Governance of Employment Relationships in Ontario: Overview


Ontario employment relationships are governed by various pieces of legislation. These laws are designed to protect the workers and ensure that they are treated fairly in the workplace, while also establishing a clear set of rules that employers can rely on when making hiring, management, and termination decisions. However, while the legislation in Ontario comes with a certain level of clarity, employment relationships are also governed by a long line of common law decisions going back to 19th century Britain and beyond. While understanding the legislation is important, businesses in Ontario must also be aware of the common law.

Employment Standards Act, 2000

The Employment Standards Act, 2000 (“ESA”) is the primary piece of legislation governing employment standards in Ontario. It sets out minimum standards for hours of work, overtime pay, minimum wage, vacation entitlement, and termination pay. Employers are required to comply with the ESA, and employees have the right to file complaints if they believe their employer has violated the ESA.

Minimum Wage

The minimum wage in Ontario is currently $15.50 per hour for most workers. However, there are some exemptions to this rule, such as for students under 18, hunting guides, and fishing guides. These workers may be paid a lower minimum wage or minimum wage at a different standard. Previously, liquor servers were also paid a different minimum wage, but are included in the general minimum wage as of 2022.

Hours of Work and Overtime

Under the ESA, most employees are entitled to a maximum of 8 hours of work per day and 48 hours per week, unless they have agreed to work longer hours. Employees who work more than 44 hours in a week must be paid overtime at a rate of 1.5 times their regular wage. This includes any employee who is not exempt from overtime, whether they are salaried or hourly. Note that specific exemptions exist for managers, IT professionals, and other types of employees.

Vacation Entitlement

Employees in Ontario are entitled to at least two weeks of vacation per year, or three weeks after five years of employment with the same employer. Employers must pay vacation pay, which is equal to 4% or 6% of the employee’s gross wages depending on whether they are entitled to 2 or 3 weeks of vacation.

Termination Notice & Severance Pay

When an employee is terminated without cause, they are entitled to notice or pay in lieu of notice. The amount of notice or pay required depends on the length of the employee’s service with the employer. For example, an employee who has worked for less than one year is entitled to one week’s notice or pay in lieu of notice, while an employee who has worked for eight years or more is entitled to eight weeks’ notice or pay in lieu of notice.

In addition, employers with a global payroll of more than C$2.5 million are required to pay severance pay to any terminated employee with 5 or more years of service. Severance pay is generally one week per year of service up to a maximum of 26 weeks.

Finally, benefits participation needs to be extended for the duration of the statutory notice period.

NOTE: This minimum standard under legislation is not the only entitlement to consider at termination. Depending on the employee’s contract, an Ontario-based employee may also be entitled to reasonable notice based on their years of service, age, character of employment, and availability of similar employment. This is a critical aspect of Ontario employment law and should be discussed with qualified counsel for proper advice.

Human Rights Code

The Ontario Human Rights Code is another important piece of legislation that governs employment law in Ontario. It prohibits discrimination in employment on the basis of a protected ground including race, sex, age, religion, sexual orientation, disability, and other grounds. Employers must accommodate the needs of employees with disabilities, and employees have the right to file complaints if they believe they have been discriminated against.

Ontario Occupational Health and Safety Act

The Ontario Occupational Health and Safety Act (“OHSA”) sets out the responsibilities of employers and employees in ensuring workplace health and safety. The OHSA requires employers to take all reasonable precautions to protect the health and safety of their workers, and to provide information, training, and supervision to employees to ensure that they can work safely. Employees also have a responsibility to report any hazards or dangerous situations to their employer, and to work in a safe and responsible manner.

The OHSA also provides for the appointment of joint health and safety representatives and committees in certain workplaces, which are responsible for identifying and addressing workplace health and safety issues.

Workplace Safety and Insurance Act

The Workplace Safety and Insurance Act (“WSIA) provides for the administration of the workplace insurance system in Ontario. Certain employers are required to have workplace insurance coverage for their employees through the Workplace Safety and Insurance Board (WSIB), which provides benefits to workers who are injured or become ill as a result of their work.

Under the WSIA, employees who are injured or become ill as a result of their work are entitled to compensation, including wage replacement, healthcare benefits, and other supports. The WSIB also provides return-to-work programs and services to help injured workers return to work as soon as possible.

Accessibility for Ontarians with Disabilities Act

The Accessibility for Ontarians with Disabilities Act (“AODA) aims to make Ontario more accessible for people with disabilities by setting standards for accessibility in areas such as customer service, information and communication, employment, transportation, and design of public spaces.

In terms of employment, the AODA requires employers to provide accommodations for employees with disabilities, and to ensure that job postings, interviews, and other aspects of the hiring process are accessible to people with disabilities. Employers are also required to provide training to employees on how to interact with people with disabilities and how to accommodate their needs.

The AODA applies to all employers in Ontario with one or more employees, and compliance deadlines for different aspects of the legislation have been phased in over time. Many of the requirements are already in effect, so if you are not yet in compliance, let us know and we can help.

Additional Legislation

In addition, certain employers may also need to comply with other pieces of legislation including the Pay Equity Act and legislation that is relevant to their particular field or industry.

At Bridge Legal & HR Solutions we can help you untangle and understand the web of obligations that applies to your employment relationships. To find out how we can help, contact us through our contact form or call us at 647-794-5442.

Latest Posts

Two people at a table.

The Underrealized Value of Employee Coaching

Leadership in the workplace transcends traditional management, focusing on motivation, empowerment, and continuous learning. Effective leaders coach employees, fostering engagement and improved performance. Key traits include visionary guidance, empathy, adaptability, clear communication, and mentorship. Integrating coaching boosts employee confidence, commitment, and productivity. Regular evaluations ensure coaching effectiveness, benefiting both individual and organizational success.

Read More »
confused businessman checking time on wristwatch

Temporary Help Agencies & Recruiters: Licensing Requirements

As of July 1, 2024, amendments to the Employment Standards Act, 2000 requiring temporary help agencies (THAs) and recruiters in Ontario to be licensed come into effect. Applications must be submitted with various documents and a $750 fee. THAs must provide a $25,000 security and recruiters must also do so unless certain conditions are met. Find out more inside.

Read More »