I Introduction

Canada is a federal state consisting of 10 provinces2 and three territories.3 The form of government is a constitutional monarchy derived from the United Kingdom. The division of powers between the federal and the provincial governments under the Canadian Constitution4 is premised on having every possible subject matter fall under either exclusive federal or exclusive provincial jurisdiction.

The nature of the business carried on by the employer determines whether its relations with its employees (whether unionised or non-unionised) are regulated by federal or provincial law. Most employers in Canada are provincially regulated. There is a relatively small number of industries that are federally regulated, including banking, navigation and shipping, railways, inter-provincial transport, air transportation, communications and broadcasting.

Canada has two legal systems in civil matters. In Quebec, the Civil Code of Quebec (CCQ)5 governs the contract of employment between an employee and an employer. In all other provinces and territories, the common law governs the employment relationship between the parties. The differences between common law and civil law systems in Canada relate primarily to the creation and termination of individual employment relationships, as well as the enforceability of post-employment restrictive covenants.

In the federal jurisdiction, the Canada Labour Code6 (CLC) applies to federally regulated employers and sets forth minimum standards of employment. The Canadian Human Rights Act7 and the Employment Equity Act8 prohibit workplace discrimination and promote employment practices that benefit historically under-represented groups. Employment litigation in the federal jurisdiction may, depending on the circumstances and issues at stake, take place before the federal or provincial courts. However, complaints filed under the CLC will proceed before specialised labour arbitrators. Employees who are eligible to file complaints under the CLC may request reinstatement of their employment, among other remedies.

At the provincial level, each province has mandatory employment standards legislation that will apply to provincially regulated employers operating within its jurisdiction. Generally, employment standards that are regulated by provincial statutes will include, among others, wages, annual vacation, statutory holidays, termination notice requirements and hours of work provisions. Occupational health and safety legislation exists in all provinces, as does workers' compensation regimes that provide for assistance to workers injured while on the job.

Employment litigation at the provincial level is usually conducted before the civil courts of each province, specialised labour tribunals or human rights tribunals.

Unionised employees at either the federal or provincial levels will generally be regulated by collective agreements that are subject, depending on the activities and operations of the employer, to federal or provincial labour laws. Grievances filed under collective agreements in Canada will generally be heard by specialised labour arbitrators, who usually have exclusive jurisdiction to decide on matters that are arbitrable under the collective agreement.

II Year in Review

Canadian employers were faced with many significant changes in 2018. Perhaps the most high-profile of these occurred on 20 June 2018, when the federal government passed Bill C-45,9 which amended the Controlled Drugs and Substances Act to decriminalise cannabis and permit adults to legally purchase, grow and use a limited quantity of recreational cannabis. Provincial variations on the ability of Canadians to purchase, grow and use recreational cannabis do exist. It is noteworthy that medical cannabis has been accessible to Canadian for several years.

Bill C-45 received royal assent and came into force on 17 October 2018. The decriminalisation of recreational cannabis promises to further refine the ability of employers to impose work safety rules regarding the use of cannabis at work and may also impact the (limited) ability of Canadian employers to implement drug and alcohol testing regimes.

Another important change that impacted the federal jurisdiction was the introduction of Bill C-65, which proposed amendments to the CLC regarding workplace violence and harassment (including psychological and sexual harassment) in federally regulated workplaces.10 Bill C-65 was passed by the federal government and received royal assent on 25 October 2018. The new provisions introduced under Bill C-65 are aimed at preventing incidents of workplace harassment, responding effectively to such incidents and supporting affected employees. It is reported that employers will need to comply with the changes brought about by Bill C-65 as early as spring 2019.

Provincial employment legislation was also the subject of important changes in 2018, including in the provinces of Alberta, Quebec and Ontario. Alberta's new Employment Standards Code was updated, effective 1 January 2018.11 The changes introduced by Bill 17 were aimed at improving family-friendly workplaces, modernising employment standards and aligning the Alberta legislation the work-related protections found in other provinces.12 Provincially regulated employees in Alberta are now eligible for new and existing leave after 90 days of employment (rather than after one year), and seven new leaves of absence.13 Additionally, some existing periods of leave have been extended, and caregiver status is expanded to non-primary caregivers.

In Quebec, Bill 176 came into force on 12 June 2018,14 amending Quebec's Act Respecting Labour Standards.15 Most notably, Bill 176 permits employees to obtain a third week of paid vacation after three years of continuous service with their employer. This change came into effect on 1 January 2019. In addition, Bill 176 extends some already existing leaves of absence and creates new ones.16 It also significantly changes the ability of Quebec employees to assert claims of psychological harassment in the workplace. In this regard, employees are now permitted to file psychological harassment complaints within two years following the last incident of unlawful harassment. Previously, the delay for filing these complaints was 90 days. Moreover, Quebec employers are now mandated to have psychological harassment policies in place for their personnel.

Finally, in 2017, Ontario's provincial government adopted Bill 148, which was intended to modernise that province's employment standards legislation, such as, for example, increasing the minimum wage to C$15 per hour (from C$11.60 in October 2017) as well as adopting equal pay for equal work provisions.17 In October 2018, following a change of government, the Ontario legislature introduced Bill 47, which represented a marked change of direction for Ontario employment standards legislation.18 Bill 47 came into force on 21 November 2018. In particular, the minimum wage in Ontario was reduced to C$14 per hour, with no planned increases until at least October 2020. Many scheduling provisions that were introduced under Bill 148 were repealed, as well as many amendments related to labour relations. Bill 47 eliminated the reverse onus on employers to substantiate that independent contractors were not actually employees.

iii Significant Cases

i Unifor, Local 707A v. Suncor Energy Inc19

In 2017, the Alberta Court of Appeal ruled on a case involving a drug and alcohol policy that provided for random testing of employees, and applied the Supreme Court of Canada's decision in Irving (which had been released in 2013).20 The Irving decision found that random drug and alcohol testing would generally be justifiable in situations where there was a dangerous workplace, which contained enhanced safety risks, such as evidence of a general problem with substance abuse in the workplace.21 The Alberta Court of Appeal ruled that the employer was not required to prove that there was a 'significant' problem relating to substance abuse in the workplace, such that it interpreted Irving as requiring only evidence of a 'general' problem.

In particular, the Alberta Court of Appeal ruled that the employer was not required to meet a higher threshold and bring evidence that proved that a substance abuse problem existed with the unionised employees that were part of the union's bargaining unit (as opposed to evidence that demonstrated a generalised problem of substance abuse in the workplace, not focused on the unionisation status of the employees who were part of the workplace).

On 14 June 2018, the Supreme Court of Canada dismissed the trade union's motion to appeal the decision. Consequently, the decision of the Alberta Court of Appeal was maintained and the trade union's grievance was returned to a new arbitration panel for adjudication. In dismissing the trade union's request for leave to appeal, the Supreme Court of Canada indicated its unwillingness to further examine the application of random drug and alcohol policies in Canadian workplaces, and endorsed the reasoning that had been applied by the Alberta Court of Appeal in interpreting Irving.

ii Amberber v. IBM Canada Ltd22

In early 2018, the Ontario Court of Appeal rendered a decision that may prove to be a useful guide for Ontario employers for the purposes of interpreting and enforcing contractual termination clauses.

An employee filed a wrongful dismissal claim against IBM. The motions judge that first heard the claim ruled that the working notice and pay in lieu thereof provided by the employer, when combined, satisfied the entitlement set forth under the termination clause in the parties' employment agreement, and that the clause was compliant with applicable provincial legislation. However, she held that the termination clause failed to rebut the common law presumption of reasonable notice. As such, she found that the clause was ambiguous.

The Ontario Court of Appeal overturned the motions judge's decision, allowing IBM's appeal and dismissing the employee's cross-appeal, confirming the principle of contractual interpretation that the clauses to a contract need to be read as a whole and not 'piecemeal', as the motions judge had done. The Court of Appeals also stated that courts should not strain to create an ambiguity where none exists. It ruled that the employer had complied with the termination clause and with the applicable legislation. As such, the Court allowed the appeal and dismissed the wrongful dismissal action.

The Ontario Court of Appeal's approach was strengthened by two subsequent decisions, also decided in 2018: Raposo v. CA Canada Company23 and Burton v. Aronovitch McCauley Rollo LLP.24

In the first decision, the employee had accepted a written offer of employment that included a termination clause (limiting his termination entitlement to the minimum set forth under provincial legislation) as well as a confidentiality agreement. The confidentiality agreement did not refer to the employee's entitlements upon termination of employment. The employee argued that there was ambiguity between the wording of the offer letter and the confidentiality agreement, which made the termination provisions unenforceable. He therefore asked the Court to determine his entitlements upon termination of employment. The Court concluded that there was no need to find a contradiction between both documents. Rather, the Court followed the approach taken by the Ontario Court of Appeal in Amberber v. IBM Canada Ltd and ruled that the absence of wording in the confidentiality agreement could not cancel out what had been agreed to in the offer letter. The Court dismissed the employee's action.

In the second decision, an employee was dismissed without cause from her employment. The termination clause in her contract stated that she was entitled to severance in accordance with the provincial legislation or, in the alternative, notice, severance pay and any other payment required by the relevant legislation. Moreover, the Ontario employment standards legislation sets forth that the employer must continue to make benefit plan contributions on behalf of an employee during the legally mandated notice period. The employee alleged that the termination clause, by not contemplating the continuation of benefits, was invalid. Again, by using the reasoning of the Ontario Court of Appeal in Amberber v. IBM Canada Ltd, the Court ruled that the clause implicitly included the continuation of benefits during the notice period. As a result, it dismissed the employee's action.

iii West Fraser Mills Ltd v. British Columbia (Workers' Compensation Appeal Tribunal)25

This decision by the Supreme Court of Canada significantly expands the obligations of site owners, who can be considered employers for the purposes of workplace health and safety legislation, even in the absence of an employment relationship with the injured worker.

In this decision, the Supreme Court upheld a decision of the British Columbia Court of Appeal, which involved an individual who was fatally struck by a falling tree. West Fraser was the 'owner' of the worksite, but not the employer of the worker. The Workers Compensation Board held that West Fraser had violated obligations under the provincial occupational health and safety act, thus being liable for an administrative penalty of C$75,000. The relevant legislation provided that the British Columbia Workers Compensation Board may impose such a penalty on 'an employer'. West Fraser argued that it was not the actual employer of the worker.

The Supreme Court rejected this argument, stating that West Fraser, as the owner of the licence for the land, was necessarily an employer with respect to the worksite, and thus, the decision of the British Columbia Workers Compensation Board, and that of the Court of Appeal subsequently, was to be upheld.

This decision is based on the specific provision of law in British Columbia, but its underlying principles will likely be applied in the coming years. Thus, site owners should be aware of their increased liability in the context of employee workplace health and safety matters.

iv Lemieux v. Aon Parizeau Inc26

The Quebec Court of Appeal's decision in Aon Parizeau related to the importance of demonstrating that damage had been caused to the former employer of an individual that violated his covenant not to solicit and violated his legal duty of loyalty.

The employee in question left the employer to work for a competitor. Prior to his departure, he transferred his clients' contact information to his new employer. He also contacted several clients to announce his career change, believing them to be more likely to follow him over to his new employer.

The Quebec Superior Court ruled that the employee had violated his duty of loyalty by failing to give his employer the notice of termination provided in his contract, entitling the employer to two weeks of the employee's salary as damages. Regarding the non-solicitation covenant, the Court ruled that a significant violation had not occurred in the circumstances, but it still awarded the former employer damages corresponding to 12 months of the individual's salary.

The Court of Appeal allowed the employee's appeal and overturned the lower court's judgment, stating that the violation of a contractual obligation was not sufficient to support the employer's claim. The Court of Appeal reasoned that if damages were not proven, the employer had failed to prove a correlation between the former employee's fault and the damages being claimed.

This decision sends an important message to employers: the mere existence of a restrictive covenant is not sufficient. Employers must be prepared to substantiate that damages have been caused by the departing employee's misconduct. Damages must be proven in order to be compensated for, even where the employer has demonstrated a clear violation of the employee's contractual or legal obligations.

IV Basics of Entering an Employment Relationship

i Employment relationship

There is extensive regulation of individual contracts of employment by both provincial and federal statutes that govern minimum standards of employment, which may not be contracted out of by the parties to the employment relationship.

Individual contracts of employment are often not in writing. That being said, it is generally recommended that these contracts be in writing, particularly if the employer wishes to assert a right arising from the agreement (e.g., a termination clause or a restrictive covenant). Fixed-term employment agreements are permissible. Absent a sufficiently detailed fixed-term provision, employees will be considered to be employed for an indefinite period of time.

ii Probationary periods

Probationary periods are a common feature of most Canadian employment agreements. These periods may be determined by contract and generally range from three to six months in duration, although shorter or longer periods may exist. Most collective agreements in Canada will also include probationary periods. In the event that the employee is dismissed during the probationary period, and provided he or she is exempt from qualifying for statutory notice requirements, an employer will be able to terminate the employment relationship during the probationary period without financial consequences.

iii Establishing a presence

Foreign employers will generally be able to hire Canadian personnel, even if they not registered to do business in Canada. In such a case, the employee's employment will be governed by the laws of the Canadian jurisdiction in which their work and duties are performed, notwithstanding the employer's lack of registration in Canada. The employee's compensation will be subject to applicable provincial and federal source deductions, which the employer will be required to remit.

v Restrictive Covenants

Generally, it is implied that, during their employment, employees have a duty of loyalty and honesty towards their employer. Employees are also obliged to comply with the lawful directions of their employer within the scope of their employment, and to perform their employment with diligence and with an appropriate standard of skill and competency.

It is generally accepted that, absent a restrictive covenant, post-employment competition and solicitation by an employee is permissible. However, employers may protect their interests by resorting to written contracts of employment restricting certain post-employment activities. There are three general types of restrictive covenants used in Canadian employment contracts: non-solicitation covenants, which restrict departing employees from soliciting clients, customers, suppliers or other employees; non-competition covenants, which restrict departing employees from commencing employment with competitors or from setting up competing businesses; and non-disclosure covenants, which restrict departing employees from disclosing confidential information. In the absence of a non-disclosure covenant, employees still have a legal duty (whether under common law or civil law) not to disclose confidential information or trade secrets.

Restrictive covenants are viewed as a restraint of trade and will be approached by the courts with great scrutiny.27 The enforceability of non-competition covenants depends largely on their duration and geographic scope, the wording of the contract, the nature of the business and the legitimacy of the interests that the employer is seeking to protect. The law is clear in maintaining that a non-competition covenant must go no further than is reasonably necessary to protect the employer's legitimate proprietary interests. Should a non-competition covenant be viewed as excessive or overreaching, Canadian courts will likely strike the covenant in its entirety, rather than reduce or rewrite the covenant to a lesser version.

VI Wages

i Working time

The employment standards legislation that exists in each Canadian jurisdiction sets forth rules governing work hours for employees. Certain jurisdictions provide for limits on the number of hours that can be worked per week or per day. In the federal jurisdiction and in Ontario, the weekly maximum for most employees is 48 hours of work per week and eight hours per day.28 Saskatchewan establishes a maximum of 44 hours of work per week.29 In Alberta, a daily maximum of 12 work hours is applicable.30

Meal and break periods are usually required after a specified duration of work. Generally, these break periods are without pay, although employees may be required to be compensated if they are not allowed to leave their work station. This is the case in Quebec, for example.31

ii Overtime

All Canadian jurisdictions have established thresholds for overtime pay eligibility. Although this legislation differs in detail from jurisdiction to jurisdiction, the standards that exist are generally similar.

Where permissible, employees may be required to work in excess of the statutory maximums but must be paid overtime, usually at one-and-a-half times their regular hourly rate.32 Not all employees are eligible for overtime. Managerial employees are almost always excluded.33 Certain jurisdictions also exclude professional employees from overtime eligibility.34 In Quebec, employees may contractually agree to be exempt from overtime entitlement, provided they are paid an annual salary that is more than the minimum wage, do not record their hours of work and do not have an established hourly wage. In such a case, an appropriately detailed employment agreement is required to substantiate the employee's exclusion from overtime pay.

Certain Canadian jurisdictions allow for averaging agreements to be implemented, in order to avoid the triggering of overtime and hours of work thresholds under employment standards legislation.35 All jurisdictions have provisions in their employment standards or day-of-rest statutes requiring that employees be allowed at least one day off per week.36 In practice, a 40-hour, Monday-to-Friday working week is virtually universal in offices.

Vii Foreign Workers

As a general rule, all persons who are not Canadian citizens or permanent residents require a work permit to work in Canada. The length of work permits assigned to foreign workers will vary. A work permit is normally granted only if there is no qualified Canadian available to fill the position in question. This is usually done by way of a Labour Market Impact Assessment, which must demonstrate that the hiring of a foreign worker will not have a negative impact on the Canadian labour market.

However, there are several scenarios that make a work permit unnecessary, or that make a work permit much easier to obtain. For example, business visitors may enter Canada without the need for a work permit. In addition, certain international trade agreements37 to which Canada is a party facilitate the temporary entry of certain categories of workers who are nationals of one of the other Member States. Intra-company transferees that serve in senior executive, managerial or specialised positions, who are employed by a branch, subsidiary or parent of a company located outside Canada, may also be considered for temporary employment in Canada for a related Canadian company.

Generally, foreign workers who are able to lawfully work in Canada will be protected by applicable labour and employment laws.

VIII Global Policies

Comprehensive policies governing employment and labour relations are generally adopted by Canadian employers, particularly those with a large workforce. Employment policies are usually distributed in paper or electronic format, or are posted online or on company intranets. These policies are generally unilaterally imposed by employers, and Canadian employment laws usually do not require employee consultation or approval, except for unionised workplaces that are governed by collective agreements.

Internal discipline rules that are adopted in employment policies generally follow the progressive discipline approach, that is, to mandate a series of disciplinary measures leading up to an eventual termination of employment (e.g., verbal or written warnings, suspensions or other forms of corrective action). Employment policies frequently include prohibitions against harassment, discrimination and workplace violence, and in certain cases, respond to legislative requirements to have written policies and procedures relating to such workplace issues. Canadian employers are not usually required to file employment policies with government authorities.

IX Translation

Canada has two official languages, English and French. Quebec, which is predominantly French-speaking, recognises French as the official language of the state. That province's Charter of the French Language38 contains provisions that require Quebec-based employers to make written communications to their staff in French, as well as provide offers of employment or promotion in French.39 Collective agreements for unionised employees in Quebec must be drafted in French.40 However, employment agreements and collective agreements may be translated into a language other than French, provided that the parties to these agreements both agree. This is important as employers in Quebec are generally prohibited from imposing English-language employment agreements without the employee's consent.

The Charter also requires employers in Quebec to implement the use of the French language in the workplace. Depending on the size of the workforce, Quebec-based employers may be subject to francisation requirements, which are aimed at promoting the widespread usage of French in the workplace. Francisation requirements under the Charter generally commence once the employer has reached the 50-employee threshold.41 The Charter also affords protection to workers, notably by prohibiting employers from demanding language skills other than French for employment, unless the duties of the position require knowledge of a second language.42

x Employee Representation

All Canadian jurisdictions recognise by statute the right of trade unions to organise and represent employees, and to engage in collective bargaining. Collective bargaining consists of negotiations between an employer and a group of employees over the terms and conditions of employment. The result of collective bargaining is a collective agreement.

Provincial and federal labour legislation includes provisions that grant exclusive bargaining rights to certified trade unions that postpone the right to strike or lockout until after the expiry of a collective agreement, prohibit unfair labour practices, recognise and enforce collective agreements, and provide for the resolution of disputes through arbitration.43 While the precise nature of these provisions varies from jurisdiction to jurisdiction, these features are common to all Canadian jurisdictions.

Employees have the right to belong to a trade union of their choice, free of any coercion or interference by the employer. Employers have a duty to recognise and bargain in good faith with the trade union chosen by their employees.44 Labour relations tribunals supervise the organisation of employees and, to some extent, the collective bargaining process.

Employers and employees have different rights and obligations under a collective agreement than under individual contracts of employment, where there is no trade union. The right to notice under the common law (or the CCQ) prior to termination does not exist for unionised employees. However, statutory requirements under employment standards legislation are usually required.

Union certification procedures vary widely across Canadian jurisdictions. Certain jurisdictions certify trade unions on the basis of signed membership cards, while others require secret ballot votes prior to certification.45 In the event a secret ballot vote is required, Canadian jurisdictions have varied thresholds for unionisation to occur. Certification votes are generally supervised by a labour relations board, and usually take place within a relatively short time period (varying from several days to more than a week). Remedial certification (e.g., in the event of an unfair labour practice) is possible in some, but not all, jurisdictions.46

xi Data Protection

i Requirements for registration

Canadian law provides for both private-sector and public-sector privacy legislation. Depending on the jurisdiction in which they operate, private-sector employers in Canada are subject to either federal or provincial legislation governing the collection, use and disclosure of personal information.

The federal Personal Information Protection and Electronic Documents Act47 (PIPEDA) applies to federally regulated employers, as well as employers that are provincially regulated that operate in provinces that have not adopted substantially similar privacy legislation. To date, Quebec, Alberta and British Columbia have enacted personal information legislation, which has been recognised as substantially similar to PIPEDA.48 In 2013, Manitoba passed private-sector privacy legislation that is not yet in force.49 It has not yet been determined whether this legislation is substantially similar to PIPEDA.

In addition to PIPEDA and provincial legislation dealing specifically with the collection, use and disclosure of personal information in the private sector, employers may have additional statutory privacy obligations. For example, several provinces have enacted legislation, such as the British Columbia Privacy Act,50 which makes it an actionable wrong for one person, wilfully and without claim of right, to violate another's privacy. In Quebec, the CCQ and the Quebec Charter of Human Rights and Freedoms51 provide for additional privacy obligations.

ii Cross-border data transfers

Canadian privacy legislation addresses the notion of cross-border data transfers. In this regard, the transfer of personal information outside Canada must be disclosed in an employer's privacy policy, to meet the openness and safeguarding principles that apply to PIPEDA and similar privacy legislation. Further, employees whose personal information is collected must be informed of the transfer to any foreign entities and must be provided with appropriate contact information for obtaining details on the privacy obligations of those entities. While this has been held to exist as an implicit requirement in privacy legislation across Canada, it is made explicit in Alberta's Personal Information Protection Act, which also differs from other Canadian privacy law in that it imposes specific breach notification obligations on organisations.

iii Sensitive data

Under all Canadian privacy legislation, personal information is broadly defined as 'information about an identifiable individual', with certain exclusions. Sensitive information that would generally fall under the ambit of 'personal information' in Canadian privacy legislation would include, in particular, financial information, medical information, educational history, union membership or information relating to an employee's family background.

iv Background checks

The validity of background checks varies greatly across Canadian jurisdictions. Generally, employers may perform a background check on prospective employees; however, certain jurisdictions limit criminal or credit checks. Human rights legislation and privacy legislation across the jurisdictions will limit the use of criminal or credit background check results, even if these types of background checks are permitted. Employee consent to background checks is almost always preferred, if not required in most Canadian jurisdictions.

XII Discontinuing Employment

i Dismissal

In the absence of an express agreement regarding the consequences of termination, the law holds that employees who are dismissed without cause (without 'serious reason' in Quebec) are entitled to reasonable notice of termination of employment, and may recover damages if such notice is not given. In providing reasonable notice, an employer may require the employee to continue to work through the notice period (working notice) or may provide pay in lieu of working notice. All employment standards statutes contain minimum periods for notices of termination and, if applicable, severance pay. Employers will generally be required to provide employees with both statutory notice of termination and notice of termination under the common law or the CCQ. The duration of common law or CCQ notice that is reasonable is determined by the circumstances of each case (reasonable notice). The courts will usually take into account the employee's age, position, length of service, overall compensation and the availability of similar employment, among other factors.

Written employment contracts may also contain an express provision that specifies the amount of notice that will apply to a termination without cause. However, these provisions may not always be enforceable before the courts, depending on the jurisdiction, drafting and content of the clause.52 In particular, such a provision will not be enforceable where the notice period is less than that which the employee would have been entitled to under the applicable employment standards legislation, where the clause otherwise fails to provide an employee with minimum statutory entitlements, or where it is too vague or ambiguous. If a termination provision in an employment contract is unenforceable, the reasonable notice entitlement under the common law or the CCQ will apply and the employee will be entitled to reasonable notice based on the factors described above.

Only where just cause for termination exists can an employee be summarily dismissed without notice. The Supreme Court has recently confirmed that federally regulated employers are not permitted to terminate employment of non-managerial employees under the CLC, unless there is just cause, with certain exceptions.53

What constitutes just cause varies greatly, although theft, gross misconduct and insubordination would generally qualify. It is advisable for the employment contract to provide a non-exhaustive list of examples of what would constitute just cause. In addition, Canadian law recognises the notion of constructive dismissal, in such cases where an employer has made one or more substantial changes to the essential terms of an employee's employment. Examples of constructive dismissal may include, in particular, significant changes to an employee's compensation, a significant reduction in the employee's duties or responsibilities, a demotion to a more junior position or a significant change to the employee's hours of work. In such a case, an employee may assert a claim of constructive dismissal and allege that such changes are tantamount to an outright dismissal by the employer.

A dismissed employee who is not unionised may bring an action before the civil courts alleging an unjust dismissal. In the federal jurisdiction, Quebec and Nova Scotia, employment standards legislation allows certain employees with a specified length of service to have their dismissals adjudicated by an arbitrator. In those cases, reinstatement is generally an available remedy.54

A unionised employee can generally request that the union bring a grievance contesting the dismissal under the collective agreement. This grievance will be heard by an arbitrator or a board of arbitration. If the dismissal is found not to be made for just cause, then the employee will be reinstated, normally with full back pay. Should the arbitrator find that a period of suspension was warranted, the amount of back pay will be adjusted accordingly.

Upon termination of employment, whether for cause or without cause, employers are required to report the employee's interruption in earnings to the federal government. If eligible, employees may receive employment insurance benefits following a termination of employment. Generally, dismissals for just cause will disentitle an employee for such benefits.

It is common across Canadian jurisdictions for employers to enter into settlement agreements with employees following a termination of employment, particularly in the case of a without-cause termination. In such a case, the terms of the settlement agreements are usually kept confidential between the parties, except where disclosure is permitted by law or for some other specific reason agreed to by the parties.

ii Redundancies

Terminations made for economic reasons (i.e., redundancies) are permissible across Canadian jurisdictions. In such a case, the termination of employment is considered to have been made on a without-cause basis and the employee will be entitled to the notice requirements specified in subsection i, above. Where a mass termination has been triggered, greater periods of statutory notice may be required to be provided by the employer, and there may be an obligation to report the mass termination to a governmental entity. The criterion that is applicable to a mass termination will vary depending on the jurisdiction.

Temporary lay-offs (done without severing the employment relationship) are used by many Canadian employers, particularly where the employer's activities are seasonal in nature or there is a lack of work. Statutory notice requirements that apply to temporary lay-offs will vary from jurisdiction to jurisdiction.

XIII Transfer of Business

Canadian jurisdictions have all adopted successor-rights provisions that make a union certification and a collective agreement binding on the purchaser. The tendency among Canadian labour relations boards has been to require the transfer or sale of all or part of a going concern, as opposed to a sale or transfer of assets. Labour boards have emphasised that what constitutes a going concern will vary from industry to industry and that each case will be determined by its specific facts.

Successor rights concepts applied in the labour relations context have only limited relevance for individual employment. Where a business is sold or otherwise disposed of, employment standards legislation typically deems employment to be uninterrupted for the purposes of applying minimum employment standards that depend on length of service. This employment standards legislation has been broadly interpreted, so that rights acquired by employees cannot readily be circumvented by the new employer.

XIV Outlook

In 2019, Canadian employers will be closely watching the continued review of employment standards legislation in many jurisdictions, including changes in Ontario, Quebec and British Columbia.

In addition, the decriminalisation of recreational cannabis will continue to push the courts to examine whether current limits on drug and alcohol testing are appropriate, and whether employers should be given more latitude in reprimanding drug and alcohol use in the workplace. It is expected that cannabis-related dependency issues and requests for accommodation will continue to challenge many Canadian employers.

Finally, it is expected that 2019 will bring a continued emphasis on combating harassment and discrimination issues in the workplace, including issues associated with the #MeToo movement, gender parity and the protection of minorities and historically under-represented workers. As such, Canadian employers should be mindful of these issues in the year to come.


1 Robert Bonhomme and Michael D Grodinsky are partners at Borden Ladner Gervais LLP. The authors acknowledge the valuable contributions of Vanessa Lapointe in the preparation of this chapter.

2 British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador.

3 Nunavut, Yukon and the Northwest Territories.

4 Constitution Act, 1867, 30 & 31 Vict, C 3, Sections 91-92.

5 1991, c. 64.

6 RSC, 1985, c. L-2.

7 RSC 1985, c. H-6.

8 SC 1995, c. 44.

9 The Cannabis Act.

10 An Act to amend the Canada Labour Code (harassment and violence), the Parliamentary Employment and Staff Relations Act and the Budget Implementation Act 2017.

11 RSA 2000 c E-9.

12 The Fair and Family-Friendly Workplaces Act.

13 The leaves of absence are the following: bereavement leave (three days unpaid); personal and family responsibility leave (five days unpaid); long-term illness and injury leave (16 weeks unpaid); citizenship ceremony leave (half-a-day unpaid); critical illness of a child (up to 36 weeks unpaid); critical illness of an adult family member (up to 16 weeks unpaid); domestic violence leave (10 days unpaid); death or disappearance of a child (up to 52 weeks unpaid).

14 An Act to Amend the Act Respecting Labour Standards and Other Legislative Provisions Mainly to Facilitate Family-Work Balance.

15 Act respecting Labour Standards (Quebec), RSQ, c. N-1.1.

16 The leaves of absence are the following: domestic or sexual violence leave (26 weeks unpaid) and parental or family obligations leave (10 days, of which up to two can be paid).

17 An Act to Amend the Employment Standards Act 2000.

18 The Making Ontario Open for Business Act 2018.

19 2018 CanLII 53457.

20 Irving Pulp & Paper Ltd v. CEP, Local 30, 2013 SCC 34.

21 ibid., at para. 31.

22 2018 ONCA 571.

23 2018 ONSC 4226.

24 2018 ONSC 3018.

25 2018 SCC 22.

26 2018 QCCA 1346.

27 Courts in certain jurisdictions, such as Ontario, have greatly limited the use of non-competition covenants. Other jurisdictions, such as Quebec, have recognised the validity of non-competition covenants, provided the covenants meet the applicable criterion (Article 2089 CCQ) and are not used where an employee has voluntarily resigned or has been terminated without serious reason (Article 2095 CCQ).

28 Section 17 of the Ontario Employment Standards Act 2000, S.O. 2000, c. 41, and Section 169 of the CLC.

29 Section 2-12 of the Saskatchewan Employment Act, SS 2013, Section S-15.1.

30 Section 16 of the Alberta Employment Standards Code, RSA c. E-9.

31 Section 79 of the Act respecting Labour Standards (Quebec).

32 See, for example, Section 55 of the Act respecting Labour Standards (Quebec).

33 See, for example, Section 167 of the CLC.

34 See, for example, Section 2 of the Nova Scotia General Labour Standards Code Regulations, R.S.N.S. 1989, c. 246.

35 See, for example, Section 53 of the Act respecting Labour Standards (Quebec).

36 See, for example, Section 18 of the Ontario Employment Standards Act 2000.

37 For example, the North American Free Trade Agreement or the Canada European Union Comprehensive Economic and Trade Agreement.

38 RSQ, c. C-11.

39 ibid., Section 41.

40 ibid., Sections 43, 44 and 50.

41 ibid., Sections 135 et seq.

42 ibid., Section 45 and 46.

43 See, for example, the Quebec Labour Code, c. C-27, or the Labour Relations Act (of Manitoba), C.C.S.M. c. L10.

44 See, for example, Section 17 of the Ontario Labour Relations Act 1995, S.O. 1995, c. 1, Sched. A.

45 British Columbia, Manitoba, Newfoundland and Labrador, Nova Scotia, Ontario and Saskatchewan all require secret ballot votes before a trade union can be certified. Alberta, Quebec, New Brunswick, Prince Edward Island and the federal jurisdiction all permit union certification on the basis of signed membership cards.

46 See, for example, Section 11 of the Ontario Labour Relations Act 1995, S.O. 1995, c. 1, Sched. A.

47 SC 2000, c. 5.

48 The Personal Information Protection Act (British Columbia), SBC 2003, c. 63, the Personal Information Protection Act (Alberta), SA 2003, c. P-6.5, and the Act respecting the Protection of Personal Information in the Private Sector (Quebec), RSQ c. P-39.1.

49 The Manitoba Personal Information Protection and Identity Theft Prevention Act, CCSM c. P33.7.

50 RSBC 1996, c. 373.

51 RSQ, c. C-12.

52 See, for example: Wood v. Fred Deeley, 2017 ONCA 158; Roden v. Toronto Humane Society, O.J. No. 3995 (Ontario Court of Appeal). In Quebec, Article 2092 of the CCQ states: 'The employee may not renounce his right to obtain an indemnity for any injury he suffers where insufficient notice of termination is given or where the manner of resiliation is abusive.'

53 Wilson v. Atomic Energy of Canada Inc, 2016 SCC 29.

54 Section 124 of the Act respecting Labour Standards (Quebec), Section 240 of the Canada Labour Code and Section 71 of the Nova Scotia Labour Standards Code, R.S.N.S. 1989, c. 246.