U.S. companies looking to set up shop in Canada quickly notice the legal protections that employees have here. There is a maze of legislation and jurisprudence that can be challenging to grasp, but it’s important to realize which laws apply and what has legal jurisdiction over the employment of your workforce.
The overall legal system of Canada and the U.S. have similarities based on their origin in British common law – with the exception of the province of Quebec, which is grounded in the French Napoleonic Code of law. However, the Canadian system has developed many differences from the U.S. and, even within Canada, the rules may differ depending on where you are – particularly when it comes to the rules governing the employment relationship.
Like in the U.S., where employment laws involve a combination of federal rules and regulations and state laws, there are employment and labour laws issued by the federal government as well as the individual provinces and territories. However, the laws from these different levels of government don’t necessarily work together. Employers are generally subject to the laws of either the federal jurisdiction or provincial/territorial jurisdiction.
Federally-Regulated Employers
Federally-regulated employers are those in specific industries that generally operate across the country and fall outside the scope of the provinces and territories – such as transportation, banks and telecommunications, to name a few. These employers are subject to the federal Canada Labour Code and its associated regulations.
The Canada Labour Code essentially sets employment standards for employers under the federal jurisdiction. Matters such as termination obligations, overtime, job-protected leaves, sick days, occupational health and safety, and other employee protections fall under this legislation. When disputes arise from rights protected by the Canada Labour Code, such as unjust dismissal complaints, and are not settled between the parties, they are generally heard by an adjudicator with powers under the Canada Labour Code. Some issues are handled by the Federal Court (and the Federal Court of Appeal, if necessary). Federally-regulated employers with unions see disputes go before federal labour arbitrators.
Provinces and territories
Most other employers in Canada must follow the rules in the particular province or territory in which they operate and have employees. The legislation can have slightly different names – employment standards act, employment standards code, labour standards code, for example – but they all serve the same purpose and are analogous to the Canada Labour Code.
|
Province/Territory |
Legislation |
| Alberta | Employment Standards Code, RSA 2000, c E-9 |
| British Columbia | Employment Standards Act, RSBC 1996, c 113 |
| Manitoba | The Employment Standards Code, CCSM, c E110 |
| New Brunswick | Employment Standards Act, SNB 1982, c E-7.2 |
| Newfoundland and Labrador | Labour Standards Act, RSNL 1990, c L-2 |
| Northwest Territories | Employment Standards Act, SNWT 2007, c 13 |
| Nova Scotia | Labour Standards Code, RSNS 1989, c 246 |
| Nunavut | Labour Standards Act, RSNWT (Nu) 1988, c L-1 |
| Ontario | Employment Standards Act, 2000, SO 2000, c 41 |
| Prince Edward Island | Employment Standards Act, RSPEI 1988, c E-6.2 |
| Quebec | Act respecting labour standards, CQLR c N-1.1 |
| Saskatchewan | The Saskatchewan Employment Act, SS 2013, c S-15.1 |
| Yukon | Employment Standards Act, RSY 2002, c 72 |
Employment standards and occupational health and safety complaints under provincial employment standards legislation, along with any appeals, are heard by provincial courts and provincial appeal courts. Employment cases are generally heard by judges only, with jury trials rare.
Unionized employers – with the exception of those in the above-mentioned federally-regulated sectors – are subject to provincial labour laws and grievances are heard by arbitrators. Arbitration decisions can sometimes be appealed to provincial courts, although labour arbitration decisions are generally in a separate stream and are not considered in non-unionized employment law disputes and court decisions.
Human rights
The human rights regime in Canada is very similar to the employment and labour standards structure. Federally-regulated employers are subject to the Canadian Human Rights Act, with complaints heard by the Canadian Human Rights Tribunal. In turn, each province has its own human rights legislation that applies to employers under its purview and its own human rights tribunal to hear complaints. While there may be some differences from jurisdiction to jurisdiction, most human rights legislation in Canada is similar, particularly when it comes to protected grounds from discrimination.
Employer’s location
It is important for businesses to know which jurisdiction oversees their workforce and which rules they must follow. While the rules can be similar, there are often differences, such as statutory holidays to which employees are entitled. When employment disputes are litigated, decisions from other provinces may be considered and even persuasive, but there can also be regional differences in how the courts interpret certain employment law principles. There have been a few employment law issues where the courts in different provinces have been at odds with each other.
It is not just the employer’s location that has to be considered. With the rise of remote work, it is common for the employee to be in a different province than the employer. This is not an issue for federally-regulated employers, but for provincially-regulated ones, navigating the law can be trickier. Usually, the employment standards of the province in which the employer is located prevail, but there are exceptions, so employers need to do their homework.
Any employer setting up shop with employees in Canada needs to have a handle on the employment laws applicable to them and their workforce. And that starts with knowing which jurisdiction is calling the shots.