The Basics of Common Law Employment Rights

The Basics of Common Law Employment Rights A critical concept in Canadian Labour and Employment law is common law employment rights, which are the contractual rights and obligations of employers and non-unionized employees.

These rights encompass both the express and implied contracts of employment in Canada and exist in addition to the mandatory rights provided under various Canadian Employment Standards and Human Rights Acts.

Common law employment rights are defined in one of two ways, either through an agreement between an employer and an employee or, in the absence of any express, written agreement, they are implied by the law and enforced by the court system.

As an example, common law holds that employees have an implied duty to be loyal to their employers. The nature of that loyalty is determined by the employee’s role with the company as well as he or she’s responsibilities. These broad legal concepts are laid out in judicial precedents.

Reasonable Notice of Termination Another example – perhaps the most important concept in common law – is an employee’s right to reasonable notice of termination or payment in lieu of notice of termination when there’s not just cause for a firing. This is a fundamentally different ideal than the common American concept of “at will” employment. In Canada, “at will” employment is, on its face, illegal.

“Reasonable notice” is a tricky concept under common law, because there’s no formula to determine how much prior notice an employee is entitled. Typically, courts look at various factors and determine what is reasonable notice on a case-by-case basis. Maddeningly, courts usually don’t give any indication of how they came to their decision, although occasionally they’ll indicate the importance of one factor in its decision-making process.

For employees with long service records, courts have found reasonable notice periods can be as long as a year or more, although two-year reasonable notice period is generally the maximum a court will award.

Generally speaking, the factors courts consider when determining the reasonable notice an employee is owed include the employee’s length of service, the employee’s age, the employee’s role within the company (i.e. how many people the employee supervises, who he or she reports to, etc.), the employee’s professional qualifications, the employee’s ability to find replacement employment; how the employee was hired (particularly whether the employee was lured away from another place of employment), the reason or reasons for the termination, the employee’s pay or remuneration, and whether the employee relocated to take the position.

Employment standards versus common law There’s a delicate interplay between common law and Canadian employment standards that is important to understand. The Employment Standards Act establishes a minimum or floor for the amount of notice or termination pay an employee is entitled. Under the Employment Standards Act, employers can offer you more, but never less.

Common law, on the other hand, establishes the maximum, or ceiling, for the amount of notice or termination pay an employee is entitled.

COVID-19 wrinkles Common law is a firmly established concept in Canadian jurisprudence. But with the advent of the COVID-19 pandemic, some questions have emerged about its application In May 2020, for example, the government of Ontario amended its Employment Standards Act to change the layoff and constructive dismissal rules, thereby eliminating temporary layoffs and constructive dismissal claims during the COVID-19 period, which is defined as March 1, 2020 to July 3, 2021.

There is no case law, however, on whether this change impacts common law or is limited to just the statute.