Canada is a great target country for international expansion for many companies, especially those located in the United States. Canada is the top trading partner for the U.S., and the country led the G-7 nations in economic growth between 2003 and 2012. Canada’s population and spending power make the country a great way to extend your company’s reach.
If you want to expand your business into Canada, here are some hiring basics you’ll need to know.
Canada Hiring Relationships Are Contractual
Canada’s employment laws assume that a relationship between an employer and an employee is a form of a contract. Labor laws create several implicit obligations between employer and employee. When there is no written contract, courts and tribunals will add their own stipulations to implied employment contracts. They can even go above the requirements of the law. In the end, however, the general rules of contracts govern the employment relationship.
Limited-term contracts are rare in Canada, except in certain industries. If you want to write a limited-term contract, make sure that it is explicit about those terms. Canada’s court system puts the burden of proof on the employer to show that the contract has a limited term.
Canada Labor Standards
Like nearly every country, Canada has standards that it requires every employer to follow, such as minimum wage. Statute governs many areas, including:
- Work hours, overtime, and minimum wage
- Statutory holidays, usually eight per year
- Vacation, usually at least two weeks
- Parental leave, usually of at least 17 weeks, unpaid
- Sick leave and leave to care for a sick family member
- Other leave (Quebec offers leave for family weddings)
- Gender parity in compensation, i.e. equal pay for equal work
These rules can be complicated, and they vary from province to province. To ensure that you hire someone with a compliant contract and that your liability risk is minimal, contact a professional that can help navigate employment compliance.
Canada’s laws require employees to keep their employer’s information confidential. As with all aspects of Canada’s labor laws, the specifics should be spelled out in a contract. When you hire a new employee, develop an agreement that outlines exactly what information should remain private. Without a clear document, it can be difficult to prove in court.
As the employer, you also have a duty to keep the employee’s information confidential. The Office of the Privacy Commissioner recommends several practices regarding employee privacy:
- Be transparent about what information you collect
- Using, collecting, or sharing information should be done only with the employee’s consent
- Only collect information that’s necessary
- Use private information only for the purpose for which it was collected
- Employees should have access to their information and be able to challenge its accuracy
It is wise to develop a clear policy regarding how you collect private information, including whether you track or monitor web traffic or email usage.
Termination of Employment Can Be Difficult
Since limited-term contracts are the exception, most contracts are indefinite-term contracts. Canada only allows termination for these reasons:
- The employee resigns
- Termination with cause
- Termination without cause
- Frustration of the employment relationship
To terminate an employment relationship without cause, Canada requires you to give notice or pay in lieu of notice. The statutory minimums run from one week to eight weeks. If you have a written employment contract, you should clearly spell out how long the notice period is. Without a contract, the courts can mandate much longer notice periods depending on the circumstances.
Quebec, Novia Scotia, and federally regulated employers have different standards for terminating without cause. Their protections go above those in the rest of Canada.
To terminate with cause, the employer must show that the employee has breached the employment contract. Cause can include:
- Dishonesty, fraud, or theft
- Violence or harassment
- Breach of confidentiality
- Persistent negligence
- Gross insubordination
If you were to terminate an employee with cause, the burden of proof is on you, the employer, to show that there truly is cause. The courts in Canada are heavily weighted toward the employee, so this can be difficult to do.
Take Advantage of International Hiring Opportunities
Canada is a great place to do business, and there are many opportunities for an ambitious entrepreneur to make money. This quick primer in Canada hiring basics should help you get started with the process. Contact us if you have questions about global expansion and the best ways to make a move into a new country.