GLOSSARY OF EMPLOYMENT LAW TERMS
| AODA Compliance Report | AODA is the Accessibility for Ontarians with Disabilities Act. This Act came into force in 2007 and presented a gradual schedule for compliance based on organization type and size.
Businesses and non-profits with 20 or more employees and public sector organizations were required to submit a Compliance Report, detailing how they are complying with AODA, by December 31, 2017.
Read our blog on Recruiting Online for information about AODA and disablity in the workplace. |
| Common Law | The common law is the system of law that comes from the way judges and decision makers have previously decided cases, we call this “precedent.” The common law is a source of law separate from law that comes from statutes, or what we think of as “laws.”
In employment law we often speak of statutory notice and common law notice. This means the amount of notice a terminated employee is entitled to under statute, the Employment Standards Act in Ontario, or under the common law, which is determined by looking at how cases with similar facts have been decided. |
| Compensation | The total amount of the monetary and non-monetary pay provided to an employee by an employer in return for work performed. This could include things like benefits, car allowance, performance bonus, gym membership, as well as a regular pay cheque. |
| Constructive Dismissal | Constructive dismissal can arise where an employee has not been fired, but has been treated in such a way that the employer’s actions allow them to assert that their employment contract has been voided. This would be the case if the employer makes a unilateral and fundamental change to a term or condition of employment, without providing reasonable notice of that change. An employee asserting constructive dismissal typically quits their job and then sues the employer for damages for wrongful dismissal.
Job changes such as unlawful layoffs or reductions in salary will often be considered constructive dismissals. |
| Duty to Accommodate | An employer’s duty to make adjustments to work environments, job requirements, policies and practices to ensure full participation of all employees. |
| ESA Poster | Under the Employment Standards Act, employers are required to post in a conspicuous place in the workplace a poster that sets out employee rights and requirements under the ESA. This is referred to as an ESA poster and can be obtained from the Ministry of Labour. |
| Fiduciary | Someone who holds a position of trust, such that they are required to put the needs of someone, or something, else ahead of their own. |
| General Damages | General damages are an amount of money awarded to compensate for personal injury such as pain and suffering, mental distress or human rights violations. |
| Human Rights | Human rights are rights that belong to all human beings, regardless of their personal characteristics, ethnic origin, abilities or other status. All humans are equally entitled to human rights without discrimination.
In Ontario human rights are protected by the Human Rights Code, which prohibits actions that discriminate against people on the basis of a protected ground in a protected social area. The protected grounds are:
The protected social areas are:
Read our blogs for more information on human rights in the workplace. |
| Just Cause, For Cause, With Cause, Cause |
Employee misconduct that justifies immediate termination of the employment contract without any notice or pay in lieu of notice. |
| Lump Sum Payment | A lump sum payment refers to the way that money is paid all at once, in a lump sum. With respect to pay in lieu of notice, this amount can be paid via a lump sum, salary continuance, or a combination of the two. Employee’s typically prefer lump sum payments, as there is value in getting a chunk of money all at the same time. |
| Mediation |
A dispute resolution process, often required prior to a trial or hearing, where the parties try to arrive at a settlement agreement with the help of their lawyers and a third party mediator. Mediations are without prejudice. |
| Mitigation | In the employment law context, mitigation by the employee is taking steps to reduce the damage suffered from a job loss. This means doing what any reasonable person in a similar situation would do to find and accept a job comparable to the one lost. The employee has a duty to mitigate their damages by looking for a new job. Notice Damages can be reduced by a court if it is determined that the employee failed in their duty to mitigate. |
| Notice Damages | Notice damages are money paid to compensate an employee for the notice period with respect to the termination of their employment. Notice damages are considered employment income and taxed as such. For more information about how damages are taxed see our blog post. |
| Notice Period |
Employees are entitled to reasonable notice of termination, unless they are terminated for just cause. The notice period is the time between when the employee receives notice that their employment will end and the last day of their employment. Employees do not usually continue to work during the notice period, but are instead paid for the value of the notice period. This is called pay in lieu of notice. |
| Release | In the employment context, a Release is a binding document that restrains an employee from making a claim against the employer for matters arising out of their employment or the termination of their employment. Employees will typically only sign a release once they have been paid an amount of reasonable notice beyond their minimum statutory entitlements. |
| Reasonable Notice |
This is the amount of notice that an employee, terminated without cause, is entitled to receive. It is intended to compensate the employee for the period of time that it will take them to find comparable employment. A specific amount of notice of termination may be set out in the employment contract. If there is no contract, reasonable notice will be determined by the common law. Common law reasonable notice is determined with consideration to the employee’s age, position, length of service and the availability of comparable employment given the employee’s experience and education. |
| Restrictive Covenants | Restrictive Covenants are agreements which inhibit the employee’s ability to compete with the employer, and to lure away their clients or employees. These are usually called non-competes and non-solicits. They can exist both during and after employment. Restrictive covenants protect the employer’s interest by restraining the employee from using knowledge gained during the course of employment about the employer’s business to compete with the employer.
Read our blog on Restrictive Covenants for more information. |
| Retiring Allowance | When an employee is terminated they may be able to characterize some of the compensation they receive from their former employer as a retiring allowance for tax purposes. A retiring allowance is intended to compensate an employee for their long service to an employer or the loss of their employment. Tax is withheld on a retiring allowance at a different rate than on notice damages. Read our blog on Tax Treatment of Wrongful Dismissal Awards for more information. |
| Salary Continuance |
When a notice period is paid out to an employee (as opposed to worked out, through working notice) this can be done through salary continuance. Pay in lieu of notice delivered though salary continuance will mean that the employee continues to receive their regular pay cheque for the length of the notice period, even though they may not still be working. |
| Severance Package | This is the term for an amount of compensation that an employee is given upon termination of their employment without cause. It will usually include pay in lieu of reasonable notice and will often be contingent upon the employee signing a release. Notice pay and severance pay are two different things under the Ontario Employment Standards Act, but the term severance is often used colloquially to include both. Employees terminated without cause are entitled to notice or pay in lieu of notice. Severance pay is an additional amount, only paid in certain circumstances. |
| Sexual Harassment | Harassment is a course of comments or actions that are known, or ought reasonably to be known, to be unwelcome. It can involve words or actions that are known, or should be known to be, offensive, embarrassing, humiliating, demeaning or unwelcome.
Sexual harassment is harassment based on someone’s sex. This could include remarks about someone’s physical characteristics, unwelcome physical contact, suggestive or offensive remarks about either sex, sexual advances or propositions, discussions or questions about sexual activities, telling sexual jokes, treating someone differently or denying them a benefit because they are pregnant or otherwise on the basis of their sex, demanding dates, displaying sexually explicit or offensive pictures or other materials and so on. Sexual harassment in the workplace is a violation of the Ontario Human Rights Code and the Ontario Occupational Health and Safety Act. There are several posts on sexual harassment on our blog. |
| Simplified Rules | These are court rules that set out the litigation procedure to be followed for claims that are between $35,000.00 and $200,000.00. Under the Simplified Rules, litigation requires fewer steps and is typically less costly than under the regular rules. |
| Temporary Layoff | Where your employer tells you they don’t have enough work to keep you at work right now, but that they will hire you back later. In order to have the right to temporarily lay an employee off the employer needs to include this term in a valid written employment contract. Where this term is does not exist the layoff will be unlawful.
In Ontario a temporary layoff can last for up to 35 weeks in a 52 week period if benefits are continued or other conditions are met. If no benefits or payments continue and if the employee is not otherwise earning money a layoff can only last for 13 weeks in a 20 week period. |
| Without Cause | There are generally two types of termination of employment, with just cause and without cause. Being terminated without cause is far more common. Non-unionized employees can generally be terminated for no particular reason as long as they receive adequate notice. Common reasons to terminate an employee without cause are restructuring or downsizing. |
| Without Prejudice |
Without prejudice is a phrase lawyers often use in written communications with the other side of a dispute. By indicating that communications are without prejudice the intention is that the contents of the communication will not be used in court. Without prejudice discussions are usually about settlement. Mediations are typically without prejudice. |
| Workplace Violence & Harassment | Ontario’s Occupational Health and Safety Act establishes that workers have the right to be free from violence and harassment at work.
Workplace violence is the exercise or attempted exercise of physical force by a person against a worker, in a workplace, that causes or could cause physical injury to the worker. A statement or behaviour that it is reasonable for a worker to interpret as a threat to exercise physical force against the worker, in a workplace, that could cause physical injury to the worker also constitutes workplace violence.
Workplace harassment is engaging in a course of vexatious comments or conduct against a worker in a workplace that is known or ought reasonably to be known to be unwelcome.
Workplace harassment can involve unwelcome words or actions that are known or should be known to be offensive, embarrassing, humiliating or demeaning to a worker or group of workers. It can also include behaviour that intimidates, isolates or even discriminates against the targeted worker. |
| Wrongful Dismissal |
A wrongful dismissal occurs where an employee is terminated without reasonable notice or pay in lieu of notice. This can arise when an employer pays the employee less than their entitlements, or when they pay them nothing and wrongfully assert the termination is with cause. |
