|A Crash Course on Canadian Employment
Law for Americans
by J. Talbott, LL.B.
“What do you mean we can’t just fire her?” It is a question often asked by American managers coming to grips with Canada’s employment laws. And, as American corporations continue to open branches in Canada, or simply buy Canadian companies, this question and others like it are begging to be answered. So, offered as a primer for Americans managing employees in Canada, this article will cover some of the key differences between employment law in the two countries.
First off, dismissing an employee who has committed no wrong without any compensation is as unthinkable in Canada as Thanksgiving in November. At-will employment—as it is known in the U.S.—is effectively barred by Canadian employment laws. So, how to terminate an employee? Generally, there are two choices—either locate evidence of just cause, or pay the employee to go.
Just Cause or Reasonable Notice
Just cause is a double-edged sword. Employees can be dismissed without notice for certain isolated acts—like theft, violence, harassment, or other acts serious enough to irreparably damage the employment relationship. Alternatively, employees can be fired as a culmination for a series of minor incidents. But, dismissing for a series of lesser incidents requires employers to use progressive discipline. Employers must give warnings of increasing severity to employees and must carefully document the use of these warnings.
Since Canadian managers are as human as their U.S. counterparts, they often fail to collect the paperwork necessary to prove just cause. And without an “at-will” doctrine, Canadian managers instead rely on the familiar doctrine of cold, hard cash. Paying employees to leave their jobs is a common practice in Canada. “Reasonable notice”—a common law doctrine not to be found in any statute—requires employees to be given a significant heads up of their impending dismissal, or provided with pay in lieu of that notice.
There is no scientific rule for calculating reasonable notice, which is usually measured in weeks or months of an employee’s salary. The courts indicate that the amount of such notice will lengthen as the age and seniority of the employee increases. Employees in professional positions will receive more than employees in blue collar or service jobs. The case of David v. B’Nai Israel Congregation  O.J. No. 1238 (Gen. Div.) resulted in one of the lengthiest awards for reasonable notice. A dismissed rabbi with 26 years of service was awarded the equivalent of 30 months of pay for the reliance he placed in his congregation’s leaders and for the callous way in which he was fired. Needless to say, for those new to Canada, contact an employment lawyer for advice about dismissal.
Canada’s Supreme Court has set the trend for other courts to follow, offering generous payments to departing employees. The Court views employment relationships as inherently lopsided—characterized by a powerful employer extracting concessions from a weak employee. As a result, the Court has fashioned another doctrine American managers must come to know—bad faith dismissal. Basically, with this tool an employee who is dismissed in a callous fashion can increase their reasonable notice entitlement by up to a third for the way in which he was fired.
Oddball Canadian HR Practices
This leads to particularly Canadian human resources practices. Managers may, for example, need to put off the employee’s date of dismissal if the employee is experiencing hardship in his personal life. “If something traumatic is going on in the employee’s life,” says Janice Payne, an employment lawyer in Ottawa, “most employers in Canada would not lightly compound the employees problems with termination of employment.” To do so may risk incurring greater legal liability.
And, in Canada, the relatively natural act of giving birth is fraught with complications for employers. “Even the men want to get pregnant!” says Micki Bell, a former HR Director for a U.S. company in Canada, referring to Canada’s generous maternity leave laws. In Canada pregnant women often leave on maternity leave for up to one year. However, they may choose to return to work early, allowing their spouse to use paid parental leave and stay home and look after the baby. This is a right granted under provincial law and funded under the federal government’s Employment Insurance program. During the maternity leave, the employer does not owe any obligation to maintain an employee’s wages. However, the employer must return the employee to her former job, or one comparable to it, at the end of the leave.
This piece originally debuted in the Human Resources Professional Association of Ontario’s HR Professional magazine.
ABOUT THE AUTHOR
Specializing in training and coaching HR managers, J. Talbott, LL.B., is a labour lawyer, consultant, and founder of the Ottawa firm, Labour Relations Consultants. He was formerly Director of Human Resources for a unionized, national non-profit organization. His contact information is given below.
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