Employment Standards Act
The Employment Standards Act, 2000 establishes minimum requirements for employment in Ontario with regard to matters such as hours of work, vacation and leave, payment of wages and termination of employment. Employers must, among other things, keep accurate and complete employment records, pay overtime or holiday pay in a timely fashion, and not require employees to work hours that exceed daily or weekly limits without a written agreement and authorization from the Director of Employment Standards. Recent changes to the Act require that an employer not treat employees as if they were individual contractors. A variety of legal decisions makes it possible to distinguish a genuine contractor from someone who is called a contractor in order to save the employer from complying with the Act for treatment of employees.
Employers who fail to meet the requirements under the Employment Standards Act, 2000 may be subject to charges under the Provincial Offences Act, with fines if they are found to be liable. In other cases, employers may be subject to a Notice of Contravention issued by an employment Standards Officer, which may entail a significant penalty. Decisions of Employment Standards Officers may be appealed to the Ontario Labour Relations Board.
The Employment Act, 2000 sets out the lawful ways of terminating someone's employment, As long as the rules are followed, there should be no problem for either the employer or the employee.
An employee may be dismissed for just cause, which is limited to serious infractions, such as dishonesty, repeated insolence and insubordination, harassment, bullying and abuse of power, abandonment of the position (which requires more than a few days' unjustified absence), intoxication or criminal activity (such as theft). In the absence of just cause, an employer may still terminate an employee's employment, so long as there is no discriminatory reason involved, and so long as proper payments are made. Either the employer must give the employee sufficient notice of the termination, or pay the employee an amount of money equivalent to the wages he or she would have earned during the notice period (called pay in lieu of notice). For companies of a certain size, and employees who have more than three years of employment with that employer the employer must also pay severance.
Wrongful dismissal can be alleged if the employer claims that the termination is for just cause, but the employee considers that the termination was not justified, or if the amount of pay in lieu of notice and/or severance (if applicable) is not sufficient.
In other situations, even though the employer meets the minimum requirements of the Employment Standards Act, 2000 for termination of employment, the dismissal may still be considered wrongful, based on some recent court decisions. The calculation of what constitutes reasonable notice should take into account the employee's age, length of service, position, salary or wage level, and the availability of other employment in the same field.
Sometimes, an employer will change an employee's terms and conditions of work in a negative way, so much so that the employee feels he or she can no longer work there. If the employee quits under such circumstances, he or she may still be able to demand termination pay, on the basis that the employer had left no option but resignation. This is called constructive dismissal and can lead to a complaint to the Ministry of Labour, to a claim in Small Claims Court (if the amount involved is no more than $25,000.00) or to a full civil action. If the reason for the dismissal includes even only in part a ground of discrimination under the Human Rights Code, then the dismissal may also be discriminatory and an Application can be made to the Human Rights Tribunal of Ontario. The human rights matter may also be raised in the context of the wrongful dismissal claim, but if that is the case, then there can be no parallel Application to the Tribunal.