5 Ways HR in Canada Is Different

Introduction

​The United States and Canada are next-door neighbors—or neighbours, for those living north of the 49th parallel. We’re a lot alike, though our respective leaders sit on opposite ends of the political spectrum. Canada has been somewhat more progressive in its HR policies as well, while it lags the U.S. in others.

Take work/life balance. It has been a perennial issue in the U.S. for years, with workers reporting record levels of burnout. And now, increasingly, it’s becoming a concern in Canada as well.

While most Canadians—nearly 7 in 10—feel satisfied with their ability to balance their job demands and home activities, the numbers are dropping and more than half are currently less content with their work/life balance than they were a decade ago, according to Statistics Canada, a government agency. 

​That’s why Prime Minister Justin Trudeau has elevated the issue with some legislative ideas and why more companies north of the border are emphasizing employee-friendly policies, according to HR experts.

1. Termination of Employment

​Employers in Canada, unlike in the U.S., do not practice at-will employment. That’s one of the biggest differences between the laws of the two countries.

In the U.S., an employer can generally dismiss someone for any reason and without warning, as long as the decision to do so is not based on a factor protected by law, such as age, gender or race. In Canada, every employment relationship is governed by an agreement that grants employees rights regarding termination. For example, “Canadian employers must always provide notice or pay … if they wish to cancel that contract―or, in other words, fire someone,” says Lisa Stam, founder of Spring Law, a Toronto-based employment law firm that advises companies and executives.

The main exception is just cause for termination, which generally refers to firing someone for serious misconduct, incompetence or willful disobedience. “But that is a very high and difficult threshold to meet in Canada,” Stam says.

​Instead of resorting to termination, Canadian managers and supervisors tend to rely on progressive discipline to help people correct problem behavior, says Stacy Glass, senior human resources consultant at HR Options in Toronto.

“Termination of employment is—and always should be—the last resort,” Glass says, adding that it can often be a lengthy process. And when employees are let go, severance packages are often much more generous than they are in the United States.

Canadian laws are similar from province to province, with the exception of Quebec, where standards differ, notes Cissy Pau, principal consultant at Clear HR Consulting in Vancouver, British Columbia. Each jurisdiction adheres to its own Employment Standards Act, which sets out the rights and responsibilities of employees and employers, along with laws that establish human rights standards, labor relations rules, and occupational health and safety laws.

The British Columbia act, for example, requires that terminated workers receive advance written notice or compensation based on their length of consecutive service. No compensation is required if an employee is given prior notice equal to the number of weeks of pay for which he or she is eligible. Absent notice, one week’s pay is given after three months of employment, two weeks’ after a year and three weeks’ following three years on the job. After that, one week’s pay is given for each additional year, up to a maximum of eight weeks. 

In Quebec, unlike in other provinces, employees who have been on the job for two or more years of uninterrupted service with the same firm gain an added level of job security. Once an individual reaches this benchmark period, he or she can be let go only for just cause or due to economic or technological changes.

2. Parental Benefits

​Canadian parents receive more-generous leave by law than their U.S. neighbors. “This can be a challenge―or at least requires a good heads-up―when drafting policy manuals for both sides of the border,” Stam says.

One significant difference between the maternity/paternity in the two countries is the role of the government. “In the United States, employees depend on their employers to provide substantial paid time off. In Canada, employees look to the government for assistance,” says Lisa Durante, founder and strategic consultant at Lisa Durante International Inc., a consultancy for working mothers in Toronto.

In the U.S., the Family and Medical Leave Act provides certain workers up to 12 weeks of unpaid, job-protected leave per year for family and medical reasons. But, increasingly, U.S. workers—particularly those from the Millennial generation, who are starting to have children—are driving demand for more flexibility and time off for caregiving. That’s why leaders at organizations of all sizes are responding with better benefits, including extended maternity leave and financial assistance during the time off. “As with other health and wellness-related benefits, parental leave policies are a key differentiator to attract and retain talent,” Durante says. 

​In Canada, primary caregivers often take a year of leave after the birth of a child. Some of that is paid time off, which is provided through an employment insurance program administered by the federal government. “During this time, not only are parents’ jobs protected; they are compensated,” Durante says.

Birth mothers receive 15 to 17 weeks of maternity leave. Both parents―same-sex couples, opposite-gender couples and adoptive parents―can take a total of 27 to 35 weeks of parental leave and split it however they choose. In both cases, qualifying parents can receive 55 percent of their income, up to a maximum of $547 (in Canadian dollars) per week, for a 12-month period, Durante says.

Quebec offers parents a more robust financial plan―$900 a week―compared with other jurisdictions. And it is the only province that grants fathers an additional five weeks of paternity leave beyond 35 hours.

As of December 2017, Canadians with new children became eligible to have their federal parental insurance benefits paid over an 18-month period rather than for 12 months after the birth or adoption of a child. Parents who opt to take more time off will receive smaller monthly payments. Lawmakers in Ontario approved legislation along the same lines.

Going one step further, the Liberal government, led by Trudeau, has introduced the Employment Insurance Parental Sharing Benefit to increase the insurance coverage that parents could receive to up to 40 weeks. However, the full duration of paid leave will be available only if the second parent―usually the father―takes the extra five weeks off. The plan is based on Quebec’s model.

The proposal, which will go into effect in June 2019, is a “use-it-or-lose-it scheme,” Durante says. “The hope is that more fathers will take time off so their family doesn’t lose out on the benefit.”

3. Marijuana Legalization

If you’re operating in Canada, consider revising the following policies before marijuana becomes legal:

Rules on drugs and alcohol. Update your organization’s handbook to include marijuana. “HR should set policies and clear expectations to ensure people are fit to work,” Pau says.

​Your guidance on pot―whether the drug is legal or not―should be similar to your rules on alcohol use. “If a workplace policy prohibits employees from drinking alcohol on the job or at lunch, it will also need to prohibit them from using cannabis during work hours or on breaks,” Stam says.

Impairment tests for marijuana. Canadian employers generally are not allowed to administer pre-employment or random alcohol and drug tests in nonsafety-sensitive workplaces, since that is considered discriminatory by the Canadian Human Rights Commission, a federal agency tasked with protecting equal opportunity. “Testing for impairment by marijuana is tricky, as drugs metabolize differently from alcohol and can remain detectable in the body long after the effects have passed,” Stam says.

Duty to accommodate. Canadian employers have a duty to accommodate employees with disabilities under federal and provincial laws, so be mindful that pot is sometimes used to treat an illness or medical condition. According to statistics from Health Canada, a federal government department, more than 269,000 Canadians have signed up for legal access to medical cannabis as of December 2017. Canadian physicians are also increasingly willing to authorize the substance for their patients, Health Canada reports. However, an accommodation must always be balanced with worker safety, Stam says.

The Supreme Court of Canada has ruled in recent years that employers cannot permit random, unannounced drug testing in safety-sensitive work environments like construction, health care and law enforcement or in resource-extraction industries such as forestry, oil and gas drilling, and mining. Canadian judges have found that alcohol and drug testing is permitted in safety-sensitive workplaces if the company has reasonable cause to believe an individual is impaired while working, has been directly involved in a workplace accident, or is returning to work after treatment for alcohol or substance abuse. 

“The core issue [with the court rulings] tends to be whether employees can safely perform their jobs,” Stam says.

4. Sexual Harassment and #MeToo

​Sexual misconduct issues, along with the #MeToo movement, have been at the forefront in North American workplaces for the past several months. Across Canada, federal human rights legislation has protected against sexual orientation and gender discrimination for years, Pau says. Harassment tends to be covered in provincial occupational health and safety laws, adding a layer of protection for workers and obligations on employers, Stam notes.

“It’s a legal responsibility for HR to create a toxic-free workplace,” says Melanie Peacock, an owner and lead consultant of Double M Training and Consulting, based in Calgary, Alberta, and an associate professor with the Bissett School of Business at Mount Royal University.

In Ontario, legislators incorporated sexual harassment into the province’s Occupational Health and Safety Act. Since 2016, the law has required employers to thoroughly investigate all sexual harassment complaints and inform complainants of the findings, Stam says.

​As in several U.S. states, training is mandated, too. “All employees in Ontario are now trained on their companies’ sexual harassment policies and formal investigation procedures annually,” says Shana French, a lawyer at Sherrard Kuzz, a Toronto-based labor and employment firm.

“Having strong laws is only helpful, however, when employees feel confident to access their rights under the laws,” Stam says. “The #MeToo movement has made a big difference with empowering employees to pursue their rights, given our society’s newfound optimism that a woman’s complaint will be taken seriously and believed.”

The legislation is driving change, French says. “There has been an uptick [in the number] of women bringing forth complaints, resulting in sexual harassment investigations,” she says. “There seems to be more awareness in Ontario workplaces, and HR is committed to educating its staff about sexual harassment. The effort is sincere.”

5. Minimum Wage

​The governments of British Columbia, Alberta and Ontario have mandated increases in the minimum wage in recent years—providing a case study in how such legislation can affect businesses. One unfortunate consequence of the resulting higher labor costs is an increase in the number of terminations and staff reductions at small and midsize businesses, HR experts say.

Rising minimum wages across the country have also led employers to look beyond the pay rate of just their front-line workers, Stam says. 

In Ontario, the recent increase in the minimum rate to $14 (Canadian dollars) per hour has had a significant impact on retailers, which have been evaluating and adjusting salary increases based on seniority, says Kathryn Benson, senior human resources consultant at HR Options in Toronto. In some cases, it has resulted in unintended consequences. “The minimum wage hike has created tension among senior and junior employees.”

​Meanwhile, in British Columbia, where the minimum wage is set to rise annually through 2021, employers will pay a new health tax beginning in January 2019. “The cost burden for health insurance in B.C. will shift to employers, as this tax will be based on the size of a company’s payroll,” Pau says. Individuals will save up to $900 (Canadian dollars) per year.

So, while the issues are similar in both countries, there are wrinkles in Canadian employment law that might seem foreign to U.S. practitioners. Yet Canada’s worker protections and emphasis on work/life balance could inform HR leaders as they develop policies to help alleviate stress and burnout among workers. That’s essential to building world-class workplaces on both sides of the border.

Catherine Skrzypinski is a freelance writer in Vancouver, British Columbia.