Rules apply in province where employee works, not where employer is located
Many employers are now looking at hybrid and remote work as a reality, as opposed to a temporary solution to the COVID-19 pandemic. Hybrid and remote work environments can be a great way to maximize the talent pool and meet your employees’ needs.
However, where your employee performs their work can have a significant impact on their rights and your obligations towards them.
Many employers have not adjusted their employment agreements to account for where their employees perform their work, opening them up to potential liability and risk.
As a starting point, the key thing to remember is that in general, within Canada, where an employee performs their work for the company determines which province’s laws apply, with respect to employment standards, health and safety, and human rights. The company’s location does not matter.
Why does it matter?
Workers’ rights vary from province to province: Let’s say your company is based out of Montreal and an employee relocated to Ottawa during the pandemic and remains there, working from home. That employee is no longer protected under Quebec’s legislation for worker’s rights, and Ontario’s legislation now applies. This means that the company now must comply with the minimum employment standards that are set out by Ontario’s Employment Standards Act, 2000 (ESA) for key factors such as (but not limited to) sick days, leaves of absence, public holidays, overtime, and vacation.
In addition, each province has its own notice period, setting out what employees are entitled to upon termination. If the company were to terminate the employee's employment, they would now need to look at Ontario’s ESA to determine what they need to pay the employee (including benefits) and for how long.
To whom the ESA applies also depends on the province, with each province’s codified employment standards setting out a list of occupations and industries that are not covered by the province’s minimum standards or who have special rules or exemptions.
Internal policy requirements vary according to jurisdiction: Each province also has legislation - that can change with amendments introduced year by year - requiring employers to have certain internal workplace policies in place. This matters because a company’s obligations towards its employees may extend beyond simply knowing and applying the minimum standards. They may also be required to create written policies for their employees.
For example, in Ontario, employers with 25 or more employees must create a written policy on disconnecting from work and provide their employees with this policy.
Legal remedies vary from province to province: The remedies and legal avenues an employee has access to for claims of breaches of their worker’s rights vary in each province. For example, employees who believe they have faced discrimination in Quebec can file a claim with the Commission des droits de la personne et des droits de la jeunesse to request an investigation from the commission and representation at the Human Rights Tribunal.
This process differs from Ontario, where employees would not submit individual claims of discrimination directly to the Ontario Human Rights Commission, but rather file claims with the Human Rights Tribunal of Ontario (HRTO). In addition, because the province has its own adjudication process in place, monetary damages available to employees also depend on ranges that have been established based on the applicable legislation or case law.
Case law examples
Here are some case law examples:
In Shu Zhang v. IBM Canada Limited, 2019 CanLII 79641, although an employee worked for a company with headquarters in Ottawa, since moving to British Columbia the employee had performed work for the company in that province for the majority of the time, which included attending virtual meetings with co-workers based in Ontario. This meant that when it came to payments owed at the end of employment, British Columbia’s ESA applied, not Ontario’s.
In Arquette v. Stuart Olson Northern Ventures Inc., 2020 HRTO 103, while an employee worked for an employer that was based both in Ontario and the Northwest Territories, the actual work was exclusively performed in the Northwest Territories when an alleged breach of human rights occurred. As a result, the HRTO refused to adjudicate the human rights application and stated that it would be up to the Northwest Territories Human Rights Adjudication Panel to address the issues.
If employees are permitted to work from anywhere within Canada, ensure that you know where they are performing their work so you can tailor their employment agreements and internal workplace policies to comply with the province’s legislation. In addition, consider having rules and policies in place that require them to notify the company if their work location changes.
Employment agreements
A company that is prepared to have employees working out if any province in Canada should create template employment agreements for different provinces and update existing employment agreements once an employee starts performing work from a different province.
Employers can add a clause to their employment agreements that explicitly states that the law of a specific province applies, even if an employee ends up moving to a different province and performing the work there. However, caution should still be exercised as there is no guarantee that a court will uphold a choice of law clause in the context of employment.
In addition, because the court is concerned with an employee’s vulnerability in an employment relationship, it will examine whether the clause is bona fide and legal, in addition to exploring public policy concerns.
