Canada

Sources of regulation

The Canada Labour Code (CLC),[1] amended in 1992, and the Canada Labour Standards Act are the sources of labour legislation in relation to termination of employment for employees falling within their scope. In addition, legislation at the provincial level may afford protection in relation to dismissal (see, for instance, the separate entry for Quebec).

Scope of legislation

The CLC applies to employees and employers[2] in federal undertakings. It is divided into three parts:

• Part I (secs. 3 to 121.5) deals with industrial relations. It does not apply in respect of employment by the Crown (sec. 6).
• Part II (secs. 122 to 165) relates to occupational safety and health. It excludes employment in the sectors of the Canadian civil service specified in Schedule I of the Public Service Staff Relations Act (sec. 123(2)).[3]
• Part III (secs. 166 to 267) concerns standards. It does not apply to managers or superintendents or employees who exercise management functions, or to members of such professions designated by regulation as those to which Division I of the CLC does not apply (sec. 167).[4]

Contracts of employment

The concept of an employment contract can include a contract for an indefinite period, and a contract for a specific project.

Termination of employment

Depending on the nature of the employment relationship, the contract of employment can terminate, not at the initiative of the employer, in various circumstances, including through:

• the expiry of a fixed-term individual contract; and
• the completion of the project for which a contract was concluded.

Dismissal

An employer is free to terminate employment. However, such dismissal must be linked to good and sufficient cause. The following situations constitute invalid grounds for the dismissal of an employee:

• the employee’s trade union activities or participation in a general strike action (sec. 94, CLC);
• if the employee has given evidence in proceedings or an inquiry held under Part II of the CLC (sec. 147a), CLC);
• if the employee has provided information regarding the conditions of work affecting his or her safety or health or that of any fellow employee (sec. 147b), CLC);
• if the employee has acted in accordance with the provisions of Part II of the CLC or has sought their enforcement (sec. 147c), CLC);
• if the employee is pregnant or has requested maternity or parental leave (sec. 209.3, CLC);
• if garnishment proceedings are to be taken against the employee (sec. 238, CLC); and
• if the employee has been absent due to illness or injury, provided that he or she had worked for the employer for at least three months, and that his or her period of absence was not over 12 weeks. Nevertheless, the employee must submit a medical certificate to the employer within 15 days after returning to work (sec. 239, CLC).

Sec. 212(1) establishes that the dismissal is deemed collective if it affects at least 50 (fifty) workers of the same establishment and carried out either simultaneously or within a period not exceeding four weeks.  

Notice and prior procedural safeguards

An employer who dismisses a worker who has worked continuously for at least three consecutive months is obliged to give the worker notice of termination in writing at least two weeks in advance, or to pay compensation in lieu of notice of an amount equivalent to two weeks’ wages at the regular rate of wages for his or her regular hours of work (sec. 230, CLC).

However, sec. 232 states that where an employee continues to be employed for more than two weeks after the date specified in the notice, the employer, in conformity with sec. 230 of the CLC, may terminate employment only with the written consent of the employee, or if the dismissal is based on just cause.

In the case of a collective dismissal,[5] the employer must give the Minister of Human Resources Development written notification at least 16 weeks before the date of the first dismissal. A copy of this notice should also be submitted to the Minister of Employment and Immigration, the Canada Employment and Immigration Commission and to any trade union representing the redundant employees concerned.[6] Such notice shall set out the date or timetable for the proposed dismissals, the estimated number of employees in each occupational classification and such other information prescribed by the regulations (sec. 212(1), (2) and (3), CLC).[7]

As soon as notice has been submitted to the Minister, the employer must set up a joint planning committee consisting of at least four members, half of whom should be representatives of the redundant employees and the others, representatives of the employer (sec. 214(1), (2) and (3), CLC).

The objective of the joint planning committee is to develop an adjustment programme to eliminate the need for the termination of employment, to minimize the impact of the termination on the redundant employees and to assist them in obtaining other employment (sec. 221(1), CLC).

Sec. 222(2) of the CLC sets out provisions for an inspector to monitor the work of the committee and to attend any of its sittings as an observer.

Severance pay

Subject to sec. 235 of the CLC, an employer who terminates the employment of an employee who has completed 12 months of continuous employment shall pay to the employee a severance allowance equivalent to two days’ wages for each year of service, or five days’ wages for each year of service, except where the termination is by way of dismissal for just cause.

Avenues for redress

Complaints against termination of employment for trade union activities may be made to the Canada Labour Relations Board[8] no later than 90 days after the date of the termination (sec. 97, CLC).

An employee who has completed 12 consecutive months of continuous employment with the same employer, and who is not a member of a group of employees subject to a collective agreement, may submit a complaint in writing against unjustified dismissal to an inspector. Such complaints must be made within 90 days from the date of dismissal (sec. 240, CLC).

Sec. 105 of the CLC states that the Minister, on request or at his or her own initiative, may at any time appoint a mediator to confer with the parties to assist them in settling the dispute.

The burden of proof rests with the employer who must prove that the dismissal was justified. Nevertheless, the employee must refer the complaint to the arbitrator in advance (secs. 98(4) and 133(6), CLC).

In the case of collective dismissals, the members of the committee may, within six weeks from the date of the submission of notice to the Minister, apply jointly for the appointment of an arbitrator, if the committee has not completed the development of the adjustment programme, or if they are not satisfied with the programme (sec. 223(1), CLC). If the Minister agrees, he or she will appoint an arbitrator and, if necessary, provide a list setting out any matters in dispute (sec. 224(1), CLC). The arbitrator must render a decision within four weeks (sec. 224(4), CLC). He or she may not review the employer’s decision or delay the termination of employment, and the arbitrator’s judgement is final and binding. However, it may be subject to an application for review by the Federal Court of Canada under certain limited circumstances.

In the event of the annulment of a notice of termination or dismissal without notice, the employer may be ordered to pay the equivalent of the wages and benefits to which the employee would have been entitled during the notice period (sec. 258(1), CLC).

In the case of unjustified dismissal, the Canada Industrial Relations Board is authorized to require the employer to pay the employee a sum not exceeding the remuneration that would, but for the failure, have been paid by the employer (sec. 99(c)(ii), CLC).

Sec. 242(4)(a) of the CLC states that in cases of unjustified dismissal, an arbitrator may, by order, require the employer:

• to pay the employee compensation not exceeding an amount equivalent to the remuneration that would have been paid by the employer if the dismissal had not taken place;
• to reinstate the employee in his or her position; or
• to take any similar action that is equitable to require of the employer in order to remedy or counteract any consequence of dismissal.

In addition, sec. 258(2)(a) of the CLC provides that if an offence for which the employer has been convicted relates to the discharge of an employee, the convicting court may, in addition to any other punishment, order the employer:

• to pay compensation for loss of employment equivalent to the wages that would have accrued to the employee up to the date of conviction; and
• reinstate the employee in his or her former position on a date which the court deems reasonable in the circumstances, and in the position that the employee would have held had he or she not been dismissed.

Reinstatement after a dismissal for trade union activities is covered by sec. 99(1)(c)(i) of the CLC, and sec. 242(4)(b) regulates reinstatement for unjustified dismissal.

Further information

• Consolidated Statutes and Associated Regulations: Access Government of Canada’s legislation and obtain the latest version of the Canada Labour Code.
• Human Resources and Skills Development Canada: Obtain information on Employment Insurance, Human Resources Investment, Income Security Programs and Labour. See in particular the Labour Standards Publication.
• Canadian Human Rights Commission: Under the Employment Equity Act, the Canadian Human Rights Commission is responsible for ensuring compliance with the Act. To this end, the Commission conducts audits to determine whether employers meet the statutory requirements of the Act. The purpose of the Employment Equity Act is to ensure that federally regulated employers provide equal opportunities for employment to the four designated groups: women; aboriginal peoples; persons with disabilities; and members of visible minorities.

[1] http://www.canlii.org/ca/sta/l-2/

[2]“Employee” means any person employed by an employer and includes a dependant contractor and a private constable, but does not include a person who performs management functions or is employed in a confidential capacity in matters relating to industrial relations; “Employer” means (1) any person who employs one or more employees, and (2) in respect of a dependant contractor, such person as, in the opinion of the Canada Industrial Relations Board, has a relationship with the dependent contractor to such extent that the arrangement that governs the performance of services by the dependent contractor for that person can be the subject of collective bargaining (sec. 3, CLC).

[3] Departments such as Canada Statistics, Civil Service Commission, Royal Canadian Mounted Police, Privy Council, among others. See the official website of the Public Service Labour Relations Board: http://www.pslrb-crtfp.gc.ca/

[4] Sec. 3 of the Canada Labour Standards Act which excludes persons employed in the areas of architecture, dentistry, engineering, law and medicine.

[5] To obtain information concerning the notice of collective termination in the different Canadian jurisdictions, see: http://www.sdc.gc.ca/en/lp/spila/clli/eslc/CollTermEn.pdf

[6] Where any redundant employee is not represented by a trade union, a copy of that notice should be given to the employee or immediately posted by the employer in a conspicuous place within the industrial establishment in which that employee is employed.

[7] For example, the name of the employer, the place where the proposed termination of employment is to take place, the nature of the operations performed by the industry, the name of the trade unions representing the redundant employees and the reason for the dismissal.

[8] See the official website of the Canada Industrial Relations Board: http://www.cirb-ccri.gc.ca/. This quasi-judicial tribunal is responsible for the interpretation and administration of Part I (Industrial Relations), and certain provisions of Part II (Occupational Health and Safety) of the CLC. The Board has jurisdiction in regard to some 1,300,000 employees engaged in federal jurisdiction industries, which include interprovincial transportation (air, land and water), broadcasting, banking, longshoring and grain handling, and to private sector employees in Nunavut, the Yukon, and the Northwest Territories.