Employment Standards

Employment law refers to the many rules that govern the contractual relationship between employers and employees. The area of “employment law” is different from “labour law,” which governs the relationship between unionized employees and their employer.

In Canada, employment law is set by provincial governments, except where the workplace is on a federal (national) level. Some examples of employment industries that are governed by federal law include federal government employees, telecommunications industry (e.g., banks, telephone, radio, and television), employees engaged in international or inter-provincial transportation and airlines. In these cases, the Canada Labour Code applies to these workplaces and employees.

For most other employees who do not work in these federal (national) industries, the laws of the specific province where the employees are based will apply. In Ontario, the Employment Standards Act, 2000 (“ESA”) is the statute that regulates the relationship between employer and employee.

The Employment Standards Act, 2000  (ESA) creates basic rights that all employees have, including:

• overtime pay
• hours of work and eating periods
• public holidays
• paid vacation
• pregnancy and parental leave
• personal emergency leave
• termination and severance of employment 

It is illegal for employers to provide you with less than these minimum standards.  Employers who fail to comply with these requirements face serious consequences, including Provincial Offences charges by the Ministry of Labour.  

Therefore, it is useful to think of the ESA as a piece of legislation that sets out basic minimum standards that all employers have to follow. As noted above, the ESA sets out certain minimum standards relating to wages, vacation, hours of work and overtime, minimum notice requirements after a termination of employment, and leaves of absences. An employer cannot impose conditions on employees that are less favourable than the minimums established in the ESA. Furthermore, an employee and employer are, for the most part, prohibited from contracting out of the ESA. So, for example, a clause in an employment contract that sets out a notice period less than the ESA requires would be unenforceable because that clause violates the ESA, as will be an employment contract that attempts to pay the employee less than the required minimum wage.

However, it is important to note that the ESA creates only minimum requirements. In other words, they establish the ground floor, not the ceiling on which the employment relationship is based. Therefore, employees and employers can agree to higher minimum standards of employment by signing an employment contract.

Further, while employment relationships are governed by the ESA or a valid employment contract, they are also governed by the common law. In contrast to the ESA, the common law usually sets out rules that are far more generous to the employee (“common law” refers to “judge-made law” in previous court decisions that must be followed).

This means that, in Ontario, an employment contract, the ESA and the common law create 3 sets of overlapping rules that govern the relationship between an employer and an employee. So, where an employment contract seeks to take away basic minimums entitlements of an employee required by the ESA (e.g., terminating their employment without notice or severance pay), the common law will automatically protect the employee with greater protections).