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What is the Governing Law for Interprovincial Remote Workers?

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Since the COVID-19 pandemic began in early 2020, the main change many employers have had to implement is shifting from a physical workforce to an online one. While most aspects of pre-pandemic life have returned, remote work continues to be utilized by many companies across Canada. This shift to remote and hybrid work has raised some legal questions regarding provincial employment legislation and jurisdiction; for example, if an employee’s place of work is based in British Columbia, but they live and work remotely in Ontario, which employment standards act governs them? Although each situation may vary and must be addressed on a case-by-case basis, the general rule is that the employee will be governed by the employment standards laws of the province they live and perform the work in.

While this is often the case, each province also has specific rules regarding employees working outside of their employer’s jurisdiction. In an effort to provide as much information as possible, this article will give an overview of the way each province deals with these jurisdictional issues.

Before discussing each province, it is important to keep in mind that many of the rules pertaining to interprovincial workers were originally established for physical work between the provinces, such as truck driving, and have not fully contemplated permanent remote work.

Ontario and New Brunswick

The Ontario Employment Standards Act (“ESA”) will apply to workers located outside the province if the work being performed is a continuation of work that originated in Ontario. Section 3 of the ESA states that the legislation applies to the employment relationship if:

  • the employee’s work is to be performed in Ontario; or,
  • the employee’s work is to be performed in Ontario and outside Ontario but the work performed outside Ontario is a continuation of work performed in Ontario.

Other aspects, such as where the employment contract was signed or where the employee lives, are not relevant to establishing the ESA’s jurisdiction as it applies to workers outside of Ontario; the only relevant factor is the continuation of work. An example of this is a salesperson who lives in Ontario but often works in other provinces. Since the work originated in Ontario and is only being “continued” in the other provinces, the worker would be governed by the ESA.

Similar to Ontario, employees who work for a New Brunswick-based company but live and work remotely from another province are still subjected to the New Brunswick Employment Standards Act (“NB ESA”). This is stated in the NB ESA in Section 2:

Except where exempted under this Act or the regulations, all employers and employees whose relations are subject to the legislative authority of the Legislature are bound by this Act, notwithstanding that the work or services may be performed in whole or in part outside New Brunswick.”

While the above-noted section speaks of an exemption under the NB ESA, there are no stated exemptions in the legislation or case law.

Quebec

The Quebec Labour Standards Act (“LSA”) applies to the employment relationship:

  • when the work is done across multiple provinces (both in and outside Quebec) but the employee’s employer has an office location in Quebec; or,
  • when the work is done solely outside of Quebec, the LSA applies if the employer has a work location in Quebec and the employee lives in Quebec.

Alternatively, if the company does not have work premises in Quebec, the employment standards legislation that applies is that of the province where the company operates. In essence, the only relevant factor when determining the governing power of the LSA is if the employer is located in Quebec.

Alberta

Alberta’s Employment Standards Toolkit for Employers states that if an employee is working from another province, that province’s employment standards legislation may apply. Furthermore, it specifies that when an employee works outside Alberta for an Alberta-based company, the Employment Standards Code (“ESC”) will govern the employee depending on the specific circumstances and the nature of the employment agreement. Due to this:

  • the law that applies is the law that is intended by the parties, whether explicitly stated or implied.
  • even if the work is done entirely outside Alberta, the ESC can govern the employment relationship if it is stated in the employment contract or if there is supporting evidence of the parties’ intentions to have it governed by the same.

In the event that the intention of the parties cannot be determined through a contract or other documentation, a test has been established by the courts to ascertain which legislation will apply. This test is made up of many aspects, some of which are:

  • where the work is done;
  • whether the employer is based in Alberta;
  • where the hiring took place; and,
  • where the payment of wages occurs.
British Columbia

The legislation in British Columbia is mostly silent on this matter, but the case law states that if the employment contract does not specify which province’s employment standards legislation should govern, the British Columbia Employment Standards Act (“ESA”) will apply if there is a strong enough connection between the employment and the province. Some factors that can be used to determine this connection are:

  • whether the business is located in B.C.;
  • whether the employee lives in B.C.; and,
  • whether the terms of employment require the employee to work in other provinces as well.

With all of this information, it can be difficult to determine which employment legislation is applicable when employees are working and living in a different jurisdiction than their employer. With permanent remote work on the rise, the future will likely bring a change in the existing legislation, or the implementation of new laws to provide more substantial answers to these jurisdictional questions.

Manitoba, Saskatchewan, Newfoundland & Labrador and Nova Scotia

The legislation regarding interprovincial remote workers is silent in Manitoba, Saskatchewan, Newfoundland & Labrador and Nova Scotia. While the legislation does not provide an exact answer, the general rule that employees are governed by the employment standards legislation of the province in which they live applies.

For example, if an employee is employed by a Manitoba company but is working remotely from their home in Saskatchewan, it would be the Saskatchewan Employment Act that would govern the employment relationship.

Do you need help creating a remote work policy for your small business?

It can be difficult to determine which employment legislation is applicable when employees are working and living in a different jurisdiction than their employer. With permanent remote work on the rise, the future will likely bring a change in the existing legislation. Implementation of new laws may provide more definitive answers to these jurisdictional questions.

Our experts can help you develop company policies as well as with any other HR and health and safety advice you need. See how we have helped other small and medium businesses get their business compliant with provincial legislation.