Employment Agreement

Does Your Employment Agreement Comply With the ESA?

Within the Province of Ontario, every employee employed by a provincially regulated employer is entitled to minimum rights and protections provided by the Employment Standards Act, 2000 (the “ESA”). 

In any employment relationship, it is important that the employee and employer have a contract that complies with the ESA’s minimum standards. That said, how can you tell if your contract complies with the minimum standards? 

Does the ESA apply equally to all employees? 

Not necessarily. As an example, construction workers are exempt from receiving termination pay under the ESA. On the other hand, employees who work in the federally regulated sector are not covered by the ESA and are instead covered by the Canada Labour Code. As another example, certain classes of employees are not entitled to overtime pay. Every situation is different and you should speak to a lawyer when trying to determine your rights. 

What rights and entitlements are governed by the ESA? 

The ESA is very comprehensive legislation. It covers basic employee rights, such as minimum wage, hours of work, public holidays, vacation pay, and different types of leave. 

The following is a list of some of the entitlements provided by the ESA, although the ESA certainly covers a lot more: 

Employment Standard Poster 

Every workplace should contain a poster that provides information about the ESA. New employees should receive a copy of the poster within 30 days of commencing employment.

Work, Eating, and Rest Period 

Employees who work full-time and more than 44 hours per week should receive overtime pay, subject to any exceptions under the ESA or the employee’s contract. Furthermore, every employee is entitled to a 30-minute meal break after working at least five hours. 

Payment of Wages

Employers must decide a specific frequency and period through which to pay their employees. As an example, most businesses pay their employees on a bi-weekly basis consistently throughout each year. 

Tips and Gratuities 

Some businesses, in particular businesses in the restaurant industry, allow employees to collect tips and gratuities. These tips and gratuities should be recorded and distributed to the employees within a reasonable period. 

Minimum Wage

The ESA provides for a minimum hourly wage that all employees must be paid. Note that certain industries can have different rules on what constitutes minimum wage.

Leave

The ESA allows for many different types of leave, including but not limited to pregnancy and parental leave, sick leave, bereavement leave, critical illness leave, and family caregiver leave.

 

Each type of leave contains its own criteria for eligibility and also provides employees with different benefits. 

Public Holidays

Employees are entitled to paid time off on public holidays in Ontario. Examples of such holidays include Christmas.  

Vacation 

Employees with five years or less of employment are entitled to two paid weeks of vacation per year. Employees with over five years of service are entitled to three weeks of vacation. Some employees may receive even more based on their agreement with their employer. 

Termination and Temporary Layoffs

The ESA permits employers to terminate employees without cause, so long as they provide the employees with minimum termination pay, benefits continuation, and in some cases also severance pay (depending on the employer’s global payroll, and other factors). 

Is it possible for an employer to contract out of the ESA? 

No. Our courts in Ontario have determined that attempting to expressly contract out of the ESA is illegal. It is a very important principle of employment law that every contract, whether written or verbal, must provide all of the minimum benefits and standards contained in the ESA. Employers who attempt to contract out of the ESA may receive claims for wrongful dismissal, complaints by employees to the Ministry of Labour, and other issues. A contract that opts out of the ESA will also have issues with its enforceability and validity. In short, trying to opt out of the ESA is a dangerous practice.

Conclusion 

The ESA was introduced as minimum standards legislation intended to protect the basic rights of employees within Ontario. Whether you are an employee who believes your employer is not complying with the ESA, or you are an employer who requires help to draft an ESA-compliant contract, feel free to contact us and we will be happy to assist you. 

 

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