Key Differences between American and Canadian Human Resources Practices
U.S. Employers with Canadian Employees
I am often asked by U.S. employers who employ Canadians employees, and by Canadian employees who work for U.S. organizations, about the differences between U.S. and Canadian employment practices. Well, those differences are quite significant, and they exist at all stages of the employment relationship from the point of recruitment up to the point where the relationship is severed and, in certain cases, beyond.
In order to explain these as clearly as possible, I have laid them out based on sub-headings, and have also created a checklist of considerations for each subheading.
1. Recruitment and Selection
2. Background Checks
3. Employment Agreements
4. Employee Policies and Procedures
5. Unionization
6. Minimum Employment Standards
7. Universal Healthcare, Employment Insurance, and Extended Group Benefits
8. Payroll and Human Resources Administrative Matters
9. Occupational Health and Safety
10. Workers’ Compensation
11. Restrictive Covenants
12. Disability
13. Employment in Quebec
14. Employer Obligations Upon the Termination of Employment
From the outset, it is important to recognize that in Canada employment matters are governed by provincial or federal legislation (with only a few minor exceptions). This determination is based on the interpretation and application of Canada’s constitutional legislation. By way of a general statement, the federal government retains jurisdiction over certain industries that have a national, international, or inter-provincial character (i.e. banks, air transport, inter-provincial and international trucking). All other employers are provincially regulated. And, in our Movement, all employers would be provincially regulated. In addition, each province and territory in Canada (Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Prince Edward Island, Quebec, Saskatchewan, Northwest Territories, Nunavut, and Yukon) has its own specific legislation relating to occupational health and safety, workers’ compensation, labour relations, human rights, and employment standards. This means that employees in Ontario will be governed differently than employees in Alberta or Manitoba, and so on.
While there are many important issues to consider when an U.S. organization has employees in Canada, I have highlighted what I believe to be the most common issues. In order to make this document as practical as possible, each of the respective sub-headings listed below consists of a brief summary, and where appropriate, a checklist of salient matters to be considered.
1. Recruitment and Selection
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A U.S. employer hiring in Canada should ensure that job descriptions and employee application forms do not run afoul of human rights legislation. Human rights laws provide that an individual has a right to equal treatment with respect to, among other areas, employment. The law prohibits discrimination based on prohibited grounds as set out legislatively, and those prohibited grounds in each jurisdiction tend to be more expansive than in the U.S. Job descriptions and employee application forms should not suggest a preference for candidates whose personal characteristics relate to a prohibited ground, nor elicit information relating to a prohibited ground. For example, questions related to a candidate’s flexibility regarding hours of work or whether the applicant has a driver’s license may offend such legislation.
A helpful resources for human rights by province can be found here.
Your Recruitment and Selection checklist should include such matters as the following:
Job descriptions
“Canadianized” application forms
Conditions of employment (i.e. qualifications, experience, pre-employment skills testing, etc.)
Proof of eligibility to work in Canada
2. Background Checks
Basic background checks are generally permitted in all provinces. The employee must provide explicit consent for the checks to be performed. It is important to be mindful of both human rights and privacy law implications in the background check process.
Your Background Check checklist should include such matters as the following:
Criminal background check authorization form
Authorization to confirm employment references
3. Employment Agreements
Employment agreements (also referred to as “employment contracts” or “offers of employment”) represent the most effective means of defining the scope of the employment relationship and setting the terms and conditions of employment.
Employment agreements should be in writing, and should not be reserved for senior employees only. All employees including full-time, part-time, fixed-term, and casual employees should be given employment agreements.
In order for employment agreements to be enforceable, the terms and conditions must meet minimum employment standards legislation requirements (see Section 6 below called “Minimum Employment Standards”), they must be clear and unambiguous, they must provide that the employee is given time to consider the agreement, and they must be executed in advance of the commencement of the employment relationship.
Your Employment Agreement checklist may include such matters as the following:
Position
Reporting arrangements
Start date
Probationary period
Salary
Benefits
Expenses
Bonus
Termination clause
Intellectual property
Confidentiality
Restrictive covenants
Minimum employment standards legislation compliance
Signed prior to start date
4. Employee Policies and Procedures
An employee handbook serves as an opportunity to promote organizational values, to articulate company rules and expectations, and to promulgate policies which are required in law. Unlike in the U.S., Canadian employers typically seek to have employee handbook policies and procedures incorporated as terms of their employment agreements, and are often to given to applicants together with the Employment Agreement so that employees can fully understand all aspects of the employment relationship that they will be entering into.
It is imperative that U.S. employers operating in Canada provide all Canadian employees with an employee handbook that is in compliance with Canadian legislation, and that they not provide Canadian employees with a U.S. employee handbook as it will simply be unenforceable.
Your Employee Handbook checklist should include such policies as the following:
Vacation
Maternity leave
Other statutory leaves of absences
Statutory holidays
Overtime
Dress code
Business conduct
Harassment
Violence in the workplace
E-maiI, internet use, and social media
Performance reviews
Alcohol and drug use
Health and safety
Telecommuting
Confidentiality
Employee record-keeping
Privacy policy
Complaint mechanism
Progressive discipline
Handbook sign-off and acknowledgment
5. Unionization
In Canada, as in the U.S., labour relations legislation is designed to promote freedom of association and union recognition. However, unlike in the U.S., courts in Canada have interpreted the Charter of Rights and Freedoms as protecting the right to join a union and impose a duty on employers to bargain in good faith. In other words, Canada is more union-friendly than the U.S.
In all Canadian jurisdictions, a union that wishes to represent a group of employees must submit an application for certification showing that it has a requisite level of support in the form of membership evidence. For example, in Ontario, a union is required to prove it has the support of at least 40% of employees in the form of signed union membership cards. If the union shows the requisite membership evidence, this will trigger a secret ballot vote. In some jurisdictions, including in the province of Quebec, a secret ballot vote is not required where a certain threshold of support is established. A representation vote is typically held within a short period of time after the application for certification is received. Should 50% plus one of the employees that cast their ballots vote in favour of having union representation, then the respective labour board will certify the union, and declare it the sole bargaining agent of the group of employees.
Employers must be aware that they are prohibited from engaging in any conduct considered to be an act of intimidation, a threat, undue influence, or conduct interfering with union organizing. If an employer is found to have engaged in such conduct, it may be found to have committed an Unfair Labour Practice, and may receive sanctions from the respective labour board. In some jurisdictions, where the labour board finds the employer to have engaged in acts of misconduct, the labour board has the discretion to order automatic certification despite limited employee support for the union.
For existing unionized organizations, the employment relationship is governed exclusively by a collective agreement which outlines all terms and conditions of employment. As such, unionized employers must be cognizant of the “traditional” labour relations issues relating to discipline and discharge, work assignments, and contracting-out, as well as emerging issues such as social networking, and privacy.
Lastly, an important distinction between Canadian and U.S. labour law is successor rights. Specifically, under U.S. law, when a company acquires another business, the existing collective agreement and/or its duty to bargain does not automatically flow to the successor employer. However, in Canada, on a sale or transfer of a business, the collective agreement and the bargaining rights will transfer to the acquiring employer in most cases.
6. Minimum Employment Standards
As noted in the introduction, each Canadian province has its own legislation that sets out the minimum employment standards governing such terms of employment as wages, hours of work, overtime pay, vacation, public holidays, leaves of absence, and notice of termination. Although similarities exist between the provinces, each has distinct employment standards legislation governing an employee’s terms and conditions of employment. Accordingly, employers cannot assume that what applies in one jurisdiction will apply similarly in another jurisdiction.
For example, a high degree of variance amongst the jurisdictions exists with respect to minimum wage. While some jurisdictions maintain a standard rate for all employees, others maintain separate rates for certain classes of employees, or employees working in specified industries. Similarly, with regards to hours of work and overtime, some provinces maintain a weekly threshold which, when exceeded, triggers the requirement to pay overtime, while others maintain both a daily and weekly overtime threshold. In some, an employee’s entitlement to vacation time and vacation pay may vary depending on the employee’s length of service, while others maintain a single entitlement regardless of length of service. The observance of paid public holidays also varies with some observing as few as seven, while others observe up to ten days. Each also provides for different types of statutorily protected leaves of absences, such as pregnancy and parental leave, as well as leaves of absence which allow an employee to take time off due to the illness of the employee or certain of his or her family members.
Lastly, it is important to note that unlike the U.S., the categories of “exempt” and “non-exempt” employees are not applicable in Canada. Distinctions in employment with respect to entitlement to overtime pay are not based upon the manner of remuneration (salaried versus hourly paid employees). With the exception of executives, true managerial employees (not just those who have managerial titles), and other specified position exemptions in Canada, all employees are entitled to overtime pay regardless of income level and/or job title.
Your Employment Standards checklist should include such matters as:
Minimum wage
Hours of work
Vacation time and vacation pay
Statutory leaves of absences
Public holidays
Overtime
Record keeping
7. Universal Health Care, Employment Insurance, and Extended Group Benefits
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In contrast to the U.S., Canadian employees have universal access to medical and hospital care, as well as access to employment insurance benefits. Health care in Canada is funded by a combination of general taxes, employer contributions, and individual premiums.
Employment insurance benefits are administered by the federal government and funded by employers and employees. Employees are generally eligible for employment insurance benefits in circumstances where they have experienced a loss of employment, as well as during disability, and maternity leaves. In addition to universal health care and access to employment insurance benefits, most Canadian employers offer some form of extended group benefits, including health and dental, group life insurance, and accidental death and dismemberment insurance. There is nothing analogous to the Consolidated Omnibus Budget Reconciliation Act (C.O.B.R.A.) in Canada.
Your Benefits checklist should include such matters as the following:
Provincial health plan enrollment (where applicable)
Benefit enrollment
Insureability
Co-pay arrangements
Extended group benefits
Short-term disability
Long-term disability
Health care spending accounts
Summary of benefits
Opting out of benefits
8. Payroll and Human Resource Administrative Matters
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More often than not, U.S. employers will assume that payroll and human resources administrative practices are similar on both sides of the border. In reality, there are several key differences. For example, in Canada, there is nothing analogous to the I-9 Employment Eligibility Requirement forms. Proof of eligibility of employment in Canada is typically determined by providing proof of a valid Social Insurance Number (S.I.N.). Also, in Canada, an employer is required to provide Record of Employment forms (R.O.E.) whenever an employee experiences a break in service (i.e. any leave of absence of a prescribed duration, termination, etc.). R.O.E. forms are to be issued within five calendar days of either the first day of an interruption of earnings, or the day the employer becomes aware of an interruption of earnings. Privacy legislation generally permits the storage of employee information outside of Canada, on the condition that employees are advised of such, and that their information is accessible upon request.
Lastly, each jurisdiction may enforce various employee information posting requirements in accordance with specific legislation. Posting requirements vary, but tend to pertain to employment standards and occupational health and safety notices.
Your Payroll and Human Resource Administrative checklist should include such matters as the following:
Employee personnel file
TD-1 “Personal Tax Credits Return” form
Social Insurance Number (S.I.N)
Benefit enrolment forms
T-4 “Statement of Earnings” forms
T-2200 “Declaration of Conditions of Employment” forms
Record of Employment (R.O.E.)
Third-party remittance forms
Canada Pension Plan (C.P.P.) / Quebec Pension Plan (Q.P.P.) deductions
Employment Insurance (E.I.) deductions
Union remittances forms (where applicable)
Workplace posting requirements
9. Occupational Health and Safety
Each province has its own occupational health and safety legislation that protects employees against health and safety hazards in the workplace. The hallmark of the Canadian occupational health and safety scheme is the requirement that employers establish joint health and safety representatives or committee (depending on the number of employees in the organization) consisting of employees and management representatives. The expectation under the legislation is that the joint health and safety representative or committee will work cooperatively to identify work hazards and propose measures to eliminate such hazards. Canadian occupational health and safety legislation also places significant positive obligations on employers, as well as positive obligations on employees in ensuring safe workplaces.
Your Occupational Health and Safety checklist should include the following matters:
General occupational health and safety policy
Training on the Workplace Hazardous Materials Information System (if applicable)
Workplace hazard signage/posters
Health and safety representative
Health and safety committee
Workplace violence programs and policies
Working alone policies
Training schedule
10. Workers’ Compensation
Provinces have adopted “no fault” workers’ compensation schemes to provide compensation for work-related injuries. Coverage is typically mandatory with few exceptions. The workers’ compensation schemes are funded by employers based on their payroll, industry, and history of injuries. Each province has a workers’ compensation board which sets rates, administers rehabilitative services for workers, and enforces reinstatement obligations.
Your Workers’ Compensation checklist should include the following matters:
Registration
Accident reporting forms
Early and safe return to work program
11. Restrictive Covenants
In the U.S., employers may rely upon the doctrine of “inevitable disclosure” to prevent an employee from working for a competitor where such employment would inevitably result in the disclosure of confidential information and trade secrets in the course of performing their duties for the new employer. This doctrine is not recognized in Canada.
Further, post-employment obligations/restrictions such as non-competition and non-solicitation provisions will be strictly interpreted and will only be enforced if they are reasonable in terms of scope, duration, and geography. In most cases, Canadian courts will not enforce a non-competition provision if a non-solicitation provision will reasonably protect the employer’s legitimate interests.
In Quebec, an employer will not be able to rely upon an otherwise valid non-competition provision if the employee has been terminated without a serious reason (i.e. just cause), including constructive dismissal.
Your Restrictive Covenants checklist should include such matters as the following:
Assessment of legitimacy based on interests
Scope, duration, and geography reviewed and assessed
Appropriateness of drafting
12. Disability
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Although U.S. law prohibits discrimination on the basis of disability, in Canada employers must accommodate employees with a disability to the point of “undue hardship”, which is a high threshold for employers to meet. The undue hardship standard varies depending on the nature of the employee’s disability and the employer’s operation. As a general rule, employers must explore all available options as well as assess whether any such options are reasonable to implement in light of the undue hardship test.
13. Employment in Quebec
Conducting business in the province of Quebec can be quite different from conducting business in the rest of Canada. First, Quebec is a civil law jurisdiction, as opposed to a common law or judge based law system, which means that most of the laws and legal principles come from one primary piece of legislation, namely the Civil Code of Québec. Second, and perhaps the greatest challenge are the French language requirements for any company conducting business in Quebec. Namely, all Quebec employers are monitored by the “Office québécois de la langue française” (Office) and employers with more than 100 employees have an obligation to form a “francization committee”, and where deemed necessary go through the “francization program”. For most employers with 50 or more employees, there is an obligation to provide an analysis of the company’s linguistic situation to the Office. Lastly, French is the official working language in Quebec. The practical implication of this is that all employees have the right to communicate with their employers in French and there is a prohibition against employers assigning a language other than French as a job requirement (subject to some exceptions).
14. Employer Obligations Upon the Termination of Employment
In Canada, an employment relationship can be terminated in one of two ways: 1) for “cause”; or 2) “without cause”. This is in stark contrast to the doctrine of “employment-at-will” in the U.S.
Termination for “cause” is a very high threshold test which, if met, typically results in the employer being relieved of its obligation to provide notice of termination to the employee. “Cause” is known to occur where an employee has engaged in conduct so egregious that the relationship is no longer viable. Examples of cause may include, but are not limited to: dishonesty, theft, conflict of interest, insubordination, wilful disobedience, breach of fiduciary duty, serious violation of workplace rules, and/or gross negligence.
Where “cause” cannot be established, the individual employment relationship cannot be terminated without providing reasonable notice of termination. An employer may satisfy this obligation by providing actual working notice of termination, pay in lieu of notice, or a combination of both. The employment standards legislation in each jurisdiction sets out the minimum amount of notice that must be provided to employees upon termination.
Where no employment agreement exists limiting an employee’s entitlement to notice upon termination (subject to employment standards legislation minimums), reasonable notice is determined by considering various key factors historically defined by Canadian courts, including an employee’s age, length of service, the character of their employment, and the availability of similar employment. Additional factors Canadian courts will consider in determining the reasonable notice period include inducement and the nature of the industry. Typically, the range for reasonable notice is between one and twenty-four months although there have been a limited number of recent decisions providing for greater reasonable notice periods.
Conclusion
All employees in our Movement, regardless of which side of the boarder the work on, share the passionate desire to work towards total animal liberation. It is my hope that this blog empowers employers in the U.S. to understand a little bit more about the differences regarding employment matters between Canada and the U.S., and to help them ensure that they are creating the most productive workplaces for activists.
The following information is provided for general information purposes only. It is not intended to provide legal advice or opinions of any kind. No one should act, or refrain from acting, based solely upon the materials provided on this website, any hypertext links or other general information without first seeking appropriate legal or other professional advice.
The intention of this blog is to promote the longevity and engagement level of the ACTivist community within the Animal Advocacy Movement (AAM). The majority of the advice will be geared towards employees within the AAM in Canada and the United States, but may be applicable to other countries. All information provided assumes that the employee works within a non-unionized environment.
Krista is the Executive Director of For The Greater Good where she consults with animal protection organizations across North America on matters of organizational development and governance. In addition to holding five degrees and designations in human resources, including a master’s degree in organizational development and leadership, she is pursuing her doctorate focused on the employment experiences of animal rights activists in Canada and the United States. Krista first joined the Animal Advocacy Movement as the VP of Mercy For Animals in Canada where she led twelve undercover investigations into factory farms and slaughterhouses. Krista also served as the President of the Board for Happily Ever Esther Farm Sanctuary for over five years, also now serves on several other Boards including One Protest, The Rancher Advocacy Program, Egg-Truth, and Dairy-Truth. Krista is also a member of Womxn Funders in Animal Rights. Krista is a peer reviewer for the Journal of Critical Animal Studies. Prior to joining the Movement, Krista founded a boutique employment and labour law firm in Toronto where she consulted to employers across Canada and the U.S. for a decade, and before that she spent fifteen years in human resources including as the Vice President of HR for one of the largest software companies in the world.