Employers and employees in Ontario are subject to the Employment Standards Act, 2000 (the ESA”), which outlines key employment standards and obligations. Understanding and complying with the ESA can help employers mitigate risk and avoid claims. In this blog, we provide a summary of the key provisions and obligations that employers should take into consideration in order to mitigate risk and avoid any claims.
Key Provisions for Employers to Mitigate Risk and Avoid Claims
1. Compensation:
Most employees have the right to receive compensation equivalent to at least the minimum wage. While a standard minimum wage is applicable to most employees, specialized minimum wages exist for distinct categories such as:
- Students;
- Homeworkers; and
- Hunting, fishing, and wilderness guides.
Currently, the hourly wage in Ontario (excluding the categories listed above) is $17.20.
2. Hours of work:
Non-unionized employees are subject to restrictions on the maximum hours they can work per day and week. While an employee may consent to working additional hours, this can only occur under the condition of a documented agreement, which may include a written agreement, between the employee and the employer.
4. Vacation:
Employees with less than five years of tenure typically accrue a minimum of two (2) weeks of vacation time for every 12 months worked. Additionally, they are entitled to receive vacation pay equivalent to at least 4% of their total wages (subject to calculation based if compensation is variable).
For employees with five or more years of service, the minimum vacation entitlement increases to three weeks per year, accompanied by vacation pay amounting to at least 6% of their total earnings.
5. Public Holidays:
In Ontario, there are nine (9) public holidays annually. Generally, employees have the right to take these days off work while receiving public holiday pay. Alternatively, employees may opt to work on a public holiday with written consent (including an agreement with your employer), receiving public holiday pay along with additional premium pay, or opting for regular wages while securing a substitute day off.
6. Leaves and absence:
Under the ESA, eligible employees are entitled to a range of job-protected leaves. Employers are strictly prohibited from terminating employees for either requesting or taking such leaves. Nevertheless, it’s essential to maintain clear communications regarding leaves.
Additionally, seeking guidance from an employment lawyer can provide valuable insight for planning ahead.
7. Termination notice:
When ending an employee’s employment (if not for cause), they are entitled to receive written notice, termination pay in lieu of notice, or a combination of both, depending on their length of service with the company. The specific duration of notice or payment is contingent upon the employee’s tenure.
8. Severance Pay:
Severance pay is provided to eligible employees whose employment has been terminated. It differs from termination pay, which is issued instead of the mandated notice of termination. If an employee meets the criteria for severance pay, they are entitled to receive it alongside any termination pay or notice.
Enforcement of Employment Standards:
Complaints and Investigations:
If an employee believes that their rights have been violated under the Employment Standards Act, 2000 (“ESA”), they have the option to file a complaint with the Ministry of Labour, Immigration, Training and Skills Development. Subsequently, the complaint will be investigated by an employment standards officer. Employers will be given an opportunity to participate in the investigation and may be asked to provide evidence, records, or other pertinent information.
If the employment standards officer concludes that the employee’s rights have indeed been violated, an employer may be obligated to rectify the violation, such as by compensating the owed amount to the employee. Additionally, the employer may face an administrative fine and potential prosecution.
FAQs
Can an employer fire an employee on sick leave?
In short, yes. However, it is important to note that termination is only permissible if it is entirely unrelated to the employee’s leave, meaning it is not because the employee is on leave. In such cases, there will be no violation of the employee’s rights. For example, if an entire department is downsized and one member happens to be on medical or other leave, they do not have any additional job protection compared to their colleagues.
Do employers have to include a bonus in a severance package?
Yes. Employees who have been dismissed prior to the disbursement of an annual bonus remain eligible for the payment, even though they are no longer employed. Severance packages should include all elements of an employee’s compensation, including any bonuses owed. To clarify, bonuses tied to company performance—rather than purely discretionary ones are included.
What can an employer do if they are faced with a Ministry of Labour complaint?
If you are an employer in receipt of a complaint from the Ministry of Labour (“MOL”) in relation to an employee or former employee, we recommend you reach out to an experienced employment lawyer immediately.
Takeaway
By understanding and adhering to these essential employment standards and obligations, employers can protect their company from potential claims and ensure compliance with the Employment Standards Act, 2000. Proactive measures, clear communication, and legal guidance are key to maintaining a collaborative employer-employee relationship while protecting the interests of the company.
Furthermore, an experienced lawyer can assist in conducting a workplace audit to ensure adherence to regulations and mitigate the potential for investigations by regulatory authorities such as the Ministry of Labour, enabling employers to concentrate on their business operations. Contact employment lawyers, Sultan Lawyers, online or by telephone at 416-214-5111 today.
