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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.

  Ontario requirements UK requirements
Qualifying conditions and eligibility for severance Where there is a termination without cause and:
i. There is a termination without cause; and
ii. The employee has worked for the employer for five or
more years (including all the time spent by the employee
in employment with the employer, whether continuous or
not and whether active or not); and
iii. The employer has either:
a. A global payroll of at least $2.5 million; or
b. Has severed the employment of 50 or more employees
in a six-month period because all
or part of the business permanently closed.
Redundancy situations only, where the employee has been
employed for 2 + years
Weekly cap on wages (for statutory redundancy pay) None £700
Maximum statutory sums 26 weeks – no cap, but higher common law amounts possible 20 weeks – maximum of £21,000 -but only for redundancy.
Not required for other dismissals i.e. misconduct.
Industry specific differentials At common law None
Paid holidays on termination Employee is entitled to vacation pay that they have earned and that has not yet been paid. Vacation pay is payable on termination pay but not on severance pay. Accrued but untaken annual leave up to the termination date.

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.

  Ontario UK
Sick leave 3 days’ unpaid each calendar year (if they have worked for employer for at least 2 consecutive weeks). Statutory Sick Pay (£116.75 per week) for up to 28 weeks.
Holiday entitlement Employees with less than 5 years of employment: 2 weeks’ after each 12 month holiday entitlement year.
Employees with 5 or more years’ employment: 3 weeks’ holiday.
For a full-time employee, 28 days per holiday year (20 days’ plus 8 bank holidays in England and Wales)
NB: different for Scotland.
Overtime For most employees, overtime begins after they have worked 44 hours in a work week. Their hours after 44 must be paid at the overtime pay rate (time and a half) For salaried employees, no requirement to pay overtime.
Hourly paid employees are usually paid on hours actually worked, at their usual rate.
Minimum wage 17.20 CAD for general rate. (approx. £10.02)
Various rates depending on roles.
£11.44 for employee 21 and over (from April 2024) – approx. 19.50 CAD. Various lower rates depending on age.
Holiday pay NB: employees’ contract of employment or collective agreement may provide a greater right or benefit. First 20 days’ holiday pay must be paid at employees’ ‘normal’ rate of pay (i.e. include commission, bonus, overtime, etc).
Remaining 8 days’ can be paid at employees’ basic salary.
NB: employees’ contract of employment may provide a greater benefit.
Maternity leave Pregnancy leave (before baby is born): 17 weeks (unpaid)
Parental Leave: If birth mother takes pregnancy leave: 61 weeks’ leave (unpaid)
If birth mother does not take pregnancy leave (plus all other new parents): 63 weeks’ parental leave (unpaid).
Up to 52 weeks paid maternity leave.
NB: employers can recover the majority of this cost from HMRC.
Family Caregiver Leave Employees can take unpaid, job-protected leave of up to eight weeks per calendar year per specified family member Employees have a right to take a reasonable amount of unpaid time off work for urgent family reasons. The right to time off to care for dependants is intended to be for emergencies only, and the time taken off is unpaid.
Parental Leave Most employees have the right to take up to three days of unpaid job-protected leave each calendar year because of an illness, injury, medical emergency or urgent matter relating to certain relatives. This is known as family responsibility leave. Parents one year's continuous service can take up to 18 weeks of unpaid parental leave for each child up to their 18th birthday (max 4 weeks in any single year). Leave is unpaid, and must be taken for the purpose of caring for a child.

 

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