doing business in canada - Davies Ward Phillips & Vineberg LLP

Employment LawCanadian employment legislation applies to employees who work in Canada even if the employer is outsideCanada. Most employees are under provincial jurisdiction, but federal legislation governs employees offederally-regulated undertakings such as telecommunications, railways, banking and certain interprovincialenterprises.MINIMUM STANDARDSEach province has employment standards legislation setting out minimum entitlements for employees. Similarstandards are provided for employees under federal jurisdiction by the Canada Labour Code.The main areas covered by this legislation include minimum wages, overtime, hours of work, vacation andholidays, pregnancy and/or parental leaves of absence, mass layoffs and notice of termination. Employmentstandards legislation applies to most employees, but most statutes provide specific exemptions from theirrequirements for certain types of employees (for example, commissioned travelling salespersons).In general, the standards imposed are relatively consistent across Canada. However, there can be significantdifferences in detail between jurisdictions, not only in the standards required, but also in other matters, such asthe remedies available to employees. For example, in Ontario an employer can only be ordered to reinstate aterminated employee in limited circumstances (for example, if the employer has improperly terminated anemployee because she has taken pregnancy leave), whereas the Canada Labour Code and Québec legislationgive employees potentially much broader rights to seek reinstatement.The legislated minimum standards cannot be contracted out of nor waived by employees. Terms morefavourable to employees than the minimum standards can also be agreed upon, in either an individualemployment contract or, in the case of unionized employees, a collective agreement. In Canada, agreed terms ofemployment will typically be more generous to employees, at least in certain respects, than the statutoryminimum standards. In addition, non-statutory legal principles may also impose additional obligations onemployers, particularly in connection with the termination of employees: see "Termination of Employees" below.In Ontario and Québec, employment standards legislation provides that where a purchaser of all or part of abusiness employs any of the former employees, their employment is deemed to be continuous for the purposeof the legislation (e.g., if the purchaser later terminates any of these employees, it must recognize their priorservice with the seller in giving notice of termination). The Ontario Employment Standards Act, 2000 alsoprovides for related employers to be treated as a single employer for purposes of the Act. This is meant toprevent employers from splitting their payroll in order, for example, to avoid payment of severance pay, which ispayable to employees with more than five years of service, if the employer has a payroll of $2.5 million or more,or there is a "mass layoff" of 50 or more employees.In Québec, An Act respecting labour standards generally does not apply to senior managerial personnel, whichhas been interpreted as applying only to a limited group of individuals who participate in the decision-makingprocess with respect to the policies and the strategies of the organization.The Québec statute provides recourse for employees who are victims of specified prohibited practices, includingpsychological harassment. A remedy is also available to employees who have more than two years of serviceand who believe they were dismissed without cause. An employee who is successful in challenging theemployer's conduct may request to be reinstated in his or her employment, in addition to being awarded any lostwages.56 Employment Law