From the perspective of a global economy, Canada is generally regarded as an extension of the U.S. market. Multi-national businesses, whether based in the U.S. or overseas, may tend to assume that expansion into Canada can be accomplished on the back of a U.S. business strategy. Whether there is merit in such an approach from a business or marketing perspective is beyond the authors' expertise. However, it is clear that human resource management in Canada requires a distinct approach. Unique risks and liabilities exist for employers in Canada, hidden in a cultural and legal landscape that is seemingly very similar to the American in many respects.

This paper provides an overview of the different Canadian approach to regulating the employment relationship and highlights the key distinctions between Canadian and U.S. labour and employment law in three main areas of interest: union organizing, termination of employment and human rights or anti-discrimination law. The content of this article is based on the text "Canadian Labour and Employment Law for the U.S. Practitioner" by the same authors, recently published by BNA Books.

Background: A Continental Business Environment

The economic and political ties that bind Canada and the U.S. have been characterized as the closest and most extensive in the world--more than two hundred million people cross the Canada-U.S. border each year. Canada and the United States are each other's largest trading partner, with more than 80% of all Canadian exports going to the U.S. and nearly a quarter of U.S. exports coming to Canada. Two-way trade between Canada and the U.S. has more than doubled since 1989 when the first North American Free Trade agreement was struck. The volume of trade between the two countries is now more than 1.7 billion dollars (U.S.) a day. An amount the U.S. Department of State has called "staggering" .

U.S. direct investment in Canada has also grown under free trade from about six billion dollars in 1994 to over eleven billion dollars in 1999. The era of Canadian government oversight into American investment in the Canadian economy has given way to an "open for business" philosophy. In the free trade environment, many Canadian industries have also expanded successfully into the U.S. market. Indeed, Canada is often used by multinationals as an entry point into the North American market. Seamless North American market access makes Canada an ideal platform to sell to the U.S.

Overview: The Canadian Approach to Regulating the Employment Relationship

Differences in the legal systems of such close neighbours as Canada and the United States may not be immediately apparent. Canadian labour law is largely modeled on the U.S. Wagner Act and the basic principles of contract governing the employment relationship have similar common law roots in both countries. Further, human resource management systems in Canada and the United States have much in common. Best practices, which aim above compliance with local minimum standards or legal requirements, are very similar across North America. In this sense, first-class human resource policies and practices travel well across the Canada-U.S. border. Nevertheless, when U.S. companies (or international firms familiar with the American environment) expand into Canada, they encounter both subtle and surprising differences in the labour and employment law framework.

Canadian law consistently grants more extensive statutory protections to employees. For example, maternity leave in Canada has recently been extended to a full year in most provinces, with the mother enjoying both a right to return to her job and a government financial benefit during the leave. Additional parental leave also exists for adoptive parents and fathers (or mothers who wish to take further time off work). Canadian minimum standards for vacation, public holidays, overtime pay, maximum hours of work and so on, all tend to apply to more employers and create more generous entitlements for employees than American counterpart legislation. Further, the Canadian approach is to enforce employee statutory protections with efficient administrative bodies. Complaint and investigation procedures are available free of charge to employees, mediation and settlement are emphasized, and the tribunals which hear the disputes that are not resolved make speedy rulings that are in most cases final. The sort of administrative delay and appeals to the courts that exist in the U.S. do not take place in Canada.

Against the backdrop of a more intrusive regulatory system, employers must balance the fact that Canadians are far less litigious. In Canada, the existence of a statutory complaint procedure generally precludes a civil action being brought in the courts based on the same event. For example, in a case of discrimination or sexual harassment the victim has a free, statutory complaint mechanism that will involve the employer in an investigation, intensive mediation and a hearing by a tribunal if the matter is not resolved (the vast majority of complaints are settled). However, the employee may only recover a small award if successful--often less than $20,000. Meanwhile, because the statutory procedure exists, the complainant is precluded from suing the employer, whether or not she actually files a statutory complaint. Under this approach to the jurisdiction of the courts, much employment litigation is statute-barred. Moreover, novel lawsuits by employees outside the bounds of existing statutory rights are essentially unheard of in Canada. Tort costs in Canada are about one-third those in the U.S and large jury awards are virtually unknown. Therefore, while the average employee may enjoy greater protection in Canada, the employer's obligations are more predictable and the threat of U.S.-style employment litigation does not exist.

Also, some Canadian government programs relieve employers of financial liability. For example, universal health care in Canada is funded primarily through general government revenues. Although employers share in the cost of the Canadian health care system, the expense is significantly lower than the cost of providing private insurance for employees in the U.S. According to the Ontario Investment Service, Ontario's health care system costs employers $540 (U.S.) per employee annually, compared to $3,100 (U.S.) for health coverage per employee in the U.S. This is a significant cost saving.

There are many advantages to doing business in Canada, not the least of which is our perennially low dollar, currently worth less than 70 cents U.S. KPMG Canada has studied the relative cost of doing business in eight countries--Canada, France, Germany, Italy, Austria, Japan, the United Kingdom, and the United States--and found that for 1999 Canada had an overall cost advantage over each of these countries, including a 7.8% overall cost advantage over the United States. Canada's cost advantage over the U.S. in the software industry was 14.3%--the study found that running a 110 employee software firm in Canada would save the average U.S. company about $1.6 million (U.S.) a year. Canada's labour costs were the lowest among the countries examined. The cost of technical and professional employees was less than 65% of comparable U.S. costs. The Canadian workforce is also stable, highly literate, skilled and educated.

A strategic knowledge of Canadian labour and employment law will allow American business to take advantage of the many opportunities of doing business in Canada. With appropriate adaptation, U.S. human resource policies and procedures can generally be applied in Canada.

Union Organizing: Two Concerns and an Opportunity

Concern #1: Union Organizing is More Likely to Occur

The possibility of a union organizing drive may have slipped on the American radar screen because of the poor showing by trade unions in the U.S. in recent years. Trade unions now represent less than 10% of American workers and the decline continues. The reality is quite different in Canada where unions continue to represent 30% of the workforce. Greater public sector unionization in Canada accounts for some of this divergence. However, just over 18 percent of the Canadian private sector is unionized, still double the U.S. rate of about 9 percent. The risk of union organizing remains real in Canada, including in industries that tend to be non-union in the United States.

Canadian unions are active organizers and place great importance on attracting new members. They have responded to the changing economy and the shift of jobs from their traditional blue collar strongholds by attempting to gain new support among white collar workers, including retail, service sector and call-center employees. Unions in Canada will not necessarily be discouraged by the fact that it is uneconomic to represent a group of employees who request representation. They may also target a business for an organizing drive to gain a foothold in an industry. Large American multinationals present an ideal target for a high-profile organizing drive. No sector is exempt; non-union companies such as Wal-mart, McDonalds and Starbucks have all been hit with union organizing attempts in Canada, with varying degrees of success. Unions may also organize to protect existing collective bargaining relationships. For example, in the heavily unionized auto sector, when the big three automakers outsource production to small manufacturers of auto parts, the Canadian Auto Workers will pursue such companies in order to protect their auto sector wage rates and jobs.

Concern #2: Union Organizing is More Likely to be Successful

If a union attempts to organize a company's employees in Canada, there is a greater chance that the union will be successful. Union certification is facilitated in Canada by labour laws that allow organizing to be conducted by card-signing or quick votes. In some provinces, such as Quebec and British Columbia, a union may be certified on the basis of membership cards filed with the labour board--no vote is held. In these provinces, unions often gather sufficient cards to be entitled to automatic certification (usually about 55% support) before the employer is even aware that the union is organizing. In other provinces, such as Ontario, a vote is conducted in every certification application. However, the resemblance to the American system ends there as the vote is conducted very quickly--in Ontario within about five days of the union's application. It is often the case that head office managers only learn of a union's organizing drive in Canada when the union files its application for certification. At this point in time, the union is likely to have already collected sufficient signed membership cards to be entitled to either automatic certification or a quick vote. The company's position is often already compromised.

Further, under Canadian law the employer's right to campaign in response to union organizing is restricted. Despite shared legal rules prohibiting threats, promises, coercion and intimidation, employer campaigns in Canada are much more neutral in tone, style and content compared to the more freewheeling approach permitted in the U.S. For example, campaign statements permitted in the U.S. because they are "legitimate prophecies", that is reasonable predictions of adverse consequences of unionization that are beyond the employer's control, would almost certainly be considered unlawful threats in Canada, even if they are factually accurate. The different position in Canada results from a more narrow labour board interpretation of the employer's right of free speech. Employees in Canada are considered to be economically vulnerable and highly susceptible to employer pressure, and therefore in need of protection from employer interference. There is little recognition of the counterbalancing perspective that exists in the U.S.--that employees are mature individuals able to discount propaganda.

For American management arriving on the scene when union organizing has begun or an application for certification has already been filed at a Canadian subsidiary, it can be very frustrating to learn how restricted the employer's options may be. A typical scenario is that head office managers want to conduct an all-out campaign for the "hearts and minds" of their employees--to actively attempt to persuade employees against union representation. They may want to hold meetings with employees, conduct individual employee interviews and have a top executive fly in to address the assembled workforce. Canadian counsel is likely to recommend against most of these plans as potentially unlawful in Canada with possibly serious adverse legal consequences, including labour board remedies designed to restore the union's position.

Employer communications are possible in Canada during union organizing that are both lawful and persuasive, although more restrained than the American approach. Employees do often reject unionization in secret ballot votes, either because the union never reached the level of majority support or because a number of employees changed their minds about union representation upon reflection. Employer communications can encourage such sober second thoughts by pointing to the company's good record in its treatment of employees and the disadvantages of third party representation, in the context of carefully worded and balanced statements. Nevertheless, in Canada it is not wise for the employer to rely on being able to turn the tide of union organizing that has already gained momentum.

The salient fact remains that in Canada labour law facilitates union organizing. Once a union has begun to secretly organize a company's employees, the employer's ability to respond is restricted. Advance knowledge of this reality ought to encourage the human resource manager to take the preferred preventive approach in a timely fashion and avoid the last minute "crisis" management engaged in by American companies that mistakenly assume the Canadian system will provide an opportunity to campaign freely against any union that comes knocking.

The Wal-mart Saga

The story of how a Wal-mart store in Canada became the only unionized store out of Wal-mart's 2,600 stores worldwide is a cautionary tale for other U.S. companies. The battle over unionization at Wal-mart spanned several years and featured repeated trips to the Ontario Labour Relations Board, appeals to the courts and amendments to the Ontario Labour Relations Act brought in by Ontario's Conservative government in response to rulings in the Wal-mart case. Although the union ultimately walked away from its representation rights, no company wants to become involved in such costly and protracted proceedings or risk the less favourable outcome that could easily have resulted.

The following is a chronology of the Wal-mart story:

In 1994, Wal-mart acquired 122 stores in Canada, none of which was unionized.

In 1996, a small group of dissatisfied employees at the Wal-mart store in Windsor (a city just across the border from Detroit) approached the United Steelworkers of America seeking union representation.

The union quickly and secretly gathered signed membership cards from 44% of the stores employees, enough to apply for certification and obtain a Labour Board supervised representation vote.

In the secret ballot vote held one week later, 79% of the 205 employees voted against the union--a significant turnaround.

The Steelworkers applied to the Labour Board for automatic certification, a remedy then available in Ontario if employer unlawful conduct interfered with employees' freedom of choice to the point that the vote did not reflect their true wishes.

In a surprising 1997 decision, the Board ordered the Steelworkers certified despite the overwhelming "no" vote. The Board's decision was controversial because it was based on relatively subtle violations of the law by Wal-mart, no "flagrant" contraventions were found, and because it eschewed the less intrusive option of a second vote.

Wal-mart had conducted a fairly aggressive campaign by Canadian standards leading up to the vote, including the presence in-store of several members of management who engaged employees in discussions about the union. The Board was most concerned that Wal-mart maintained silence in the face of employee questions about whether the store would close if the union got in. The company's "no comment" response was found to have had a "chilling" effect on the union's campaign because employees concluded that the store would in fact close.

Wal-mart's culture was held against the company when considering the impact of the company's silence. Wal-mart has an open door policy and a culture that emphasizes a family or team atmosphere in which employees have a right to quick answers to questions and are entitled to information about the business. Silence in this environment was judged by the Board to be particularly significant.

Wal-mart brought an unsuccessful application to judicially review the Board's decision in the courts. Ontario's Divisional Court and Court of Appeal both ruled that the Labour Board's decision was within its jurisdiction and not unreasonable. Leave to appeal to the Supreme Court of Canada was denied in May, 1998.

As a result of the controversy, the pro-business Conservative government in Ontario changed the law so that the Labour Board no longer has the power to certify a union based on employer violations. The Board must now order a second vote but retains the power to grant whatever additional remedies it finds necessary to restore freedom of choice for employees, such as ordering union access to the workplace.

Wal-mart negotiated with the union and reached a collective agreement in November, 1997 which the union was unable to get ratified. Employees voted 102-68 against the deal. One month later the union came back to employees with essentially the same deal and this time it was ratified 109-39.

A group of employees opposed to the union immediately complained to the Labour Board that the second ratification vote was tainted by fraud. They collected 71 sworn affidavits from employees who said they had voted against the agreement.

Wal-mart also brought a complaint to the Board that the union had posed an improper question to employees when it gave them a choice on the ballot between ratification of the deal or a strike. Wal-mart argued that two separate questions should have been asked. The Board ruled against Wal-mart on this issue and an application to the courts for judicial review was unsuccessful.

The employees filed an application for decertification of the union.

All outstanding proceedings were settled in April, 2000 when the union (now the Canadian Auto Workers which had succeeded to the Steelworkers) abandoned its right to represent the employees. The settlement included an agreement not to comment publicly. However, it is likely that the union walked away because it had failed to get a collective agreement ratified after almost four years and was not confident in its ability to survive an eventual decertification vote.

This long and costly battle began for Wal-mart with secret card-signing initiated by a small faction of disgruntled employees, an immediate vote and the restricted right of the employer to campaign. Although the tide of employee opinion quickly turned against the union, the rapid and aggressive response by Wal-mart laid the ground for union complaints of unlawful conduct. Legislative amendments have removed some of the problems that arose for Wal-mart, however the fundamental differences in the Canadian system remain.

The Opportunity:
Employee Communication and Participation Programs

Advance understanding of the Canadian system allows for the preferred approach of maintaining positive employee relations to be adopted before a union appears on the horizon. The essential elements of developing positive employee relations will be familiar to human resource managers and are likely to be similar in Canada to the approach taken in the home jurisdiction, namely ensuring that compensation is competitive, training supervisors to be fair and responsive to employee concerns, creating an employee complaint procedure, adopting policies that protect employees from sexual harassment, and so forth. An increasingly important component of good employee relations in the modern workplace involves the implementation of employee communication and participation programs. This is one area in which Canadian law presents an opportunity for employers.

Canadian law is more favourable for employers than American law in the area of developing employee communication and participation systems because there is no Electromation doctrine in Canada. Direct dealings with employees or employee committees are not restricted in Canada during the period before a union appears on the scene. It is possible for the employer to initiate committees or other forums for discussion of employee concerns and the functions of an employee committee may include those that would be suspect in the U.S. Topics that may be dealt with in a non-union workplace include terms of employment or soliciting employee complaints and the company is free to correct problems it identifies through employee communication programs. The employer is generally limited in direct dealings with non-union employees only by its own unwillingness to "bargain" with groups of employees. (In Canada, the line that most employers approach with caution is the creation of an employee bargaining committee that is a short step from being able to qualify as a trade union and become certified.)

From the perspective of jurisdictions other than the United States, such as many European countries, the Canadian system also offer employers a degree of latitude to avoid union organizing that human resource managers may not be familiar with at home. Canada favours a decentralized system of collective bargaining that generally requires trade unions to organize employees on a plant or location basis. The European model of centralized bargaining is not followed except in certain industries, such as construction. In Canada, employee groups are not often automatically included in existing bargaining units--they must be organized. The requirement of unit-by-unit organization allows employers an opportunity to avoid unionization by developing positive employee relations--essentially removing the desire for third party representation through good management and responsiveness to employee concerns.

In addition to contributing to positive employee relations, an established pattern of regular communications and meetings with employees has another major advantage. Such a pattern is generally allowed by labour boards to continue during union organization. In fact sudden silence in the context of an organizing campaign can be held against the employer with an open communication policy, as happened to Wal-mart in the case summarized above. The ability that the U.S. employer has to discuss the pros and cons of unionization with employees during a campaign can to a certain extent be created in Canada by a well-established precedent of open communication. The statements that may be made must still be vetted carefully--the tone of communication will not switch to one of propaganda. However, a channel for balanced and reasonable communication will have been opened. An employer/employee communication program creates a pre-existing forum that may continue to operate within legal bounds when a union comes on the scene; may make third party representation undesirable or unnecessary to employees; allows the company to learn of and address employee concerns as they arise before employees turn to an outside party for assistance; and can create a record of employer responsiveness that will be helpful to point to if a union comes knocking. The fact that Canadian law allows the employer to initiate employee communication and participation programs creates a significant opportunity for the organization--one that the informed human resource manager can use to advantage.

Termination of Employment:
Greater Protection, Predictability

The second major difference between Canadian and American employment law concerns the termination of employment. "At will" employment does not exist in Canada. Under Canadian common law, the individual employment relationship can only be terminated for cause or with reasonable notice. Just cause for dismissal without notice is difficult to establish and reasonable notice can be lengthy--up to two years in the case of senior executives with long-time service. Not surprisingly, the greater employer liability upon the termination of an employment relationship informs the entire human resource management system. Recruitment, hiring, use of written contracts, performance and attendance management, decisions to reassign, relocate or demote employees, in short virtually every step in the ongoing employment relationship, must be managed in light of the employer's obligation to give notice if termination becomes necessary.

Following are highlights of Canadian law governing the dismissal of employees:

All Canadian jurisdictions require minimum statutory notice of termination, which can be quite lengthy in the case of mass dismissals. Ontario and the federal jurisdiction also require statutory severance pay. Exceptions exist within the statutory scheme, for example if a lay off is temporary. Statutory minimums are fixed obligations and are generally satisfied first, with the employer receiving credit towards the common law obligation of reasonable notice.

"Reasonable notice" of termination at common law is assessed by the courts on an individual basis and depends on factors intended to reflect the period of time necessary to find new employment. The dismissed employee's age, length of service, position held (managers are entitled to lengthier notice than more junior employees) and the prospects for re-employment are the main factors taken into account. Common-law notice may greatly exceed the statutory minimum. For example, a middle-aged manager with long service may be entitled to a year or more notice of termination. An older senior executive with long service may be entitled to as much as two years notice. In contrast, a young clerk with short service may not be entitled to much more notice at common law than the minimum standard requires.

Notice of termination may be actual advance notice or an equivalent payment instead. The remedy in a common law wrongful dismissal action is damages based on a calculation of the salary and benefits that the employee would have received had he or she been given reasonable notice of termination. A court calculating wrongful dismissal damages will first determine the appropriate period of reasonable notice and then determine the sum of the salary, benefits and other compensation payable during this period. Depending on the language of the applicable plan, damages may include bonuses, pension service and stock options that would have been earned, accrued or vested during the period had actual notice been given.

Bad faith dealings or harsh treatment of the employee on termination can increase the employee's notice entitlement. Damages for mental distress may also be awarded where the employee can prove a mental or emotional condition attributable to the employer's action. Punitive damages may also be awarded in response to deliberately harsh and humiliating treatment by an employer, but such awards are rare.

A dismissed employee has an obligation to mitigate by diligently searching for comparable employment. The employee's potential claim is reduced by any amounts earned during the reasonable notice period.

Just as employment may not be terminated at-will in Canada, terms of employment may not be adversely changed at-will. A "constructive dismissal" occurs when fundamental changes are made to the terms of employment, such as a reduction in compensation or responsibilities, without the employee's consent. Constructive dismissal triggers notice obligations similar to an actual termination.

Just cause for dismissal avoids the obligation to provide reasonable notice but is difficult to establish. Essentially, the employer must establish either serious misconduct, such as theft, or a demonstrated failure to perform the requirements of the job despite repeated warnings, adequate training and opportunities to improve. The burden of proof on the employer to establish cause for termination is heavy and requires a proactive approach to managing the performance of employees and documenting any deficiencies or incidents of misconduct. Business necessity or economic difficulties do not constitute cause for dismissal or avoid the obligation to give notice.

In a wrongful dismissal action, the courts have authority to compensate but not reinstate. However, in the federal jurisdiction, Quebec and Nova Scotia, a statutory adjudication procedure is available for non-union employees dismissed for reasons other than redundancy. The adjudicators acting under these procedures do have the power to reinstate (with back pay) as well as to award damages.

The employer in Canada may face human rights consequences if the dismissal was for a discriminatory reason.

Although there are greater employer liabilities surrounding the termination of employees in Canada, the obligations are relatively clear-cut and predictable. Most employers develop practical approaches for handling reductions in force and individual terminations based on providing advance notice, salary and benefit continuance, relocation counseling and so forth. Individual termination packages are often offered in exchange for a release and the employee is given an opportunity to obtain legal advice. A domestic human resource capability should be developed in Canada to manage both downsizing and individual terminations (and the rest of the employment relationship in light of the potential liability upon termination). Again, it is important to remember that while employees consistently do better upon termination in Canada because they may not be terminated at-will, satisfaction of the notice obligation essentially avoids all claims by outgoing employees. The sort of novel wrongful dismissal litigation that exists in the United States as employees develop arguments that they were terminated improperly on one ground or another (such as claims by whistleblowers or allegations of discrimination) are far less frequent in Canada.

Case Study: Reasonable Notice Period

The recent Ontario case of Kilpatrick v. Peterborough Civic Hospital awarded the highest notice in a wrongful dismissal case to date (30 months). The employer having admitted liability for wrongful dismissal, Kilpatrick brought a summary judgment motion seeking a determination of the reasonable notice period. The main question for the judge was the significance of the plaintiff's having been recruited away from a previous long-term position.

Kilpatrick commenced employment with the Peterborough Civic Hospital in 1991 as its new chief executive officer (CEO). He was 53 years old. After performing his duties in a satisfactory manner, he became involved in the rationalization of the Civic Hospital with another local hospital. After the rationalization had occurred, Kilpatrick was terminated without cause in 1997.

Before joining the Peterborough Civic Hospital, Kilpatrick had worked 29 years with the Moncton Hospital, the last 21 of which he held the hospital's CEO position. Kilpatrick was recruited by an executive search firm that had been retained by the Peterborough Civic Hospital. He had not applied for the position when it was advertised, and when he was approached, at first he was not interested. The court found that Kilpatrick had been actively wooed to the new position.

The court rejected the employer's argument that there had been no "inducement" to Kilpatrick during the recruitment process in the form of an implied commitment that the position would be long-term:

Implicit in the wooing would be the unstated inducement that this man who is 53 years of age who has been invited to uproot himself and his family from his life-long relationship with the community of Moncton and surrender his seniority as a 29 year employee with 21 years as chief executive officer in order to move to a new city, a new region and a new province and undertake a new job with a new employer, would reasonably be able to expect that the job would be available to him and provide economic security for him and his family until his natural retirement at age 65.

A significant factor in the 30-month notice assessment was also the difficulty faced by Kilpatrick in finding a comparable job at the age of 60.

Because Kilpatrick worked for the Peterborough Civic Hospital for six years, it was argued that the circumstances of his recruitment were no longer significant. The judge, however, rejected the traditional reasoning that the longer the period of time served with a new employer after being induced to leave a previous position, the less impact such inducement would have on the reasonable notice period:

It would be a curious result if an employee induced into acceptance of a position who was dismissed shortly thereafter would become entitled to a significant period of notice, perhaps comparable to a non-induced individual employed for a long duration who would also be entitled to a significant period of notice, whereas an employee induced into a position in which they served well for a number of years could be terminated with a substantially shorter notice requirement.

This case raised the 24-month ceiling on reasonable notice previously in existence in Ontario.

On appeal, the Ontario Court of Appeal, on a procedural issue ruled that summary judgement was not an appropriate vehicle for determining reasonable notice. The case was sent for a new trial on the issue of length of notice. It now remains to be seen whether the precedent-setting 30-month notice period will be confirmed at the new trial.

Human Rights and Anti-Discrimination Law

A third major difference between Canadian and U.S. employment law lies in the field of human rights or anti-discrimination law. In this area, the underlying principles are very similar. Both countries protect employees and job applicants from discrimination on broadly similar grounds. However, Canada has expanded the grounds of protection from discrimination in recent years to include new grounds such as sexual orientation. The interpretation of what constitutes a disability also tends to be broader in Canada and the validation of hiring standards is more difficult. Finally, the Canadian approach to privacy tends to be more protective of the individual. Drug and alcohol testing programs that are widespread in the U.S. are difficult to implement in Canada. It is for such reasons that most American-based human resource policies and hiring practices must be reviewed and modified for adoption in Canada, not because the basic principles of human rights protection are different.

Following are highlights of the key distinctions between Canadian and American anti-discrimination law:

In Canadian jurisdictions, the protection against discrimination is consolidated in a single human rights statute, unlike in the United States. For example, in Ontario, the Ontario Human Rights Code encompasses forms of protection afforded by the Americans With Disabilities Act, the Age Discrimination and Employment Act and Title VII of the Civil Rights Act.

The Canadian Charter of Rights and Freedoms is part of Canada's constitution, like the U.S. Bill of Rights. The Charter applies to government action and may be invoked to challenge a statutory provision or government program that is discriminatory or fails to afford equal treatment. The Charter does not apply to private sector employers, but may be relevant indirectly, as the courts require new grounds of protection from discrimination to be recognized in statutes that apply to the employment relationship.

The basis of anti-discrimination protection tends to be broader in Canadian jurisdictions than in the United States, including such grounds as ancestry, ethnic origin and citizenship, family and marital status, as well as sex, age, religion, disability and criminal record (limited to minor or pardoned offences). Most surprising to U.S. employers is the fact that sexual orientation is a ground of anti-discrimination protection in Canada. Further, the law is becoming settled that this includes a requirement to recognize same-sex spouses for benefit plan purposes.

Canadian employers are covered by human rights legislation regardless of the number of employees on their payroll.

Discrimination does not give rise to a private cause of action in Canada. The complainant's right to redress is found in the remedial provisions under the applicable human rights statute. For example, victims of sexual harassment must file complaints under human rights statutes and may not bring a civil action.

Complaints under human rights legislation in Canada do not yield the extraordinary damages that are common in discrimination litigation in the United States. For example, in Ontario, the human rights tribunal has jurisdiction to make a victim of discrimination whole by awarding back pay and reinstatement. However, an Ontario tribunal's authority to award damages for the indignity caused by discriminatory conduct is limited to $10,000.

The protection against discrimination by reason of disability is enhanced by a far?reaching duty to accommodate. For an employer to justify an exclusionary bona fide job requirement, the Supreme Court of Canada has recently ruled that it must meet a stringent test. The employer must prove that (1) the standard is rationally connected to the job, (2) the standard was adopted in a good faith belief that it was necessary for the legitimate work-related purpose, and (3) the standard is necessary to accomplish the work-related purpose and accommodation of individuals who do not meet the standard is impossible without imposing undue hardship on the employer. Folding the requirement of reasonable accommodation into the setting of job standards is a new approach in Canada and remains to be addressed in practice by most employers. However, the result is likely to be that job standards will be even more difficult to validate in Canada than in the U.S. For example, if an individual can meet a visual acuity standard with contact lenses or glasses, under recent U.S. caselaw the individual may not meet the definition of "disabled" or be covered by the ADA. In Canada, the result may be diametrically opposite as the visual acuity standard itself may now have to be reconsidered in light of whether it is feasible to accommodate candidates by allowing them to wear contact lenses or glasses on the job.

Protection against age discrimination in Canada generally begins at age 18 and continues until at least age 65. The lower limit on protection against age discrimination is significantly below the ADA's age 40.

The ability of employers to initiate drug and alcohol testing programs is more restricted in Canada than in the United States. Generally, the employer must have reasonable suspicion of abuse before requiring a drug or alcohol test, even in "safety-sensitive" industries. An exception is recognized in the case of cross-border industries such as trucking where the employer is required to comply with more demanding U.S. drug testing requirements.

A recent decision involving Imperial Oil Ltd., a Canadian company owned by Exxon, has confirmed a restrictive position on drug testing in Canada. In Entrop v. Imperial Oil Ltd. , the Ontario Court of Appeal reviewed a drug and alcohol policy that provided for random testing in safety-sensitive positions. The policy contemplated termination in the event of a positive test result. The policy also required employees to inform management of any existing or previous drug or alcohol dependencies.

The Court found that the policy violated the Ontario Human Rights Code in that the alcohol and drug use scrutinized by the policy did not necessarily correspond with impairment on the job. The Court was prepared to countenance random testing only in circumstances where an employee in a safety-sensitive position works beyond the scope of routine supervision. Otherwise, testing for drug and alcohol use is permissible only in circumstances where an employee must be certified, following an incident of impairment on the job, or as part of a return-to-work protocol. Even in these cases, testing is only meaningful if the results are indicative of a state of impairment.

It is also important for U.S. based organizations to note that human rights law in Canada will interact with the law governing termination of employment and the absence of employment-at-will. For example, if a female employee complains of sexual harassment, the protection owed to her as the victim of discrimination will be broadly similar in Canada and the U.S. However, if investigation substantiates the complaint and leads to a decision to dismiss the harasser, the additional issue of whether cause for termination can be established must be considered in Canada. It is possible that sexual harassment will give grounds for summary dismissal but there have been cases where the harassing employee was held to be entitled to notice of termination.

Another example of this interaction would be the case of an employee who is to be terminated for absenteeism. The employer may have to consider whether the employee has a medical disability, in which case the duty to accommodate under human rights statutes must be satisfied before termination can be considered. If no disability exists, for example if the reasons for the excessive absenteeism and lateness consist of car troubles, separate minor illnesses, absence without notification, sleeping-in and so on, the employer will still have to consider whether just cause can be proven. This may involve assessing issues of proof, whether warnings were given, whether rules were made clear, the employee's length of service and so on. Thus, the human resource manager must be mindful of the overall position in Canada as well as particular statutory protections such as anti-discrimination law.

Canadian Labour and Employment Law for the U.S. Practitioner

BNA books of Washington, D.C. has recently published Canadian Labour and Employment Law for the U.S. Practitioner, authored by Douglas G. Gilbert, Brian W. Burkett and Moira K. McCaskill.

The book compares Canada's laws of the workplace to corresponding laws in the U.S. The objective is to explain to U.S. managers and their advisors what to expect when a familiar human resource issue is encountered north of the border.

The authors of the book are lawyers in the Toronto office of Heenan Blaikie, a national law firm with one of Canada's largest labour and employment law practices on behalf of management.

Canadian Labour and Employment Law for the U.S. Practitioner can be purchased from BNA Books, (800) 960-1220, .

Douglas Gilbert is an attorney at Heenan Blaikie, representing employers in the courts, before boards of arbitration, federal and provincial labour boards, in human rights and workers' compensation proceedings and at the bargaining table. He assists U.S. clients in adapting their human resource strategies to conform with the Canadian legal environment. He is a member of the Developments under the National Labor Relations Act subcommittee of the American Bar Association. He is a former Director of the Ontario Ministry of Labour's Policy Branch. He was called to the Ontario Bar in 1979.

Brian W. Burkett is a senior partner at Heenan Blaikie, practicing in the area of management labour relations and employment law; provides strategic labour and employment law advice for employer organizations; gives input into the development of labour law policy; appears before arbitration and LRBs at provincial and federal levels and negotiates collective agreements. Mr. Burkett is a member of the CBA and the Railway and Airline Subcommittee of the ABA, and served as employer representative on the Canadian delegation to the I.L.O. in Geneva, Switzerland in 1995. He was called to the Ontario Bar in 1978.