Tuesday, July 1, 2014

Happy Canada Day!

There are a lot of great things about living in Canada.  I've done a bit of travelling now, which always gives new perspective on just how fortunate we are here in Canada.  But there are even marked differences between Canada and our neighbours to the south.  There's a delightful music video going viral performed by the Hadfield brothers (i.e. by Canada's favourite singing astronaut Chris Hadfield and his brother Dave, Dave actually having written the song), highlighting what it means to be Canadian.

I'd like to draw your attention to a lyric that starts at about 3:41 of the video:
There's workman's comp and pogey
For when we're shown the door.
There's a lot to parse in this lyric.  Strictly speaking, neither one is strictly Canadian (though to the best of my knowledge "pogey" is Canadian slang for employment insurance benefits, or sometimes welfare), nor is 'workman's comp' (aka WSIB benefits) for "when we're shown the door".

Yet the core of the point, I suspect, is the scope of Canada's income security infrastructure for those who lose their jobs.  And one of the central elements of this infrastructure are the statutory and contractual obligations on employers to give notice of termination.

Throughout most of the United States, employers are able to implement "at-will" employment.  It has certain nuances from state to state, but essentially it means that either party is able to end the employment relationship 'at will' with no further obligations.  In political discourse, you may hear it justified as protecting individual freedom for employees, but the simple reality is employees are hurt by it in the vast majority of cases.  It doesn't matter if you've worked there for 4 weeks or 40 years; if you're an 'at will' employee, your employer can send you home on a whim with no further entitlements.

In Canada, "at-will" employment is illegal.  Many American employers attempt to implement the same kinds of employment contracts here that they use in the U.S., and are in for a rude awakening when they get successfully sued in wrongful dismissal.  Contracts can be used to limit an employee's entitlements to relatively low levels, but cannot be used to reduce entitlements to below the levels set out in the applicable employment standards legislation.  And if a contractual termination clause isn't set up properly, full common law entitlements often apply.

Of course, it isn't a right to a 'package', in most cases, but it is a right to a significant period of notice, to arrange a soft landing by finding a new job.  And in practice, most terminations are without notice, entitling employees to 'pay in lieu'.

The impact of this is more significant than you might realize:  It gives dismissed employees meaningful monetary entitlements in many cases, but it also encourages increases the cost of a not-for-cause dismissal.  In non-union contexts, employers are entitled to dismiss employees at any time, but the obligation to give notice or pay in lieu is a strong disincentive to do so, thus manifesting in enhanced job security for Canadian employees.  One might also argue that this enhanced job security contributes to greater employee engagement, as well, with material benefits to employers and to the economy on the whole.  In other words, it isn't just a policy that helps people who are fired - it's a fundamental underlying tenet of the Canadian labour market.

Standing beside other Canadian policies such as universal health care and meaningful equality protection, notice of termination is an important part of what makes Canada such a great place to live.


This blog is not intended to and does not provide legal advice to any person in respect of any particular legal issue, and does not create a solicitor-client relationship with any readers, but rather provides general legal information. If you have a legal issue or possible legal issue, contact a lawyer.

The author is a lawyer practicing in Newmarket, primarily in the areas of labour and employment law and civil litigation. If you need legal assistance, please contact him for information on available services and billing.

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