Employee Rights and Considerations during the Hiring Process: Background Checks, Medical Examinations, Drug and Alcohol Testing, Discrimination, Human Rights, Employment Contracts, and Probationary Periods

BACKGROUND INFORMATION ON APPLICANTS

Background checks

Are there any restrictions or prohibitions against background checks on applicants? Does it make a difference if an employer conducts its own checks or hires a third party?

The ability to perform background checks on job applicants is limited by privacy laws and human rights legislation in most Canadian jurisdictions. These limits exist regardless of whether the checks are performed by the employer or by a third party. Human rights laws in most jurisdictions prohibit discrimination on the basis of certain criminal convictions or provincial records of offences (such as traffic violations). Employment-related decisions based on these grounds may only be made if there is a bona fide reason for doing so. For example, it may be permissible to perform a criminal record check for an employee who will be working with vulnerable persons (eg, children) but not for most office workers.

In some provinces, certain industries are statutorily required to perform background checks. Non-criminal background checks meant to verify an employee’s previous employment history may be performed in Canada with the consent of the employee. Statutory and common law privacy considerations also limit employee background checks. An employer may only collect, use and disclose the limited amount of information necessary to achieve a legitimate business purpose and with the employee’s consent. An employer must also take steps to protect the information collected.

Medical examinations

Are there any restrictions or prohibitions against requiring a medical examination as a condition of employment?

Owing to human rights legislation and privacy laws, medical examinations as a precondition to employment (or continued employment) are permitted to the limited extent necessary to determine an individual’s ability to perform the essential duties of a role. Medical examinations are therefore generally not a permissible precondition to employment for work that lacks particular physical demands. That said, medical examinations may be permissible in any type of role when an employee requires accommodation for a physical or mental disability. In such instances, an employer may require an employee to submit to a medical examination so that accommodation measures may be determined.

Drug and alcohol testing

Are there any restrictions or prohibitions against drug and alcohol testing of applicants?

Due to human rights legislation and privacy laws, drug and alcohol testing is permissible in extremely limited circumstances, and only in the context of safety-sensitive roles or workplaces. Testing will only be permitted where the employer’s interest in workplace safety (and the associated risks of drug or alcohol use) outweighs the significant invasion of employee privacy. Alcohol testing is generally more permissible than drug testing but is subject to the same balancing of interests.

HIRING OF EMPLOYEES

Preference and discrimination

Are there any legal requirements to give preference in hiring to, or not to discriminate against, particular people or groups of people?

Provincially and territorially regulated employers are not subject to affirmative action laws. However, human rights legislation in each jurisdiction prohibits workplace discrimination based on any protected grounds. While protected grounds vary by province or territory, all jurisdictions prohibit workplace discrimination and harassment on the basis of:

• race;
• national or ethnic origin;
• skin colour;
• creed;
• religion or religious belief;
• age;
• sex, gender, gender identity or gender expression;
• sexual orientation;
• marital status;
• family status; and
• disability (both physical and mental).

Many jurisdictions also prohibit discrimination or harassment based on political beliefs and criminal records or provincial records of offences.

Federally regulated employers are subject to the federal Employment Equity Act. This requires employers to engage in proactive employment practices to increase the representation of four designated groups: women, people with disabilities, indigenous peoples and visible minorities. The Canadian Human Rights Act also prohibits workplace discrimination based on any protected grounds, similar to those in provincial jurisdictions.

Written contracts

Must there be a written employment contract? If yes, what essential terms are required to be evidenced in writing?

Although preferable for the protection of both parties, an employment contract need not be in writing. Terms can be made by express or implied oral agreement and, in some instances, through the conduct of the parties. Canadian common law renders certain terms of employment to be implied as governing employment relationships in the absence of enforceable written terms to the contrary.

Fixed-term contracts

To what extent are fixed-term employment contracts permissible?

In many Canadian jurisdictions, employment standards legislation exempts fixed-term employees from entitlement to notice of termination (or pay in lieu thereof) but, most often, only when the fixed term does not exceed a specific length of time. In Alberta, British Columbia, Newfoundland and Labrador, the Northwest Territories, Nunavut, Ontario, and Prince Edward Island, notice obligations do not apply to fixed-term contracts of 12 months or less. Manitoba, New Brunswick, Quebec and Yukon exempt fixed-term employees from statutory notice entitlements without specifying any limits on the length of the fixed term.

Employment standards legislation in Saskatchewan and that of the federal jurisdiction do not expressly exempt employees from termination notice at the end of a fixed term (although there is some case law in these jurisdictions to suggest that this would be the case).

A fixed-term contract may also preclude an employee from a common law severance package—i.e., reasonable notice of termination (or pay in lieu thereof). However, it must be clear and unequivocal that the contract was intended to be temporary. The lengthier the employment relationship, the less likely a court is to perceive it as a fixed-term contract. Early termination of a fixed-term contract can obligate an employer to pay out what is left in the contract’s term.

Probationary period

What is the maximum probationary period permitted by law?

Provincial and territorial employment standards legislation and the federal Canada Labour Code (which applies to federally regulated industries) provide for statutory probationary periods, wherein non-unionised employees may be dismissed without cause and without notice of termination (or pay in lieu thereof) being owed to them as set out in the table below. Probationary periods for unionised employees are typically subject to the terms of the applicable collective bargaining agreement.

An employer cannot extend the statutory periods after which statutory notice of termination without cause is due. Therefore, regardless of any contractual terms stating otherwise, employees become entitled to statutory notice of termination (or pay in lieu thereof) after the above periods end.

The common law does not recognise a probation period or any particular period within which an employee is on probation where they may be disentitled from their common law reasonable notice of termination. Therefore, subject to the terms of any employment contract, an employee may be entitled to common law reasonable notice of termination even if their employment is terminated while still within the statutory probationary period.

Classification as contractor or employee

What are the primary factors that distinguish an independent contractor from an employee?

The Supreme Court of Canada has developed a non-exhaustive list of factors for determining whether a worker is an independent contractor or employee. No one factor is determinative. These factors include:

• the level of control the employer has over the worker’s activities;
• whether the worker provides their own equipment;
• whether the worker hires their own helpers;
• the degree of financial risk taken by the worker;
• the degree of responsibility for investment and management held by the worker; and
• the worker’s opportunity for profit or loss.

 Statute and common law in many jurisdictions also recognise ‘dependent contractors’ – a classification somewhere between employee and independent contractor. This classification results in the dependent contractor having some, but not all, of the rights of an employee.