Labour Laws in Canada: A Legal Guide for Employers
Last update: June 8th 2023
The requirements for employers in Canada appear in the labour laws Canada in order to allow for equitable hiring practices and standards. Do not forget that there are varying federal and provincial laws when doing business in Canada. Therefore, since each province has its own labor rules, it can be challenging for businesses that hire individuals from various regions to maintain compliance.
In this article, we will be talking about labour laws Canada and its details. Most companies require the services of an Employer of Record in canada to guarantee that employment laws in Canada are in place. Therefore, abiding by them and not incurring penalties and fines.
Understanding the Canadian Labour Code
For both local and international enterprises, employment and labor legislation can be complex. Organizations must fulfill specific logistical requirements in order to become employers in Canada. First, if the employee resides in Québec, Revenu Québec, or the Canada Revenue Agency, the employer must be registered. An employer could also require registration with other provincial taxing agencies, according to the size of the payroll.
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The type of the employer's company determines the relevant employment and labor regulations. The great majority of businesses are subject to provincial laws, and any employer doing business in multiple provinces has to abide by the rules of each province. Federal legislation like the Canada Labor Code and the national Employment Equity Act apply to about 10% of the workforce in Canada. Even though an employer is subject to federal regulation, it must nevertheless abide by specific provincial rules concerning things like workers' compensation.
There are significant differences in the minimum pay and hours, mandatory leaves, holiday entitlements, benefits upon dismissal, and safety and health regulations even though the laws are generally comparable across the nation. This makes managing a staff in Canada far more difficult.
Federal and Provincial Jurisdiction
In Canada, both the provincial and federal governments share the authority to enact laws. For historical and constitutional reasons, provinces often have authority over the majority of job-related issues, while the federal government only has authority over employment in relation to a small number of industries, such as banks, shipping, and the airline industry.
Labour laws Canada are controlled by provincial and federal legislation as well as the common law (judge-made law), and they are very consistent from province to province. The major exception to this norm is Quebec, where the legal system is based on an official "civil code" that stems from the Napoleonic Code of France.
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Understanding the constitutional divide of power among the federal authorities of Canada and the authorities of Canada's 10 provinces and three territories is essential for Canadian labor and employment legislation.
Employers doing business in Canada face substantial challenges due to the ongoing change linked with employment and labor regulation therefore many people avail employer of record service. This difficulty is exacerbated by the fact that companies with operations throughout Canada may be liable to different employment regulations in each province.
The majority of industries are run at the province level, while those that are interprovincial and global are controlled at the federal level, including:
· Airlines.
· infrastructure operations.
· Banks.
· Railways.
· Highway transport (trucking).
· Pipelines.
· Shipping.
· Preservation of fisheries.
· Telecommunications.
· Radio and TV broadcasting.
· Ferries, tunnels, bridges.
· Most grain elevators.
· Grain related operations.
· Uranium mining operations.
· Undertakings.
Key Features of Labour Laws
Although there are many similarities between different jurisdictions, there are also substantial variances in approaches and timetables that must be considered. There is no automatic applicability of the legislation of one province to another unless the organization is a Federal Work or Undertaking.
Workers and their employers protected by federal law continue to have "cover" in all provinces but are unaffected by provincial labor laws. However, the law in the "receiving" jurisdiction is controlling. In some situations, "related employer" or "sale of business" laws might transfer unionization from a single state to another.
In some jurisdictions, there are statutes that, in addition to the general labor legislation, permit "collective bargaining" beyond the scope of the local labor code or labor relations act. These include the laws that control 'artists' on a provincial and federal level. The legal system of Canada is not recognized or applied in Quebec, hence the general concepts of common law that deal with employment do not normally apply there.
Due to the fact that the Civil Code, various Statutes, and the labour laws Canada all control and govern the work relationship in the Province of Quebec, it is important to be aware while dealing with employment and labor legislation. In addition, numerous jurisdictions have specific labor laws that oversee relations between employers and employees of vital services like police, hospitals, and firefighters.
Employment Standards
Three categories of workers get recognition in Canada:
· Employees.
· Independent Contractors.
· Dependent Contractors.
Based on their connection to the employer organization, these employees can be identified. They have the right to all standard law rights, legal rights, and any other rights granted by the employer, such as leave time and overtime pay. Independent contractors could not be eligible for the employee benefits in canada, but even permanent employees have common law rights. The labour laws Canada, however, apply to all workers.
A contract of employment in writing is not compulsory by labour laws Canada, however, it is important. Contracts are usually helpful since they explicitly state the conditions, perks, compensation, amount of paid time off, and other aspects of the employment relationship between the company and the employee. It is a trustworthy source for both parties. Although both English and French are spoken in Canada, contracts must be written in English, with the exception of Quebec, where French is the official language.
Minimum Wage Regulations
Employers must comply by Canadian labor law to pay a wage or salary that is at least the legal minimum wage. The minimum wage is in existence to prevent underpayment of workers and to guarantee that everyone follows the proper working conditions.
The company must deduct some expenses from the employee's pay, such as certain taxes and insurances. Other deductions are also permissible, including payments to pension plans, life insurance, medical and dental insurance premiums, and savings plans.
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In accordance with Canadian employment legislation, the federally regulated private sector businesses must begin implementing new wage transparency measures by January 1, 2021. This is in place to address the wage gap that affects women, native Americans, individuals with disabilities, and people who identify as visible minorities. By the end of the year, the Canadian government will provide additional disclosures regarding the transparency of the pay gap. Salaried employee rights Canada are in place to protect both parties.
Hours of Work and Overtime
Employees in Canada have a duty to work a 5-day workweek (Monday through Friday), although provincial laws are in place to set particular guidelines for working hours across the country. Therefore, it is crucial for employers to comprehend the various relevant legislation. For instance, the maximum number of hours that can be worked per week in some provinces, like Ontario, is 48. However, most governments typically only require their residents to put in 40 hours each week.
When an employee works more than the minimum amount of hours, overtime pay depends on each jurisdiction's employment standards legislation. Employees paid hourly or monthly have the right to overtime pay. However, in most jurisdictions, personnel like supervisors, managers, and specialists are not eligible for this benefit.
Vacation and Leaves
A minimum of 2 weeks of yearly leave is necessary for the majority of federal employees. Also, a minimum of three weeks is mandatory in many provinces. The majority of firms do provide more yearly days off than what is necessary, though. Employees typically have the option to carry over a set number of unused vacation days from one year to the next. In addition, there are statutory public holidays that must be observed by all citizens.
Public Holidays
The following holidays take place both nationally and provincially in Canada:
· New Year
· Good Friday
· Easter Monday
· Victoria Day
· Saint-Jean-Baptiste Day (Quebec only)
· Canada Day
· Civic Holiday
· Labour Day
· Thanksgiving Day
· Remembrance Day
· Christmas Day
· Boxing Day
Termination and Severance
There is no such thing as an at-will job in Canada. Instead, businesses must give employees a notice of dismissal in order to formally end an employee's job. Province/Territory-specific termination laws differ. However, the following general principles are more or less universal:
· Probationary period, which may be terminated without giving cause.
· Gross misbehavior includes illegal activity, persistent disobedience, and willful misconduct. Employees have no right to receive notification or payment in lieu of warning or severance pay in this circumstance.
· End of a limited-term contract that is time-bound contractually.
· resignation of an employee.
· Absence of cause (requires notice or payment in lieu of notice).
Employers must demonstrate that employees are let go for reasonable cause in order to avoid delivering a notice. Unless there is clear proof of substantial misbehavior, this is challenging to prove.
When fired by their employers, employees who have been working for a specific amount of time have the right to severance pay. The following wage and tenure examples vary by province or territory and are not applicable everywhere:
Federal:
· Eligible for severance pay after a year of continuous employment.
· Following the first year, there will be two days of pay, with an initial limit of 5 days.
· Eight days' pay following four years of employment.
· 40 days' salary following 20 years of service.
Ontario:
· Workers have the right to one week of compensation for every year of employment after five years, up to a maximum of 26 weeks.
· Only applies if the employer terminates 50 or more employees in a 6-month period or if its annual payroll reaches CAD $2.5 million.
· A 20-week pay period is due to employees after two decades of service.
Occupational Health and Safety
The Occupational Health and Safety Act (often known as "the Act" or "OHSA") is Ontario's law governing workplace health and safety. The OHSA additionally includes 25 regulations. The fundamental goal of the OHSA is to create the necessary legislative framework for us to safeguard workers from workplace health and safety risks by:
· Defining rights and responsibilities for employees will aid in building a solid internal responsibility system (IRS) at work.
· Putting in place controls and processes for handling dangers at work.
· Making provisions for law enforcement in cases where voluntary compliance is not in place.
Workplace Health and Safety Regulations
The majority of OHSA's 25 requirements are industry, task, or hazard-specific. The additional requirements cover OHSA application, reporting, and training. These are:
· Sector-specific regulations:
o Industrial establishment.
o Construction projects.
o Mining plants and mines.
o Residential and healthcare institutions.
· Hazardous work regulations:
o Diving operations.
o Window cleaning.
o Gas production and offshore oil.
o Confined spaces.
· Health hazard regulations:
o Designated substances regulations.
o Control of exposure to chemical or biological agents.
o X-ray safety.
o Needle safety.
o Noise.
o WHMIS.
· Other regulations:
o Illness and incident reporting.
o Occupational health and safety awareness training.
o Farming operations.
o Offices of the worker.
o Employer advisers.
o Teachers.
o University academics and teaching assistants.
o Protective equipment for firefighters.
o Joint health exemptions.
o Safety committee exemptions.
Employer Responsibilities
Employers and managers have a duty to address these circumstances and inform employees of any hazards present in their employment. When it comes to workplace health and safety, the employer, who is frequently represented by top management, is most responsible. A sound culture of occupational safety and health must include a strong IRS. A robust culture of health and safety demonstrates respect for the workers.
Employee Rights and Protections
The Canada Labour Code specifies the labor rights and obligations of around 12,000 companies and 820,000 of their employees. In addition, there are other laws in Canada that cover employee rights and protections, such as:
· Canadian Human Rights Act.
· Employment Equity Act.
· Federal Contractors Program.
· Legislated Employment Equity Program.
· Workplace Equity Information Management System.
Employment Contracts
Every job comes with a contract of employment, which may be a verbal or written agreement. Additionally, it can be a mix of the two. An employment contract lays forth in detail all of the conditions and stipulations of the work relationship.
To be enforceable, a contract of employment must have all the requirements of a contractual agreement. This under common law and not be in violation of any applicable laws. A legally binding contract must be formed by an offer, acceptance, and consideration.
In Canada, indefinitely drafted work contracts are the norm. Such contracts may be terminated by the employer with one month's notice and a justifiable justification. Alternately, the employer may resign from the company after giving a month's notice.
Parties may, however, agree to restrict the employee's termination benefits to those that are essential under the labour laws Canada. The usual notice term necessary by Canadian labor law is typically substantially longer than the statutory notice period.
Discrimination and Harassment
Human rights legislation has been passed in every Canadian jurisdiction (federal, provincial, and territorial), making it illegal to discriminate against someone in the workplace on the basis of race, age, gender, religion, color, disability (including alcohol and drug addiction), marital status, family status, criminal history, ancestry, or place of birth, sexuality, gender identity, or gender expression.
Job equality laws, which are enforced by the federal government, have the goal to give women, Native Americans, people with disabilities, and members of visible minorities access to job and promotion opportunities.
Privacy and Confidentiality
Your personal information is probably protected by public sector privacy laws if you work for a government department, a government department, or a public institution. There are laws that specify what your personal information can and cannot be used for by the federal, provincial, and territorial governments of Canada (see list of laws below). Provincial law governs the employment of municipal personnel. Municipal workers have protection by unique laws in Saskatchewan, Ontario, and Nova Scotia.
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