UK vs Ontario Employment Law

Straight-talking advice

Although the UK has a reputation in Canada for being an expensive and difficult place to be an employer, in reality there are many similarities between the UK and Ontario in terms of employment law. Both jurisdictions have certain minimum requirements that you cannot drop below, however these conditions are limited for UK employers where they have employed someone for fewer than two years, especially in the case of dismissal. Be sure to familiarise yourself with your obligations on expansion.

Being an employer in the UK can have several advantages, making it a favourable choice for many businesses looking to expand from Ontario. One particular advantage is the strong employment legal framework in the UK, which provides clear guidelines for both employers and employees. UK employment law is also relatively flexible making it easier for employers to hire and adjust their workforce according to their business needs, particularly within the first two years’ employment. There are limited costs to terminate an employee, particularly within this time.

This guide sets out some of the differences and similarities between UK and Ontario employment obligations, for Ontario employers to consider as part of their expansion to the UK.

Much like Ontario, the UK government has enacted legislation setting out the minimum standards for UK employees. For a full breakdown of these rights, please see our Quick Guide: Overview of UK Employment Law.

Termination Provisions

Both Ontario and the UK have minimum statutory notice provisions. These are similar at around one week per year of employment, capped at 12 weeks in the UK and 8 weeks in Ontario.

In the UK, it is common, but not mandatory, to have a higher contractual notice period. On termination, employers should give either the contractual notice or statutory notice, whichever is higher.

In the UK, if the employee commits gross misconduct, no notice is required (subject to following the correct process).

In Ontario, the employer must generally maintain all benefits and allowances, such as group health, pension and welfare benefits, during the statutory notice period, even if paying the employee in lieu of notice.

In contrast for UK employers, payment in lieu of notice is generally limited to basic salary only.

Severance Pay

In Ontario, employee terminations are generally either “for cause” or “without cause”.

In the UK, within the first 24 months of employment, no reason is needed to dismiss an employee (as long as the dismissal is not discriminatory, connected to whistleblowing or similar).

After this period, the following are fair reasons for dismissal: redundancy, conduct, capability, illegality or SOSR (some other substantial reason). The employer must also follow a fair process, to avoid a claim for unfair dismissal. In the UK, the only statutory sums payable to an employee on termination are those connected to redundancy: a statutory redundancy payment. Unlike in Ontario, there are no common law variations between industries. Generally, in the UK, anything paid to the employee beyond the statutory amounts is up to the discretion of the employer.

Personal leave and pay entitlements

There are also certain differences between the UK and Ontario in respect of personal leave and pay entitlements. Note that while these are the minimum amounts that an employer can offer, they may choose to offer increased benefits to attract and retain talent.