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Know your jurisdiction – Considerations for employers with employees in different provinces

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National employers are well aware that the legislated employment standards differ widely between provinces. Keeping up with the changing law in different jurisdictions can be a challenge for companies with a workforce that is spread across the country. Since the pandemic, understanding the implications of employees working remotely from another province has also become a pressing issue for smaller businesses.

Termination and severance pay

As we discussed in our June 13, 2023 blog post, the Ontario Employment Standards Act (“Ontario ESA”) provides for not only termination pay, but also for severance pay for employees who have worked five years or more, and whose employers have a global payroll of at least $2.5 million. Other than industries which are federally regulated, to which the Canada Labour Code applies, Ontario is the only province whose employment legislation mandates severance pay in addition to termination pay. For example, the British Columbia Employment Standards Act (“BC ESA”) does not include provisions for severance pay, and only sets out what notice or pay in lieu of notice employees are entitled to at termination. This results in a very different financial landscape for employers who are considering the costs of terminating employees in either province.

Remote work

If an employee consistently performs their work from another province, it is very likely that the employment law of that province will apply. This can be a concern for employers whose HR staff is not well-versed in the laws of other provinces. Still, it may also be helpful due to the potentially lower financial consequences that come with different jurisdictions. With appropriate knowledge and planning, having employees work remotely from other provinces can be beneficial.

Human rights

Employers operating nationally also have to consider the subtle but real differences in human rights protections in each province. For instance, the Ontario Human Rights Code (“Ontario Code”)and the British Columbia Human Rights Code (“BC Code”) cover many of the same protected grounds, with a few differences that impact employment law. The Ontario Code lists citizenship as a protected ground, while the BC Code does not. This means that an employee in British Columbia who experienced discrimination at work on the grounds of citizenship could not bring a human rights complaint, but an employee in Ontario could under the same circumstances.

Another area of distinction is in the way these two provinces treat prior criminal convictions as a protected human rights ground. Under section 13 of the BC Code, a person must not refuse to employ or continue to employ a person or discriminate against a person regarding employment because they have been convicted of a criminal or summary conviction offence that is unrelated to the employment. In comparison, under section 5 of the Ontario Code, “record of offences” is a protected ground, and is defined to mean a conviction for an offence in respect of which a pardon has been granted and not revoked, or an offence under provincial law. These two approaches have some similarities in that both provinces offer protection against discrimination on the grounds of prior conviction, however only in British Columbia does it matter what the relationship between the offence and the job is. Accordingly, a much more context-specific exercise is required in British Columbia than in Ontario when employers are making decisions about employees with criminal records. Other provinces, such as Alberta do not include previous convictions as a protected ground at all.

Termination clauses

Another area to consider is how the courts have been interpreting termination clauses in each province. In Ontario, in recent years there have been many employee-friendly decisions in which courts have required a high level of clarity and specific language in order for termination clauses to be enforceable. In comparison, British Columbia courts have taken the opposite approach, ruling to give significant leeway to the wording of the clauses.

For example, in McMahon v Maximizer Services Inc., 2023 BCSC 4, the terminated employee tried to argue that the termination clause was unenforceable because it was ambiguous, unclear, and violated the BC ESA. The court ruled that the clause was enforceable despite the issues with clarity and continuation of other entitlements such as benefits during the notice period. In comparison, Ontario courts have been very strict with the specific wording and clearness of the clause. In Quesnelle v. Camus Hydronics Ltd., 2022 ONSC 6156 an Ontario judge ruled that the use of the words “and/or” in reference to the termination and/or severance pay that the employee was owed under the Ontario ESA was unenforceable, as the Ontario ESA requires payment of both termination and severance pay to eligible employees.

When drafting employment contracts for employees in either province it is important to be as clear as possible, however recent case law indicates that British Columbia courts may offer more leeway when it comes to interpreting termination clauses.

Navigating the specific employment law requirements of each province can be complicated, whether you are managing employees in one province or more. Employment lawyers are available to help employers ensure they meet each jurisdiction’s requirements.

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