Who Makes the Law of Work in Canada? - LawNow Magazine

Who Makes the Law of Work in Canada?

Employment Law ColumnIntroduction

 Canada is a large country with several levels of government and different law-making authorities.  Constitutionally, Canada is a federal country, which means it is organized under two levels of government: national and provincial.  It is also jointly governed by legislatures and courts.  This article attempts to answer the basic question of who makes the law of work in Canada.

The use of the term “law of work” is intended to be broadly encompassing.  Technically, labour law is the unionized collective dimension of work law and employment law generally refers to individual employees who are not covered by a collective agreement.

Moreover, there is an array of work-related legislation at both levels of government that regulates matters such as minimum employment standards, workers’ compensation, taxation, privacy, labour relations, pensions and benefits, occupational health and safety, and human rights.  When this is combined with the judge-made common law principles affecting employment relationships, we are left with the expansive conception that today is known as “the law of work”.

Federal Versus Provincial Control Over Work

Where a country – such as the United Kingdom – is structured under only one level of government, the law of work is just one of the full range of subject matters for law-making by a sovereign state.  So in the United Kingdom, Westminster enacts the law on every aspect of life that it chooses to regulate, and for the whole country.  It delegates some local law-making authority to cities and borough councils, but all plenary power and jurisdiction is found at one national level of government.

The gaps in regulation of work are filled by the judges. Federalism describes countries operating under two levels of government.  From the beginning, the Canada’s Constitution assigned to each of these levels of government the power to legislate in respect of certain subjects.  For example, the federal level might have power over national defence and the post office.  The provincial or state level might have power over roads and schools.  There may be some overlap or concurrent jurisdiction such as criminal law, environment and taxation.

In Canada, the law of work is definitively located in the provincial domain.  Some 94% of all Canadian workers are under provincial law and jurisdiction.  The remaining 6% of workers, about 900,000 in number, work for about 18,000 federally regulated industries and businesses.  These include federal Crown corporations, the federal public service, and First Nations.  It embraces employers in telecommunications, railways, roads, pipelines and bridges that cross a provincial or international border, aeronautics, banking and shipping.  Even among this cluster, by far most federally regulated employees work in the federal public service across the country.

Accordingly, the Canadian Human Rights Act and the Canada Labour Code – which regulates industrial relations, occupational health and safety and wages, hours and holidays – apply only to this 6% of people who work for a federally-regulated industry.  That explains why, by way of illustration, the federally-regulated flight attendant will enjoy different equality protections and union processes than the provincially-regulated school teacher.  It explains why the letter carrier employed by Canada Post will deliver the mail on the provincial holidays that do not exist at the federal level (eg. Family Day and Heritage Day) and will rest on a federal holiday that is not a provincial holiday (such as Boxing Day).

Technically, labour law is the unionized collective dimension of work law and employment law generally refers to individual employees who are not covered by a collective agreement.  Therefore, most workers in Canada, about 94%, will be covered by provincial law.  While the provincial level of government is the same, provincial laws, such as minimum wages, leaves and payroll taxes, are similar but not the same across the country.  Employers must apply provincial statutory variations according to where the workers are located.

Employment insurance was found to be under provincial jurisdiction in the Unemployment Insurance Reference, a decision of the English Privy Council in 1937.  Three years later, the provinces unanimously agreed to delegate power over employment insurance to the federal government by inserting it as section 91(2A) to the list of federal powers in the Constitution Act, 1867.

The Charter of Rights and Freedoms contains rights to expression, conscience, religious beliefs, association, equality and others.  These rights have been applied to work in the public sector.  All government-related employers across Canada are bound to ensure these rights are granted to their workers.

By way of comparison, Canada’s allocation of legislative jurisdiction over work to the provinces is consistent to the approach in the United States where most workers are regulated at the state level.  In Australia, however, the federal government exercises most of the legislative jurisdiction over workers.

Statutory Regulation Versus Common Law Regulation

We have just seen that, in Canada, the provincial governments have primary legislative authority over the work relationship.  While these provincial governments have diligently legislated in respect of the work relationship, they choose not to – and cannot possibly – regulate every aspect of work.

The gaps in regulation of work are filled by the judges.  In addition to interpreting and applying legislation, judges create and develop common law principles where there is no legislation.  They apply these principles to the facts of the cases that come through the courts.  For example, they set out the principles and tests of whether a work scenario such as the Uber driver is an employment (contract of services) or an independent contract (contract for services) where the rights and obligations of the parties are very different.

Some 94% of all Canadian workers are under provincial law and jurisdiction.  The judges determine the principles of cause for dismissal, reasonable notice of dismissal where there is no cause, what constitutes bargaining in bad faith, the interpretation and enforceability of non-competition agreements, and what is sufficient mitigation of damages on the part of a dismissed employee.  They consider whether the standards of progressive discipline have been met, whether a worker was constructively dismissed, and whether the duty to accommodate a worker has been met – to name some of the common law principles that supplement the legislative regulation of the work relationship.

The common law of work is developed by the judges where no legislation exists.  It is a large body of law – found in judicial decisions over the years – that compares to statutory regulation in importance.  Where a new work element emerges, such as the growth of unpaid internships, judges invariably will be faced with conflicts between parties.  To answer these disputes, judges will turn to any applicable legislation.  If there is none, they will craft their own workable principle(s) which will become part of the common law.  If the legislature is not content with these common law principles, it can over-ride them with its own legislation but it must do so in a way that complies with the Charter of Rights.


Peter Bowal
Peter Bowal
Peter Bowal is a Professor of Law at the Haskayne School of Business, University of Calgary in Calgary, Alberta.

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