Your Remote Employee Is Moving Out Of Province. What Does This Mean From A Legal Perspective?

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With many employees now working remotely, some have chosen to move to more desirable or affordable locations. This can mean moving to a different province than their original place of work or even a different country.

Does this change the law that governs the relationship between employer and employee?

Employment law is largely geographic in applicability – where the work is performed is the key concern of the Ontario ESA. This is generally the case across Canada, with certain exceptions, the law that applies is the law of the place where the work is being performed.

 

Ontario Legislation

The Ontario Employment Standards Act, 2000 provides, in s. 3(1), that the provisions of the ESA apply:

  •  Where the employee’s work is “to be performed in Ontario” 
  • Or the employee’s work is a “continuation of work performed in Ontario.”

 

The answer is straightforward for provincially regulated employees who are working in Ontario: unless otherwise exempt, the ESA will apply to their workplace relationship whether they work from home or office in Ontario, or whether their employer’s location is in Ontario, in another province, or in another country. 

 

Work Outside of Ontario

An employer might have an employee working from home for the past year. They might have run into a circumstance where the employee decided to relocate, perhaps even to another province. 

Depending on the circumstances, the duration, and other factors, the employee may have an argument that his or her employment is now governed by the laws of their new province of residence. 

This can have significant consequences: besides requiring the employer to comply with the laws of another province, also consider that an employment contract may be written with the laws of Ontario in mind

It could be that a termination clause, vacation clause, or another portion of the contract is now void because, for example, it is drafted under Ontario law while the employee has now moved to Quebec.

 

Out of Province: Decision Snapshot

Case Study: Shu Zhang worked in Ontario from 2009 until 2015. His manager permitted him to work from home in British Columbia from late 2015 until the employee alleged constructive dismissal in early 2018. Shu Zhang claimed he was an Ontario employee and therefore entitled to severance under the Ontario ESA, something which is not available under the BC ESA. Therefore, it was advantageous to Shu Zhang to be declared an Ontario employee.

Did Ontario laws apply to the workplace relationship, or did the laws of BC?

The employee argued in front the Ontario Labour Relations Board that he was an Ontario employee because:

  • he worked hours aligned with Ontario’s time zone;
  • he did not receive a health benefit that other IBM employees received in BC despite an offer to enroll in that benefit;
  • he viewed himself as an “Ontario employee” and considered working in BC to be temporary.

 

Despite these factors, in a 2019 decision, Shu Zhang v IBM Canada Limited, the Board was not convinced that the work the employee was doing was either being done in Ontario or was a continuation of work in Ontario. The employee was, therefore, not entitled to severance under the Ontario ESA.

This is only one case among many others on this matter. Have questions about employees working outside of your business’ province? Call Bridge Legal & HR Solutions today for a free initial consultation: 647-794-5442 or admin@bridgelegalhr.ca.

 

Work Outside of Canada

What about when an employee moves out of Canada?

The risks are compounded. If an employee decides to perform work outside of Canada: the applicable employment or labour law may have significant differences from Canadian law while, in addition, tax impacts and other risks may arise from the change. The same can occur for employers who are headquartered outside of Canada, but who have an employee relocate to Canada.

 

Out of Country: Decision Snapshot

In Rhinehart v. Legend 3D Canada Inc. the employee was employed in California from 2012 until around 2016. His employment was subject to an arbitration agreement nominating California as the jurisdiction for mandatory arbitration of any disputes. The employee relocated to Canada in January 2017 and worked for the employer’s Canadian subsidiary without signing any further employment agreements. His employment was terminated in March 2018.

Although the ultimate reasoning of the Court relied on the decision in Heller v. Uberthe Court noted that, because the employee’s work was, lately, performed in Ontario, the inclusion of a mandatory arbitration agreement in the employee’s contract was an attempt to contract out of the Ontario ESA which is not permitted. 

The arbitration agreement was therefore found to be invalid based on Heller principles, but the Court indicated that had the Heller principles not applied, the arbitration agreement would be void anyway because the Ontario ESA applied to the employment relationship.

 

How You Can Avoid Additional Legal Risk

What can employers do to avoid additional legal risk and administrative costs? 

One key item is professional and expert advice, which we at Bridge Legal & HR Solutions are happy to provide. Please feel free to contact us at 647-794-5442 or at admin@bridgelegalhr.ca.

Our workplace experts have also identified 4 key tips to consider:

  1. Ensure your workplace agreements have a location of work clause that specifically requires employees to work from a particular location (with flexibility for the company to change that location if desired).
  2. Employees should be made aware of expectations regarding the location of their work.
  3. Employees working from home should be made aware of expectations that their work will be done in a specific location.
  4. If you have policies regarding working from home (you should have these), those policies should also set expectations regarding work location.

 

If you have any questions about work location, workplace laws, workplace investigations, human resources, or immigration law. Contact Bridge Legal & HR Solutions at 647-794-5442 or at admin@bridgelegalhr.ca, we are here to bridge the gaps for you.

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