law doctrines. In particular, persons disclosing trade secrets may be liable where the individual is a fiduciary or otherwise owes a duty of good faith, loyalty or confidence to a company or employer; where the wrongful disclosure of trade secrets can be characterised as the tort of conversion; or through contractual limitations, such as restrictive covenants and confidentiality agreements. In Quebec, trade secrets are typically protected through more general provisions stipulating contractual or fiduciary-like obligations; however, there are specific exemptions from liability where the disclosure of trade secrets is necessary in the public interest, as well as a provision stipulating how damages for the wrongful disclosure of trade secrets are to be calculated.

In all Canadian jurisdictions, the access of trade secrets through certain unlawful means (eg, computer hacking or fraud) may be prohibited as offences under the Criminal Code or the Security of Information Act, RSC, 1985, c. O-5, section 19, the latter legislation prohibiting economic espionage engaged in by or for the benefit of foreign entities. In addition, the courts may restrict the disclosure of trade secrets in the context of litigation through publication bans or sealing orders, subject to various constitutional limitations relating to open courts and freedom of expression: see, for example, Sierra Club of Canada v Canada (Minister of Finance), 2002 SCC 41.

Data protection

Is there any legislation protecting employee privacy or personnel data? If so, what are an employer’s obligations under the legislation?

In 2001, Canada enacted the federal Personal Information Protection and Electronic Documents Act (PIPEDA), which was designed to regulate the collection, use, disclosure and management of personal information by organisations in a manner that recognises and respects the privacy of individuals. PIPEDA initially applied only to federally regulated private sector organisations, and to provincially regulated private sector organisations selling personal information across provincial or national boundaries. Effective from 1 January 2004, its application was extended to all commercial activities of provincially regulated private sector organisations, unless the regulating province has enacted substantially similar privacy legislation of its own. For reasons related to the constitutional division of federal and provincial powers, PIPEDA does not apply to a provincially regulated organisation’s personal information practices in the course of its employment activities within the province. To date, Quebec, British Columbia, Alberta and Manitoba are the only provinces to have enacted privacy legislation substantially similar to PIPEDA. In the remaining provinces, no similar legislation displaces its operation in the commercial context, nor is there comprehensive provincial legislation governing private sector organisations’ personal information practices in the employment context.

As defined under PIPEDA and substantially similar provincial statutes, ‘personal information’ captures a wide range of employee information, including information about work performance, salary, seniority, marital status, religion, race and personal interests. Unless there is an express exception provided for in the applicable statute, personal information may not be collected, used or disclosed without an individual’s consent. Further, organisations are limited to collecting information only for reasonable purposes identified at or before the time of collection.

Personal information must be safeguarded against unauthorised access, use and disclosure and kept as accurate, complete and up to date as necessary for the purposes for which it was collected. Absent exceptional circumstances listed in the applicable legislation, individuals may access their personal information upon request, along with details concerning how it has been used and to whom it has been disclosed. Individuals may also request that any inaccuracy in their personal information record be corrected. Any correction made must be noted on the record and provided to any third party who received the inaccurate information. If the organisation disagrees about whether a correction is warranted, such disagreement must be noted on the record. Finally, an organisation must establish a procedure by which individuals may challenge its compliance with the requirements of the applicable statute.

An individual who believes that his or her statutory privacy rights have not been respected may file a complaint with the office of the privacy commissioner in the applicable jurisdiction. These oversight bodies have a wide range of investigative powers and may make recommendations regarding compliance.

In a recent case, the Ontario Court of Appeal recognised invasion of privacy as a common law tort, labelled ‘intrusion upon seclusion’. To establish a breach of privacy, the victim must prove that the tortfeasor’s conduct was intentional (or reckless), amounted to an unlawful invasion of the victim’s private affairs, and would be viewed as highly offensive to a reasonable person, causing distress, humiliation or anguish. In its decision, the Court of Appeal has limited the tort to ‘deliberate and significant invasions of personal privacy’. According to the Court, the only invasions of personal privacy that could potentially qualify would include matters such as ‘financial or health records, sexual practices and orientation, employment, diary or private correspondence’.

Business transfers

Is there any legislation to protect employees in the event of a business transfer?

Employment standards statutes generally ensure that a sale of a business does not truncate or interrupt an employee’s length of service for the purpose of calculating his or her entitlement to statutory benefits. A ‘sale of business’ is defined very broadly. A sale will likely be found to have occurred if the ‘purchaser’ has acquired the capacity to carry on a business activity that it did not previously possess, regardless of the form of the transaction.

For non-union employees, a sale of business will often result in a change in the identity of the employer. At common law, a termination of employment occurs at closing when the vendor can no longer continue the employment relationship because of the sale. An employee in this situation potentially has a wrongful dismissal claim. However, if the purchaser has offered the employee a position with comparable terms of employment, the ‘dismissed’ employee will likely have an obligation to accept the position in mitigation, unless the employee would face unacceptable adversity in doing so. If, on the other hand, no employment opportunity with the purchaser is offered, the employee would have a wrongful dismissal claim against the vendor, including a claim for statutory termination benefits.

If employment continues with the purchaser, the service the employee has acquired with the vendor generally ‘flows through’ to the purchaser for the purpose of calculating entitlement to statutory benefits such as vacation and severance payments in the event of a future termination.

Under Canadian labour relations statutes, when a business is sold, the purchaser assumes the bargaining rights of the trade union and the terms and conditions of the collective agreement by operation of law. The purchaser is required to employ such part of the incumbent workforce as may be required to operate the business, selected and compensated in accordance with the collective agreement.

Termination of employment

May an employer dismiss an employee for any reason or must there be ‘cause’? How is cause defined under the applicable statute or regulation?

In most jurisdictions, non-union employees may be dismissed without ‘just cause’, in which case they are entitled to notice of termination or payment in lieu of such notice. Although determining whether there is just cause for dismissal requires a contextual analysis in each case, Canadian jurisprudence recognises several categories of misconduct that may establish cause, including:

• wilful misconduct or neglect of duty;
• theft or fraud;
• insubordination; and
• conflicts of interest.

The threshold for establishing just cause is high. The degree of misconduct must be such that it fundamentally undermines the employment relationship.

In most jurisdictions, an employer may dismiss non-unionised employees without cause upon providing the requisite statutory and common or civil law notice of termination or payment in lieu of notice.

Certain jurisdictions provide exceptions to this general rule. Employment standards legislation in Nova Scotia, Quebec and the federal jurisdiction protects non-managerial employees from dismissal without just cause and provides for the possibility of reinstatement, subject to a handful of enumerated exceptions.

In unionised workplaces, the collective agreement generally protects employees from unjust dismissal.

Must notice of termination be given prior to dismissal? May an employer provide pay in lieu of notice?

Where a dismissal is without cause, employment standards legislation requires employers to provide written notice of termination or payment in lieu of such notice. Although the applicable statutory notice periods vary by jurisdiction, all are directly related to the individual employee’s length of service. In addition, under common law (and civil law in Quebec) an employee is entitled to a period of ‘reasonable’ notice, the length of which is based on the individual’s length of service, age, position and any other factors deemed to be relevant to the individual’s ability to secure new employment. The key factor to consider is the length of time it would take the employee to find comparable employment. In most cases, an employee’s common or civil law notice entitlement will exceed the applicable statutory notice period. To press a claim, an employee must commence a civil suit. Further, employees have a duty to mitigate their damages at common law and civil law by making reasonable efforts to secure new employment. By contrast, payment in lieu of statutory notice is not subject to mitigation. The length of the common law or civil law notice period may also be affected by a written employment contract that specifies and caps an employee’s notice entitlement in the event of dismissal without cause. As stated above, however, a contractual notice provision will be unenforceable if it undercuts the statutory minimums or if the employee signed the contract under a degree of duress. Under the Quebec Civil Code, a contractual notice provision must be considered ‘reasonable’ to be upheld.

In which circumstances may an employer dismiss an employee without notice or payment in lieu of notice?

An employee that is dismissed for cause is not entitled to notice of termination or payment in lieu of notice. The employer is also relieved of the obligation to give notice or provide termination pay under the employment standards legislation of certain provinces in defined circumstances, such as wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer.

There are also limited statutory exceptions to the general principle that an employee who is dismissed without cause is entitled to notice or payment in lieu of notice. These exceptions vary by jurisdiction but generally include circumstances where the employee:

• is laid off for a temporary period as defined in the applicable statute;
• is retired and receives a pension;
• has worked less than a short period of time (eg, three months in Ontario, Quebec and BC);
• is terminated during or as a result of a strike or lock-out; or
• refuses an offer of ‘reasonable’ alternative employment from the employer, including one made available through a seniority system.

Is there any legislation establishing the right to severance pay upon termination of employment? How is severance pay calculated?

Legislation in the federal jurisdiction and Ontario entitles eligible employees whose employment is terminated without cause to a ‘severance’ payment in addition to statutory notice. Under the Canada Labour Code, an employee with 12 months of continuous service is entitled to a severance payment of five days’ regular wages, or two days’ regular wages for each completed year of employment, whichever is greater. In Ontario, an employee with five or more years of service is entitled to severance pay when either the employer’s payroll is C$2.5 million or more; or the employer permanently discontinues the employment of 50 or more employees within a six-month period owing to a permanent discontinuance of all or part of the employer’s business. In Ontario, severance pay is calculated by multiplying the employee’s regular weekly wages by the number of years of completed employment (part-years included) but is capped at a 26-week entitlement. Statutory exceptions to the severance pay entitlement generally mirror the exceptions to provide notice of termination.

Are there any procedural requirements for dismissing an employee?

Employers generally do not require permission to dismiss an individual employee. Employment standards legislation entitles an employee dismissed without cause to notice of termination or payment in lieu of such notice (and statutory severance pay in Ontario and the federal jurisdiction). Notice must be in writing, addressed to the individual and delivered personally or by registered mail, facsimile or electronic mail if the employee is able to receive such transmissions. Terms of employment may not be altered for the duration of the applicable notice period. Where payment is made in lieu of notice, any employment benefits (eg, life insurance, medical and dental insurance) must be continued beyond the termination date for a period equivalent to the statutory notice period.

The common law of dismissal requires an employer to give reasonable notice of any termination without cause. Reasonable notice is calculated with reference to the particulars of the dismissed employee’s employment relationship. Relevant factors include the employee’s age, position, length of service and compensation. The underlying principle is to provide the employee with a period of notice that will enable the employee to find alternate employment, having regard to the nature of his or her employment.

The obligation to give reasonable notice at common law may be discharged by paying the employee the equivalent of his or her salary and benefits for the duration of the notice period. Common law notice periods are inclusive of statutory notice obligations.

Employers will generally offer a dismissed employee a period of notice or termination payment having regard to notice periods that have been set by the courts in similar fact situations. It is not uncommon for the employer to negotiate with the dismissed employee over the extent of the notice period and the items of compensation to be included. If an agreement cannot be reached, the employee has the option of commencing an action for wrongful dismissal. Remedies in such an action are compensatory. Reinstatement is not possible.

Similar principles apply under the civil law of Quebec.

In Nova Scotia, Quebec and the federal jurisdiction, there are specific procedures that apply to non-unionised, non-managerial employees whose employment is terminated for cause where the employee has attained the required level of service (10 years in Nova Scotia; two years in Quebec; and one year in the federal jurisdiction). In these jurisdictions, eligible employees may challenge the justness of their dismissal in arbitration-style proceedings that resemble those available in the union context. If no settlement is reached during a preliminary mediation session, the employee’s claim is put before a government-paid and appointed arbitrator (or commissioner in Quebec) who has the remedial power to award reinstatement and compensation.

As stated above, in unionised workplaces, the collective agreement generally includes a just cause provision.

In what circumstances are employees protected from dismissal?

Subject to enumerated exceptions, employment standards legislation in Nova Scotia, Quebec and the federal jurisdiction protects non-managerial employees from dismissal without cause. In addition, collective agreements generally protect unionised employees from unjust dismissal. In all jurisdictions, employees who take or intend to take pregnancy, parental or other job-protected leave to which they are entitled under employment standards legislation may not be dismissed for reasons that are wholly or partly related to the pregnancy or the leave, and cannot be subject to retribution for filing a complaint. Human rights legislation provides protection from any dismissal that discriminates against the employee on the basis of prohibited grounds or that is imposed in reprisal for making a complaint or otherwise seeking to enforce a right under the applicable human rights statute. Reinstatement in addition to compensation is a possible remedy in such complaints. Occupational health and safety (OHS) legislation provides protection in several jurisdictions (for example, federal, BC and Ontario) from any dismissal that is based on an employee exercising their rights under OHS legislation, including raising any general safety concerns. Reinstatement is a possible remedy in such complaints.

Are there special rules for mass terminations or collective dismissals?

With the exception of Prince Edward Island, every jurisdiction has enacted employment standards legislation regulating collective or mass dismissals. The applicable statutory provisions are triggered when a set number of employees’ contracts are terminated within a specified time period. For example, in Ontario, the mass dismissal provisions are triggered when 50 or more employees’ contracts are terminated within a four-week period. Across the country, the length of the notice period in a mass dismissal ranges from four to 18 weeks, depending on the jurisdiction and the number of affected employees.

Employers are generally required to give written notice of a mass dismissal to affected employees, their trade union (if any) and a designated government official, usually the labour ministry within the jurisdiction. Notice to the government official must specify the number of employees, their date or dates of dismissal and, in some jurisdictions, the reasons for the dismissals. In Ontario, Quebec and the federal jurisdiction, employers must post the notice in a conspicuous location in the workplace. Employers in British Columbia, Ontario, Quebec and the federal jurisdiction must also be prepared to cooperate with processes that minimise the impact of loss of employment or otherwise assist employees in gaining re-entry to the labour force.

Are class or collective actions allowed or may employees only assert labour and employment claims on an individual basis?

Class action lawsuits are less common in Canada than in the United States. However, they are gaining in popularity and are significantly more common than they were even a few years ago. In a ground-breaking decision in 1999, the Ontario Superior Court of Justice approved a class action brought by employees who were dismissed owing to the closure of 31 retail stores and the termination of about 3,000 to 4,000 employees. The plaintiffs demanded payment in lieu of common law reasonable notice for their dismissal. To demonstrate that the lawsuit should be classified as a class action, the plaintiffs had to satisfy the condition under the Ontario Class Proceedings Act that a common issue existed among the members of the proposed class. The Court found that the plaintiffs satisfied the criteria and that a common issue existed among all employees because they were all employed by the same corporation; maintained the same contract of employment, which did not specify the specific amount of notice required upon termination; and were all dismissed at the same time.

Since 2007, a number of high-profile overtime class actions have been launched against national employers: banks, accounting firms and a railway company. So far, lower court decisions are roughly evenly divided as to whether such class actions for overtime claims should be certified, and there have been no decisions on the merits.

Does the law in your jurisdiction allow employers to impose a mandatory retirement age? If so, at what age and under what limitations?

In general, mandating retirement at a designated age is considered a discriminatory practice under human rights legislation in all provinces. As a result, collective agreements, employment contracts and workplace policies that require employees to retire upon reaching a set age are impermissible, except in cases where there is a bona fide occupational requirement (BFOR). The BFOR exception permits age-based mandatory retirement where the employer can establish that an employee’s age would significantly impede his or her ability to perform the job duties, and the employer cannot accommodate the employee without incurring undue hardship.

Amendments to the Canadian Human Rights Act and the Canada Labour Code in 2012 also prohibit federally regulated employers from setting a mandatory retirement age, unless there is a BFOR.

Dispute resolution

May the parties agree to private arbitration of employment disputes?

Labour relations statutes require parties to a collective agreement to arbitrate all disputes arising from the interpretation, application and administration of the agreement. Although not a prevailing practice in non-unionised workplaces, parties are legally entitled to opt out of the Canadian judicial system in favour of binding third-party dispute resolution. Contracts for third-party arbitration are enforceable as long as the parties acknowledge that the decision-maker is obliged to adhere to and, where appropriate, apply minimum entitlements, such as statutory human rights and employment standards legislation. However, it is not possible to select third-party arbitration of workers’ compensation claims in Canada. Quasi-governmental authorities administer workers’ compensation claims provincially, and participation in the system is mandatory for most employers.

May an employee agree to waive statutory and contractual rights to potential employment claims?

Parties may not waive or contract out of human rights legislation. Accordingly, Canadian courts have consistently struck down contractual limitations on an employee’s right to seek redress for discriminatory practices or other human rights violations. Likewise, parties may not contract below statutory minimum employment standards. As stated above, parties are free to contract for a specified amount of damages arising from a ‘without cause’ dismissal, as long as the amount specified does not undercut statutory minimum standards and the employee has not signed the agreement under duress.

What are the limitation periods for bringing employment claims?

All provincial human rights and employment standards statutes have limitation periods. Generally, human rights complaints must be filed within six months to a year (within two years in Saskatchewan and Quebec) of the date of the alleged human rights violation. The BC Human Rights Code has recently been amended to extend the statute of limitations for the filing of a claim from six months to 12 months. Similarly, depending on the jurisdiction, limitation periods for employment standards complaints seeking to recover pay in lieu of notice of termination, severance pay (as applicable) and other types of unpaid wages range from within 45 days to one year from the date of termination or the date that the wages became due. For the common law provinces, the limitation period for filing a civil suit alleging wrongful dismissal is established by statute in each jurisdiction. Under the Ontario Limitations Act, for example, an employee has two years from the date on which the action is discovered to commence a claim. In the context of wrongful dismissal, the limitation period starts to run when the employee knew or ought to have known that he or she was discharged without reasonable notice or pay in lieu of notice. In a recent Ontario case, Bailey v Milo-Food & Agricultural Infrastructure & Services Inc, 2017 ONSC 1789, the court affirmed that the limitation period commences when notice of termination is provided, and not on the last day of work. Further, for notice of termination to be effective, it must be clear and unambiguous. Under the Quebec Civil Code, an employee has three years from the date of the dismissal to bring an action.

Update and trends

Are there any emerging trends or hot topics in labour and employment regulation in your jurisdiction? Are there current proposals to change the legislation?

In most provinces, the courts have recognised that generally, except in exceptional circumstances, the rough upper limit for reasonable notice of termination is 24 months. Nonetheless, there has been a trend in Ontario courts to extend the upper range of reasonable notice beyond 24 months. Recently, in Dussault v Imperial Oil Limited, 2018 ONSC 1168, the court held that there is no upper limit on notice periods in wrongful dismissal cases. In Dussault, the court found that a 26-month notice period was reasonable for two employees who had over 30 years of service, were aged 57 and 63, were in positions with significant levels of responsibility and who would have difficulty finding similar employment (see also Keenan v Canac Kitchens Ltd, 2016 ONCA 79).

Employers in other provinces are carefully watching this trend, and should be aware that the 24-month ‘ceiling’ may be changing. Specifically, an employer may have to provide more than 24 months’ notice of termination for long-service employees (over 25 years) who are approaching the end of their working life (over 55 years of age), who have only ever worked for one employer (which may affect the availability of similar employment) and who have a significant degree of responsibility.