The labor laws in Canada are based on the principles of contract law, which is also observed in many other countries. These are policies that cover all types of agreements about the exchange of services, goods, properties and money. They also encompass legal requirements and issues, such as unfair dismissal, payment of damages and reasonable notice of termination. Working in a similar fashion to the United States, Canada’s laws maintain separate regulations for workers who are part of a union and those that aren’t.
The basis for all labor agreements is the presence of a valid contract between two parties, the employer and the employee. A contract can be oral or written and should detail the expectation and responsibilities of both parties. This is distinct from an “independent contractor agreement” which is a common work arrangement in the country.
Serious circumstances that require a thorough legal evaluation include, amongst others, cases of wrongful dismissal. This occurs when an employee is terminated by the employer without proper advice and cause. The basis of rightful dismissal often concerns employee actions that can be categorized as violations of the contract terms and includes behaviour such as being dishonest, committing theft of any property, prolonged absence at work without appropriate notice, or adopting a disrespectful attitude towards superiors and other members of the management team. Unfortunately, poor performance cannot be considered a legitimate basis for the employee dismissal. This is important for business owners and managers to understand: under-performance is not usually a valid reason for dismissal and can result in a lengthy tribunal hearing.
Wrongful dismissal permits the employee to collect monetary damages from their employer. The damages account for the salary and benefits for a reasonable notice period. The employee can use this time to actively look for a new job. The duration of the notice period is dependent on the worker’s age, the length of time that he has worked for the company, and the nature of his work. In Canada, this period can range from one week to as long as 24 months.