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Employment Law in Ontario as it relates to non-union employees is governed by two separate areas of law: The Common Law and the Ontario Employment Standards Act (ESA) Following is an overview of these laws.
THE COMMON LAW
The system of Common Law is a civil system of
law inherited from England.
It is a function of the Superior Courts and is the basis of the laws of all
Canadian provinces except Quebec.
The common law treats the employment relationship between the employer &
the employee as a contract, an exchange of services for money. Generally there
is little in writing in the way of terms of employment, and in the
majority of cases this represents an oral contract.
There are two basic types of employment
recognized by the common law;
Employment for an Indefinite Term
DEFINITE TERM EMPLOYMENT
A person employed for a definite term or task
can expect to be terminated at the time agreed upon without receiving severance
pay. However, if the employer terminates
employment without just cause prior to the agreed upon time, the employer may
be required to compensate the employee for lost wages & discontinued
benefits to the end of the agreed upon time.
Defined term contracts in excess of nine years are not recognized under the common law. If employment is not terminated at the end of the agreed upon time and the employee is permitted to continue working, the relationship then becomes indefinite term employment.
INDEFINITE TERM EMPLOYMENT
For persons employed for an indefinite term the
common law presumes that the employer and employee have agreed not to terminate
the relationship without notice, subject to the ‘just cause” exception. It is
implied within this contract that an employer is expected to give reasonable notice
of dismissal or provide compensation in lieu of notice. Wrongful dismissal occurs when the employer
fails to provide this notice or compensation for such when there us no just
cause.
If a contract of employment sets out a specific period of time for notice of termination, then the period of notice will be as specified in the contract and must not be less than the statutory minimum as set out in the Employment Standards Act.
REASONABLE
NOTICE OF TERMINATION
If the
contract does not directly address notice of termination,, then the law
presumes that the employer must provide "reasonable" notice of
termination. There are many factors considered in any particular situation in
determining what is "reasonable" .
The most important of which are:
An
employee's age Although Canadian Courts have rejected a universal "rule of thumb" of one month's notice per year of service, this "rule" does give a rough idea of what is often awarded.
THE
"JUST CAUSE" EXCEPTION
Unless
the contract of employment states otherwise, an employee can be dismissed
without notice if the employer has just cause. In practice, just cause is present in only a very
small minority of cases. Even though an
employer has legitimate reasons to dismiss an employee, just cause requires
that the employee has been guilty of serious misconduct, habitual neglect of
duty, incompetence or conduct incompatible with his or her duties.
Lack of work resulting from loss of business or having a legitimate business reason to terminate an employee is not the same as having just cause. An employer's dissatisfaction with the person's attitude, productivity or personality will not be enough, unless the employee has been warned unequivocally about the probability of dismissal and given a reasonable opportunity to improve (and even then the courts tend to side with the employee) |
