This is how we do things in Canada (Toughest HR Question)

Educating U.S. business leaders on the variations in employment law north of the border
By Brian Kreissl
|Canadian HR Reporter|Last Updated: 09/24/2013

Question: How do we educate executives at our parent company in the United States about the differences relating to Canadian employment law and practice?

Answer: I have heard of cases of U.S.-based executives erroneously believing they could rely on U.S. employment law provisions in Canada. Sometimes, those individuals can be quite shocked to hear of differences — or may even flatly refuse to accept, for example, that at-will employment doesn’t exist north of the border.

That can be problematic and expose the organization to legal liability. A few areas where this applies also include the absence of “right to work” legislation, drug and alcohol testing and eligibility for overtime.

‘Right to work’ legislation

A significant feature of U.S. labour law that differs from Canada is “right to work” legislation in some states. In right to work states, it is illegal to force an employee to join a union.

Although there has been talk of introducing such legislation, at present this kind of legislation doesn’t exist in Canada (although a compromise arrangement, known as the “Rand formula,” does exist in some Canadian collective agreements whereby an employee who does not wish to join a union would still be required to pay union dues unless he objects on religious grounds).

At-will employment

Employment at-will is essentially an American doctrine that provides that in the absence of specific provisions to the contrary in a contract of employment, either the employer or employee can end the employment relationship for almost any reason or for no reason at all without providing any notice or compensation.

While there are certain exceptions — and the courts have been steadily eroding the doctrine over the years — U.S. employees without a written employment contract generally have little recourse when they are terminated without notice.

That’s not the case in Canada where the provision of reasonable notice is generally required other than in cases of termination for cause.

And in most cases, non-union employees are governed not only by legislated employment standards termination provisions, but also by the common law, which generally provides for significantly lengthier notice periods than the legislation.

Drug and alcohol testing

It is safe to say Canadian courts and tribunals take a much dimmer view of drug and alcohol testing at the workplace than their American counterparts.

In general, in Canada, other than in highly safety-sensitive environments and cases where testing is capable of measuring actual on-the-job impairment, drug and alcohol testing in an employment context is generally proscribed, especially in a pre-employment context. That’s because dependency on drugs or alcohol is considered a disability under Canadian human rights legislation.

This runs contrary to the practices of many U.S. employers, which routinely conduct drug testing as part of the applicant screening process.

Exempt and non-exempt employees

There is a widely held belief in Canada that employers are exempt from having to pay overtime to salaried employees. This is a fallacy since employment standards legislation in most jurisdictions makes a distinction between supervisory/managerial employees and non-supervisory employees — not salaried versus hourly-paid employees.

This misconception may be partially attributed to the widespread knowledge, on the part of both Canadian and U.S. HR practitioners, of the exempt/non-exempt classification used in the U.S. under the Fair Labor Standards Act (FLSA).

According to the FLSA, eligibility for overtime is based on three factors:

• compensation level

• whether an employee is salaried or paid on an hourly basis

• the type of duties of that employee.

Explaining differences to U.S. superiors

So, how does one actually go about informing U.S. executives that their employment practices probably won’t fly under Canadian law and practice? For a start, I suppose, readers could send them this article. It may also be useful to send them employment law case summaries, excerpts from legislation and articles and downloads from Canadian law firms.

Another idea is to recommend or purchase books, periodicals or online services relating to HR and employment law in Canada so they can gain a better understanding of some of the differences.

Brian Kreissl is the managing editor of Consult Carswell. He can be reached at For more information, visit

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