Employers in Ontario are either provincially or federally regulated. This designation streams from the Constitution Act, 1867 which divides powers between provincial and federal jurisdictions.

As an employer, it is very important to determine whether your workplace is federally or provincially regulated to ensure you are complying with the proper obligations and legislation. An employer's main operation or type of business will determine what head of power the organization is under. Some types of organizations that are under federal jurisdictions include First Nations, air and rail transportation, telecommunications, parliament, banking, and postal services. Provincial jurisdiction includes, but is not limited to, general businesses, education, property and healthcare.

The federal and provincial work sectors are governed by different legislation. The Canada Labour Code (the “CLC”) governs federal employers and employees across Canada. In Ontario the Employment Standards Act (the “ESA”) governs provincial employers and employees. Although the employment landscape may seem similar across both sectors, some sections of the two pieces of legislation provide for a very different approach to governing the employment relationship. The Canada Labour Code and the Employment Standards Act both provide minimum standards that employers must maintain within the employment relationship, however which legislation applies depends on the workplace. An employer cannot decide which to apply, or pick and choose parts of each legislation to govern different aspects of the employment relationship.

To properly manage the employment relationship and your organization you should be aware of the following areas that differences arise:

Termination- Justification and Entitlements:

The grounds upon which a termination is justified and the minimum entitlements owed to employees upon termination differ for federally and provincially regulated organizations. Simply stated, federally governed employers do not have the right to dismiss an employee without just cause if the employee has worked for 12 or more continuous months for the employer. Federal employers are called to prove just cause to dismiss an employee. The only way to prove just cause is by showing that the employer has properly applied progressive discipline of increasing severity that is proportional to the misconduct the employee has failed to correct. This is a high threshold.

On the other hand, provincial employers can terminate the employment relationship with or without cause. If a provincially regulated employer wishes to terminate an employee without cause, they need to provide notice of termination or pay in lieu. When it comes to termination, pay in lieu of notice is a common practice. Essentially, pay in lieu of notice is the amount, based on an employee's years of service, that an employee would be entitled to under the ESA in the event that their employment has been terminated. Employers and employees generally assume that this termination pay is required upon the end of the employment relationship. However, this is not always the case. While provincially regulated employers can terminate an employment relationship by providing pay in lieu of notice in the absence of a valid justification or just cause as per the ESA, the CLC does not permit the same.  A federally regulated employer cannot offer termination notice or pay in lieu if they wish to terminate an employee without cause.

Of course, there are exceptions and nuances to this; federally regulated employers who wish to terminate an employee who has worked for the organization for less than 12 months have different rights, a lack of work or discontinuance of a function may allow for a termination, and severance pay may come into the picture in some circumstances. The best course of action if you are an employer thinking about terminating an employment relationship, or an employee who has been terminated and is wondering if this termination was permissible under law, is to reach out to an employment lawyer before taking any action steps.

Wrongful Dismissal:

Another difference between the ESA and the CLC is the potential remedies afforded to an employee who challenges a termination. If an employee who is terminated from a position under a provincially regulated employer claims a wrongful dismissal, then they need to bring their case forward through the court system and seek remedies provided for by a court of competent jurisdiction.

However, if an employee has been dismissed from a federally regulated organization after working there for 12 or more continuous months and they feel it was an unjust dismissal then they may bring a written complaint to an inspector under the CLC. The complaint must be filed within 90 days of the date of dismissal. If the complaint is not settled it may go to Adjudication by request of the inspector. This is an added layer of protection against unjust dismissals for federally regulated employees. Do not be mistaken, employees of federal jurisdiction can still bring an action in the courts, but they also have the option to bring an unjust dismissal complaint under s.240 as well.

The remedies that can be provided for these federal employees in the event that an unjust dismissal is found in the complaint and adjudication process are different and more expansive in some ways than those of a court of law. Some remedies an Adjudicator may order include providing a reference letter, amending the employee's record of employment, a substitution of the termination for a lesser form of discipline, monetary compensation, damages, legal costs and reinstatement.

One of the major differences between the provincial and federal regimes is that if a federally regulated employer unjustly dismisses an employee, Adjudicators have the power to reinstate employees to their position. This means that they can order the employer to rehire the employee with back pay after being dismissed. Reinstatement is not an automatic right for employees who have been unjustly dismissed, but is a possible remedy that may restore employees to their original position or similar position in proper situations. Some of these remedies are not possible in a court of law but are available with these tribunals.

Overtime:

Under the Canada Labour Code, the standard hours of work for an employee are not to exceed 8 hours in a day or 40 hours in a week. The Employment Standards Act outlines that for most positions, if an employee works over 44 hours in a work week, then they need to be paid for those hours. Overtime is any time worked in excess of these hours. Under the CLC and the ESA, employees must be paid at lease 1 ½ times their regular rate of pay for hours worked in excess of the standards of work outlined in each legislation unless the Employer's policies provide otherwise. It is important to note that overtime does not apply to certain positions such as dentists, lawyers, engineers, doctors or managers as defined by the CLC.

Bill C-65- Harassment & Violence:

Harassment and violence in the workplace is a serious issue that is often unreported or unresolved. In an effort to address these concerns, Bill C-65 creates obligations for federal organizations to actively address harassment and violence within their workplaces. Bill C-65 creates regulations under the Canada Labour Code that require employers to take action and encourage disclosure by employees within the workplace. With the implementation of Bill C-65, there are now both proactive and reactive measures that are mandatory for employers to apply within their organizations and the duty to investigate when needed.

Harassment and violence prevention laws are not covered under the ESA directly, but rather can be found in the Ontario Health and Safety Act. There are some obligations for employers outlined here, however they do not meet the threshold required of federal employers in the prevention of and response to harassment and violence in the workplace.

Leaves of Absence:

The leaves of absence that employees are entitled to also differ depending on whether the CLC or the ESA applies. Depending on the leave, the eligibility to take the leave, whether it is paid or unpaid, and the length of the leave vary. The leaves of absence are similar in nature but not identical. As an employer it is important to be mindful of these differences to ensure you are complying with the applicable legislation in granting employees leaves of absence in which they are entitled.

The above differences between the ESA and CLC are not exhaustive and are simply a high-level overview of some of what is required by employers and employees. That being said, this shows the importance of obtaining legal advice. This intricate area of law takes time and experience to become familiar with and not every legal practitioner can be well versed in all areas of law. Reach out to an employment lawyer who regularly practices in this area to receive the most accurate advice.

At SDLaw, we focus on providing strategic advice to employers and employees in this area of law. Call 705-268-6492 or email info@sdlawtimmins.com to connect with one of our lawyers today.