Employment Law governs the rights and obligations between individuals and their employers. The foundations of employment law arise from the common law in most provinces and the civil law of Québec. The main obligations of the employer are to provide work agreed to, pay the remuneration, and provide a safe workplace. The employee must execute the work agreed to and be loyal to the employer. The practice of employment law generally involves the negotiation and drafting of individual employment contracts, advice with respect to the numerous aspects of the main obligations, the drafting of non-solicitation and non-competition clauses, golden parachute compensation plans, and arbitration clauses. It involves litigation arising from the employment relationship, including unlawful or dismissal actions, as well as the application of provincial and federal related statutes such as Labor Standards, Human Rights, and Health and Safety legislation.
While the novel coronavirus has affected every area of law, the changes to the employment law landscape in Canada have been profound. Much of Canada’s workforce has seen their terms of employment changed. In the midst of the economic fallout of the pandemic, the Canadian Government created two significant programs to provide support to workers who have been laid off or seen their wages decrease: the Canada Emergency Response Benefit (CERB) and the Canada Emergency Wage Subsidy (CEWS).
In an interview in Canadian Lawyer, George Vassos, a partner in Littler Mendelson P.C. in Toronto, expressed the dilemmas employers face during these turbulent times: “Employers who’ve been significantly negatively affected by COVID … have to make significant decisions: what are we doing with your workforce? Are we convinced 50 per cent of our business is gone forever, do we cut 50 per cent of our staff, do we opt for temporary layoffs … before we get to mass terminations?”1 Most employers will go the temporary layoff route and eliminate the cost of a mass termination, he says.
Canadian employment standards legislation generally requires employers to provide substantial notice before a mass termination. This can be difficult for companies already facing large revenue drops such as the retail, restaurant, airline, hotel, and car rental industries. However, the biggest problem for most employers, according to Vassos, is their obligations under common law, he adds, where terminated employees may have a higher common law entitlement. “The only way to solve it is if the employer has an enforceable termination clause in an employment contract or a hiring letter,” he adds; for example, what’s required under the Employment Standards Act, plus one extra week’s salary. That could mean a difference of paying for a notice period of nine weeks rather than four months under common law, he says.
Validity of termination clauses has become increasingly more litigated, and the courts have said all termination clauses in a contract must ensure, at a minimum, that employment standard obligations are respected; otherwise, the clause is void.
Major Changes to the Canada Labour Code
As set out in a report by Fasken Martineau DuMoulin LLP lawyers Shane Todd and Rachel Devon, changes to the Canada Labour Code came into force on September 1, 2019. “The changes apply to a dizzying number of labor standards from scheduling to breaks, vacations to holiday pay, and leaves of absences, among others. Given the sweeping nature of these reforms, the changes will have a significant impact on federally regulated workplaces.”2 Employers should review the changes to ensure they are in compliance.
The following is a summary of the subjects upon which there are new standards that came into force. Many contain important exceptions, and managers and other certain employees are excluded from several of these rules.
- 24 hours’ notice of shift change
- Right to refuse overtime for family responsibilities
- 96 hours’ advance notice of schedule
- Paid time off in lieu of overtime
- Modified work schedules
- Medical breaks
- Nursing breaks
- 30-minute breaks every five hours
- Eight-hour rest periods
- Right to request flex work
- Minimum eligibility for leaves
- Leave for traditional Aboriginal practices
- Personal leave
- Vacation entitlements
- Continuity of Employer for contract tenders and provincial to federal transfers
- New regulations
- Raymer, Elizabeth. “COVID-19 and its reliefs – from mass termination rules, and through government programs.” Canadian Lawyer. August 21, 2020. https://www.canadianlawyermag.com/practice-areas/labour-and-employment/covid-19-and-its-reliefs-from-mass-termination-rules-and-through-government-programs/332605.
- Todd, Shane, and Rachel Devon. “Sweeping Changes to the Canada Labour Code in Force September 1, 2019 - Federal Employers, Are You Prepared?” Fasken Martineau DuMoulin LLP. August 9, 2019. https://www.fasken.com/en/knowledge/2019/08/federal-sector-update-changes-to-the-canada-labour-code.