All employees, whether ‘full-time’ or ‘part-time’, are governed by employment standards legislation in the various provinces and in the federal jurisdiction, which sets out minimum standards for things such as pay, hours of work, vacation, and leaves of absence. The Canadian common law (or, in Quebec, the Civil Code) also applies to employment relationships. However, depending on applicable law, some employees are exempt from portions of such legislation (for example, managers, certain health and legal professionals, etc.). Some minimum standards legislation creates a category of “assignment employees”, typically assigned to a workplace by a temporary help agency, to whom are given a particular set of rights and protections.

If an employee is part of a group of employees represented by a union, their legal rights and obligations are governed by their collective bargaining agreement as well as labor relations legislation in the jurisdiction where they are employed, or according to the industry in which they work.

Canadian law differentiates between employees and independent or dependent contractors (who are self-employed).

In Ontario, neither independent contractors nor dependent contractors are considered to be employees, although misclassification claims are relatively common.  Contractors are not protected by employment standards legislation, and employers are not usually required to deduct taxes and other payroll deductions from their pay.

In Quebec, dependent contractors may be considered employees and therefore, have certain entitlements under employment standards legislation.

The determination of whether a contractor is independent or dependent is fact-specific and depends on a number of factors, including whether the contractor was dependent on the employer for most or all of its business.

A contract may be either fixed-term or indefinite.

Clear and explicit contractual language is required to create a fixed-term employment relationship. The end date of a fixed-term contract must be clear and explicit (and maybe either a fixed date or the occurrence of a specific event). Otherwise, a court may characterize the employment contract as indefinite. Also, the uninterrupted succession of several fixed-term employment contracts may convert, in fact and law, a fixed-term agreement into an indefinite-term employment relationship. Further, a fixed-term employment contract will be tacitly renewed for an indefinite term where the employee continues to carry on work after the expiry of the term without objection by the employer. 

When the employment contract is silent on the term of employment, the common law (as well as the civil law in Quebec) presumes the employment is indefinite. The indefinite-term employment relationship continues until the parties mutually put an end to it, the employer terminates the relationship, the employee resigns, or the contract is frustrated. In contrast, fixed-term employment contracts generally end automatically upon expiry of their term or upon occurrence of a specific event (unless they are terminated beforehand).

All employees in the common law provinces as well as in Quebec have a contract of employment with their employers, whether written or oral. The common law and the employment standards legislations will imply certain terms of employment if there is no enforceable written contract to the contrary. 

The employment contract shares many of the same essential features of a commercial contract. There must be offer, acceptance, consideration (in common law provinces), certainty of terms, and capacity to enter into a contract.

Nevertheless, the notion that the employment contract is unique and in many important ways distinct from commercial contracts has been repeatedly affirmed by Canadian courts. Employers and employees cannot contract out of the minimum standards established by legislation. Any provision purporting to contract out of these standards will be void for illegality. As such, there are many implied terms contained within any Canadian employment contract compared to a standard commercial contract.

Under employment standards legislation and the common law, generally, yes.

An assignment of a contract of employment is not permitted without the consent of the employee. In Quebec, there exists an exception to this rule in the event of a sale of a significant part of a business (see our answer to the question below).

In Ontario, if a company is purchased through a share purchase transaction, the employees do not generally have a right to object or to obtain severance unless the fundamental terms of the employment relationship change and the employee claims constructive dismissal.

In Ontario in an asset transaction, in a non-unionized context, the purchaser is free to choose whether to hire the target’s employees in the common law provinces of Canada. If the buyer offers employment to (all or part of) the target’s employees, the latter has the right to refuse the buyer’s offer and to stay with the seller (with the risk of being terminated by the seller). The buyer is not obligated to match the pre-closing terms of employment the employee had with the target unless required to do so under the purchase agreement. If the buyer does not hire the employee and the seller terminates the employee, that employee will be entitled to severance as any other employee whose employment is terminated without cause. If the buyer hires the employee, there usually will be continuity of employment and any subsequent termination must take into account the employee’s service with the seller. In Ontario, the exception to this is when thirteen weeks passed before the employee is hired by the buyer.

Further, in Ontario, if the employees are unionized, the buyer will step into the shoes of the seller and be subject to all of the terms and conditions of the collective bargaining agreement upon closing the transaction.

In Quebec, in the event of an asset purchase where a significant part of an undertaking’s assets are transferred, the Civil Code of Quebec provides (with respect to non-unionized employees) that there is no termination of employment upon the change of the legal structure and existing employment contracts are binding on the successor of the employer. In other words, (non-unionized) employees who are providing services in relation to the transferring assets continue their employment automatically with the purchaser of the assets after the transaction closes, and do not have a right to object to the transfer as such.   

The Quebec Act respecting labor standards further stipulates that (non-unionized) employees who remain employed by the purchaser carry forward their prior service with the seller for the purposes of holiday pay, etc., and for the purpose of establishing entitlement to severance pay and notice of termination in the event of any subsequent termination of employment by the purchaser.

Moreover, where some (or all) of the seller’s employees are unionized, the Quebec Labor Code provides that the purchaser of an “undertaking” is placed in the role of the employer with regard to the bargaining certificate issued, except under very special circumstances. When all or most of the undertaking has been purchased, the purchaser will also be bound by the collective agreement(s) in force. There is no statutory definition of “undertaking” under the Quebec Labor Code, however, the courts have developed a definition for purposes of successor employer matters.

In certain cases, individual employment agreements may provide for a “golden parachute” (for example, a large bonus, contractual termination indemnity) in the event of a change of control.  However, these rights do not exist under Canadian statutes.

When an employer makes changes to a fundamental term of the employment agreement (for instance, a significant reduction in salary or alteration of duties), this may constitute a constructive dismissal. If the employee agrees or acquiesces to the change, the employer may continue under the changed terms. The employer may make unilateral changes to the terms of employment that are not fundamental; ideally, the employer has reserved the right to make such changes in the original employment agreement and the changes are rationally connected to the smooth functioning of the business.

If the change is unfavorable, employees may make a claim against the employer for constructive dismissal. If successful in their claim, the employee could be awarded wrongful dismissal damages, among other remedies.

Canada is not an employment-at-will jurisdiction. Employers in Canada may terminate non-unionized employees at any time, subject to providing the employee with notice or a payment in lieu of notice unless there is “cause” (the term used in Quebec is “serious reason”) justifying an immediate termination. Cause exists only in exceptional cases, typically involving serious willful misconduct on the part of the employee.

Provincial and federal statutes often establish minimum notice periods and the required amount of pay-in-lieu of notice, corresponding to the length of service. However, non-unionized employees have common law rights (and, in Quebec, a civil law right under the Civil Code of Quebec) to reasonable notice periods that go beyond these statutory minimums.

The factors typically considered pertinent to determining the reasonable notice period are: the character of the employment, length of service, nature of the position, the age of the employee, salary and the availability of similar employment, having regard to the experience, training and qualifications of the employee.

For a fixed-term employment contract, the reasonable notice requirement in the event of early termination is usually the remaining portion of the term.

In Quebec, for non-unionized employees with at least two years of uninterrupted service, the employer must have “just and sufficient cause” for termination. “Just and sufficient cause” covers both reasons linked directly to the employee as well as administrative reasons (such as job elimination due to financial difficulties). Please see our answer to question #10 for remedies in the event of termination without just and sufficient cause.

If an employee is dismissed without cause, they are entitled to the reasonable notice period or pay-in-lieu of notice (and continuation of benefits coverage during the required notice period). They may also be statutorily entitled to severance payments, depending on the length of service, the jurisdiction, and the employer’s payroll size. There is no statutory severance pay in Quebec.

In order to terminate without notice or pay in lieu of notice under the Civil Code, the employer must have “just cause” (or a “serious reason” in Quebec); if the termination is made for a grave offense, there is also no requirement to provide the employee with statutory notice. If the employer incorrectly believed that they had just cause, the employee may, depending on the circumstances, file a claim for the payment of the prior notice of termination and, in some cases, other additional damages, or exercise the right described in the next paragraph.

Please note that, in Quebec, non-unionized employees with at least two years of uninterrupted service who believe that they have been dismissed without just and sufficient cause (whether or not they were given reasonable notice of termination) may file a claim under Section 124 of the Act respecting Labor Standards asking to be reinstated in their employment and compensated for the loss of salary since the termination date (i.e., back pay). That said, reinstatement is generally not ordered in cases where relations between the parties are particularly tenuous. Where reinstatement cannot be ordered, the employee is entitled to an indemnity in lieu of reinstatement in addition to payment of lost salary since their termination date. Such recourse is free of charge for the employees who can be represented by a lawyer of the Quebec Labor Standards Board ("CNESST").

An employee has a duty to mitigate their damages by seeking alternative employment as soon as possible after the wrongful dismissal occurred. An employer should not be required to compensate the plaintiff’s avoidable losses. An employer may also be able to deduct collateral benefits from the plaintiff’s overall compensation loss claim.

Employees who claim wrongful dismissal may also be entitled to moral damages if the manner of dismissal was in bad faith (for instance, the employer was dishonest or unduly insensitive).

In Canada, certain statutes include protection for whistleblowers.

For example, under Section 425.1 of the Criminal Code, it is an offense for employers (or any person acting on behalf of an employer) to take a disciplinary measure against, demote, terminate or otherwise adversely affect the employment of an employee (or threaten to so) with the intent to (i) compel the employee to refrain from providing information to a person whose duties include the enforcement of federal or provincial law about an offense that the employee believes has been or is being committed by the employer (or an officer or employee of the employer) or (ii) to retaliate against an employee who has already provided such information. Employers found guilty of this offense are liable to imprisonment for a term of up to five years.

In addition, on July 14, 2016, the Ontario Securities Commission ("OSC") adopted OSC Policy 15-601 Whistleblower Program and established a whistleblower program in Ontario. There now exists, for whistleblowers, a civil cause of action against employers who commit a reprisal against them for cooperating with the OSC. The employer has the burden of proof to demonstrate that it did not commit the reprisal.

Similarly, on June 20, 2016, the Quebec Securities Commission ("AMF") launched its Whistleblower Program. Under said program, whistleblowers benefit from informer privilege as soon as wrongdoing is reported. The AMF’s investigators are trained specifically to respond to the issues faced by whistleblowers and make every effort to maintain the confidentiality of the information and the documents received, as well as the whistleblower's identity. The program also contains measures to protect whistleblowers against reprisal, such as immunity from possible civil suits as a result of their reporting of wrongdoing. The AMF does not offer any rewards to whistleblowers.

In addition, Section 122 of the Quebec Act respecting labor standards provides protection in the event where an employee is dismissed, suspended, transferred or is a victim of discrimination or reprisals (i) on the ground of disclosure by an employee of certain wrongdoings, notably within the meaning of the Anti-Corruption Act (or the employee’s cooperation in an audit or an investigation regarding such wrongdoing) or (ii) on the ground of a communication by an employee to the inspector general of Ville de Montréal (or the employee’s cooperation in an investigation conducted in connection with said communication).

Canada’s legal framework for privacy protection is a patchwork of provincial, federal, and common law rules.

The federal Personal Information Protection and Electronic Documents Act ("PIPEDA") governs how personal information may be collected, used and disclosed by all “organizations” regulated under federal jurisdiction (such as banks, airlines and telecommunications companies) in the course of commercial activity and within provinces without substantially similar private-sector privacy legislation. PIPEDA also applies to a federally regulated organization’s collection, use, and disclosure of personal information belonging to its employees, but does not apply to a provincially regulated employer’s collection, use, and disclosure of employee personal information for employment purposes. PIPEDA is administered by the federal Privacy Commissioner, who has the authority to make findings with respect to violations of the act, as well as refer cases to the Federal Court. An individual whose complaint has been handled by the Privacy Commissioner can also apply to the Federal Court if he or she is not satisfied with the outcome. The Federal Court can order compliance and corrective action, order an organization to publish a notice of its corrective action, and can order award damages to the complainant.

Some provinces have privacy protection acts (for example, the Quebec Act respecting the protection of personal information in the private sector, which is substantially similar to PIPEDA, and applies to all private-sector organizations with respect to the collection, use and disclosure of personal information and not just with respect to commercial activities), while others have statutes with provisions touching upon privacy (for example, Ontario’s Occupational Health and Safety Act).

The Government of Quebec has enacted privacy legislation that incorporates numerous features of the EU General Data Protection Regulation ("GDPR") into Quebec privacy law, including breach reporting requirements; requirements for outsourcing and transfers outside of Quebec, including an adequacy system; new individual rights, including a right to data portability, a right to be forgotten and a right to object to automatic processing; a robust accountability framework featuring a defined privacy officer role, an obligation to establish, implement and publish governance policies and practices as well as an obligation to conduct privacy impact assessments ("PIAs"). In addition, the bill would provide for the possibility of issuing significant administrative monetary penalties and criminal fines to sanction non-compliance.

Similarly, Ontario launched a public consultation process and published a discussion paper about new private-sector privacy legislation. The policy paper raises questions about statutory features common to the GDPR.

Note that the common law of privacy is evolving in Canada. “Intrusion upon seclusion” is a new tort that so far has only been successfully used between colleagues at work. However, there are class actions arising suggesting that employers may be liable for the intrusions of their employees. Employers are advised to provide clear explanations to employees about the company’s guidelines and consider designating a Privacy Officer.

In Quebec, an organization may become liable for damages should it collect, retain, use or disclose personal information in violation of the Act respecting the protection of personal information in the private sector. Such a remedy should be sought before the appropriate provincial court. Under the civil law principles, an organization will be liable for damages if a plaintiff demonstrates that the organization acted wrongfully, that the action resulted in damages to the plaintiff, and that there is a causal relationship between the damages suffered and the wrongful action.

Federal and provincial human rights statutes protect Canadians from discrimination on the basis of a number of protected grounds. The specific protected grounds vary across jurisdictions but generally include race, ethnicity, national origin, religion, age, sex, sexual orientation, marital status, family status, pregnancy, political convictions, disability, pardoned conviction, genetic characteristics, and gender identity or expression.

In rare circumstances, an employer may be in a position to justify a discriminatory policy if there exists a bona fide occupational requirement ("BFOR"). For example, the requirements of a particular job may justify the implementation of a mandatory retirement policy in limited circumstances, if a particular job is physically demanding. The Supreme Court of Canada upheld the mandatory retirement of police officers at the age of 60 as a BFOR. There was sufficient scientific evidence of physical diminishment and sufficient evidence of the employer’s good faith in negotiating the retirement age with the union.

Employees in Canada have statutory rights to vacation, medical and parental leave. The specific content of these rights depends on whether they are provincially or federally regulated, and, if the former, which provincial statute governs them.

Under the Canada Labor Code, shared parental and maternity leaves and bereavement leave entitlements were increased in 2019, and the minimum length of service for several categories of leave was eliminated. Effective December 1, 2022, the Canada Labor Code provides employees with up to 10 days of medical leave with pay per year. 

Quebec adopted legislation in 2018 whereby leave entitlements were globally improved, e.g., employees are now entitled to the third week of paid vacation after three (instead of five) years of service, and the 3 months’ minimum service requirement for unpaid sick leave of up to 26 weeks over a 12-month period was eliminated; the duration of certain other leaves was extended. Further improvements came recently into force at the end of 2020/beginning of 2021.

If an employer has concerns about recent changes to leave benefits in a particular province, they should contact Canadian counsel in that jurisdiction.

Restrictive covenants are recognized in Canada. However, rules of interpretation and enforcement are stricter for employment contracts than for commercial contracts. Reasonable temporal and geographic (and, in Quebec, the scope of prohibited activities) restrictions are required for non-competition covenants, and reasonable temporal restrictions are required for non-solicitation provisions.

Overly broad or ambiguous provisions will be unenforceable.

In order to be reasonable, the scope of protection granted by the restrictive covenant should be limited to business activities in which the employee was directly involved during the duration of his/her employment, and not go beyond what the employer needs for the protection of its business. The activities meant to be prohibited by the covenant must be defined with precision; a blanket prohibition on “competing business” without further definition will likely be unenforceable.

Generally, non-solicitation clauses are more likely to survive judicial scrutiny than non-competition clauses.

Note that, in Quebec, an employer cannot invoke a restrictive covenant in the event of a termination without a serious reason (i.e., cause), constructive dismissal or if it gave the employee reason to resign.

Employers in Canada can terminate employees for refusing to sign a restrictive covenant agreement, however, it would need to be a “without cause” dismissal as refusing to sign the covenants would not constitute cause for termination. Additionally, employers should be cautious about doing this as it may attract punitive or bad faith damages.

In Quebec, if the employee has more than two years of uninterrupted service, they would be entitled to claim for their reinstatement as their termination would not have been made with just and sufficient cause.

If the employer wishes to make an amendment to the employment agreement (for example, adding a restrictive covenant), fresh consideration must be provided (for example, in the form of a signing bonus or other benefit to which the employee is not already entitled).  Continuing employment would not be sufficient consideration.

In Quebec, consideration is not necessary for the restrictive covenant to be enforceable. That said, Quebec employers cannot oblige existing employees to sign a restrictive covenant since this would constitute a material change to their employment conditions, which is subject to their consent.

Canada and Quebec have public (i.e., government-administered) pension plans into which employer and employee contributions must be made. Employers are, however, generally not required to implement a private pension or retirement savings plan. 

Quebec has introduced legislation (i.e., the Voluntary Retirement Savings Plan Act) pursuant to which employers with at least 10 employees are obliged to offer their employees a voluntary retirement savings plan when no other pension scheme is being offered. Employers must automatically sign up eligible employees and deduct contributions unless employees opt out of the plan. The said plan will be managed by a legal person (generally an insurance or a financial institution) holding an authorization granted by the Quebec regulator (i.e., the Autorité des marches financiers). The employer does not have the obligation to contribute to said plan.

No. The provision of employee health and welfare benefits is discretionary.

Federal and provincial human rights statutes protect Canadians from age discrimination. Human rights tribunals now prohibit mandatory retirement policies, except in very limited circumstances (see our answer to the anti-discrimination question, above).

As such, employees are generally entitled to continue working notwithstanding the fact that they have reached or passed a certain age, and employers are generally prohibited from dismissing, suspending or retiring an employee on the mere ground that they have reached or exceeded a certain age.

An Ontario Human Rights Tribunal decision held that terminating an employee’s health, dental and life insurance benefits at age 65 constituted age discrimination and violated the Ontario Human Rights Code. Because of this decision, employers should be cautious about ceasing benefits for older employees who reach a certain age.

In Quebec, employers may establish benefits plans that terminate benefits upon a certain age (for example, 65), regardless of whether the employee continues to work. Employers may establish (private) pensions under which employer contributions cease at a certain age (for example, 65), regardless of whether the employee continues to work.

As regards the public pension plans, employees can continue to work even if they receive their public pension. Contributions to said plans are no longer required when the employee turns 70, even if the employee is still working.

Many employers in Canada have suspended their COVID-19 vaccination policies. When those policies were in place, the policies needed to have exceptions for employees who could not get the vaccine due to a ground protected under human rights legislation, such as disability or creed. The determination of whether a COVID-19 vaccination policy is reasonable is ultimately fact-specific and depends on the circumstances. As the health risks associated with contracting COVID-19 decrease, it may be more difficult for employers to justify that a policy that makes COVID-19 vaccinations mandatory is necessary for health and safety purposes.

The answer would likely depend on the circumstances. Generally, employers are able to require employees to return to work in the office. However, employers have been faced with accommodation requests from employees who wish to continue working from home. In particular, if an employee needs to continue working from home due to family status (where applicable) or a disability, the employer will need to accommodate the request, to the point of undue hardship. If an employee does not have a valid reason justifying the request to be accommodated, and if all health and safety concerns are addressed, the employer may be able to discipline employees who refuse to return to the office.