Navigating the Maze: Essential Rights and Responsibilities for Ontario Employers
As an employer in Ontario wondering: “what are my rights as an employer?”, the first steps is to know your own rights and responsibilities within the complicated and ever-changing area of employment law? Simply put, operating a business in Ontario is both a rewarding and complex task. As an employer, you wear many hats – motivator, leader, and, let’s face it, sometimes, rule-enforcer. But amidst the daily hustle, it’s easy to get lost in the legal web of your employer rights and responsibilities.
This blog is your guide to navigating the essentials, empowering you to confidently manage your workforce.
Setting the Stage: The Ontario Employment Standards Act
Consider the Ontario Employment Standards Act, 2000 your foundational document, which outlines the minimum standards you must adhere to, from minimum wage and overtime pay to vacation entitlements and termination procedures. Think of it as a complicated employee handbook that sets the stage, but is legally binding.
Employee Hiring, Recruitment and Selection
When you are on the hunt for the perfect employee, you generally have the freedom to choose who you hire. However, it is important to always remember that discrimination is a big no-no. In fact, the Ontario Human Rights Code protects individuals from discrimination based on factors like race, colour, creed, ethnicity, disability, gender, and age. Most importantly, it requires employers to treat all employees equally and provide them with equal benefit and opportunity without discrimination.So, the bottom line is to always focus on skills and qualifications, not personal characteristics or membership in a particular group in society.
Defining the Relationship: Employment Contracts
Think of an employment contract as your roadmap, which outlines the terms and conditions the relationship with your employee. While not mandatory for all employees, they are highly recommended by Ontario employment lawyers. The main reason is because they clarify expectations, protect both parties, and can help to prevent future disputes. Just remember, employees have the right to refuse signing a new contract, so be transparent and fair in your terms.
When drafting an employment contract, a Toronto employment lawyer will likely include the most important sections:
- job title, duties and responsibilities
- compensation
- confidentiality clause
- non-solicitation clause
- change of employment duties and responsibilities
- temporary layoff
- intellectual property protections
- termination clauses (which discusses an employment termination with just cause, or termination without cause by providing severance package)
Termination of Employment
Unfortunately, sometimes goodbyes are necessary, especially at the workplace . But even when letting someone go, employers have to follow the rules. As a starting point, the Ontario Employment Standards Act, 2000 outlines the rules when terminating an employee’s job and the required notice periods. For example, an employer must provide the employee with a written termination letter at least 1 week for every year the employee works for the company, benefits continuation and, in certain cases, severance pay. It is important to remember that these minimum termination of employment standards only applies if you have signed a valid and enforceable employment contract with a termination clause establishing the termination standards.
If, however, there is no binding employment contract, employers must follow the common law rules of termination, which are far greater than the minimum standards. In these cases, employers must consider the following factors:
Unless the employee has signed an employment contract with a valid termination clause or can be legally fired during during a probation period, or employee can justifiably be terminated for just cause, you must generally provide your employee with reasonable notice of termination (or pay in lieu of notice). Among other things, this means that you must provides the employee with either working notice (where they continue working for a set period of time), or pay in lieu of notice (a lump sum payment calculated based on your seniority and total annual compensation called, a severance package). The amount of notice is determined by various factors, including the employee’s age, years of service, position, current economic circumstances (but generally increases with your age and length of service).
As any experienced Ontario wrongful dismissal lawyer will tell you, wrongful dismissal claim can be costly, so ensure you have a valid reason and follow the proper procedures.
Is the Worker an Independent Contractor or Employee?
In Ontario, distinguishing between an independent contractor and an employee is crucial for both employers and workers due to significant differences in rights, responsibilities, and tax implications.
There is no single, definitive legal test for determining whether someone is an employee or an independent contractor. Instead, courts consider a multi-factor test that examines the totality of the relationship between the parties. Here are some key factors considered:
Control:
- Degree of control exercised by the employer: Factors like setting work hours, location, and methods, providing equipment, and supervising work all suggest an employee relationship.
- Freedom of the individual to work for others: Independent contractors usually have more freedom to choose their clients and projects, while employees are typically restricted to working for their employer alone.
Financial Independence:
- Risk of loss and opportunity for profit: Employees receive a fixed wage regardless of the outcome of their work, while independent contractors bear the risk of loss and have the potential for profit.
- Investment in business: Independent contractors typically invest in their own tools, equipment, and supplies, while employees usually rely on the employer’s resources.
Integration into the business:
- Essential nature of the work: Work essential to the core business of the employer suggests an employee relationship, while peripheral tasks might indicate an independent contractor.
- Level of skill and expertise required: Highly specialized skills used independently may point towards an independent contractor, while tasks easily replaceable by others might suggest an employee.
Written agreements:
- The Label: While not conclusive, written contracts describing the relationship as independent contractor vs. employee can be considered, but the actual nature of the work takes precedence.
So, understanding the distinction between employees and independent contractors – misclassification can lead to significant legal and financial repercussions.
So, if you are a business asking: “what are my rights as an employer” in Ontario, it is important to speak with an experienced Ontario employment lawyer to discuss your options and next steps on how to deal with workplace issues, such as wrongful dismissal, constructive dismissal or employment contracts. As an employment law firm in Toronto, Bune Law has reviewed and negotiated improvements to many severance packages. You will review and get guidance on your severance package before you agree to sign any termination documents, and help ensure that your severance package is fair and reasonable.