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Employment Law in Canada

There are various pieces of legislation that govern the employment relationship in Canada and two different classifications of employees; federal and provincial. Federally regulated employees work in industries such as banks, postal services, and air transportation, and are governed by the Canada Labour Code, Canadian Human Rights Act and Canada Occupational Health and Safety Regulations to name a few. If an employee is not regulated by federal employment law, the employee is regulated by provincial employment legislation.

In Canada, approximately 90% of employees are governed by the laws and regulations of the province or territory they live and work in. There are 10 provinces and three territories, each with similar, but often differing, rules and regulations regarding employment law. Ontario is the largest province in terms of population and often influences the other regions in terms of passing bills and legislation. Due to this reason, this document will profile the different laws and bodies that govern employment law in the province of Ontario.

The most important pieces of legislation that dictate employment law in Ontario are the Employment Standards Act, Ontario Human Rights Code, Occupational Health and Safety Act, Workplace Safety and Insurance Act and Labour Relations Act. Other statutes such as the Accessibility for Ontarians with Disabilities Act and the Pay Equity Act also have an impact on Ontario workplaces. Of these laws, the most prominent one in regulating the employment relationship is the Employment Standards Act (ESA). The ESA covers topics such as wages, overtime, leaves of absence, public holidays, vacation, termination of employment and temporary lay-offs.

In addition to the numerous pieces of legislation, Ontario also has two courts that see to employment law disputes. For employment law matters disputing high monetary awards, the case will be heard at the Ontario Superior Court of Justice. Alternatively, if the employment dispute is over a monetary amount of $35,000 or less, it will be handled by the Ontario Small Claims Court.

The province also has a number of tribunals that hear employment disputes, such as the Human Rights Tribunal of Ontario. This tribunal hears violations of the Ontario Human Rights Code such as discrimination in the workplace. There are also tribunals such as the Ontario Labour Relations Board which hears disputes regarding labour relations issues as well as appeals from the Ministry of Labour, and the Workplace Safety and Insurance Appeals Tribunal which adjudicates matters regarding compensation for workers injured on the job.

This topic will focus on employees in the province of Ontario who are covered by the ESA, as this applies to most workers in Ontario. Note that federally regulated employees residing in Ontario are not covered by the ESA, and accordingly this topic should not be relied on for workers in that category. Other employees in different provinces and territories are also not covered by the ESA. For these employees, advice on the applicable provincial system should be sought.

Employment Law in Canada: Quick Facts
  • The Canada Labour Code is the primary source of legislation that governs the employment relationship when the employer is federally regulated (banks, postal services, air transportation, etc).

  • If the employer is provincially regulated, the relationship is ruled by the employment standards legislation in place in the particular province or territory. There are 10 provinces and three territories in Canada, each with their own employment laws and regulations.

  • Most employees in Canada — approximately 90% — are provincially regulated and protected by the laws of their province or territory.

  • When hiring, employers must comply with the applicable human rights legislation as potential employees should only be assessed on the basis of their skills, experience and merit rather than on the basis of characteristics that are unrelated to the job or workplace rights that they have exercised.

  • Under the health and safety legislation in most provinces and territories, employers and their staff have a primary duty to take reasonably practicable steps to eliminate or minimise risks that may adversely impact the health and safety of workers while carrying out their duties.

  • Both federal and provincial human rights legislation prohibits discrimination and harassment in the workplace. These laws protect individuals and groups from being either targeted or excluded based on “protected grounds.” Protected grounds are attributes such as race, gender, age, disability, place of origin, creed, and sexual orientation.

  • All employees in Canada, either provincially or federally regulated, are covered under employment standards legislation. This legislation details the employees’ rights regarding payment of wages, overtime pay, leaves of absence, public holidays, vacation, termination of employment and temporary lay-offs. Some jurisdictions, such as Ontario, also include a section on equal pay for equal work.

  • An employment contract is typically provided by the employer at the beginning of an employee’s engagement with the company. Once the contract is reviewed by the employee, both parties should sign the document to indicate an agreement and understanding of the terms.

  • The terms and conditions of a contract must be mutually agreed upon between an employer and the employee without coercion.

  • An employee may voluntarily terminate their employment at any time by providing notice in accordance with the applicable employment standards legislation or employment contract.

  • Most jurisdictions in Canada have their own labour relations legislation which guarantees all employees the right to join the trade union of their choice and participate in its organisation and lawful activities.

  • Unionised employees have the legal right to strike if the dispute remains within the scope of the applicable labour relations legislation. If employees are not part of a union, they have no legal right to strike.

  • Employees must be Canadian citizens, permanent residents, or holders of a class of visa that allows them to work in order to be legally employed in Canada.

  • Employers need to regularly review rates of pay to ensure employee wages do not fall below the minimum amount prescribed by the applicable employment standards legislation.

  • The process for terminating an employee is subject to protections under the applicable employment standards and human rights legislation. Additionally, employees may have added protection under the common law.