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ARTICLE 11
Updated March 2020.
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are common in employee definitions in both Brazil and Canada. The existence of a minimum wage in the national or provincial territories, prior notice in case of termination and indemnities are also rights provided for in both countries. The rules that define them, however, deserve attention because they contain differences.
In Brazil, the Federal Constitution of 1988 brings the fundamental and social rights of labour, but the main source of the rule is the Consolidation of Labour Laws (CLT), which underwent a major recent reform, in the year 2017. That year there was also the creation and alteration of other labor laws, which started to regulate outsourcing . Another change in the new regulation concerns the extinction of the mandatory contribution to unions, a change that impacted the entire Brazilian union system. In Canada, issues such as outsourcing and union contributions are also regulated. Responsibility for legislation, however, is divided between the federal government and provinces. Therefore, although many rules are very similar, it is important for the employer to be aware of what the law of the province in which the business is established says.
Issues such as the workweek - 44 hours in Brazil and 40 hours in
These and other fundamental information on labour law and justice in both countries are detailed on the following pages, in articles by the attorneys Beatriz Frambach and Pablo Mourente, from David & Athayde Advogados (Brazil), and Marc-Alexandre Girard, from law firm Dunton Rainville (Canada).
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BRAZIL - CANADA COMPARATIVE LAW
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BASIC DEFINITIONS
Employee Definition
In order to be considered an employee and be granted with protection by Brazilian labour law, the services performed by a rural or urban worker must fulfill simultaneously five requirements. Those requirements are:
a) work performed by a natural person; b) personally rendered;
c) on a regular basis;
d) subordinately (the worker cannot set the means and manner of performance, etc), and;
e) in return for remuneration.
The meeting of such requirements at a real situation (no matter any written agreements) determines the existence of an “employer x employee” relationship rather than a “client x independent contractor” one.
Main Laws
At the top of Brazilian legislative hierarchy is the Federal Constitution, which establishes an expressive quantity of fundamental and social
labour rights, especially at the articles from the 7th to the 11th.
Although the Federal Constitution prevails over other norms, the main source of Brazilian labour law is the “Consolidation of Labour Laws - CLT”, a code that in 2017 was deeply amended, bringing more flexibility to the labour relations.
In addition to the CLT, the employment relations in Brazil are also mainly regulated by the following laws:
• Law 605/1949 – regulates the rest days;
• Law 3207/1957 – regulates some specifics regarding the employees who work as salesmen;
• Law 4090/1962 – regulates the payment of the annual 13th salary (Christmas bonus);
• Law 5889/1973 – regulates employment contracts of workers in rural activities;
• Law 6019/1974 amended by Law 13,429/2017 – regulates temporary work;
• Law 7418/1985 – regulates the transportation vouchers benefit; • Law 7783/1989 – regulates workers’ right to strike;
• Law 8036/1990 – regulates the “Severance Pay Fund” (FGTS); • Law 9029/1995 – prohibits discrimination in the workplace; • Law 10101/2000 – regulates profits sharing schemes;
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independent contractors are not entitled), it is worth highlighting: • Minimum wage: employees must not be paid at a rate lower than
the minimum wage hour rate.
• FGTS (a mandatory severance pay fund): the employer must deposit an amount equivalent to 8% of each employee monthly salary in a special account for that purpose. In the event of termination without cause (by the employer), retirement, or serious illness, among other situations, the employee can withdraw the amount. In case employer decides to terminate the contract without a cause, the employer shall also pay a fine equivalent to 50% of the amounts deposited in such account during the employment relationship (40% goes to the employee and 10% to the federal government). • Annual paid leave: after a 12-month working period, the employee
is entitled to 30 calendar days of paid leave with an extra bonus of one-third of his/her monthly salary (that is to say, the employee receives the same amount he/she would receive as if he/she were working + 1/3 of the monthly salary).
• 13th salary (Christmas bonus): by the end of each year, every employee is entitled to receive a 13th salary with the same amount of his/her monthly salary.
• Working hours limit: In Brazil, the working hours limit is 8 hours per day and 44 hours per week. It is possible to manage the schedule in order to allow working more than 8 hours a day (within certain parameters), respecting the 44 hours weekly limit. Any • Law 8213/91 – regulates social security benefits;
• Law 12506/2011 – regulates proportional notice of termination. Among others important laws, the same legal status is given to the collective agreements (labour agreements negotiated between employees represented by their union and the respective employer or the employer’s union), which establish specific rights regarding a specific group of employees and must also be respected during the employment contract.
RIGHTS AND DUTIES
Basic entitlements: employees x independent contractors
As explained, to be considered as an employee the worker must fulfill five requirements simultaneously, otherwise he/she is going to be classified as an independent contractor, in which case the contracting parties are free to negotiate the terms and conditions, including possible benefits.
On the other hand, when it comes to an employment contract the employer must comply with the minimum conditions determined by the law and by the applicable collective agreements. Among the mandatory labour rights applicable to employees (to which
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work performed beyond this limit shall be considered as overtime (except for some few special groups of employees).
• Meal break: for any daily period of more than six hours of work, the employee shall be granted a meal break of one to two hours, which can be reduced to 30 minutes by a collective agreement. For periods of work from four to six hours, the minimum meal break the employee is entitled by law is 15 minutes. In any case, the meal break is not paid time.
• Overtime compensation: overtime working must be remunerated with an additional amount equivalent to at least 50% of their normal work-hour rate.
• Rest day: the employee is entitled to at least one rest day per week. • Notice of termination: if one of the parties wishes to terminate
the employment contract without cause, it must provide the other party with an advance notice of termination within 30 to 90 days (according to the years of service) or compensate it with the equivalent amount of that period (payment in lieu of notice).
Outsourcing: permission and parties liability
In Brazil, historically our legislation did not use no to cover the operation of outsourcing, although it has been a kind of business strategy used by several Brazilian companies for at least 25 years.
Because of this lack of a specific legal provision, our labour courts tried
to find in generic rules some principles to guide the disputes involving this matter.
During some decades, the main guideline regarding outsourcing was the Precedent n. 331 ruled by the Brazilian Superior Labour Court. This precedent basically allowed the outsourcing, except when the main company had a significant level of control over the worker, which was presumed in several cases, such as when the role of the worker was related to the main company’s core activity. In such cases, the worker was deemed to be a direct employee of the main company (direct liability). Another important statement of this precedent was the subsidiary liability of the main company regarding the entitlements of the employees of the outsourcing company, even in case of regular outsourcing operations. In 2017, new laws were enacted to specifically regulate the outsourcing. So now the legislation expressly allows the outsourcing even when it is about the main company’s core activity and the main company is always subsidiarily liable, unless when it comes to irregular outsourcing (high level of control by the main company over the outsourcing company’s employee, for example).
In general, the employees of the outsourcing company are entitled to the same rights as the main company’s employees (although the law does not expressly requires the same salary), and the law requires the
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outsourcing company to hold a minimum share capital according to its number of employees.
Payroll Taxes
The payrolls of the Brazilian companies are highly taxed in comparison of what happens in other countries, due in most part to the pension plan contribution the employers pay, which amounts to 20% on top of the gross compensation.
Besides it, there are other social contributions which the employers pay on top of the payroll that fund several social entities that mainly offer professional education at subsidized rates. There is also a “termination tax” the employers pay on top of the balance of the employee’s compulsory severance fund when the employee is dismissed without just cause.
We must say there are many other employment costs that most people deem to be “payroll taxes” but that are not taxes because it is money that goes to the employee, although not immediately every month along with the salary. Technically, those other costs are worker’s entitlements, such as annual paid vacation leave, an extra month salary per year (13th salary), the compulsory severance pay fund, etc.
Therefore, we could summarize the employment costs in Brazil as
follows, classified under “workers’ entitlements”, “payroll taxes”, and the “ripple effect” of the second over the first:
BRAZILIAN EMPLOYMENT COSTS BREAKDOWN
A - WORKERS’ ENTITLEMENTS % ON TOP OF THE COMPENSATION
A01 - ANUAL PAID VACATION LEAVE 8,33% A02 - VACATION LEAVE BONUS PAYMENT 2,75%
A03 - 13th SALARY 8,33%
A04 - SEVERANCE PAY FUND (FGTS) 8,00% A05 - NOTICE OF TERMINATION - (WAGES IN LIEU OF NOTICE) 8,33% A06 - TERMINATION FGTS COMPENSATION FINE (40%) 3,20%
SUBTOTAL A 38,95%
B - PAYROLL TAXES % ON TOP OF THE COMPENSATION
B01 - SOCIAL SECURITY TAX (BASIC RATE) 20,00% B02 - SOCIAL SECURITY TAX - MANDATORY INSURANCE 1,00%
B03 - OTHER SOCIAL CONTRIBUTIONS 5,80% B04 - ADDITIONAL TERMINATION TAX (10%) 0,80%
SUBTOTAL B 27,60%
C - RIPPLE EFFECT % ON TOP OF THE COMPENSATION
C01 - A04 ON A01, A02, A03 AND A05 2,22%
C02 - A06 ON C01 0,07%
C03 - B04 ON C01 0,02%
C04 - B (EXCEPT B04) ON A01 2,23% C05 - B (EXCEPT B04) ON A03 2,23%
SUBTOTAL C 6,78%
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activity of their employers, disregarding the position of each employee within the company. From the cleaner to the CEO, everybody is necessarily represented by the same union (except the ones who are not deemed employees or the case of employees who perform professional services, such as lawyers, physicians, engineers, etc).
Collective agreements in Brazil traditionally set yearly compensation adjustments, as well as many other benefits, such as meal vouchers, health and life insurance, special overtime compensation rates, advantageous working hours, job protections, etc.
Types of termination and respective entitlements
Whose initiative is to terminate the contract and the cause behind the termination will determine the entitlements that the employee shall receive from the event.
The most common type of termination happens when the employer deliberately and without just cause decides not to continue the employment contract. In this case, the employee must be granted with:
a) advance termination notice (or a payment in lieu); b) salary balance;
c) proportional 13th salary;
d) annual paid leave with the respective 1/3 extra bonus (any leave
It is important to mention that Small and Medium Companies (annual gross revenue of up to R$ 4,800,00.00 [~ CAD 1,520,000]) of some industries do not pay some of the taxes, which allows them to have lower employment costs.
Employees’ representation and Unions
Unions in Brazil have a significant role regarding the majority of employment relations. That is because they automatically represent all employees of a given industry in a given region. The employees do not have to opt in to be covered by the collective agreement provisions.
Up to 2017, every employee was obliged to pay dues to his union amounting the equivalent of one day of salary, even in case the union did not even negotiate collective agreements or provide any advantage to the represented ones. The employer withheld those dues from the employees remuneration once a year. Since November 2017, the mandatory dues are no longer in force, and the unions have been struggling to find other sources of funding, since very few employees pay non-mandatory dues.
In Brazil, there are basically two kinds of unions, the employers’ unions and the employees’ unions. The former automatically represent all the employers of a given industry in a given region. The latter automatically represent all the employees of a given industry in a given region.
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already acquired and the proportion of the one being acquired); e) release of the FGTS (severance pay fund) balance with the respective termination fine (fine equivalent to 40% of the amount deposited by the employer during the contract);
f) right to apply for the government’s employment insurance.
In the event of termination by the employee’s initiative without just cause, he/she is entitled to the very same rights except the advance termination notice, the release of the FGTS balance and its fine (in fact there’s no such fine in this case), and the government’s employment insurance.
The Labour Law Reform (in force as of November 2017) also provided the possibility of termination by common agreement between the parties, in which case the employee shall be entitled to the same rights as if it were a termination without just cause, but the advance termination notice only need to have half of its duration, as well as the FGTS’s fine shall be reduced by 50% and only 80% of such fund balance shall be released. In this sort of termination, the employee is not eligible to apply for the government’s employment insurance.
Lastly, regarding the dismissal for just cause, this kind of termination refers to when, upon an employee’s gross misconduct, the employer dismisses him/ her as a sanction. The Brazilian law describes some situations that are deemed as just cause, but the definitions are broad so the employer has to interpret the law. The jurisprudence also serve as a guide with various concrete cases
examples. In case of just cause dismissal, the employee is only entitled to: a) salary balance;
b) annual paid leave with the respective 1/3 extra bonus (only the leave which entitlement was already acquired, not including the leave still being acquired).
Minimum Wage
According to Brazilian Federal Constitution, the national minimum wage must be established by Law (that is to say, approved by the parliament). Traditionally, every year a new law is enacted establishing a new amount for the minimum wage, which is always increased in order to face the inflation. In 2011 and later in 2015, laws were enacted establishing a formula for the minimum wage adjustments for the following years, based on the previous inflation plus a real growth rate based on Brazil’s GDP previous growth. Therefore, since 2011 every year a Presidential Decree establishes a new amount for the national minimum wage based on the formula defined by the laws.
As of January 1st 2019, the Brazilian national minimum wage amounts to BRL 998.00 (monthly), or BRL 4.54 (hourly), which is equivalent to around CAD 316.82 (monthly) or CAD 1.44 (hourly), according to current exchange rate (September 25th 2019).
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It is important to mention that the Brazilian states (equivalent to the Canadian provinces) can establish by state laws a specific minimum wage only applicable to specific professions. Some states enact such kind of laws, and others do not.
In addition, the collective agreements negotiated by the Unions can establish specific minimum wages applicable to the employees they represent.
Periodic adjustments of wages
There are no mandatory periodic adjustments of wages determined by law in Brazil. Such adjustments are freely negotiated by unions, which traditionally negotiate every year an adjustment of the wages of their represented employees.
These adjustments tend to be at a rate that covers last 12 months’ inflation, sometimes increased by a real gain rate.
The government has no control over the private sector salaries.
Working hours
The regular working hours limitation in Brazil is defined by the Federal Constitution as 44 hours over a six-day period. The Constitution also stipulates that an agreement between the parties may authorize the
schedule management in order to allow more than 8 hours of work per day (within certain parameters), as long as the 44 hours week limit is respected. As explained, overtime working must be remunerated with an additional amount equivalent to at least 50% of their normal work-hour rate, but a compensatory time off plan can be agreed.
Fringe Benefits
Fringe benefits are fairly popular in Brazil. Since the average salaries are low and a high number of industries have their employees represented by a union, a great part of employees is covered by a collective agreement that grants fringe benefits.
In general, very few fringe benefits are granted by law. The most known is the “transportation voucher”, that is the obligation of the employers to fund their employees home-to-work public transportation fares. In the past, this funding used to be done by the purchase of “transportation vouchers” by the employers. Nowadays, the public transportation system of many major cities work with electronic prepaid cards recharged by the employers every month. By law, the employers shall buy the “transportation voucher” for their employees and may deduct the respective cost up to 6% of the gross salary of each employee.
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Another benefit granted by law is the daycare reimbursement. It is due by the companies that have more than 30 women as employees. Originally, the law only established to the companies the obligation of providing themselves a daycare service. But over 30 years ago the government authorized the companies to reimburse the daycare expenses instead of providing the service themselves. The eligibility rules in terms of children age, as well as the reimbursement cap, etc., must be established by collective bargaining.
The most common fringe benefits granted by collective agreements are meal vouchers, health and life insurance, dental care, etc.
CONTROL AND INSPECTION
Labour Disputes Resolution System
There are no administrative courts in Brazil with power to settle disputes between employers and employees. Such disputes are settled only by specialized judiciary courts.
The labour judiciary system in Brazil has three levels of jurisdiction: the first is occupied by single labour judges, followed by labour appeal courts, and finally by the Superior Labour Court. Also, the Supreme Federal Court (a constitutional court) can also deal with
labour cases (after Superior Labour Court judgments) when it comes to apply the constitutional provisions that touch on labour matters. Nevertheless, the labour judiciary system is the fastest one compared to other judiciary courts in Brazil, as well as it has the highest level of digitalization. Nowadays, almost all of the labour lawsuits in the country are in an electronic format. The attorneys and the parties can even access the records of the lawsuits using a mobile app.
The court costs are not high and amount to 2% of the disputed amount, with low extra fees for the enforcement procedures. Such costs shall be paid in the end by the loser party, who also shall pay attorney fees amounting from 5% to 15% of the disputed amount for the prevailing party’s attorney. On the other hand, exemptions are granted for most workers so they do not pay those costs and fees when they lose, although they can be deducted from any due amount obtained in the lawsuit.
All the due amounts shall be adjusted for inflation since the date of the damage and include accrued interest at a rate of 1% per month since the filing date.
Up to the labour appeal courts level, the parties do not need to be represented by an attorney, although most of them hire attorneys anyways. However, they need an attorney for procedures before the Superior Labour Court and the Supreme Federal Court.
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According to the “Justice in Numbers” 2019 report, issued by the National Justice Council (a body of the Brazilian judiciary system), in 2018 a labour lawsuit in Brazil took, on average, 27 months to have its end (all levels, without enforcement procedure), or 6 years and 4 months including the enforcement procedure. The delay may vary depending on the state and even on the city where the court is.
Main employment litigation causes
The Brazilian Superior Labour Court has some statistics regarding labour lawsuits. According to that, the main employment litigation causes between January 2019 to July 2019 were:
• Employment termination payments (payment in lieu of notice of termination, severance fund termination fine, termination payments’ deadline, etc.)
• Overtime payment • Meal break;
• Hazard pay.
Labour inspection
The labour inspection in Brazil is performed by the Subsecretariat of Labour Inspection of the Ministry of Economy. Up to 2019, it used to be a Ministry of Labour’s duty, but such ministry no longer exists.
The mentioned subsecretariat is an administrative body of the government and the inspections are performed by the Labour Auditors, who do their job requesting documents (electronically or physically) or even visiting worksites.
Once a violation is identified, they issue a notice of violation and the company who is alleged to have committed the violation has a deadline to respond. After the response and once a decision is rendered, the company can contest it before a special department of the Subsecretariat, which decision is final. Nonetheless, the companies can still contest the Subsecretariat final decisions before the labour courts, through all the levels of the Brazilian labour judiciary system.
The decisions of the Subsecretariat impose monetary penalties or can even order a full or partial shutdown of a worksite.
The monetary penalties do not go to the employees, but to the government. Their amounts did not use to be high but as of November 2019 a new provisional measure enacted (to be confirmed by the parliament) changed the penalties system and raised the penalties amounts to a considerably higher level.
It is also important to mention that, in cases involving a systematic non-compliance of labour standards by the companies, the Labour Prosecution Service can file class actions in order to represent all the affected
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employees and claim for damages as well as request for an order to force the company to comply with the standards. The Labour Prosecution Service can also propose a compliance agreement in such cases.
Occupational health and safety main issues
Brazil has a very extensive legislation concerning occupational health and safety. The most part of it are regulations issued by the Secretary of Labour and Social Security of the Ministry of Economy (up to 2018 it was a Minister of Labour’s duty). As regulations, they do not need to be approved by the parliament, since the law delegates to the mentioned authorities the power to issue regulations in this matter, which allows the regulations to be updated on a regular basis.
Most of rules concerning occupational health and safety are contained in a set of regulations called “Normas Regulamentadoras” (Regulatory Standards), also known by the acronym NRs.
Currently there are 37 NRs, some of them containing general rules, others providing guidelines regarding certain activities (electrical services, outdoor works, etc.) or concerning the use of specific equipments (furnaces, pressure vessels, etc.). There are also some NRs that contain provisions only applicable to certain industries, such as construction, agriculture, mining, shipbuilding, works at oil and gas floating units, etc. In case of non-compliance of those standards, monetary penalties can be
applied, as well as a full or partial shutdown of a worksite can be ordered in severe cases. The inspection is performed by Labour Auditors of the Subsecretariat of Labour Inspection of the Ministry of Economy, since it is part of the regular labour inspection system.
The Labour Prosecution Service also works in case of systematic non-compliance of the mentioned standards, through class actions and proposal of compliance agreements, as mentioned in the previous topic. The occupational health and safety performance of the companies is also considered each year as a moderation factor to calculate part of the social security tax rate. So if a company does not manage well these matters, it can increase the tax rate for a given year.
Lastly, if a company does not comply with occupational health and safety regulations and a work-related accident or disease occurs, the social security agency may pursue the company for the costs of pensions and related benefits. ■
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Introduction
In Canada, the jurisdiction over employment laws is shared by the provincial and federal governments. Most businesses are regulated under the provincial laws and some specific sectors fall under the jurisdiction of the federal government. While the protections may vary from a province to another, there is a certain uniformity in regards to employment standards.
BASIC DEFINTIONS
Employee Definition
A contract of employment is a contract by which a person, the employee, undertakes for a limited or indeterminate period of time to do work for remuneration according to the instructions and under the direction or control of another person, the employer. Those basic conditions must be present in order to form a contract of employment, as opposed to a contract for service, where there is no relationship of subordination.
Main Laws
Every Canadian province or territory passes legislation in order to establish the minimum employment standards applicable to the employees under its jurisdiction. The federal government does the same.
These laws mainly guarantee standards in regards to the minimum wage, the maximum number of hours worked in a day and week, the minimum time off required at work, vacations and vacation pay, statutory holidays, various paid and unpaid leaves, pay equity and minimum periods for notices of termination or severance pay.
The main employment laws applicable in Quebec are the following: • Civil Code of Québec, CQLR c CCQ-1991;
• Act respecting labour standards, CQLR c N-1.1;
• Act respecting industrial accidents and occupational diseases, CQLR c A-3.001;
• Act respecting occupational health and safety, CQLR c S-2.1; • Labour Code, CQLR c C-27;
• Canada Labour Code, RSC 1985, c L-2.
These laws set minimum standards that cannot be waived by contract. The Canadian courts, in case of ambiguity, will generally interpret these employment standards law in favour of the employee.
RIGHTS AND DUTIES
Basic entitlements: employees vs. independent contractors
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independent contractor and an employee relates to the execution of the work. In a contract for service, there is no relationship of subordination between the service provider and the client. The contractor is free to choose means and methods in order to perform his service and fulfill his obligations.
An employee, on the other hand, will act and perform his duties under the control and direction of the employer.
To distinguish between the two situations, an inspector or the courts will examine whether the individual accomplished his work at the alleged employer’s establishment, if he used his own tools, his own materials as opposed to those of the alleged employer, etc. Those factors are indicative but not conclusive in themselves. A case-by-case analysis is normally carried out to identify the person’s status when it is unclear or ambiguous.
Outsourcing: permission and parties’ liability
As a rule, in the event of a sale, even if the transferor terminates the employees and the transferee hires them, there is normally a continuity of employment recognized by the law and the courts. The Act respecting labour standards and the Civil Code of Quebec deal with this situation when the employees are not unionized.
When the employees of a business are unionized, the Labour Code applies
essentially the same rule. It states that “The alienation or operation by another in whole or in part of an undertaking shall not invalidate any certification granted under this code, any collective agreement or any proceeding for the securing of certification or for the making or carrying out of a collective agreement”.
In addition, in the event that an employer is subcontracting a large part of the company’s functions, there is a risk that it would be considered a partial transfer of the company. In such a case, the transferee will also be liable in the same way as the transferor. This question is one which depends heavily on the facts and a tribunal will have to review them carefully before ruling.
Payroll Taxes
Employers in Canada are required by law to deduct income tax and employee contributions to certain social programs at source, in order for these funds to be handed to the government. The social programs vary across the country depending on which province the employer is operating in. However, some payroll taxes apply to all. For example, employers and employees have to make contributions in accordance with the federal Employment Insurance Act and the laws establishing the Canada Pension Plan (in the province of Quebec it is the Quebec Pension Plan).
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by the employer. For example, in Quebec, apart from the Quebec Pension Plan, there is the Quebec Income Tax, the Health and Services Fund, the Quebec Parental Insurance Plan, the Labour Standards Commission and the Health and Workplace Safety Fund.
The payroll taxes can vary from a province to another, however the employer will certainly have to contribute to a number of social programs by deducting certain amounts at source.
Employees’ representation and Unions
The right to form or join a trade union is guaranteed by the Canadian Constitution. Labour legislation, both at the federal and the provincial level, aims to provide a framework to those liberties. Employers are therefore obliged to recognize a labour union (with some discussion possible on the “bargaining unit”) and to negotiate with it in good faith, in order to conclude a collective agreement. The goal of such an agreement is to protect both employees and the employer. While the collective agreement is in effect, strikes and lockouts are illegal. Such manoeuvres are permitted during the bargaining period, which is established by law.
Once an association is accredited, it becomes the sole representative of the employees towards the employer.
In addition, the employer must deduct union dues from the pay of his employees part of the bargaining unit. An employee may refuse to be a member of an association, however, he or she will still have to pay an amount equivalent to the union dues since the association has a duty to represent him or her. This system provides stability in labour relations and promotes collective rather than individual rights.
Both federal and Quebec legislation provides rules to establish a trade union. There is a certification process for the union to be recognized and there are also remedies for employers who oppose the description of the bargaining unit as described by the union.
When a disagreement arises between the employer and the union on the application of the collective agreement, the Labour Code specifies that the disagreement must take the form of a grievance to be decided by an arbitrator.
However, when an employer or a union is accused of illegal practices, the Labour Code mandates the Administrative Labour Tribunal, a specialized tribunal, to decide the dispute.
Types of termination and respective entitlements
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Canada. As a result, an employer who terminates an employee without cause must give sufficient notice or pay compensation in lieu of such notice. In Quebec, both the Civil Code of Quebec and the Act respecting labour standards regulate the length of the notice.
Case law under the Civil Code of Quebec “refers to a reasonable notice of termination”, which varies from one to four weeks per year of service. The length will depend on the employee’s age, his position, the circumstances of his hiring and his possibility to find other employment.
The Act respecting labour standards also outlines minimum notice requirements. The notice shall be of one week if the employee is credited with less than one year of uninterrupted service, two weeks if he is credited with one year to five years of uninterrupted service, four weeks if he is credited with five years to ten years of uninterrupted service and eight weeks if he is credited with ten years or more of uninterrupted service.
An employee cannot contract out of his right to a fair notice or compensation in lieu of notice, which means that even unionized workers governed by a collective agreement must receive the minimum guaranteed by law.
It is important to note that each province and the federal government
Of course, the law does not allow an employer to pay employees below the minimum wage. It should be noted that this standard does not apply to certain categories of employment where the minimum wage is prescribed by regulation.
have legislation regarding collective dismissals. The length of the notice in such a case is prolonged depending on the circumstances.
Minimum wage
The minimum wage is regulated by the provinces. As of October 1, 2019:
Saskatchewan $11.31 Newfoundland and Labrador $11.40 New Brunswick $11.50 Nova Scotia $11.55 Manitoba $11.65 Prince Edward’s Island $12.25
Quebec $12.50 Yukon $12.71 Nunavut $13.00 North-East Territories $13.46 British Columbia $13.85 Ontário $14.00 Alberta $15.00
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Mandatory periodic adjustments of wages
Employers decide if and when employees receive pay raises, if not stipulated by contract or in a collective agreement.
Mandatory periodic adjustments of minimum wages vary from a province to another. In Quebec, the minimum wage is increasing annually on May 1 of each year. Consequently, the only requirement regarding the periodic adjustments of wage is that every employee must earn at least the minimum prescribed by the law.
However, the parties may contractually provide that the salary will increase according to predetermined periods. The same applies to certain collective agreements.
Working hours
As with the other topics discussed here, the working hours standards can vary from a province to another.
For federally regulated businesses, the normal working hours are 8 hours a day and 40 hours a week. Hours worked in excess must be paid at an overtime rate (150%). The Canadian Labour Code states, inter alia, that the working week may not exceed 48 hours, with certain exceptions.
In Quebec, the Act respecting labour standards stipulates that the regular workweek is 40 hours. Any work performed in addition to the regular workweek entails a premium of 50% of the prevailing hourly wage.
Quebec legislation does not set a maximum number of hours to be worked per week, but it does provide for a right of refusal, which is exercised as follows:
An employee may refuse to work:
1. more than two hours after regular daily working hours or more than 14 working hours per 24 hour period, whichever period is the shortest or, for an employee whose daily working hours are flexible or non-continuous, more than 12 working hours per 24 hour period; 2. more than 50 working hours per week or, for an employee
working in an isolated area or carrying out work in the James Bay territory, more than 60 working hours per week;
3. if he was not informed at least five days in advance that he would be required to work, unless the nature of his duties requires him to remain available, he is a farm worker, or his services are required within the limits set out in subparagraph 1.
Fringe Benefits
In Canada, employers are free to grant fringe benefits to their employees. However, labour and employment laws do not deal with
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fringe benefits, which cannot be included in the calculation of the minimum wage rate.
Also, in the case of dismissal, the calculation of compensation in lieu of notice may be affected by the value of these benefits.
CONTROL AND INSPECTION
Labour Disputes Resolution System
The system of dispute resolution in labour law can vary greatly depending on the jurisdiction under which the employer is operating and the type of complaint involved. There is also a distinction to be made when the parties are subject to a collective agreement. In the latter case, for example, in Quebec, the parties will go before an arbitrator.
Also, in the case of a non-unionized employee, a special regime has been set up in Québec through the Commission des normes, de l’équité, de la santé et de la sécurité du travail (hereinafter the “CNESST”).
This regime ensures that an employee who is the victim of a practice prohibited by an employer or who is subject to psychological harassment may file a complaint with CNESST, who will represent him before a specialized tribunal, the Administrative Labour Tribunal.
The same process is available to an employee credited with two years of uninterrupted service who is dismissed without a just and sufficient cause.
In other cases, such as when an employee believes he or she has not received overtime pay, the CNESST may bring the employee’s claim before the civil courts.
Main employment litigation causes
In Canada, the main cause of litigation in the employment sector is about the entitlements of an employee upon termination. The allegation of a prohibited practice, dismissal without just and sufficient cause and the allegation of psychological harassment are also the common causes of disputes between employers and employees.
Labour inspection
Failure to comply with legislation can end up costly for an employer. When an employee files a complaint, depending on the government authority to which the employer is subjected, there will generally be an inspector dispatched to the workplace to investigate the situation. Employers have a general duty to cooperate in these inspections. Violations of occupational health and safety laws or labour standards can result in employee claims and very costly fines for employers.
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Occupational health and safety main issues
In Quebec, the occupational health is governed mainly by two laws: • Act respecting industrial accidents and occupational diseases,
CQLR c A-3.001;
• Act respecting occupational health and safety, CQLR c S-2.1
It is generally the responsibility of employers to ensure that the workplace is safe. Worker’s compensation insurance provides protection for employers against claims resulting from injuries sustained by employees at the workplace.
Under provincial legislation providing workers’ compensation, covered employees are generally denied their right to sue their employer, but in return they can claim benefits under the compensation plan. When an employee is injured in the workplace and while performing his or her duties, compensation is paid. In Quebec, the employees receive a percentage of their salary as compensation. These allowances are largely funded by employer contributions.
In the event of a dispute arising under either of these laws, a specialized tribunal will decide the matter. For example, if an employer claims to have suffered an employment injury at work, but the employer denies it, the Administrative Labour Tribunal will decide the matter. ■
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Reference Legislation
Brazilian Laws:
• Brazilian Federal Constitution - Articles to 7° to the 11o; • Consolidation of Labour Laws - CLT
• Law nº 605/1949; • Law nº 3207/1957; • Law nº 4090/1962; • Law nº 5889/1973;
• Law nº 6019/1974 amended by Law nº 13.429/2017; • Law nº 7418/1985; • Law nº 7783/1989; • Law nº 8036/1990; • Law nº 9029/1995; • Law nº 10101/2000; • Law nº 8212/91; • Law nº 8213/91; • Law nº 12506/2011. Canadian and Quebec Laws:
• Canadian Constitution
• Civil Code of Québec, CQLR c CCQ-1991;
• Act respecting labour standards, CQLR c N-1.1;
• Act respecting industrial accidents and occupational diseases, CQLR c A-3.001;
• Act respecting occupational health and safety, CQLR c S-2.1; • Labour Code, CQLR c C-27;
• Canada Labour Code, RSC 1985, c L-2. • Employment Insurance Act.
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BRAZIL-CANADA COMPARATIVE LAW
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Updated March 2020.
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