Five Key Considerations for American Retailers Opening in Canada

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By Anthony Panacci and Emily La Mantia, Filion Wakely Thorup Angeletti LLP

A great deal of planning is required before opening a retail location in Canada. From an employment perspective, retailers need to consider not only the applicable laws, but also local best practices and workplace norms. This article provides American retailers with five key issues to consider when planning to expand into Canada.

Workplace Laws Vary Between Provinces

Each province in Canada has its own unique set of workplace laws. For example, each province has different laws regarding minimum wage, public holiday, work schedules, and overtime. While there are similarities from province to province, retailers need to be aware of the legal requirements in the specific province where they plan to operate. Retailers also need to tailor or redraft policies to comply with the laws in all of the provinces where stores will be located.

“Employment at-Will” Does not Exist in Canada

In the United States, many states permit “at-will” employment, meaning that both the employer and employee can end the employment relationship at any time without advanced notice.

“At-will” employment is not permitted in Canada. Absent exceptional circumstances, such as wilful misconduct, employees are generally entitled to notice (or pay in lieu), before their employment is terminated. The minimum amount of notice varies from province to province based on the laws of the particular jurisdiction.

However, employees can be entitled to much more than the minimum amount of notice if their employment agreement does not expressly restrict their entitlement to the statutory amount. Without an enforceable limiting contract, employees will generally be entitled to what is known as “common law reasonable notice”. Common law notice is often considerably greater than the minimum notice required under employment standards legislation.

For this reason, we strongly recommend that retailers use written employment agreements that limit employees’ termination entitlements. In our experience, retailers can save a significant amount in termination costs and legal fees by properly implementing employment agreements before employees begin work. In some cases, an enforceable employment agreement can mean the difference between owing an employee 8 weeks of notice or 24 months of notice!

Having clear, articulate, and consistently enforced workplace policies is generally seen as a best practice in most jurisdictions around the globe. However, in Canada, certain policies are required by law. Examples of workplace policies that are commonly required across Canadian provinces include:

  • occupational health and safety policies;
  • workplace violence and harassment policies;
  • anti-discrimination policies; and
  • accessibility policies.

Retailers should identify all of the provinces and territories where they plan to operate and determine which policies are required by law.

Training is Required by Law

Many Canadian jurisdictions require employers to provide training to their staff on various labour and employment issues. An example of training that is commonly required is occupational health and safety training, which includes training on workplace violence and harassment. Some jurisdictions also require employers to train employees on how to interact with, and accommodate, people with disabilities.

Retail Managers are Often Entitled to Overtime Pay

In contrast with many jurisdictions in the United States, managers at retail locations are often entitled to overtime pay. In Canada, overtime pay exemptions depend on the duties that are actually performed by an employee, as opposed to how that employee’s job is characterized by the employer or the employment contract. In addition, the exemptions vary from province to province. For example, retailer managers in Ontario will only be exempt from overtime pay if they: (1) perform managerial or supervisory duties; and (2) refrain from performing non-managerial or non-supervisory work, except on an irregular or exceptional basis. If a manager regularly performs non-managerial tasks, such as serving customers, stocking shelves, or working cash, the manager will likely be entitled to overtime pay, regardless of whether the manager is compensated on an hourly basis or by salary.

While the above suggestions are not complicated, they do require some planning in advance of a decision to open a retail location in Canada. In addition to the above, it is also important to recognize the requirements of French language laws in existence in the province of Quebec.

Anthony Panacci and Emily La Mantia are lawyers with Filion Wakely Thorup Angeletti LLP, one of Canada’s leading management-side labour and employment law firms. Anthony and Emily provide advice to both unionized and non-unionized organizations on all aspects of the employment relationship. This includes assisting employers with hiring, terminations, health and safety matters, and employment policies. They regularly provide employers with day-to-day advice and also defend employers in legal proceedings. For further information, Anthony can be reached at apanacci@filion.on.ca, and Emily can be reached at elamantia@filion.on.ca

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