Ontario Employers: 11 Actions That Could Land You in Legal Hot Water

As business owners, it's easy to feel like you're in complete control of your workplace. After all, you're the boss, right? But here's the reality check: while you have the authority to run your business, you must operate within the boundaries of employment law.

In Ontario, a complex web of legislation and court decisions governs the employment relationship. Many employers are shocked to discover that having a written employment agreement isn't enough – if those provisions violate the law, they're completely unenforceable.

So what exactly can't you do as an Ontario employer? And what happens when you cross these legal lines? Let's dive into 11 prohibited actions that could land you in serious legal trouble.

1. Workplace Discrimination

Under the Ontario Human Rights Code and federal Canadian Human Rights Act, employees deserve workplaces free from discrimination based on protected grounds like age, sex, race, ethnicity, sexual orientation, family status, religion, and disability.

This protection extends through the entire employment lifecycle – hiring, daily operations, and termination. Remember, discrimination doesn't need to be intentional, and having policies in place doesn't automatically protect you.

Key point: Failing to accommodate disabilities, religious needs, or family status to the point of undue hardship violates human rights legislation.

2. Workplace Harassment

Every employment relationship includes an implied term of respect and dignity. Harassment can include discriminatory remarks, unwanted physical contact, sexual harassment, intimidation, public discipline, yelling, swearing, false performance allegations, and workplace violence.

Under Ontario's Occupational Health and Safety Act, you're required to prevent harassment and have systems to address complaints. Ignoring harassment can create toxic environments and lead to constructive dismissal claims.

3. Retaliation

You cannot take direct or indirect action against employees who enforce their workplace rights or file complaints. This includes:

• Disciplining or firing

• Changing employment terms

• Harassment

• Terminating benefits

• Demanding resignation

  
  

Even if the employee's complaint is unsuccessful, retaliation based on timing proximity to their complaint can still result in legal consequences.

4. Wrongful or Unjust Termination

This is where many employers stumble. When terminating without cause, you must provide proper notice or severance pay. Both the Employment Standards Act and Canada Labour Code set minimum requirements, but depending on your employment agreement, you might owe up to two years of compensation.

Critical mistake: Don't allege cause for termination unless you have extensive documentation, independent investigations, written warnings, and have given the employee opportunities to improve.

5. Unauthorized Wage Deductions

You cannot deduct from employee pay without written consent, except for:

• Taxes

• Benefits contributions

• Statutory deductions

• Court-ordered payments

  
  

Always provide pay stubs outlining all deductions.

6. Withholding Wages

Pay employees at least twice monthly and never withhold wages they've lawfully earned, even during disputes.

7. Avoiding Vacation Obligations

Employees are entitled to at least two weeks vacation annually and 4% vacation pay. You cannot deny this time except in limited circumstances.

8. Demanding Unpaid Overtime

Non-managerial employees must receive time-and-a-half for work exceeding 44 hours weekly. This applies regardless of hourly or salary status.

9. Misclassifying Employees as Contractors

You can't falsely classify employees as contractors to avoid responsibilities like vacation pay, overtime, and severance. Employment law looks at the actual relationship substance, not just contract labels.

This misclassification can result in fines, tax consequences, and workplace investigations.

10. Forcing Retirement or Resignation

These must be voluntary, self-initiated decisions. Forcing either can trigger constructive dismissal claims and age discrimination damages.

11. Unilateral Employment Agreement Changes

You cannot make significant changes to wages, bonuses, hours, location, or duties without employee consent. Such changes can trigger constructive dismissal claims, entitling employees to severance pay.

The Consequences of Crossing Legal Lines

Workplace disputes arising from these violations can result in:

• Negotiated settlements

• Legal proceedings

• Significant damage awards

• Your legal costs plus potentially the employee's legal fees

For example, terminating an employee for poor performance when they requested workplace accommodations could result in severance pay, additional damages, and substantial legal costs.

How Employment Lawyers Can Help

Whether you're an employer or employee, consulting an employment lawyer should be your first step. Every situation is unique, and expert guidance is invaluable.

For employers: Get proactive legal advice to minimize risks, establish compliant protocols, and draft enforceable employment agreements.

For employees: Navigate disputes, negotiate resolutions, and pursue desired outcomes through proper legal channels.

Early consultation with an employment lawyer can literally be the difference between winning and losing a lawsuit.

The Bottom Line

Understanding Ontario's employment laws isn't optional – it's essential for both employers and employees. While these 11 prohibited actions represent major legal pitfalls, they're not exhaustive.

The workplace legal landscape is complex and ever-changing. There's no substitute for experienced legal counsel to understand your risks, strategize next steps, and guide you toward your desired outcomes.

Remember: being the boss doesn't mean being above the law. Operate within legal boundaries, and you'll protect both your business and your employees.

Until next time,