Important Terms of Labor Law

Important Terms of Labor Law

Understanding Canadian labor and wage laws is crucial for newcomers entering the workforce. Below is a detailed explanation of the most important terms commonly used in Canadian labor and wage laws:

1. Minimum Wage

  • Definition: The lowest hourly wage an employer can legally pay employees.
  • Key Points:
    • Varies by province or territory (e.g., Ontario: $16.55/hour as of 2025).
    • Different minimum wage rates may apply to specific groups, like students, liquor servers, or agricultural workers.
    • Reviewed periodically to reflect inflation and economic conditions.

2. Employment Standards

  • Definition: A set of minimum rights and obligations in the workplace as outlined by provincial or federal labor laws.
  • Key Points:
    • Covers areas like hours of work, overtime, vacation, leaves, and termination.
    • Federal employees (e.g., those in banks, telecommunications) are covered under the Canada Labour Code.
    • Most other employees are covered by their province’s or territory’s employment standards.

3. Overtime

  • Definition: Additional compensation for hours worked beyond the standard work hours.
  • Key Points:
    • Typically applies after 8 hours/day or 40 hours/week (varies by jurisdiction).
    • Paid at 1.5 times the regular hourly wage (called "time and a half").
    • Some positions, such as managerial roles, may be exempt from overtime pay.

4. Statutory Holidays (Public Holidays)

  • Definition: Specific days when employees are entitled to a day off with pay or additional compensation if they work.
  • Key Points:
    • Common holidays include Canada Day, Christmas Day, and New Year’s Day.
    • The number and type of statutory holidays vary by province/territory.
    • Employees working on these days are often entitled to extra pay (e.g., 1.5x or 2x the regular wage).

5. Vacation Pay

  • Definition: Compensation provided to employees for vacation time earned.
  • Key Points:
    • Employees are entitled to at least 2 weeks of vacation after 1 year of employment (may vary by province).
    • Vacation pay is typically 4% of gross earnings (6% for longer-tenured employees).
    • Can be paid out with each paycheck or as a lump sum when taking vacation.

6. Probationary Period

  • Definition: An initial period of employment during which an employer evaluates an employee’s suitability for the role.
  • Key Points:
    • Commonly lasts 3 to 6 months.
    • Termination during this period may have fewer legal requirements (depending on jurisdiction).
    • Employees still have rights under employment standards.

7. Termination Notice

  • Definition: The period of notice an employer or employee must give before ending employment.
  • Key Points:
    • Minimum notice periods depend on the employee's length of service (e.g., 1 week for 1 year of service in many provinces).
    • Employers may provide pay in lieu of notice (termination pay).
    • Just cause termination (e.g., for misconduct) may not require notice.

8. Severance Pay

  • Definition: Compensation provided to an employee when employment is terminated without cause.
  • Key Points:
    • Required in certain circumstances, such as long-term employment or large layoffs.
    • Amount is based on factors like years of service and salary.
    • Differs from termination pay.

9. Employment Insurance (EI)

  • Definition: A federal program providing temporary financial assistance to unemployed individuals.
  • Key Points:
    • Funded through employee and employer contributions.
    • Covers job loss, maternity/paternity leave, sickness, and caregiving.
    • Eligibility depends on the number of insurable hours worked in the last 52 weeks.

10. Workers’ Compensation

  • Definition: Insurance that provides benefits to employees injured on the job.
  • Key Points:
    • Covers medical expenses, lost wages, and rehabilitation.
    • Administered by provincial or territorial workers’ compensation boards.
    • Employers are required to register and contribute.

11. Collective Bargaining

  • Definition: The process of negotiation between employers and a group of employees (usually represented by a union) to establish working conditions.
  • Key Points:
    • Results in a collective agreement covering wages, hours, and workplace policies.
    • Union membership may be required in unionized workplaces.

12. Discrimination

  • Definition: Unfair treatment based on protected grounds such as race, gender, religion, age, disability, or sexual orientation.
  • Key Points:
    • Prohibited under the Canadian Human Rights Act (federal level) and provincial human rights laws.
    • Employers must provide reasonable accommodation unless it causes undue hardship.

13. Harassment

  • Definition: Behavior that demeans, humiliates, or intimidates employees in the workplace.
  • Key Points:
    • Includes verbal, physical, sexual, or psychological harassment.
    • Employers are required to have policies to address workplace harassment.

14. Equal Pay

  • Definition: The principle that men and women must receive equal pay for performing the same or similar work.
  • Key Points:
    • Protected under provincial laws and the Canadian Human Rights Act.
    • Applies to pay, benefits, and bonuses.

15. Temporary Foreign Worker Program (TFWP)

  • Definition: A federal program allowing Canadian employers to hire foreign workers when no Canadians are available.
  • Key Points:
    • Workers are protected under the same labor laws as Canadian employees.
    • Employers must provide proper working conditions and ensure fair treatment.

16. Independent Contractor

  • Definition: A self-employed individual providing services to a company under a contract.
  • Key Points:
    • Not covered by employment standards (e.g., no minimum wage or overtime).
    • Responsible for managing their own taxes and benefits.

17. Leave Entitlements

  • Definition: Time off work for specific reasons, often protected by law.
  • Key Types:
    • Maternity/Paternity Leave: Time off for parents after the birth or adoption of a child.
    • Sick Leave: Time off for personal illness.
    • Compassionate Care Leave: For caring for a seriously ill family member.
    • Bereavement Leave: For dealing with the loss of a loved one.

18. Pay Equity

  • Definition: Ensuring wages are fair and reflective of the value of the work.
  • Key Points:
    • Prevents wage discrimination based on gender or other protected grounds.
    • Supported by legislation in most provinces.

19. Full-Time vs. Part-Time Employment

  • Definition: Classification based on hours worked per week.
  • Key Points:
    • Full-time: Usually 35–40 hours/week.
    • Part-time: Fewer than full-time hours; benefits may differ.
    • Rights and protections are largely the same under labor laws.

20. Record of Employment (ROE)

  • Definition: A document issued by employers when an employee’s work ends or their earnings are interrupted.
  • Key Points:
    • Used to determine eligibility for Employment Insurance (EI).
    • Includes details like hours worked and reasons for job separation.

Understanding these terms can help newcomers navigate the Canadian labor market, protect their rights, and ensure they are fairly treated in their workplace.