Chapter 2: The Legal Environment in Canada

2.1 Federal and Provincial Jurisdiction in Canada

Learning Objectives

By the end of this section, you will be able to

  1. Explain the hierarchy of laws in Canada, and the different types of laws.
  2. Describe when a working relationship would be governed by federal rather than provincial law.

There is a hierarchy to the legal system in Canada. The Constitution Act adopted in 1982 has the highest level of authority in Canada. No governmentfederal, provincial, or municipalcan pass a law or regulation that contravenes the Canadian Constitution, and any law in Canada can be challenged before the Supreme Court if it is not consistent with the Constitution. The Constitution outlines our rights and freedoms, including the freedom of association, freedom of peaceful assembly, and freedom of conscience and religion. All individuals are equal before and under the law and have the right to freedom from discrimination. Sections 1 to 34 of the Constitution make up the Canadian Charter of Rights and Freedoms, often simply referred to as “the Charter.” The Constitution gave rise to the various human rights codes and acts in Canada and has had a profound effect on employment law, as well as labour law. We have seen the right to join unions defended under the Constitution as well.

Figure 2.1 The legal environment in Canada.

In Canada, there are two different “jurisdictions”: provincial and federal. This division arose from the British North America (BNA) Act, which served as Canada’s constitution until 1982. While employment legislation in the early 1900s was driven by the federal government, the Snider case (Toronto Electric Power Commissioners v. Snider et al.) in 1925 clarified that provincial governments were responsible for civil and property matters, including employment law, which is a form of contract law. The federal government retained responsibility for interprovincial industries. As a result of the Snider case, most Canadian workers fall under provincial jurisdiction.

Industries that fall under federal jurisdiction are identified in Section 2 of the Canada Labour Code, and these industries are defined as either “for the general advantage of Canada or for the advantage of two or more of the provinces.”

The following are examples of industries that are federally regulated:

  • Shipping and transportation services that cross provincial or international boundaries
  • Marine, ferry, and port services
  • Airports, airlines, and aviation companies
  • Pipelines, tunnels, and bridges that cross provincial boundaries
  • Postal services (e.g., Canada Post)
  • Chartered banks
  • Telecommunications services (cellular and internet services)
  • Broadcasting (television and radio)
  • Uranium mining
  • Grain elevators, feed and seed mills

Sources of Laws Impacting HRM

In addition to having both provincial and federal jurisdictions, there are five sources of laws that impact human resource management (HRM). Each province has its own set of laws, and the federal government has its own set of laws.

These different laws include

  1. Human rights laws, which protect groups of individuals from discrimination based on a criteria including race, religion, physical or mental disability, and sexual orientation.
  2. Labour laws, which stipulate the rights of workers to organize unions and bargain collectively with employers.
  3. Employment standards laws, which set the minimum requirements employers must meet in terms of hours of work, wages, statutory holidays, vacations, work leave, termination, and severance.
  4. Legislation that governs workplace health and safety. In B.C., that’s the Worker’s Compensation Act, which is enforced by WorkSafeBC. The Canada Labour Code (federal jurisdiction) defers to the local provincial workplace health and safety regulations rather than trying to create a parallel agency.
  5. Privacy legislation, such as B.C.’s Personal Information Protection Act, which obligates organizations to protect any personal information they collect, use, or disclose. This includes information about name, sex, age, weight, height, medical information, marital status, employment history, education, credit history, and fingerprints.

In addition to the statutory laws, unionized workplaces are also governed by collective agreements, which are contracts negotiated and agreed to between employers and unions. Non-union work agreements are also a form of contractual law, although they are generally much less formal, and employment agreements are not always well documented. Typically, the letter of offer provided to a new hire will contain the terms and conditions of employment. Anything that is not specifically addressed by the employment contract is deemed to fall under common law by default.

Common law (sometimes referred to as case law) is a final source of law and is created by judges when they interpret and apply statutory laws to specific cases. Statutory law is written law. It is created, debated, and voted upon by elected officials. Decisions made by judges of a higher court can be binding on lower courts; this ensures consistency in how the law is interpreted. Case law from other provincial jurisdictions is not binding, but could be considered persuasive if the context of the case is substantially similar. A persuasive argument is when one party in a court case refers to a case decided in another jurisdiction or a lower court. While an arbitrator or judge does not need to adopt the same analysis, it may influence them to do so. Judges will often consider the findings of judges in other jurisdictions and may choose to align their decisions with those decisions. Or, they may state that the case is not applicable because it is distinguishable (different) from the current decision at hand.[1]

Is an employee who was fired without just cause entitled to damages?

“Wallace Awards” refers to a 1997 Supreme Court case that held that how an employee was terminated and whether it was in “bad faith” could be a factor considered for compensatory damages in wrongful dismissal. In the 2008 Supreme Court case Honda Canada Inc v. Keays, the court determined that damages resulting from pain or distress as result of the manner of dismissal would only be considered where the employer had acted in bad faith by being dishonest, misleading, making false accusations, damaging future employment prospects, or being unduly insensitive (e.g., firing an employee in front of co-workers).


A tribunal is a board, panel, or committee tasked with making decisions. Tribunals are generally less formal and less expensive than going through the court system and are also better able to respond to issues in a timely way.

  • The B.C. Human Rights Tribunal is an “independent, quasi-judicial body responsible for adjudicating human rights complaints.”[2]
  • The B.C. Labour Relations Board is an “independent, administrative tribunal with the mandate to mediate and adjudicate employment and labour-relations matters related to unionized workplaces.”[3]
  • Many jurisdictions also have a tribunal which adjudicates complaints related to employment standards. In B.C., the province has moved towards a process which involves completing a “self-help” kit, which encourages employees to work with their employer to resolve the issue. If they are unable to, the employee may make a complaint to the Employment Standards Branch (ESB). The ESB will provide education and mediation in an attempt to resolve the issue. If that fails, the ESB may choose to investigate the matter and refer it to an officer to issue a Determination. At times, an adjudication hearing may be called, and both parties will be required to attend, either in person or by teleconference, along with any witnesses.

Key Takeaways

  • The Canadian Constitution is the highest law in Canada. No other laws can conflict with the Constitution.
  • There are three types of laws:
    • Statutory law is the written law created by politicians.
    • Common law is case law precedents created by judges and arbitrators.
    • Contract law includes collective agreements and employment letters.
  • The five sources of law affecting employment practices in Canada are Constitutional law, labour law, employment law, privacy laws, and safety laws.
  • Most employment relationships are governed by provincial law. Certain industries fall under federal jurisdiction.

Key Terms

Canadian Constitution: The highest level of legal authority in Canada, which outlines our rights and freedoms. The Constitution inspired the various human rights codes and acts in Canada and has had a profound effect on employment and labour law.

common law: Law created by judges when they interpret and apply statutory laws to specific cases. Often referred to as “case law.”

contract law: collective agreements between employers and employees/unions and employment letters

persuasive argument: When one party in a court case refers to a similar case decided in another jurisdiction or a lower court.

statutory law: Written law that is created, debated, and voted upon by elected officials.

tribunal: A board, panel, or committee tasked with making decisions.


  1. Patch Rocket is a new delivery “hot shot” service based in Fort Nelson and serving the oil patch in northeastern B.C. They offer same-day delivery of equipment and supplies to camps and drilling operations. You are the HR manager there, and have just learned that sometimes your delivery drivers unknowingly cross the border into Alberta to deliver supplies. From an HR perspective, why might this be an issue? What would this mean for your HR policies?



  1. Honda Canada Inc. v. Keays, [2008] 2 SCR 362, 2008 SCC 39 (CanLII),, accessed on January 29, 2017.
  2. BC Human Rights Tribunal, accessed May 18, 2016,
  3. Labour Relations Board British Columbia, accessed May 18, 2016,


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Introduction to Human Resource Management - First Canadian Edition Copyright © 2017 by Zelda Craig and College of New Caledonia is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License, except where otherwise noted.

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