The Employment Law Dictionary defines commonly used terms in Ontario employment, labour, and human rights law. Some terms have multiple meanings, depending on the context. As with all employment law, the terms may not be applicable in all situations. None of the information below should be construed as legal advice. Should you require legal advice, please consult an employment lawyer, labour lawyer, or human rights lawyer. You can contact Toronto Employment Lawyer Jason Wong at 647-242-5961 or jason@wongemploymentlaw.com.

Last updated: April 17, 2019

Index: A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

A

Accommodation:

All employers and service providers in Ontario have a duty to accommodate their employees and customers. This means that employers are required to prevent and remove barriers to provide accommodation to the point of undue hardship. Employers must accommodate employees regarding their creed, religion, family status, sex, pregnancy, disability, age, and gender.

The duty to accommodate has a procedural component and a substantive one. The procedural duty to accommodate refers to the procedure the employer takes to examine what types of accommodation may be appropriate. The substantive duty to accommodate refers to the actual accommodation provided. A failure to accommodate an employee will be a violation of the Ontario Human Rights Code, and could lead to the Ontario Human Rights Tribunal ordering an employer to pay an employee for discrimination.

B

Bad Faith:

All parties in a contract, especially employers and employees in an employment relationship, have an obligation to perform their end of the deal in good faith. The most common area where employers face liability regarding bad faith is when an employee is terminated. Courts and judges have regularly ruled that an employee is most vulnerable at the time of their termination. Therefore, during terminations, an employer must be candid, reasonable, honest, and forthright with their employees. Employers should not engage in conduct that is unfair or in bad faith by being untruthful, misleading, or unduly insensitive.

Where an employer’s bad faith conduct during termination causes mental distress on the employee, the employer may be ordered to pay an employee aggravated or moral damages. For an example, an employer had to pay $30,000 in damages when it fired an employee during Christmas.

C

Constructive Dismissal:

Constructive dismissal occurs when an employee quits but claims that they have only resigned due to the employer’s actions. Even though the employee quit, it is really a termination because the employee is not leaving voluntarily. This makes it a constructive dismissal.

Constructive dismissal can occur in a variety of ways including:

  • Less pay;

  • Less hours;

  • Demotion;

  • Harassment;

  • Toxic Work Environment;

  • Discrimination; or

  • Failure to pay wages.

As indicated by the above, constructive dismissal essentially occurs when an employer tries to change the terms and conditions of employment without the employee’s consent.

Further, when an employee quits, they are not entitled to any severance or notice of termination. They are also not eligible for EI or employment insurance benefits. However, if an employee quits but claims constructive dismissal, the result is the same as a termination without cause. The employee is entitled to severance and EI.

D

Discrimination:

In the human rights context, discrimination refers to the differential treatment based on a prohibited ground. For example, section 5 of the Ontario Human Rights Code prohibits discrimination in employment:

Every person has a right to equal treatment with respect to employment without discrimination because of race, ancestry, place of origin, colour, ethnic origin, citizenship, creed, sex, sexual orientation, gender identity, gender expression, age, record of offences, marital status, family status or disability. 

Also see: Accommodation

E


Employment Insurance:

Employees who lose their job through no fault of their own may be eligible for employment insurance (EI). Employees who are terminated for cause do not qualify for EI unless they successfully convince Service Canada that the employer did not have cause to dismiss them.

Service Canada lists the following criteria to be eligible for EI regular benefits, employees must be:

  • employed in insurable employment;

  • lost their job through no fault of their own (e.g. termination without cause, layoff);

  • have been without work and without pay for at least seven consecutive days in the last 52 weeks;

  • have worked for the required number of insurable employment hours in the last 52 weeks or since the start of their last EI claim, whichever is shorter;

  • are ready, willing and capable of working each day;

  • are actively looking for work (including keeping a job search log).

How much EI an employee gets depends on their number of hours worked and the unemployment rate in their region. For example, as of January 1, 2019, a Toronto employee who worked 665 insurable hours could get a maximum of 38 weeks of EI benefits, at a rate of $547 per week.

Employees cannot start their EI payments until after their notice of termination has finished, or until after all severance payments have been received. Further, an employee who receives EI but subsequently receives severance must pay back their EI for the period of time that the severance covers. However, any repaid EI can be claimed back if the employee is still unemployed after the severance is used.

Employees can also receive EI due to sickness. They can also receive EI for maternity and parental leaves.

In all cases, employees can apply for EI online through their My Service Canada Account. Records of Employment (ROE) are required; they are completed by the employer. ROEs can be submitted directly to Service Canada online or physically given to the employee. If ROEs are submitted online, employees can simply follow the EI application process online. If ROEs are given physically, employees should go to their nearest Service Canada to ensure Service Canada receives their Record of Employment to process their EI application.

F

Fixed Term Contract:

Most employment contracts are of indefinite term, and can be terminated by the employer by providing the employee notice of termination, pay in lieu of notice - often referred to as severance. A fixed term contract is one where the end date is defined. When an employer terminates a fixed term contract and it does not have an enforceable early termination clause, the employer must pay the employee the rest of the fixed term as severance.

For example, if an employee is working under a fixed term contract of two years and is terminated one year into employment, the employee may be entitled to the remaining year of the fixed term as severance.

Frustration:

When an employment contract can no longer be performed through no fault of either employer or employee, the contract can be terminated through frustration. This commonly occurs when an employee is medically unfit to perform work or passes away. It also occurs when an employee is disabled and the employer cannot accommodate their disability. In most cases, an employer does not have to provide the employee with severance at common law. However, most employers would have to provide the employee their minimum entitlements under the Employment Standards Act, including termination pay, severance pay, and benefit continuation.

G

Good Faith:

See Bad Faith

H

Harassment:

Workplace harassment can take many forms. The Ontario Human Rights Code and the Ontario Occupational Health and Safety Act both contain similar definitions for harassment.

The Ontario Human Rights Code defines harassment as:

engaging in a course of vexatious comment or conduct that is known or ought reasonably to be known to be unwelcome

The Ontario Occupational Health and Safety Act defines workplace sexual harassment as:

(a) engaging in a course of vexatious comment or conduct against a worker in a workplace because of sex, sexual orientation, gender identity or gender expression, where the course of comment or conduct is known or ought reasonably to be known to be unwelcome, or

(b) making a sexual solicitation or advance where the person making the solicitation or advance is in a position to confer, grant or deny a benefit or advancement to the worker and the person knows or ought reasonably to know that the solicitation or advance is unwelcome

Harassment can take many forms, including bullying, yelling, and isolating. One incident is sufficient to establish harassment. The result of workplace harassment can lead to constructive dismissal and discrimination contrary to the Ontario Human Rights Code. The Ontario Occupational Health and Safety Act also requires employers conduct a workplace investigation into allegations of harassment that is appropriate in the circumstances. Further, employers are not allowed to reprise, retaliate, or punish an employee for reporting harassment.

Human Rights:

Human rights recognizes the inherent dignity and the equal and inalienable rights of all members of the human family. It is the foundation of freedom, justice and peace in the world.

In Ontario, human rights is governed by the Ontario Human Rights Code. The Human Rights Code provides that every person has a right to equal treatment with respect to services, goods and facilities, without discrimination because of race, ancestry, place of origin, colour, ethnic origin, citizenship, creed, sex, sexual orientation, gender identity, gender expression, age, marital status, family status or disability. 

For employers and services providers that are federally regulated, human rights is governed by the Canadian Human Rights Act.

I

Intentional Infliction of Mental Suffering (or Distress):

The tort of intentional infliction of mental suffering is a cause of action that employees can sue their employers for. The tort’s name is self-explanatory, and occurs when an employer deliberately tries to harm an employee, which could be considered extreme harassment. There is a 3-part test to prove this tort of intentional infliction of mental distress:

  1. Was the Employer’s conduct flagrant and outrageous?

  2. Was the Employer’s conduct calculated to harm the employee?

  3. Did the Employer’s conduct cause the employee to suffer a visible and provable illness?

L

Labour Law:

Labour laws in Ontario usually refer to employees who belong to a union, and the laws that govern the relationship between a union and the employer. While the Employment Standards Act applies to unionized employees, the Ontario Labour Relations Act is an important statute that outlines the laws governing unions and employers. Instead of individual employment contracts, each employee in the union will be subject to one contract, the collective agreement. Employers must recognize the union as the employees’ legal representation. Similarly, when employees have a dispute with their employer, usually having to do with a breach of the collective agreement, employees must turn to the union for legal help. However, employees can turn to an outside lawyer for human rights and discrimination. Learn more about the differences between employment law and labour laws Ontario.

Layoffs:

Temporary layoffs under the Employment Standards Act are allowed. In some circumstances, layoffs that last longer than 13 weeks will be deemed an automatic termination. A layoff can be more than 13 weeks provided certain conditions, including the employee continues to receive salary or receives employment insurance (EI) benefits. In no circumstance can layoffs last longer than 35 weeks in a year.

Layoffs under the ESA are only allowed if the employment contract provides that the employer can lay the employee off. If the employment contract is silent, an employee can treat a layoff as a termination or constructive dismissal, and ask for severance pay.

M

Ministry of Labour (MOL):

The Ontario Ministry of Labour, or MOL, is part of the provincial government that oversees employment standards through various laws including the Employment Standards Act, Occupational Health and Safety Act, and the Labour Relations Act.

The MOL also is in charge of processing employment standards in Ontario, including employee claims of unpaid wages, severance, and other violations of the Employment Standards Act. The Ontario Labour Relations Board is the labour board in Ontario that issues decisions regarding the various employment and labour laws.

N

Non-Compete Clause:

A non-compete clause, or non-competition provision in an employment contract limits an employee’s ability to work with competing businesses after they leave employment. These non-compete clauses are very difficult to enforce at court. They are usually only appropriate for high level management or executives. To determine whether a non-compete clause is enforceable, a court will examine whether the clause is drafted clearly and the reasonableness of the clause, including the type of work that is restricted, the length of the restriction, and the geographical scope.

Many employers sue former employees for breach their non-compete clauses. However, this will always be difficult for employers to prove, and is sometimes used as a scare tactic.

Non-Solicit Clause:

Like non-compete clauses, non-solicitation provisions limit a departing employee’s ability to persuade a previous employer’s clients or employees to leave the employer. Non-solicit clauses are easier to enforce, but they still must be drafted clearly and be reasonable among the parties.

R

Record of Employment (ROE):

A Record of Employment, or ROE, records important information of an employee’s employment history. It is mostly used for Service Canada to determine an employee’s right to employment insurance or EI benefits. It records information such as the employer’s name, employee’s start and end dates, reason for stoppage of work (the ROE Code), amount of insurable hours, and earnings.

ROEs have to be completed when there is an interruption of earnings. Generally, an interruption of earnings occur when an employee has no work or no insurable earnings for seven consecutive calendar days, or their salary falls below 60% of their regular weekly earnings.

Employers must complete or issue an ROE each time there is an interruption of earnings. ROES can be issued on paper or electronically. If a Record of Employment is issued on paper, it must be within five (5) days of the interruption of earnings. If the Record of Employment is issued electronically, it must be sent to Service Canada within five days of the regular pay period or within 15 days after the interruption of earnings, whichever is earlier.

Employers also must provide the reason for issuing the ROE. These are the ROE Codes. Service Canada has a full listing of the Codes here. The most common ROE codes are:

  • A - Shortage of work;

  • E - Quit;

  • F - Maternity;

  • K - Other;

  • M - Dismissal

The ROE Code can be supported by a short description. When an employee quits (Code E), or is fired for cause, (Code M), the employee is generally not entitled to receive EI benefits.

Release:

When an employee is terminated and is offered severance, the employer makes the severance package conditional upon the employee signing a Release. It is sometimes called a Full and Final Release, or Final Release. Releases are essentially contracts, where the employee agrees to the terms of the Release in order to accept severance; the employee releases the employers of all legal claims.

While Releases are different and can contain many terms, Releases usually provide that an employee can no longer sue the employer regarding their employment, the severance provided includes all claims to termination, severance, pay, and any other compensation regarding employment, the employee can not start a discrimination claim, and that the employee keep the severance terms confidential,

S

Service Canada:

Service Canada is the governmental service that assists Employment and Social Development Canada in processing Employment Insurance (EI) benefits and payments to employees who have been recently dismissed. For example, employees can submit their Record of Employment (ROE) to their closes Service Canada. Employees can also submit their applications for EI online through their My Service Canada Account.

Severance:

Severance is commonly referred to the amount of money an employee is paid upon termination. It is often called severance pay, or a severance package. How much severance an employee should get may depend on a variety of factors about the employee, including their employment contract, length of service, age, character of employment, and availability of similar employment. The size of the employer also may matter. To determine how much severance pay an employee is entitled to, see this guide in how to calculate severance.

While often referred to as severance, the proper legal reference is the amount of notice of termination, or pay in lieu of notice. Most employees whose employment is terminated without cause is entitled to notice of termination or pay in lieu of notice. Most employers just provide the pay in lieu of notice, or severance pay.

“Severance” also has a definition under the Ontario Employment Standards Act. Under the ESA, a terminated employee is entitled to severance pay if the employee has worked for more than five years’ service and the employer has a payroll of $2.5 million. Employees are also entitled to severance pay if they have more than five years’ service and 50 or more employees are let go at the same time.

To calculate severance pay under the ESA, employees get one week of pay for every year of service, up to a maximum of 26 weeks.

Sexual Harassment:

The Ontario Occupational Health and Safety Act defines workplace sexual harassment as:

(a) engaging in a course of vexatious comment or conduct against a worker in a workplace because of sex, sexual orientation, gender identity or gender expression, where the course of comment or conduct is known or ought reasonably to be known to be unwelcome, or

(b) making a sexual solicitation or advance where the person making the solicitation or advance is in a position to confer, grant or deny a benefit or advancement to the worker and the person knows or ought reasonably to know that the solicitation or advance is unwelcome

The Ontario Human Rights Code defines sexual harassment as:

Every person who is an employee has a right to freedom from harassment in the workplace because of sex, sexual orientation, gender identity or gender expression by his or her employer or agent of the employer or by another employee.

Every person has a right to be free from,

(a)    a sexual solicitation or advance made by a person in a position to confer, grant or deny a benefit or advancement to the person where the person making the solicitation or advance knows or ought reasonably to know that it is unwelcome; or

The Supreme Court of Canada defined sexual harassment as:

unwelcome conduct of a sexual nature that detrimentally affects the work environment or leads to adverse job-related consequences for the victims of the harassment. It is … an abuse of power. When sexual harassment occurs in the workplace, it is an abuse of both economic and sexual power. Sexual harassment is a demeaning practice, one that constitutes a profound affront to the dignity of the employees forced to endure it. By requiring an employee to contend with unwelcome sexual actions or explicit sexual demands, sexual harassment in the workplace attacks the dignity and self-respect of the victim both as an employee and as a human being.

The Canadian Human Rights Tribunal stated that sexual harassment runs “the gamut from overt gender based activity, such as coerced intercourse to unsolicited physical contact to persistent propositions to more subtle conduct such as gender based insults and taunting, which may reasonably be perceived to create a negative psychological and emotional work environment.”

Employees subject to sexual harassment can sue the harasser for discrimination at the Ontario Human Rights Tribunal. They can also sue the employer if the employer did not take appropriate steps to address the sexual harassment. Further, both the Human Rights Code and OHSA protect employees who report sexual harassment by preventing an employer from punishing, reprising, or retaliating against complainants.

Sick Leave:

Under the Employment Standards Act, Ontario employees are entitled to three (3) unpaid sick days each year. Reasons for sick days include personal illness, injury, or medical emergency. Employees must have worked two consecutive weeks first before being able to take sick leave. Further, if the employee only takes one hour off, that could count as one of the three (3) days for the year.

W

Wrongful Dismissal:

When an employee is terminated from employment, it will be a wrongful dismissal if the employer does not provide them with enough notice of termination, or payment in lieu of notice. Payment in lieu of notice is often referred to as “severance pay.” How much notice an employee is entitled to depends on a variety of factors. The following may indicate how much notice an employee is entitled to: employment contract, length of service, age, character of employment, and availability of similar employment.