What U.K. Employers Should Know About Canadian Employment Law

Canadian employment law shares many similarities with U.K. employment law by virtue of Canada having inherited its common law system from the U.K. Nevertheless, it is important for U.K. employers seeking to expand operations into Canada to understand how Canadian employment legislation operates within a federalist state.

Structure of Laws

Like the U.K., Canadian employment relationships are governed by both private contract law and public law including employment protection and other legislation. Canada's 10 provinces and three territories each have their own employment legislative regime. While statutes vary from province to province, employment law is largely similar across the country — with the exception of Quebec, the only Canadian province to use a European-style civil law system. In Quebec, while common law principles are often respected in employment matters, additional care must be taken to recognize the applicable civil legislative employment codes.

Provincial and territorial employment legislation applies to most employment relationships save for two specific industries assigned to exclusive federal jurisdiction under Canada's constitution, such as those related to banking, interprovincial transport, intellectual property and telecommunications. These operations are governed by federal law and the Canada Labour Code, which have unique employment and adjudicative provisions.

Employment Agreements

Employers and employees in Canada are not required to sign a written employment agreement to commence an employment relationship. Without a signed employment agreement, employees nevertheless have rights under minimum employment standards legislation and the common law. Minimum employment standards laws, such as Ontario's Employment Standards Act, 2000, give employees a set of minimum rights which may not be contracted out from. Any attempt by the employer or its agent at removing an employee's statutorily protected rights by agreement is void and can void the written contract.

Employers are, however, allowed to contract out of common law employment rights. Most Canadian employers do so because common law rights are generally more onerous to the employers than the rights given under employment legislation. For this reason, the standard practice of Canadian employers is to provide a written contract to define the employment relationship in more specific terms. U.K. employers should therefore seek legal advice in drafting employment...