In the wake of global shifts in work culture accelerated by technological advancements and the COVID-19 pandemic, remote work has become more prevalent than ever before. Although remote operations offer some advantages for Ontario employers, such as reduced rent and utility expenses, they also bring about potential legal issues and risks that must be carefully addressed. For Ontario-based employers who are now hiring remote workers from various locations across the country, it is imperative to navigate these challenges with caution. 

Employment Standards and Governing Law

One of the foremost considerations for Ontario employers is compliance with the applicable employment standards legislation. Employers must ensure that remote workers receive entitlements such as minimum wage, overtime pay, and statutory holidays as stipulated by the applicable employment standards legislation.

When determining the applicable employment standards, one challenge is deciding the governing law. In most cases, the employment relationship is governed by the laws of the province or territory where the worker resides and performs their work. For example, if an Ontario-based company hires an employee who resides in British Columbia, their employment relationship will generally be governed by the employment laws of British Columbia.

Sometimes, determining the applicable laws for remote workers can be complex. Imagine an employee who splits their time between working remotely in Ontario for the first six months and in British Columbia for the remaining six months of the year. While the employment relationship is governed by Ontario laws at first, the employee’s relocation to British Columbia may trigger the application of that province’s employment laws. Differences in employment standards, such as statutory holiday entitlements between the two provinces, may present administrative and compliance challenges to the employer.

Further, the employer should also be aware of the difference in termination standards between the two provinces. Under British Columbia’s Employment Standards Act, employers can terminate an employee for just cause without providing notice. However, under Ontario’s Employment Standards Act, 2000 (Ontario ESA), termination without notice is only allowed when an employee is “guilty of wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer.” 

Choice of Law

Employers may want to include a choice of law clause to specify which law will govern the employment relationship (for instance, the law of the province where the company’s headquarters is located), regardless of the remote worker’s physical location. However, it is important to note that courts will not enforce an explicit choice of law clause that is intended to bypass mandatory rules of the province where the employee works. Instead, like in Mittra v. Royal Bank of Canada et al (2024) and EM Technologies, Inc. et al. (2013), courts will consider the employment laws of the location where the employee works (local laws) and compare them to the laws specified in the employment contract (foreign laws). If the standards of foreign laws are lower than the local laws’ mandatory standards, local laws still apply regardless of the choice of law clause.

Rules Regarding Digitalized Workplace

Employers in Ontario are required to follow certain rules regarding their policies on disconnecting from work and electronic monitoring under the Ontario ESA. Although these rules are not specifically for remote workers, they are particularly important for those who rely heavily on digital communication.

• Policy on Disconnecting from Work: Employers with 25 or more employees must have a written policy on disconnecting from work. This policy should outline when employees are not expected to engage in work-related communications, including emails, phone calls, video calls, or other messages. The policy must be provided to employees and updated according to specified timelines. While the Ontario ESA mandates the policy, it does not create new rights for employees to disconnect from work.
• Policy on Electronic Monitoring: Similarly, employers with 25 or more employees must have a written policy on electronic monitoring. This policy should clarify whether and how the employer electronically monitors employees and how the collected information may be used. Employers must provide this policy to employees and update it within specified timeframes. This requirement aims to ensure transparency regarding electronic monitoring practices but does not establish new privacy rights for employees.

Workplace Health and Safety

Under Ontario’s Occupational Health and Safety Act (OHSA), employers are required to ensure that their workplace is free from any kind of violence and harassment. Although OHSA does not typically apply to work performed in private residences as per s.3(1), that does not exempt employers from their responsibility to provide a safe working environment, even if their operations are fully remote. It is important to note that harassment is not limited to physical interactions, it can also occur digitally, and employers have a duty to address and prevent such incidents.

It is worth noting that courts tend to give a broad definition of “workplace”. In Rainy River v Olsen (2016) and Ontario (Ministry of Labour) v. 614128 Ontario Ltd. (Trisan Construction)(2017),  the courts state that the definition of “workplace” should be broadly viewed. Given that the OHSA is remedial legislation, it is to be interpreted and applied in order to protect and enhance the rights of workers and, more specifically, to promote public safety and to prevent harm in a wide variety of circumstances. Employers are responsible for ensuring the health and safety of remote workers, despite the physical distance, and protecting them from harassment that may occur through emails, messages, and other means.

Other provinces and territories have workplace health and safety laws that are similar to the OHSA. If an employer in Ontario hires employees from another province, they should also be aware of any legislative requirements that impose specific obligations on employers with respect to remote work arrangements in that province. 

Tips on Hiring Remote Workers

• Employment Contracts: In an employment contract, employers can give themselves some flexibility to determine the employee’s place of work in a reasonable manner, and the terms of any remote work. If some in-person attendance is a requisite of the position, that should be specified. This could include a term that the employee cannot relocate to another province without first obtaining the employer’s consent.
• Employment Policies: Employers should establish clear and comprehensive policies for remote work. These policies should outline the expectations regarding work hours, communication channels, performance metrics, and other relevant aspects. It is also important to ensure that these policies comply with the relevant employment standards.
• Disconnecting from Work and Electronic Monitoring: To comply with the Ontario ESA regarding disconnecting from work and electronic monitoring, employers with 25 or more employees should develop clear policies, communicate them to employees, and update them regularly. For disconnecting from work, outline clear expectations and provide reminders or training sessions. For electronic monitoring, be transparent and engage with employees during policy drafting. Regularly review and update both policies, provide training, and lead by example.
• Health and Safety: Employers must establish policies in the workplace concerning health and safety and keep a documented program to implement these policies. These policies should specifically address the identification of digital harassment, the process to file a complaint, and the investigation of harassment claims. Additionally, employers should provide mental health support initiatives and necessary equipment, as well as establish clear protocols for reporting injuries or hazards encountered during remote work.

While hiring remote workers offers numerous benefits for Ontario employers, it also presents legal complexities that must be carefully navigated. By prioritizing legal compliance, establishing clear policies, and embracing future trends, Ontario employers can effectively harness the potential of remote work while staying compliant with provincial employment law.