Fired Without Warning in Canada: Wrongful Dismissal Guide

What laws govern employment and labor in Canada?

Employment and labor in Canada are governed by both federal and provincial or territorial laws. About 90% of workers are regulated by the laws of their province or territory, while federally regulated sectors follow the Canada Labour Code and related federal legislation.

Key points:

• Division of powers: The Constitution Act divides jurisdiction between:
  • Federal - banking, telecommunications, interprovincial transportation, airlines, broadcasting, federal public service, and some Crown corporations.
  • Provincial/territorial - almost all other private sector employers and provincial public service.
• Core statutes (federal):
  • Canada Labour Code (Part II: occupational health and safety; Part III: employment standards; Part I: industrial relations).
  • Employment Equity Act (for federally regulated employers, mainly larger ones).
  • Canadian Human Rights Act (via the Canadian Human Rights Commission and Tribunal).
  • Employment Insurance Act (EI benefits after job loss or leave).
• Core statutes (provincial/territorial, examples):
  • Ontario: Employment Standards Act, 2000, Labour Relations Act, 1995, Occupational Health and Safety Act, Human Rights Code.
  • British Columbia: Employment Standards Act, Labour Relations Code, Workers Compensation Act, Human Rights Code.
  • Quebec: Act respecting labour standards, Labour Code, Act respecting occupational health and safety, Charter of human rights and freedoms.
• Common law and civil law:
  • In most provinces, judge-made common law adds rights, especially regarding wrongful dismissal and reasonable notice.
  • In Quebec, the Civil Code of Quebec and specific labour statutes play a similar role.
• Authorities and regulators:
  • Federal Labour Program (Employment and Social Development Canada).
  • Provincial ministries of labour or employment standards branches.
  • Human rights commissions and tribunals.
  • Workers' compensation boards (for example WSIB in Ontario, WorkSafeBC in British Columbia, CNESST in Quebec).

What minimum employment standards apply to most workers in Canada?

Most workers in Canada are entitled to minimum standards for wages, hours, overtime, rest, vacations, and public holidays under employment standards legislation. These are non-negotiable minimums: contracts and policies can provide more, but not less.

1. Minimum wage

• Varies by jurisdiction and often by sector or age.
• As of 2024, examples (rounded, subject to regular increases):
  • Federal (Canada Labour Code) minimum wage: about $17.30/hour (indexed annually).
  • Ontario general minimum wage: $16.55/hour as of October 2023.
  • British Columbia general minimum wage: $17.40/hour as of June 2024.
• Special rates may exist for:
  • Students or young workers (in some provinces).
  • Liquor servers (where tips are common, though many provinces have eliminated lower liquor server rates).
  • Specific roles like hunting or fishing guides, farm workers, live-in caregivers.

2. Hours of work and overtime

• Typical maximum daily/weekly hours (varies by jurisdiction):
  • Commonly 8 hours per day or the normal workday, and 40-48 hours per week before overtime applies.
• Overtime pay:
  • Usually at least 1.5 times the regular wage after the weekly threshold (for example 44 hours in Ontario, 40 hours in BC, 48 hours under the Canada Labour Code).
  • Some provinces allow time off in lieu at the overtime premium with a written agreement.
• Rest periods and breaks:
  • Daily and weekly rest periods (for example 11 consecutive hours off in each 24-hour period under some legislation).
  • Meal breaks (for example 30 minutes after 5 hours of work under several statutes).

3. Vacations and vacation pay

• Standard minimums are typically:
  • 2 weeks vacation after 1 year of service.
  • 3 weeks after 5 years of service (some provinces reach 3 weeks sooner).
• Vacation pay:
  • Usually at least 4% of gross wages for 2 weeks of vacation.
  • Usually at least 6% of gross wages for 3 weeks of vacation.

4. Public holidays

• Most jurisdictions recognize around 9-12 statutory public holidays per year (for example New Year's Day, Canada Day, Labour Day, Christmas Day).
• Entitlements often include:
  • A day off with public holiday pay.
  • Premium pay (for example 1.5 times wages) if working on the holiday, plus a substitute day off or additional pay.

5. Protected leaves of absence (high level)

• Common statutory leaves include:
  • Pregnancy/maternity leave.
  • Parental leave.
  • Personal illness or injury leave.
  • Family caregiver or compassionate care leave.
  • Bereavement leave.
  • Domestic or sexual violence leave.
• Many leaves are unpaid under employment standards, but employees may receive:
  • Employment Insurance (EI) benefits.
  • Top-up payments from the employer if provided by contract or policy.

6. Who is excluded from minimum standards?

• Certain workers may be fully or partly excluded, such as:
  • Managers and supervisors (often exempt from overtime).
  • Professionals (for example lawyers, some regulated health professionals).
  • Some farm workers, seasonal or construction workers, and commission salespersons.
• Misclassifying an employee as an "independent contractor" does not remove their rights if, in substance, the relationship is employment.

How do employment contracts work in Canada?

Employment contracts in Canada set the specific terms of a job but cannot legally give less than the minimum protections in legislation. Written contracts are strongly preferred because they can clarify duties, compensation, and termination rights, but courts will scrutinize them closely, especially termination clauses.

1. Types of employment relationships

• Indefinite (permanent) employment:
  • No fixed end date.
  • Employee is usually entitled to notice or pay in lieu if terminated without cause.
• Fixed-term employment:
  • Ends on a specific date or after a project.
  • Early termination can trigger a duty to pay the balance of the term if the contract is poorly drafted.
• Part-time or casual:
  • Fewer or irregular hours, but many employment standards still apply on a pro-rated basis.
• Independent contractors:
  • Operate a business separate from the client; control their work, supply tools, and bear profit/loss risk.
  • Misclassified "contractors" may be found to be employees or "dependent contractors", with corresponding rights.

2. Essential contract terms

• Job title and duties: A clear description reduces disputes about role changes or constructive dismissal.
• Compensation: Salary or hourly wage, bonuses, commissions, benefits, and eligibility conditions.
• Hours and location of work: Including flexibility, remote work, or hybrid expectations.
• Probationary period: Often 3 months; must comply with statutory minimums and human rights.
• Termination clause:
  • Attempts to limit notice or severance to statutory minimums must be carefully drafted.
  • Courts often strike down defective clauses, restoring higher common law reasonable notice.
• Restrictive covenants:
  • Non-competition clauses are difficult to enforce and, in many cases (for example Ontario for most employees), are restricted or prohibited.
  • Non-solicitation and confidentiality clauses are more likely to be enforceable if reasonable.

3. Changing contract terms

• Substantial unilateral changes by the employer to core terms (for example pay cut, demotion, relocation) may amount to constructive dismissal.
• To change key terms lawfully, employers should:
  1. Give clear written notice of the proposed change.
  2. Provide consideration (for example a raise, bonus, or benefit) if imposing a new agreement during ongoing employment.
  3. Obtain signed consent, ideally before the change takes effect.

How are discrimination and harassment handled in Canadian workplaces?

Discrimination and harassment on protected grounds are prohibited in Canadian workplaces by human rights legislation and occupational health and safety laws. Employees can raise internal complaints, file human rights complaints, or pursue legal claims if they face discrimination or a poisoned work environment.

1. Protected grounds

• Exact grounds vary slightly, but commonly include:
  • Race, colour, ancestry, ethnicity, or place of origin.
  • Sex, gender identity or expression, sexual orientation.
  • Age.
  • Religion or creed.
  • Disability (physical, mental, learning, addiction).
  • Family status, marital status, or pregnancy.
  • Citizenship (in some jurisdictions) and record of offences (limited in scope).

2. Employer duties

• Non-discrimination in hiring, promotions, pay, discipline, and termination.
• Duty to accommodate protected characteristics (especially disability, religion, family status) to the point of undue hardship:
  • Use medical or supporting information to assess restrictions.
  • Consider modified duties, flexible scheduling, remote work, or leaves.
• Anti-harassment policies:
  • Most occupational health and safety statutes require written policies and procedures.
  • Employers must investigate harassment and violence complaints promptly and objectively.

3. Complaint options for employees

1. Internal complaint:
   • Report to a supervisor, HR, or through a designated reporting channel.
   • Document incidents, dates, witnesses, and responses.
2. Human rights complaint:
   • File with the relevant human rights body:
     • Canadian Human Rights Commission for federally regulated employers.
     • Provincial commissions such as the Ontario Human Rights Tribunal, BC Human Rights Tribunal, or Quebec Commission des droits de la personne et des droits de la jeunesse.
   • Deadlines are strict, often 1 year from the last incident.
3. Health and safety or labor standards complaint:
   • For harassment or reprisal, complain to the relevant Ministry of Labour or occupational health and safety regulator.
4. Court action:
   • Discrimination can be raised within wrongful dismissal or constructive dismissal claims, often to increase damages.

How are termination, notice, and severance calculated in Canada?

Termination in Canada usually requires giving an employee notice or pay in lieu, at a minimum level set by legislation, and often a higher level implied by common law or civil law. In some cases, employees may also receive statutory severance pay on top of notice, and additional damages if the termination was in bad faith or discriminatory.

1. Termination with cause vs without cause

• With just cause:
  • Reserved for serious misconduct, such as theft, fraud, gross insubordination, or repeated serious performance issues despite warnings.
  • No notice or pay in lieu is required if cause is proven, but the legal threshold is high.
• Without cause:
  • Most terminations are without cause, based on restructuring, fit, or performance.
  • Employee is entitled to:
    • Statutory notice and, where applicable, statutory severance.
    • Common law reasonable notice or pay in lieu, unless a valid contract limits it.

2. Statutory notice and severance (high level)

• Notice or pay in lieu:
  • Commonly 1 week of notice per year of service up to a capped maximum (for example up to 8 weeks in Ontario), but thresholds and caps vary by jurisdiction.
  • Employers can often choose to provide working notice or pay in lieu, or a combination.
• Severance pay:
  • Not all jurisdictions have separate statutory severance pay.
  • Ontario, for example, requires additional severance for some employees with 5+ years of service where the employer's payroll exceeds specific thresholds.
  • Federally regulated employees may have special protections under the Canada Labour Code (for example unjust dismissal complaints for non-managerial employees with 12+ months of service).

3. Common law reasonable notice

• In most provinces (outside Quebec), courts assess reasonable notice based on factors such as:
  • Age of the employee.
  • Length of service.
  • Character and level of the position.
  • Availability of similar employment in the market.
• There is no strict formula, but many employees receive between 2 and 24 months of notice or pay in lieu, depending on circumstances.
• Valid written contracts can limit notice to statutory minimums, but courts often strike down flawed clauses.

4. Termination process and documents

1. Prepare termination letter:
   • Specify whether termination is with or without cause.
   • Outline notice periods, pay in lieu, benefits continuation, and any severance offer.
2. Decide on a release:
   • Employers often offer additional compensation in exchange for a signed release of claims.
   • Employees should obtain legal advice before signing a release, especially if they have not had time to review.
3. Provide statutory documents:
   • Record of Employment (ROE) for Employment Insurance.
   • Final pay including outstanding wages, vacation pay, and any statutory amounts within required timelines.

5. Constructive dismissal

• Constructive dismissal occurs when the employer:
  • Makes a significant unilateral change to a fundamental term (for example major pay cut, demotion, relocation); or
  • Creates or tolerates a poisoned work environment that effectively forces the employee to resign.
• An employee claiming constructive dismissal usually must:
  1. Object to the change or situation promptly.
  2. Resign within a reasonable time.
  3. Seek legal advice before resigning, because missteps can be costly.

What leaves of absence and job protections are available?

Canadian employees have rights to take specific leaves of absence with job protection under federal or provincial employment standards, though most of these leaves are unpaid and instead supported by Employment Insurance or employer benefits. While details vary by jurisdiction, maternity, parental, sickness, and caregiving leaves are widely available.

1. Maternity and parental leave

• Maternity or pregnancy leave:
  • Available to birthing parents for a defined number of weeks before and after birth.
  • Job-protected, but usually unpaid by the employer.
• Parental leave:
  • Available to parents (including adoptive parents) after birth or adoption.
  • Can be shared between parents; total weeks vary by jurisdiction.
• EI maternity and parental benefits:
  • Administered by Service Canada under the Employment Insurance Act.
  • Provide partial income replacement, with options for standard or extended benefit periods.

2. Sickness and disability related leave

• Many jurisdictions provide:
  • Short-term personal illness or injury leave (for example a set number of days per year).
  • Longer-term unpaid medical or disability leave.
• Income support may come from:
  • EI sickness benefits.
  • Short-term or long-term disability insurance through the employer.
  • Provincial disability programs for long-term situations.

3. Family, caregiving, and other leaves

• Common leave types include:
  • Family caregiver or critical illness leave to care for a seriously ill family member.
  • Bereavement leave when a family member dies.
  • Domestic or sexual violence leave, which may include some paid days.
  • Jury duty or reservist leave.
• Employees taking protected leave usually have the right to:
  • Be reinstated to their job or a comparable one at the end of the leave.
  • Continue participating in benefit plans (subject to contributions) during certain leaves.

What are employers' health and safety duties in Canada?

Employers in Canada must provide a safe and healthy workplace, comply with occupational health and safety laws, and carry workers' compensation coverage in most industries. They must assess risks, train workers, prevent injuries and harassment, and report and investigate incidents.

1. Occupational health and safety (OHS) obligations

• Key duties under OHS statutes include:
  • Take every reasonable precaution for the protection of workers.
  • Provide information, instruction, and supervision to protect worker health and safety.
  • Ensure equipment and protective devices are used and maintained properly.
• Most jurisdictions require:
  • Written health and safety policies and programs (especially for larger employers).
  • Joint health and safety committees or representatives, depending on workforce size.

2. Right to refuse unsafe work

• Workers generally have the right to:
  • Refuse work they reasonably believe is dangerous to themselves or others.
  • Be protected from reprisal for making a good faith refusal.
• Typical process:
  1. Worker reports the safety concern to the supervisor.
  2. Employer investigates and attempts to resolve the issue.
  3. If unresolved, the matter is referred to an OHS inspector for a binding decision.

3. Workplace injuries and workers' compensation

• Most employers must register with and pay premiums to a workers' compensation board:
  • WSIB (Ontario), WorkSafeBC, WCB Alberta, CNESST (Quebec), and similar in other provinces.
• Workers' compensation is typically a no-fault system:
  • Injured workers receive benefits like wage-loss replacement and medical coverage.
  • In exchange, they usually cannot sue their employer for workplace injuries.
• Employers must:
  • Report workplace injuries and illnesses promptly.
  • Cooperate in return-to-work and accommodation processes.

How do unions and collective bargaining work in Canada?

Unions in Canada are regulated by federal or provincial labor relations legislation that sets rules for union organizing, certification, collective bargaining, and strikes or lockouts. Employees have the right to join a union, and employers must not interfere with or retaliate against union activity.

1. Union organizing and certification

• To unionize a workplace:
  1. Employees sign membership cards indicating support for a union.
  2. The union applies to the relevant labor relations board (for example Canada Industrial Relations Board, Ontario Labour Relations Board).
  3. The board assesses whether the union has sufficient support and whether a vote is required.
• Some jurisdictions use:
  • Card-check systems, where a certain level of signed support can lead to automatic certification.
  • Mandatory secret ballot votes, where a majority of voters must support the union.

2. Collective agreements

• Once certified, the union becomes the exclusive bargaining agent for the bargaining unit.
• The employer and union must:
  • Bargain in good faith toward a collective agreement.
  • Follow the agreement's terms for wages, benefits, scheduling, seniority, layoff, and grievance procedures.
• Disputes under a collective agreement are generally resolved through:
  • Internal grievance procedures.
  • Arbitration before a neutral arbitrator, not the regular courts.

3. Strikes and lockouts

• Legal strikes and lockouts can only occur:
  • After the collective agreement has expired.
  • After mandatory conciliation or mediation steps are completed.
  • After required strike votes and notices are properly given.
• Some sectors (for example essential services) may face special restrictions or require maintenance of minimum services.

How are employment disputes resolved, and what do they cost in Canada?

Employment disputes in Canada can be handled internally, through government agencies, human rights bodies, labor boards, or the courts. Costs and timelines vary widely, but many employees and employers resolve matters through negotiation or mediation before reaching a full hearing or trial.

1. Common avenues for disputes

• Internal resolution:
  • Raise concerns with management or HR.
  • Use internal complaint or grievance procedures where available.
• Employment standards complaints:
  • For unpaid wages, overtime, vacation pay, or basic employment standards violations.
  • Filed with the provincial Ministry of Labour or the federal Labour Program.
• Human rights complaints:
  • For discrimination and harassment on protected grounds.
  • Filed with human rights commissions or tribunals.
• Workers' compensation appeals:
  • For disputes about workplace injury decisions.
• Court actions:
  • For wrongful dismissal, constructive dismissal, or breach of contract.
  • Higher stakes but also higher cost and longer timelines.

2. Typical costs and timelines (approximate)

3. Factors that increase or decrease cost

• Increase cost:
  • Multiple legal issues (for example discrimination plus wrongful dismissal).
  • Large volumes of documents or many witnesses.
  • Parties unwilling to consider settlement.
• Decrease cost:
  • Early legal advice and realistic expectations.
  • Use of administrative and tribunal processes where appropriate.
  • Early settlement offers and mediation.

When should you hire an employment lawyer or HR expert in Canada?

You should hire an employment lawyer or qualified HR expert when the issue affects your livelihood or business risk in a meaningful way, or when you are asked to sign something you do not fully understand. Early advice usually prevents costly mistakes and improves your leverage in any negotiation or dispute.

1. For employees

• Strong reasons to speak with a lawyer include:
  • Receiving a termination package or being told to sign a release.
  • Experiencing discrimination, harassment, or retaliation after raising concerns.
  • Facing a major change in pay, role, or location that you did not agree to.
  • Being classified as a contractor but treated like an employee.
  • Being put on a performance improvement plan that feels unfair or pretextual.
• Many employment lawyers offer:
  • Fixed-fee contract or severance package reviews.
  • Contingency or hybrid fee arrangements in certain cases.

2. For employers

• Engage counsel or senior HR support when:
  • Drafting or updating employment contracts, especially termination clauses and restrictive covenants.
  • Planning layoffs, restructuring, or large-scale terminations.
  • Handling serious misconduct, harassment complaints, or workplace investigations.
  • Responding to human rights complaints or labor board proceedings.
  • Entering or exiting unionized environments.
• Proactive legal advice:
  • Reduces the risk of wrongful dismissal and human rights claims.
  • Helps design policies that comply with multiple overlapping statutes.

What are the best next steps if you have a workplace issue in Canada?

The best next steps are to gather your documents, understand which laws and authorities apply, and seek tailored advice before making major decisions or signing anything. Clear evidence and early strategy usually put you in a stronger position, whether you are an employee or an employer.

1. For employees

1. Document everything:
   • Keep copies of your contract, policies, pay stubs, performance reviews, and emails or messages related to the issue.
2. Identify your jurisdiction:
   • Confirm if you are federally or provincially regulated, and which province or territory's laws apply.
3. Check basic rights:
   • Review your local employment standards and human rights information on official government websites.
4. Get legal advice before signing:
   • Have a lawyer review any termination package, settlement, or non-competition clause.
5. Decide on a route:
   • Work internally to resolve the problem, or file an administrative complaint, or pursue a legal claim after considering deadlines and costs.

2. For employers

1. Audit your practices:
   • Review contracts, policies, classification of contractors, and payroll against the relevant legislation.
2. Standardize documentation:
   • Use consistent employment agreements and updated policies, especially for termination, performance management, and harassment.
3. Train managers:
   • Ensure supervisors understand basic employment law concepts, human rights, and safety obligations.
4. Plan before acting:
   • Consult legal counsel before major decisions like terminations, restructuring, or responding to complaints.
5. Foster early resolution:
   • Create internal channels for employees to raise concerns and resolve them quickly and fairly.