Here are 5 Surprising Facts about Employment Law in Ontario

As in most areas of the law, Ontario employment law is a complex and evolving area of law that affects both businesses and employees. Not only do the rules that govern workplaces come from legislation and regulations, but new rules are often created in court cases (called “caselaw“). As a result, it is important for all employers and employees to consistently stay on top of employment law rules and trends, as they continually evolve. Here are five surprising facts that you may not know about Ontario employment law:

As of October 2021, for most employees, non-compete agreements are illegal. The general exceptions are if an employee is a senior executives (think “C-Suite” positions, such as a CEO, CFO, COO, etc.), or if it is required as part of the sale or lease of a business. What does this mean? Simply put, it means employers cannot prevent their former employees from working for or starting their own competitive business after the employment is terminated or they resign (i.e., employment relationship has ended).
Most employees are entitled to financial compensation called a “severance package” if their employment is terminated. While the general rule is that an employee is only entitled to prior notice of termination (or severance package to provide compensation instead) if their employment is terminated without cause, courts will quite often find the employer did not have just cause to fire an employee if challenged in a wrongful dismissal claim, simply because the threshold to justify just cause is very high for employers to prove. The other cases where an employee is not entitled to a severance package is if the employee resigns (quits) their job, or if there is a “frustration” of the employment relationship.
Determining if you are an “Employee” or “Independent Contractor” is Hard. The general rule is to look at the factual circumstances underpinning the working relationship and determine who maintains “control” over the relationship. This means looking at various factors, such as who sets the work schedule, who owns the tools or equipment to carry out the job and is there a chance of profit or risk of loss from the work? In most cases, however, employers run the risk of misclassifying the relationship, with the courts (and Ministry of Labour) often concluding the worker is an employee.
Temporary Layoffs are Not Automatically Allowed. In fact, the general rule is that an employer can only put an employee on an unpaid temporary layoff (i.e., ask them to stay home and not work, without paying their wages or salary during that time) if the employee has agreed to that in a written employment contract. Otherwise, an employer’s one-sided decision to temporarily layoff an employee (even when supposedly justified because of financial reasons) is a constructive dismissal under common law, which means effectively a termination entitling the employee to receive a severance package.
Employees Have a Duty to Mitigate. When an employee is terminated from their job, they are generally entitled to a severance package compensation. However, the amount is not guaranteed. In fact, an employee has a duty to mitigate, or a responsibility to look for and apply for similar employment. If they fail to persuade a court in a wrongful dismissal claim that they put reasonable efforts to secure new employment (and instead, seek to rely on maximizing the severance package their employer had to provide), they may have their severance package reduced as a consequence.

Call Now if You Are Looking for Employment Lawyer in Toronto

If you are an employee who believes they were wrongfully terminated from your employment, it is important to speak with an experienced Toronto wrongful dismissal lawyer as soon as you are told by your employer that their employment will be terminated. Likewise, if you are an employee who believes you have been wrongfully dismissed and the decision to terminate was unjust or discriminatory, please speak with our experienced wrongful dismissal lawyer in Toronto regarding your options, including negotiating your severance package to obtain the severance compensation you deserve, as well as wrongful dismissal claim.

Contact us by phone 647-822-5492 or fill out the contact form to the side. Our employment lawyer in Toronto would be happy to assist in your Ontario employment law matter as quickly as possible.

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