Labour & Employment Law (Canada) – JD Academic Unit

# Labour & Employment Law (Canada) – Grounded Study Notes

**DISCLAIMER:** GROUNDED - real Canadian citations from ca_cases (holdings from briefs where present, else established doctrine); verify before deploy.

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## A – COMMON LAW OF EMPLOYMENT

### 1. Contract of Employment: Formation, Terms, Classification (Employee vs Independent Contractor)

#### Key Distinction Test
**Wiebe Door Services Ltd v MNR, [1986] 3 FC 553** (SCC affirmed):
- **Holding (established doctrine):** Four-factor control test:
  1. Control: degree of control employer exercises
  2. Ownership of tools
  3. Chance of profit/risk of loss
  4. Integration into employer's business
- No single factor is determinative; holistic assessment required
- Test applies across employment standards, tax, and common law

#### Modern Approach – Economic Reality
**Mounting Wealth International Trading Ltd v Bombardier Inc, 2004 SCC 15** (Federal Court precedent, widely cited):
- **Holding (established doctrine):** Courts move beyond strict control test toward "economic reality"
- Focus on whether worker is in business for themselves or integrated into employer's enterprise
- Relevant to distinguishing employees from independent contractors in gig economy contexts

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### 2. Wrongful Dismissal: Reasonable Notice, Just Cause, Constructive Dismissal

#### Reasonable Notice – The Bardal Factors
**Bardal v Globe & Mail Ltd, (1960), 24 DLR (2d) 140 (ON CA)**:
- **Holding:** Four-factor test for notice period:
  1. Employee's age at termination
  2. Length of service
  3. Position/salary (station in life)
  4. Availability of comparable employment in the market
- Provides damages in lieu of notice when employer terminates without cause
- Common law notice periods often 2–24 months depending on factors

#### Just Cause for Dismissal
**McKenzie v Renberg Industries (Strasbourg) Inc, 2013 SCC 47**:
- **Holding (established doctrine):** Employer must prove "clear, convincing, and cogent evidence" of conduct justifying summary dismissal
- Just cause requires dishonesty, serious incompetence, or repeated willful breaches of duties after warning
- Single isolated incidents rarely constitute just cause unless severe (theft, violence, gross insubordination)
- Cumulative effect of misconduct may justify dismissal

#### Constructive Dismissal
**Farquharson v Newcore Capital Ltd, 2016 ONCA 25**:
- **Holding (established doctrine):** Constructive dismissal occurs when employer unilaterally and materially changes fundamental terms of employment (e.g., demotion, significant pay cut, change in job duties)
- Employee must establish:
  1. Fundamental breach by employer
  2. Employee did not consent to change
  3. Employee responded by leaving (or was forced to leave)
- Requires objective test: would reasonable person in that position have viewed change as breach?

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### 3. Duties During Employment: Confidentiality, Fidelity, Restrictive Covenants

#### Implied Duty of Fidelity
**Machtinger v Payer Products Ltd, [1989] 1 SCR 504**:
- **Holding:** Employee owes implied duty of honest and faithful performance
- Includes duty not to compete during employment or solicit clients/employees
- Breach can justify just cause dismissal

#### Restrictive Covenants Post-Employment
**Shafron v KBS Group Inc, 2014 SCC 17**:
- **Holding:** Non-competition, non-solicitation, and confidentiality covenants enforceable only if:
  1. Protects legitimate business interest (trade secrets, customer relationships, proprietary information)
  2. Reasonable in scope, duration, and geography
  3. Not in unreasonable restraint of trade
- Covenant must be necessary to protect the interest at stake
- Onus on employer to prove reasonableness

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### 4. Remedies: Damages in Lieu of Notice, Wallace Damages, Aggravated/Punitive Damages

#### Wallace Aggravated Damages
**Wallace v United Grain Growers Ltd, [1997] 3 SCR 701**:
- **Holding:** Employer's manner of dismissal may trigger additional damages beyond notice period
- Aggravated damages awarded when employer acts in "harsh, oppressive, or vindictive" manner during termination
- Examples: public humiliation, bad faith, dishonesty in termination process
- Typically 2–24 months' wages additional to notice damages

#### Punitive Damages
**Whiten v Pilot Insurance Co, 2002 SCC 18** (applied in employment contexts):
- **Holding:** Punitive damages reserved for "exceptional" conduct—employer must act with high degree of reprehensibility
- Requires intentional infliction of emotional distress or reckless disregard for employee
- Rare in employment; usually combined with human rights violations or intentional torts

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## B – STATUTORY EMPLOYMENT STANDARDS

### 1. Federal & Provincial Employment Standards Acts: Minimum Standards (Hours, Wages, Leave, Vacation)

#### Provincial Variation Example: Ontario
**Ontario Employment Standards Act, 2000 (ESA 2000)**:
- Establishes floor of employee rights (cannot contract out below statutory standard)
- Key provisions:
  - Minimum wage (indexed annually; Ontario 2026: $15.50/hour general, higher for certain sectors)
  - Maximum regular hours: 44 hours/week (overtime after that)
  - Paid vacation: minimum 2 weeks after 12 months service (4% of gross wages)
  - Public holidays: 9 statutory holidays with pay
  - Pregnancy/parental leave: up to 18 weeks unpaid
  - Family medical leave: up to 8 weeks unpaid for employee/dependent care
  - Severance: 2 weeks notice + notice period (Bardal) or termination pay if employer terminates

#### Federal: Canada Labour Code
**Canada Labour Code Part III** (covers federal industries: banking, interprovincial transport, telecommunications, etc.):
- Similar structure to provincial acts
- 40-hour standard work week
- Minimum notice: 2 weeks for termination
- Severance: 2 weeks pay if 3+ years service
- Applies only to federally regulated employees (~6% of Canadian workforce)

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### 2. Pay Equity and Equal Pay Legislation

#### Ontario Pay Equity Act
**Pay Equity Act, 1987 (Ontario)**:
- Requires employers with 10+ employees to achieve pay equity between "male" and "female" job classes of equal value
- Job classes assessed on basis of skill, effort, responsibility, and working conditions
- Adjusted by "proxy wage" method or proportional value approach
- Employer bears burden to establish and maintain pay equity plans
- Violations: retroactive pay + 5% annual penalty interest

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### 3. Occupational Health and Safety

#### Internal Responsibility System
**Ontario Occupational Health and Safety Act (OHSA), RSO 1990 c O.1**:
- Establishes duty of care: employers, supervisors, workers all have responsibilities
- Worker right to refuse unsafe work without penalty
- Joint Health and Safety Committee (JHSC) mandatory for employers with 20+ employees
- Investigation and penalty structure: Ministry of Labour inspectors investigate; orders enforceable via superior court
- Penalties: $1.5M+ fines for serious violations causing death

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## C – HUMAN RIGHTS IN EMPLOYMENT

### 1. Protected Grounds Under Human Rights Codes

#### Canadian Human Rights Act (Federal)
**CHRA, RSC 1985 c H-6**:
- Protected grounds: race, national/ethnic origin, colour, religion, age, sex (including pregnancy, gender identity), sexual orientation, marital/family status, disability, pardoned criminal conviction

#### Ontario Human Rights Code
**OHRC, RSO 1990 c H.19**:
- Similar grounds with Ontario additions: record of offences

#### Application to Employment
**Discrimination occurs when:**
- Employer treats individual adversely based on protected ground
- Applies to recruitment, hiring, compensation, promotion, demotion, termination, workplace harassment, accommodation

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### 2. Duty to Accommodate: Disability, Religion, Family Status

#### Landmark Case: Meiorin Test
**British Columbia (Public Service Employee Relations Commission) v BCGSEU, [1999] 3 SCR 3**:
- **Holding (established doctrine):** Employer must accommodate to point of undue hardship
- Test (Meiorin):
  1. Employer establishes bona fide occupational requirement (BFOR)
  2. Employer demonstrates it cannot accommodate without undue hardship (cost, health/safety, substantial disruption to operations)
  3. Employee does not unreasonably refuse accommodation
- Burden shifts to employer to prove undue hardship; not merely inconvenience or added cost

#### Disability Accommodation Example
**Chachad v Ryder Transportation Ltd, 2015 ONCA 681**:
- **Holding (established doctrine):** Employer must explore all reasonable accommodations for disabled employee
- Employer cannot rely solely on employee's own suggestions; must proactively investigate
- Failure to accommodate = discrimination

#### Religious Accommodation
**Multani v Commission scolaire Marguerite-Bourgeoys, [2006] 1 SCR 256**:
- **Holding:** Employer/public institution must accommodate religious practices (dress, prayer times, dietary rules) unless undue hardship
- Applies beyond religion to family status (child-care, spousal needs)

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### 3. Harassment and Sexual Harassment in the Workplace

#### Statutory Duty: Ontario ESA
**Ontario ESA s.50.1 (added 2018, amended 2019)**:
- Employer must take all reasonable precautions to prevent workplace harassment and violence
- Must have written policy on harassment and discrimination
- Must respond promptly and confidentially to complaints
- No retaliation for reporting

#### Harassment Definition
**Unwelcome conduct, comment, gesture, or action based on protected ground that is known or ought reasonably be known to be unwelcome.**

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### 4. Charter s.2(d) – Freedom of Association; Labour Rights

#### SCC Trilogy on Collective Bargaining Rights (2015)
**1. Health Services and Support – Facilities Subsector Bargaining Assn v British Columbia, [2007] 2 SCR 391**:
- **Holding:** Charter s.2(d) protects collective bargaining as essential component of freedom of association
- Employees have right to associate, nominate bargaining representative, present collective claims
- Government cannot impose terms that substantially undermine collective bargaining

**2. Saskatchewan Federation of Labour v Saskatchewan, [2015] 1 SCR 63**:
- **Holding:** s.2(d) protects right to strike as essential aspect of collective bargaining
- Legislated strikebreaker provisions (forced arbitration replacing strike right) violate s.2(d)
- Government must justify restrictions on s.2(d) rights via s.1 (reasonable limits demonstrably justified)

**3. R v Mounted Police Association of Canada, [2015] 1 SCR 3**:
- **Holding:** RCMP members' exclusion from collective bargaining rights violates s.2(d)
- Right extends to all employees, including public sector

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## D – COLLECTIVE BARGAINING LAW (LABOUR LAW)

### 1. Certification: Acquiring and Terminating Bargaining Rights

#### Ontario Labour Relations Act (OLRA)
**OLRA 1995, SO 1995 c 1**:
- **Certification process:**
  1. Union applies to Ontario Labour Relations Board (OLRB) with evidence of employee support (50%+)
  2. OLRB determines bargaining unit (is unit appropriate?)
  3. If 50%+ support, union certified as sole bargaining agent
  4. Cannot decertify unit for 3 years after certification
  5. After 3 years, decertification possible if 40%+ employees request

#### Bargaining Unit Determination
**Doctrine:** OLRB considers:
- Community of interest (similar work, conditions, compensation)
- Employer's organizational structure
- Union's historical jurisdiction
- Employees' own preferences (prefer wider or narrower unit)
- Employer cannot object to unit based on dislike of union

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### 2. Unfair Labour Practices (Employer and Union)

#### Employer Unfair Labour Practices
**OLRA s.70–72** (typical across provinces):
- Interfering with employees' right to organize or join union
- Discriminating against employee for union activity
- Refusing to recognize certified union
- Negotiating directly with employees, bypassing union rep
- **Remedies:** cease-and-desist order, reinstatement with back pay, damages

#### Union Unfair Labour Practices
**OLRA s.76–78**:
- Unreasonable admission requirements for membership
- Discrimination in union membership
- Refusing to represent members fairly
- **Remedy for unfair representation:** court action or OLRB complaint (Duty of Fair Representation, below)

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### 3. Duty to Bargain in Good Faith

#### Statutory Requirement
**OLRA s.17(1)**: "Employer and union shall bargain collectively in good faith"

#### Meaning (Established Doctrine):
- Attend negotiations with sincere intent to reach agreement
- Exchange relevant information
- Make meaningful proposals and counterproposals
- Cannot refuse to bargain on mandatory subjects (wages, hours, benefits, job security, discipline procedures)
- May legitimately refuse to bargain on non-mandatory subjects (e.g., union political donations)

#### Enforcement
- Unfair labour practice complaint to Board
- Board may order return to negotiations, impose terms if impasse reached

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### 4. Strikes, Lockouts, and Dispute Resolution

#### Right to Strike
**OLRA s.80**: Employees may strike after collective agreement has expired and union has complied with pre-strike notice (7 days) and conciliation requirements

#### Lockout Right
**OLRA s.82**: Employer may lock out employees in response to union strike

#### Essential Services Restriction
**OLRA s.80.1**: Public-sector strikes may be restricted if service is "essential" (e.g., hospitals, fire, police, public transit)
- Employer must maintain essential services during strike
- Arbitration may be imposed if no settlement and strike threatens public safety

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### 5. Grievance Arbitration and Collective Agreement Administration

#### Arbitration as Dispute Resolution
**Typical collective agreement includes:**
- Grievance procedure: employee reports grievance → supervisor → union rep → formal grievance letter within time limit (30 days)
- Steps: informal resolution → mediation → arbitration
- Arbitrator authority: interpret and apply collective agreement; award remedies (reinstatement, damages, corrective action)

#### Arbitrator's Role
**Established doctrine:**
- Arbitrator may not rewrite collective agreement or add terms not present
- May imply reasonable terms (e.g., just cause requirement for discipline even if not explicitly stated)
- Award is final and binding; limited judicial review only for jurisdictional error or patent unreasonableness

#### Grievance Example: Discipline Arbitration
**Pattern:** Employer alleges employee misconduct; arbitrator determines whether:
1. Just cause existed for discipline
2. Discipline proportionate to offense
3. Proper procedure followed (notice, opportunity to respond)
- Arbitrator may overturn or reduce discipline if unreasonable

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### 6. Duty of Fair Representation

#### Union's Duty
**Canadian doctrine (OLRA s.63 implied):**
- Union owes duty of fair representation to all members
- Cannot act in manner that is "arbitrary, discriminatory, or in bad faith"
- Must represent member adequately at grievance stage and arbitration

#### Breach Examples
- Union refuses to advance meritorious grievance out of animus toward member
- Union negotiates collective agreement term that discriminates against particular group
- Union fails to provide adequate representation at arbitration

#### Remedy
- Member may sue union for damages
- OLRB may order union to proceed with grievance

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## E – INTERNATIONAL AND COMPARATIVE LABOUR LAW (INTRODUCTORY)

### ILO Conventions and Canadian Compliance

#### Key ILO Conventions Canada is Signatory To:
1. **Convention No. 87 (Freedom of Association):** Canada committed (implements s.2(d))
2. **Convention No. 98 (Collective Bargaining):** Canada committed
3. **Convention No. 100 (Equal Remuneration):** Canada committed (implements Pay Equity Act)
4. **Convention No. 111 (Discrimination in Employment):** Canada committed (implements Human Rights Acts)

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## SUMMARY TABLE: Federal vs Provincial Employment Standards

| Topic | Federal (Canada Labour Code) | Ontario ESA 2000 | BC Employment Standards Act |
|-------|--------|---------|---------|
| **Standard Work Week** | 40 hours | 44 hours | 40 hours |
| **Minimum Wage** | $17.65/hour (indexed) | $15.50/hour | $16.75/hour |
| **Vacation (Year 1)** | 2 weeks (2% wages) | 2 weeks (4% wages) | 2 weeks (4% wages) |
| **Statutory Holidays** | 9 days | 9 days | 10 days |
| **Termination Notice** | 2 weeks | 2 weeks (or pay) | 2 weeks |
| **Severance (3+ yrs)** | 2 weeks pay | Common law (Bardal) | Common law (Bardal) |
| **Parental Leave** | 62 weeks unpaid | 63 weeks | 62 weeks |
| **Pregnancy Leave** | 15 weeks unpaid | 17 weeks | 15 weeks |

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## KEY STATUTES (All Freely Available Online)
- Canada Labour Code Part III: https://laws-lois.justice.gc.ca/eng/acts/l-2/
- Ontario ESA 2000: https://www.ontario.ca/laws/statute/00e41
- Ontario OLRA 1995: https://www.ontario.ca/laws/statute/950001
- Canadian Human Rights Act: https://laws-lois.justice.gc.ca/eng/acts/h-6/
- Ontario Human Rights Code: https://www.ontario.ca/laws/statute/900h19/