Employment

Canada is generally a more employee-friendly jurisdiction than the U.S. Practices that are common in the U.S. (such as random drug testing) are generally not allowed in Canada. Moreover, unlike the U.S., the concept of “at-will” employment does not exist in Canada: employees are entitled to minimum statutory notice in the event of termination by the employer without just cause. 

Employment relationships in Canada are affected by various sources, including: 

• Legislation: Provincial and federal statutes regulate all aspects of employment, including minimum employment standards, human rights and accessibility, occupational health and safety, workers’ compensation, and benefits/pensions. Labour law legislation in each jurisdiction also regulates workplace relations and collective bargaining between employers and unions.  
• Contracts: Employers and employees are free to negotiate the contractual terms and conditions of the employment relationship, as long as these terms do not fall below the minimum standards established by employment-related legislation.  
• Common Law: In all Canadian jurisdictions except Quebec (where employment is governed by the rules set out in the Code), the common law (i.e., judge-made law) incorporates implied rights and obligations into employment relationships, such as the obligation to provide employees with “reasonable notice” of termination of employment absent a limiting provision in their employment contract, unless there is just cause for summary dismissal. A similar right to reasonable notice is required in Quebec, as set out in the Code. 

1. JURISDICTION OF EMPLOYMENT  

The default rule is that provincial governments have exclusive authority to regulate labour and employment law within their borders. However, due to the way in which Canada’s constitution divides powers between the provincial and federal governments, employment in certain industries (such as banking, interprovincial transportation, and telecommunications) is regulated solely by the federal government. Employers who are provincially regulated for employment law purposes will be subject to provincial employment standards, health and safety, labour relations, and human rights legislation, while federally regulated employers will be subject to federal legislation, such as the Canada Labour Code. 

2. EMPLOYMENT STANDARDS LEGISLATION 

Legislation in each jurisdiction (i.e., each province and territory, and the federal sector) establishes the minimum employment standards that apply to work performed in that jurisdiction. These statutes cover subjects such as minimum wage, overtime pay, hours of work, holidays, vacation and various paid and unpaid leaves of absence (e.g., sick leave, parental leave, bereavement leave, compassionate care leave, organ donor leave, etc.). The parties cannot contract out of these minimum entitlements.  

The manner in which an employee is paid (i.e., whether on a salaried or hourly basis) does not affect an employee’s entitlement to statutory overtime pay in Canada. Rather, exemptions from statutory overtime pay are generally tied to the employee’s job functions; for example, many jurisdictions exempt professionals (lawyers, information technology professionals, etc.) and managerial and supervisory employees from entitlement to statutory overtime pay. 

As discussed further below, employment standards legislation also sets out the minimum notice and severance entitlements owed to an employee upon the termination of their employment by the employer.  

3. HUMAN RIGHTS AND ACCESSIBILITY  

The Canadian Charter of Rights and Freedoms establishes equality rights which constrain the actions that the government may take. It does not apply to private businesses. 

Each jurisdiction has human rights legislation which prohibits employers from discriminating against an individual in employment on the basis of protected grounds.  Protected grounds differ between jurisdictions, but include characteristics such as race, ancestry, place of origin, colour, ethnic origin, citizenship, creed/religion, sex, gender expression, gender identity, sexual orientation, age, record of offences, marital status, family status, and disability (which includes mental health disorders, addiction, etc.). The law prohibits direct discrimination of individuals on these grounds, as well as “constructive” or adverse effect discrimination, where a seemingly neutral rule has the effect of subjecting a group to unequal treatment. 

Employers have a duty to accommodate employees’ needs in relation to their protected personal characteristics, up to the point of undue hardship. Accommodations most commonly relate to the protected grounds of disability, sex (pregnancy), family status, and creed/religion. Examples of workplace accommodations include changing an employee’s work schedule, modifying their job duties, and/or permitting a leave of absence.  

Each province, and the federal government, has established human rights commissions or tribunals to process human rights complaints. Individuals who believe that they have experienced unlawful discrimination may file a complaint with the applicable body. Alternatively, individuals may sometimes be able to allege contraventions of human rights legislation in court proceedings (for example, as part of a wrongful dismissal lawsuit). 

Several Canadian jurisdictions have implemented, or are in the process of implementing, accessibility standards with the goal of making it easier for individuals with disabilities to access goods, services, and employment. Currently, accessibility legislation in Ontario, Manitoba and Canada requires employers to, among other things, provide employees with training on the accessibility standards (e.g., on providing accessible customer service) and to share employment-related information in accessible formats. Larger employers must also submit accessibility compliance reports to the provincial government at regular intervals.  

4. TERMINATION OF EMPLOYMENT 

Generally, non-union employee may be terminated by the employer “for cause” or without cause providing they are provided with proper advance notice.  Employees in Quebec and federally-regulated businesses have certain just cause protections, similar to unionized employees.   

a. Termination Without Cause  

When employment is terminated without cause, employees will be entitled to, at minimum, (i) any contracted-for entitlements set out in their employment agreement, and (ii) statutory notice of termination or payment in lieu thereof, along with other entitlements such as statutory severance pay, benefits continuation, etc., as may be required by the applicable employment standards legislation.  

In large group terminations, the minimum statutory notice entitlements are higher. In addition, notice of large group terminations must be provided to the government. 

In Canada, the common law (i.e., judge-made law) implies an obligation for an employer to provide employees with “reasonable notice” of the termination of employment, absent an express term in an employment agreement that limits an employee’s entitlement to same.  The calculation of reasonable notice depends on such factors as the employee’s age, position, salary, years of service, likelihood of securing alternative employment. Reasonable notice is inclusive of the minimums, and generally maxes out at two years’ notice for long service management employees.  If less notice is provided, courts on a wrongful dismissal action will generally award damages to put the employee in the same position they would have been in if actively working during that time, minus any amounts the employee earned from new employment during that period. 

An employee’s entitlement to reasonable notice of termination at common law can be limited via a termination provision in their employment agreement. Care is needed when drafting such provisions, as Canadian courts subject termination provisions in employment agreements to heavy scrutiny. If any part of a termination provision contravenes applicable employment standards legislation, even inadvertently, the entire provision will be declared void and unenforceable and the employee will be entitled to reasonable notice of termination at common law. 

In Quebec and unlike the common law jurisdictions, employees cannot contract out of their right to reasonable notice under the Civil Code of Quebec upon signing the employment agreement. In Quebec and Nova Scotia, employees who believe that their employments have been unlawfully terminated may file a claim and seek reinstatement as a remedy under employment standards legislation. Reinstatement is also an available remedy under the Canada Labour Code. 

b. Termination for Cause 

Alternatively, an employee who has engaged in severe misconduct (i.e., conduct that fundamentally breaches the essential terms of the employment relationship, or otherwise renders continued employment impossible) may be terminated on a summary basis for “just cause”. Just cause for termination is a high threshold. In most jurisdictions, the employment standards legislation contains a similar exemption for conduct amounting to “just cause”, “willful misconduct” or “serious reason” for termination.  

In Quebec, employees with two or more years of service may challenge their termination for performance related reasons under a government tribunal which provides a free lawyer, and may have a right to reinstatement.  Federally-regulated non-management employees with more than one year of service have a similar right. 

Due to the nuances in this area, employers should obtain legal advice before proceeding with a termination for cause. 

5. OCCUPATIONAL HEALTH AND SAFETY 

Each jurisdiction has established occupational health and safety legislation to keep workers and the public safe. This legislation imposes rights and duties upon employers, supervisors, owners, and employees, including: 

• an obligation to take every precaution reasonable in the circumstances to protect the health and safety of workers; 
• the right for workers to refuse unsafe work; 
• the requirement to establish workplace health and safety committees; 
• prohibitions on reprisal against an employee for raising a workplace health and safety complaint;  
• the requirement to provide adequate training to workers and supervisors; 
• the requirement to report workplace accidents to the appropriate government body; and 
• the requirement to establish policies and procedures to prevent and investigate incidents of workplace violence and harassment. 

An employer’s breach of workplace safety requirements can result in substantial fines and/or imprisonment (including, in some jurisdictions, against directors and officers personally).  

6. WORKERS’ COMPENSATION LEGISLATION 

Each jurisdiction has established a no-fault worker’s compensation system to compensate employees who are injured in the course of their employment. These programs are funded by employer-paid premiums, with applicable rates generally being determined on the basis of factors like the employer’s payroll, industry sector, and the employer’s history of injuries or accidents in their workplace. 

7. UNIONIZATION 

Each province, and the federal jurisdiction, has its own labour relations legislation regulating workplace relations and collective bargaining between employers and unions. 

Typically, the process by which a workplace becomes unionized begins with a union conducting an organizing campaign in which it attempts to obtain sufficient support among workers in a proposed group of employees in a workplace (a “bargaining unit”). Support for the union is evidenced by the signing of union membership cards. If sufficient support is obtained, the union will file a certification application before the applicable labour relations board or tribunal. The labour relations board will determine which employees fall within the bargaining unit. At that point, depending on the jurisdiction, the union may become certified immediately if it submits union membership cards from a majority of employees in the bargaining unit (card-based certification) or, if the union has sufficient membership evidence, a secret ballot will be conducted to determine whether the union is to be certified. 

When a certification application is successful, the union becomes the sole bargaining agent of the employees in the bargaining unit, with authority to negotiate the terms and conditions of employment on their behalf. 

The timelines in which employers must respond to a certification application before a labour relations board or tribunal is generally very short. Moreover, employer conduct during the certification process will be scrutinized heavily, as labour relations legislation prohibits employers from interfering with the formation of a trade union. Employers who are alerted to a union organizing campaign or a certification application should consult legal counsel immediately. 

8. PRIVACY 

Privacy-related rights and obligations in the employment context do not apply uniformly across Canada but instead are subject to the specific jurisdiction of the employment relationship.  

The federal government, and the provinces of British Columbia, Alberta, and Quebec, have passed legislation regulating how employers handle employees’ personal information. In these jurisdictions, consent is typically required to collect, use, or disclose personal information. These statutes also create obligations as to how employers store and retain employees’ personal information. 

9. EMPLOYMENT BENEFITS 

Canada Pension Plan (CPP) and Employment Insurance (EI): Employers in Canada are required to pay Canada Pension Plan contributions and Employment Insurance premiums to the Canada Revenue Agency (CRA), calculated as a percentage of payroll, subject to yearly maximums. Employees are also required to pay Canada Pension Plan contributions and Employment Insurance premiums; employers must withhold these employee contributions from the employee’s salary and remit these to the CRA together with the employer contributions/premiums. 

Health Care. Government-funded medical care is available to all citizens in Canada. However, government health insurance does not cover everything (e.g., vision and dental care), and so many employers provide group extended health insurance, intended to pick up where the government plan ends. In order to be competitive, an employer might wish to provide such extended coverage.  

Other Private Insurance. Many employers also choose to provide employees with long term disability insurance and life insurance as an additional employment benefit, in addition to other types of non-mandatory coverage.  Short term disability coverage is less common, particularly for smaller employers.  Although some government-funded disability benefits are available (currently for up to 17 weeks), and some minimal life insurance is available through the Canada Pension Plan, most employers offer some type of additional coverage to their employees.  

Retirement Savings Benefits. Canada has government provided pension benefits, but many employers will supplement these by offering a Group Registered Retirement Savings Plan (RRSP), similar to a 401K Plan in the U.S.  This allows employees the opportunity to establish personal savings accounts for tax-deferred retirement savings. Under this system, employees can establish individual, personal accounts on their own with a bank or other provider, and an employer can optionally choose to make its own contributions to the employee’s individual account in whatever amount it elects. Larger employers may have a Registered Pension Plan, although they are becoming less common due to high administrative costs and potential funding deficits for defined benefits plans. 

10. LANGUAGE REQUIREMENTS IN THE WORKPLACE (QUEBEC ONLY) 

The province of Quebec’s sole official language is French. On May 24, 2022, the Québec National Assembly passed Bill 96, An Act respecting French, the official and common language of Québec, amending the Charter of the French Language in order to introduce new measures to ensure the predominance of French in the workplace.  

Most of the amendments made by Bill 96 came into force on June 1, 2022. 

Accordingly, workers have a right to carry on all activities in the workplace in French. As a corollary to this right, an employer must use French in all written communication to its employees or exclusively in a language other than French, if so expressly requested by the employee.  

Under the Charter of the French Language, employers must also: 

• use French in any employment contract the employer enters into (or in a language other than French at the express wish of the parties); 
• draft employment-related documents in French and, if available in another language, ensure that the French documents are available on equally or more favourable terms; 
• if a job posting is posted by the employer or a recruiter in a language other than French, the employer must ensure the postings in English and French are posted simultaneously, using transmission means of the same nature and that reach a target audience of a comparable size; and, 
• not require the knowledge of a language other than French to obtain or maintain a position, unless the nature of the duties require such knowledge and the employer first took reasonable means to avoid imposing such a requirement. 

As of June 1, 2025, all businesses employing more than 25 persons in Quebec for at least 6 months must register with the OQLF and comply with various francization obligations (as previously discussed in Section B above). 

Businesses with 100 or more employees in Quebec must form a francization committee. This committee must analyze the linguistic situation and develop, implement and supervise the francization program. This measure does not have to be met from day one. It can be implemented gradually, over a certain period of time. 

Bill 96 has doubled the minimum fine for any misrepresentation to the Office québecois de la langue française or any contravention of an order of the Office québecois de la langue française, as well as when an offence is committed by a director or officer of a legal person. It also provides that, unless they have exercised due diligence, directors of a legal person will be presumed to have committed an offence by that legal person.