What are the Rights of Employers and Employees in Canada?

  • Employment Contract
What are the Rights of Employers and Employees in Canada?
Francis Ibana

Francis Ibana, Employment Law Content Specialist

(Last updated )

Whenever an employment relationship exists, it is important that the employer and employee are aware of their rights and responsibilities. Employer and employee rights and obligations during employment can either be legislated or developed through common law.

This guide will help employers understand their basic rights and obligations in an employment relationship and explore what happens if you violate an employee’s rights.

What are employee rights in Canada?

Employment rights in Canada are typically legislated through employment standards legislation. For example, employee rights in Ontario are legislated under the Employment Standards Act, which include:

  • The right to notice of termination or payment in lieu
  • The right to hours free from work
  • The right to daily or weekly overtime
  • The right to certain job-protected leaves of absence
  • The right to a meal break or eating period

Although many of these rights come into effect immediately after the employee is hired, some of them have prerequisites. For example, an employee is not entitled to notice of termination or payment in lieu of notice if the employee has been employed for less than three (3) months (in most jurisdictions) or has been terminated for committing willful misconduct.

What are my rights as an employer?

Many employer rights and obligations are also contained under employment standards legislation. Employers have the right to:

  • Discipline their employees.
  • Terminate their employees without notice or pay in lieu for serious or wilful misconduct.
  • Create the business’s hours of operation.
  • Develop company policies and procedures.

In addition to their rights, employers have the obligation to:

  • Not deduct wages unless authorized under the legislation or with the employee’s consent.
  • Retain documents so they are readily available if requested by an employment standards officer.
  • Pay men and women equally for doing the same or similar job duties.
  • Provide proper notice of termination or pay in lieu to employees terminated without cause.

In addition to other rights and obligations under employment standards legislation, employers must comply with their legal obligations under occupational health & safety, human rights, and workers’ compensation legislation.

Is employment protected under human rights?

The purpose of human rights legislation is to create a workplace free from discrimination and foster equality for people with various backgrounds. Under human rights legislation across Canada, employment is one of five protected social areas. Employees have a right to equal treatment, without discrimination because of their:

  • Age
  • Ethnicity
  • Race
  • Marital status
  • Gender identity/expression
  • Sexual orientation
  • Disability
  • Ethnic origin

It is important for employers to create a healthy and inclusive workplace that is free from discrimination. An employee who believes they have been discriminated against by their employer—or even other employees or managers—may file a complaint with the applicable human rights tribunal in their jurisdiction. For example, an employee may file a complaint for discrimination in Ontario at the Human Rights Tribunal.

What other legislation applies to employment?

In addition to the rights and obligations under employment standards and human rights legislation, employers must comply with their legal obligations under occupational health & safety, pay equity (if applicable), and workers’ compensation legislation.

Occupational Health & Safety Legislation

Provinces across Canada have established their own occupational health & safety laws to protect workers from health hazards on the job. Employers are required to:

  • Establish a workplace violence and harassment policy.
  • Establish measures and procedures to deal with workplace hazards.
  • Instruct supervisors and workers to practice health and safety while at work.

In addition to the above, employees are protected from reprisal by their employers. Reprisal occurs when an employer threatens to terminate or discipline an employee for acting on their right to refuse unsafe work or give information to an employment standards officer as part of an investigation.

Workers’ Compensation Legislation

Employers must be aware of their obligations under workers’ compensation legislation. If an employee is injured on the job, the employer has an obligation to report it. Some other obligations under this legislation include:

  • Writing a detailed report of the incident
  • Facilitating the return-to-work process for a recovering employee
  • Establishing safety standards and workplace posters regarding the prevention of workplace injuries

What are the obligations of an employer and employee under Common Law?

In addition to legislated rights and responsibilities, employers and employees must be aware of their obligations that have developed through common law. These are commonly referred to as implied terms of an employment relationship.

Some implied obligations that have developed through common law include:

  • Complying with the terms and conditions of the employment contract
  • The employee performing the duties of the job with reasonable skill and judgment
  • The employee refraining from soliciting their employer’s staff, during or after employment
  • Treating the employee with respect and acting in good faith when taking disciplinary action, up to the point of termination
  • The duty for both parties to keep confidential information private

It is easy to forget the implied obligations at common law for both employers and employees; that is why it is important to explicitly state them in an employment contract.

What happens if an employee does not follow their obligations?

If you feel that an employee has violated their rights or obligations, whether it be in the employment contract or under the legislation, there are various remedies available for employers.

Discipline

One of the most common forms of remedies available for employers is discipline. Discipline is a corrective action for employers to take if an employee fails to follow company rules, employment standards legislation, or policies established by the business.

If an employee violates any of their obligations, employers may discipline their employees by giving warnings or suspensions. It is best to establish a progressive disciplinary policy to ensure both you and the employee are aware of the corrective measures in place if an employee violates their obligations to the company.

Performance Improvement Plans

In a business that is sales-focused, or where there are targets that are required to be met in a specific period, it is important for employers to ensure that their employees are performing to their full potential. A performance improvement plan (“PIP”) is a great tool to resolve issues of poor performance. A PIP usually involves continuous monitoring and mentorship to assist the employee to boost their performance and meet the company’s expectations.

Termination

While terminations are inevitable in any workplace, it does not mean that they are not complicated. If an employee does not comply with their obligations, employers may be quick to terminate them. It is important for employers who are terminating their employees to familiarize themselves with the laws regarding the same.

If an employer improperly terminates an employee, the employer may be liable for fines, penalties, and/or additional termination pay.

What if the employee believes their rights have been violated?

If an employee believes their rights have been violated, there are several courses of action they may take depending on the situation. For example, if an employee has not been paid their statutory holiday pay, they may file a complaint with their provincial employment standards office.

Once a complaint is filed, an employment standards officer will investigate the complaint by communicating with the employer about the allegations.

If the employment standards officer finds that the employer has violated an employee’s rights, they will typically issue an order to the employer to pay the employee what they are owed.

As previously stated, if an employee believes they have been discriminated against by their employer or treated unfairly based on a protected ground, they may file a human rights complaint.

Additionally, if an employee feels they have been reprised against for enforcing a legislated right, they may file a reprisal complaint with the applicable body.

Lastly, if an employee feels they have been wrongfully terminated, they may file a complaint with the employment standards office or commence legal action against their employer.

What are my obligations if I want to terminate an employee?

Employers who want to terminate an employee have several legal obligations.

In most provinces, employers are required to provide written notice of termination to their employees. If an employer fails to provide written notice or provides only verbal notice of termination, the notice is generally deemed invalid. It is best practice for employers to put everything in writing, whether it is required under employment standards legislation or not.

Termination without Cause

Employees who are terminated without cause are entitled to notice of termination or pay in lieu of notice.

Employment standards legislation states the minimum notice requirements for employees who have been terminated without cause. For example, an employee who has been continuously employed by the same employer for three years in Ontario is entitled to three weeks’ notice of termination or pay in lieu of notice. However, if an employer does not have an employment contract, or has an employment contract containing an unenforceable termination provision, the employee will be entitled to common law notice of termination.

Common law notice of termination is based on four factors established by a case called Bardal v. Globe and Mail Ltd. When calculating common law notice, the court considers the:

  • Employee’s age.
  • Employee’s length of employment.
  • Availability of similar employment.
  • Characteristics of the employee’s employment.

It is important that employers have enforceable termination clauses in their employment contracts in order to limit the employee’s entitlements at termination to the minimum amounts stated in the applicable employment standards legislation.

Termination with Cause

Termination with cause, or just cause termination, occurs when an employee has engaged in behaviour that is so severe that the employment relationship is irreparable. An employee who has been terminated for cause is not entitled to notice of termination or pay in lieu thereof.

An employer who has terminated an employee for just cause must meet the high threshold to prove that the act or omission of the employee was severe enough to deprive the employee of notice of termination or pay in lieu thereof. In Ontario specifically, the employment standards legislation states that employees are not entitled to notice of termination or termination pay if they are found guilty of wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer.

To ensure you are protected, it is important that you have well-documented evidence to show that the employee’s actions or omissions were so severe that you could not continue employing them.

Employer’s Conduct During or After Termination

Once an employee has been terminated – whether for cause or without cause – employers must remember their obligations regarding their conduct during and after termination. When terminating an employee, the employer must remain respectful and treat them with dignity. If an employer acts in bad faith after or during termination, the employer may be liable for damages in addition to termination pay.

Which Law Applies to Remote Workers?

Due to the pandemic, employers have expanded their candidate pool to persons outside their province to accommodate remote workers. If an employer operates in one province and one of their employees lives and resides in a different province, the employment standards legislation where the employee resides generally applies. For example, if an employer in Ontario employs a person to work remotely in Alberta, the employment standards legislation in Alberta applies to the employee.

Do you need assistance with drafting employment contracts? 

Figuring out exactly what clauses to include in your employment contract can be complicated. If you have any questions about your employment contracts, talk to one of our experts.

Over the years, our advisors have drafted numerous customized employment contracts, helping identify any potential issues with wording and policies. To learn more about how our HR outsourcing services can benefit your business, call an expert today at 1 (833) 247-3652

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