Employment law foundations: human rights, standards and discrimination

Dr. Rahimi opens the third session with a warning delivered as a joke. The most expensive sentence in management, she says, is the one a manager says to a colleague in the hallway after a difficult meeting, because it is the sentence that will be read aloud in a tribunal or a courtroom two years later. Her point is serious. Every HR decision in this course, from the questions asked in an interview to the way a layoff is carried out, is made inside a framework of law. General managers do not need to be lawyers, but they need to know where the lines are, why they are there, and when to call for advice before acting rather than after.

She sets out the course's approach. The law differs between Canada and the United States in ways that matter for every practice the cohort will design, and it differs within each country by province or state. This lesson covers the foundations: who regulates employment, the minimum standards every employer must meet, the law against discrimination and harassment, the duty to accommodate, and how employment ends. Later lessons return to the law where it shapes a practice, such as selection in lesson 5, pay transparency in lesson 8 and unions in lesson 10.

Who regulates employment

In Canada, employment is mostly regulated by the provinces and territories. About nine in ten workers fall under provincial law: employment standards acts, human rights codes, occupational health and safety acts, workers' compensation and labour relations acts. The federal government regulates employment in a list of industries that cross provincial borders or are national in character, including banks, airlines, railways, interprovincial trucking, ports, telecommunications and broadcasting, and the federal public service. Those employers follow the Canada Labour Code, the Canadian Human Rights Act and federal pay equity and employment equity laws. A retailer such as Cedarline, with stores in several provinces, follows the law of each province where it employs people, so its policies must meet the strictest standard or vary by location.

Dr. Rahimi notes a second layer that general managers sometimes forget: the employment contract itself. Written contracts, offer letters, handbooks and the terms implied by courts all create obligations. A handbook that promises a progressive discipline process may bind the employer to follow it. A collective agreement, covered in lesson 10, replaces much of the individual contract for unionized employees.

Minimum standards

Each province's employment standards act sets minimums that cannot be waived by contract: minimum wage, hours of work and overtime, vacation and public holiday pay, leaves of absence such as pregnancy, parental, sick and family leave, and notice of termination. In Ontario, the Employment Standards Act, 2000 requires overtime at one and a half times the regular rate after 44 hours a week, at least two weeks of vacation after each year of service, rising to three weeks after five years, and a set of job-protected leaves. Minimum wages are adjusted each year, usually in line with inflation. The federal minimum wage rose to 18.15 dollars an hour on 1 April 2026; British Columbia's general minimum rose to 18.25 dollars on 1 June 2026, Quebec's to 16.60 dollars on 1 May 2026 and Ontario's to 17.95 dollars on 1 October 2026, while Alberta's has stayed at 15.00 dollars since 2018. Ontario also prohibits most non-compete agreements in employment contracts entered into since late 2021, with exceptions for senior executives and the sale of a business.

Misclassification is a common and costly error in both countries. Treating a worker as an independent contractor when the relationship is really employment, or treating an employee as exempt from overtime when the job does not meet the tests, exposes the employer to back pay, penalties and sometimes class actions. The tests look at the substance of the relationship, such as who controls the work, who owns the tools, who bears the risk of profit or loss and whether the work is integral to the business, not at the label in the contract. Leo admits that Kestrel's early customer support staff were hired as contractors to save on payroll costs; the company converted them to employees after its first audit raised the question.

Discrimination and harassment

Human rights law in Canada prohibits discrimination in employment on protected grounds. Ontario's Human Rights Code, the first in Canada when it was adopted in 1962, lists grounds that include race, ancestry, place of origin, colour, ethnic origin, citizenship, creed, sex including pregnancy, sexual orientation, gender identity, gender expression, age, marital status, family status and disability; other provinces' codes and the Canadian Human Rights Act have similar lists. The law covers every stage of employment, from job advertisements to dismissal, and both direct discrimination and adverse effect discrimination, where a neutral rule has a disproportionate effect on a protected group. Complaints go to human rights tribunals or commissions rather than to court, and remedies include lost wages, damages for injury to dignity and orders to change policies. Employers are also responsible for preventing harassment, and Ontario's Occupational Health and Safety Act requires workplace harassment policies, programs and investigations.

Discrimination law recognizes two broad forms. Disparate or differential treatment is treating someone less favourably because of a protected characteristic: refusing to promote a woman because she might have children, or dismissing an older worker to bring in someone younger and cheaper. Adverse effect or disparate impact discrimination arises when a practice that looks neutral, such as a height requirement, a test or a rule about schedules, falls more heavily on a protected group and cannot be justified by the needs of the job. Lesson 5 shows how employers check selection methods for adverse impact.

Canadian law treats adverse effect discrimination and direct discrimination under a single test. In its 1999 Meiorin decision, the Supreme Court of Canada held that an employer defending a rule that discriminates must show that it adopted the standard for a purpose rationally connected to the job, in good faith, and that the standard is reasonably necessary, which requires showing that accommodating the affected individuals is impossible without undue hardship. A firefighter fitness test that women failed at much higher rates was struck down because the employer had not shown that the specific aerobic standard was necessary for safe work.

Harassment is a form of discrimination when it is linked to a protected ground, and it is also regulated as a health and safety hazard in many jurisdictions. It includes sexual harassment and unwelcome conduct based on race, religion, disability or other grounds that a reasonable person would find hostile. Employers are expected to have a clear policy, more than one channel for complaints, prompt and impartial investigations, protection against retaliation, and corrective action proportionate to what is found. Dr. Rahimi's experience is that most of the damage in harassment cases comes not from the original conduct but from a weak response: complaints ignored, investigations run by the accused person's friend, complainants moved to worse shifts.

The duty to accommodate

Canadian employers must accommodate employees' needs related to protected grounds, such as disability, religion and family status, up to the point of undue hardship. Undue hardship is a high bar: it considers cost, outside sources of funding and health and safety risks, and in practice large employers rarely meet it on cost alone. Accommodation is a shared process: the employee must provide enough information about their needs, usually through medical information about functional limitations rather than a diagnosis; the employer must explore options seriously, including modified duties, schedules, equipment and alternative jobs; and a union, where there is one, must cooperate. An employer that refuses without exploring options breaches the duty even if no accommodation would in the end have worked.

Hana says accommodation is a daily issue at Lakeview. Nurses with back injuries need modified duties; a nurse who observes a religious sabbath needs scheduling flexibility; a parent needs to avoid rotating night shifts. Her lesson has been that accommodation works best when supervisors have a simple process and support from HR, rather than treating each request as an exception to resist. Dr. Rahimi adds that accommodation costs are usually small compared with the cost of losing an experienced employee and defending a claim.

How employment ends

Canada has no doctrine of employment at will. An employer may dismiss an employee without cause, but it must give notice or pay in lieu of notice. The statutory minimum under employment standards law is modest: in Ontario, one week per year of service up to eight weeks, plus severance pay of one week per year up to 26 weeks for employees with five or more years of service at employers with a payroll of at least 2.5 million dollars. Unless a written contract validly limits the entitlement to the statutory minimum, courts award reasonable notice at common law, which is usually much longer. The factors, set out in the 1960 Bardal case, include the character of the employment, length of service, age and the availability of similar work; senior employees with long service can receive up to about two years. Dismissal for just cause, with no notice, requires serious misconduct such as theft or a pattern of misconduct after warnings, and courts set a high bar. Changing a fundamental term of employment without agreement can amount to constructive dismissal.

# Ontario statutory termination entitlements (weeks of pay), simplified
def notice_weeks(years):
    if years < 0.25: return 0
    if years < 1: return 1
    if years < 3: return 2
    return min(int(years), 8)

def severance_weeks(years, payroll_millions):
    if years < 5 or payroll_millions < 2.5: return 0
    return min(years, 26)

weekly_pay = 1_150
for years in (0.5, 2, 6, 12, 30):
    n, s = notice_weeks(years), severance_weeks(years, payroll_millions=40)
    print(f"{years:>4} years: notice {n:2d} weeks, severance {s:4.1f} weeks, "
          f"statutory total {(n + s) * weekly_pay:9,.0f}")

# Common law reasonable notice is often far longer; a rough illustration only
years, months = 12, 12
print(f"Common law at {months} months for {years} years' service: about {weekly_pay * 52 * months / 12:,.0f}")

 0.5 years: notice  1 weeks, severance  0.0 weeks, statutory total     1,150
   2 years: notice  2 weeks, severance  0.0 weeks, statutory total     2,300
   6 years: notice  6 weeks, severance  6.0 weeks, statutory total    13,800
  12 years: notice  8 weeks, severance 12.0 weeks, statutory total    23,000
  30 years: notice  8 weeks, severance 26.0 weeks, statutory total    39,100
Common law at 12 months for 12 years' service: about 59,800

The statutory figures are a floor, and the real cost of a dismissal depends on the legal system and the quality of the process. Dr. Rahimi's advice applies in both countries. Document performance problems honestly and as they happen, not in a burst before a dismissal. Give clear warnings and a real chance to improve. Treat similar cases alike, because inconsistency is the raw material of a discrimination claim. Conduct terminations with dignity, in private, with a witness, and with the practical details ready. And involve legal advice early in any dismissal involving long service, a protected ground or a recent complaint.

Privacy, monitoring and new technology

Privacy law for employee information in Canada is a patchwork. Federally regulated employers are covered by federal private-sector privacy law, Quebec, Alberta and British Columbia have their own private-sector laws that cover employees, and in other provinces employee privacy in private firms depends largely on common law and collective agreements. Ontario has required employers with 25 or more employees to have a written policy on electronic monitoring since 2022, and from 1 January 2026 to disclose in job postings whether artificial intelligence is used to screen, assess or select applicants. Employers using algorithmic tools in hiring must also ensure they do not produce adverse effects on protected groups.