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Notice periods in Canada
Termination of employment in Canada
Post-termination restraints in Canada
Waivers in Canada
Transfer of undertakings in Canada
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Every employment relationship eventually comes to an end — and each country has clear rules governing what that process looks like. In Canada, this is covered by both federal and provincial legislation. Employers must ensure they understand the specific rules, norms, and customs in their region.
In this section, we’ll cover everything employers need to know about the end of the employment relationship in Canada, including the notice periods that apply to employers and employees and the different forms of dismissal that you may come across. We’ll also discuss post-termination restraints (and the restrictions that apply to them in Canada) as well as employee rights following a transfer of undertakings.
Notice periods in Canada vary depending on the length of employment and the laws of the specific province or territory where the employee and the employer are based. In general, the longer the employment relationship, the longer the notice period required (particularly for employers). We’ll provide some more details about different notice periods in Canada below.
Notice periods in Canada for federally regulated employers
Employers in federally regulated industries (e.g. banking, telecommunications, interprovincial transportation) must provide at least the following notice to their employees, depending on their length of service:
These notice periods are set out in the Canada Labour Code. They don’t apply if the termination is for just cause. No notice is required for employees who have been engaged for less than three months.
For non-federally regulated employers, statutory notice periods vary by region. For example, in Quebec, the Act Respecting Labour Standards sets out the following minimum notice periods:
In British Columbia, the following notice periods apply:
These are just a few examples. Employers hiring in Canada should be sure to check the local requirements in their province or territory.
Employees in Canada may or may not need to give notice to resign from their jobs. For example, there’s no statutory requirement for employees in federally regulated companies to give notice under the Canada Labour Act. However, employment contracts or collective agreements may stipulate specific notice periods (two weeks is common). In Ontario, the Employment Standards Act mandates that employees provide written notice of resignation as follows:
In British Columbia, notice is not required. However, if an employee offers notice and the employer chooses to end the employment earlier, the employer must compensate the employee. Again, employers should check the requirements in their province or territory.
The requirements for severance pay also vary depending on the province or territory where the termination occurs. In general, severance pay is due when an employee is dismissed without cause after they have accrued a minimum length of service.
For example, the Canada Labour Code obliges federally‑regulated employers to pay severance to workers with at least 12 months of continuous service who are let go without cause. The amount they need to pay is the greater of:
This means that, for example, an employee who has been engaged for three years would be entitled to severance pay equal to six days’ wages.
The use of probationary periods in Canada also varies by jurisdiction. Under the Canada Labour Code, the standard probationary period is three months, and several other territories and provinces match this standard. Employers should be sure to check the specific requirements in their jurisdiction.
In Canada, termination of employment is governed by both federal and provincial laws, depending on the jurisdiction. Termination can occur in various forms, each with specific conditions and procedures. Read on for an overview of the different types of employee termination in Canada.
Termination without cause is when an employer ends an employment relationship through no fault of the employee. This includes termination for organisational or economic reasons. Employers must provide reasonable notice (or payment in lieu of notice). In some cases, severance pay may also be required.
Employers in Canada can also terminate an employee’s contract with just cause. This type of employee termination is only possible when the employee has committed a serious offence like fraud, theft, or wilful misconduct. Minor misconduct or unsatisfactory performance is unlikely to be considered just cause under Canadian labour law. Employers generally don’t need to give notice or pay severance pay to dismiss employees with just cause.
Constructive dismissal is when an employer doesn’t actually fire an employee but instead makes significant changes to their contract that lead to their resignation. This may be considered a termination or layoff under both federal and provincial labour laws.
Group termination is when a large number of employees are laid off within a certain period. Exactly what counts as a group termination varies by jurisdiction. Employees have specific rights in these situations. For example, they may be entitled to extended notice periods and/or severance pay.
Employees in Canada can file a claim for unfair dismissal if they feel their employer didn’t have a good reason to end their contract. If their claim is upheld by a court, they may be entitled to compensation or reinstatement. The exact rules vary by jurisdiction — employers should ensure they understand what may be counted as unfair dismissal in their region.
Post-termination restraints are restrictions that employers can impose on their employees after the end of the employment relationship. In Canada, these are subject to strict legal scrutiny. To be upheld by a court, they must be carefully drafted to protect legitimate business interests without unduly restricting an individual’s ability to work. Read on to learn more about post-termination restraints in Canada.
Different types of post-termination restraints in Canada
Here are the different types of post-termination restraints you may be able to impose on employees as an employer in Canada:
This makes them even more restrictive than non-solicitation clauses. In Canada, they must be narrowly tailored to protect legitimate business interests without being overly broad.
Post-termination restraints in Canada are subject to strict legal restrictions, which differ from one province to another. In general, they must be clear and unambiguous in their language and be designed to protect a legitimate proprietary interest of the employer. As a general principle, courts are more likely to uphold non-solicitation clauses than non-compete clauses and non-dealing clauses as they are less restrictive.
In some countries, it’s possible for employees to waive certain employment rights in the context of a settlement agreement. In Canada, it’s generally not possible for employees to waive or ‘contract out of’ the minimum rights and benefits guaranteed to them under federal or provincial employment standards statutes. The exception is when they are doing so in exchange for a ‘greater right or benefit’.
A transfer of undertakings is when all or part of a business is sold, transferred, or changes service providers, potentially affecting employees’ rights and employment continuity. In this situation, employees in Canada are entitled to certain protections under both federal and provincial employment legislation.
While the term ‘transfer of undertaking’ isn’t commonly used in Canadian employment law, the underlying principles are addressed through various federal and provincial statutes. In most jurisdictions, legislation exists that either:
The specific provisions and protections can vary by jurisdiction, so employers are advised to consult the relevant legislation or seek legal advice for detailed guidance.
There are many different ways an employment contract can come to an end. But whatever the situation, you need to understand the rules that cover the end of employment in Canada — or you could end up facing legal issues.
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