Glossary of Employment Law Terms

Bad Faith

In employment law, acting in bad faith means that an employer has acted dishonestly or unfairly towards an employee. For example, an employer might be found to have acted in bad faith if they lie about the reason for termination to other employees or customers.


A bonus is a form of compensation that is typically paid to an employee in addition to their regular salary or wages.

The terms of a bonus program, including the amount, frequency, and eligibility requirements, are generally set out in an employee’s employment contract or in a separate bonus plan document. In some cases, bonuses may be discretionary and based on the employer’s subjective evaluation of an employee’s performance. In other cases, bonuses may be earned based on objective performance metrics or other criteria, such as sales targets or production goals.

If an employer provides a bonus to an employee on a recurring basis, the bonus may be considered part of the employee’s regular wages and be owing in the event of termination.

Canadian Human Rights Act

The Canadian Human Rights Act, RSC 1985, c H-6 is a federal law in Canada that prohibits discrimination on the basis of certain protected grounds, such as race, religion, sex, age, and disability.

Employers that are federally regulated (such as banks, airports, radio and tv, nuclear energy, among others) must comply with the Act.

Confidentiality Clause

A clause in an employment contract that requires an employee to keep certain information confidential, usually after their employment has ended.

Conflict of Interest

A conflict of interest occurs when an individual or organization has competing interests, loyalties or obligations that could influence their decision-making or actions. For example, a manager who is in a romantic relationship with an employee they supervise may have a conflict of interest.

Constructive Dismissal

Constructive dismissal occurs when an employer makes significant changes to an employee’s job or working conditions without the employee’s consent, which results in a fundamental breach of the employment contract. It can include changes in compensation, workplace harassment, change in reporting structure, change in job duties, change in benefits, as a result of a temporary suspension or layoff, among many other circumstances.


The person or business against whom a legal action or lawsuit is brought by the plaintiff in a civil court case.

The plaintiff is the person suing and the defendant is the person being sued.

Dependent Contractor

A dependent contractor is an individual who is in a dependent relationship with a client or employer, but who is not considered an employee. Dependent contractors may be entitled to some employment protections, such as minimum wage and vacation pay, under certain circumstances.


A disability is a legal term that includes any physical or mental metal condition, including learning disability, developmental disability, mental illness, and substance addiction, including alcohol or other drugs. You could be born with a disability. Or, you could have a disability because you are sick or injured.

Employers are obligated to accommodate an employees disability pursuant to Ontario’s human rights laws.


Any distinction, exclusion, or preference made on the basis of a prohibited ground of discrimination, such as race, gender, age, or disability, that has the effect of nullifying or impairing equality of opportunity or treatment in employment.

Discrimination can occur in the workplace when an employer or co-workers treats an employee unfairly or differently based on one or more of the prohibited grounds. Or if an employer refuses to accommodate an employee in a way that would not cause them undue hardship.

Duty to Accommodate

Accommodate; Accommodation; Workplace Accommodation

The duty to accommodate refers to an employer’s obligation to make reasonable accommodations for an employee with a disability, to enable the employee to perform their job duties. This duty is imposed under the Ontario Human Rights Code and the Canadian Human Rights Act.

Accommodation can require employers to make changes to the work environment or an employee’s job duties to allow them to work effectively, despite a disability or other protected ground of discrimination, and include allowing a disable employee to work remotely.

Employers have a legal duty to accommodate to the point of undue hardship.

Employment Contract

Employment Agreement; Offer Letter

An employment contract, employment agreement or offer letter refers to the terms between an employer and an employee that outline the conditions of employment, such as the job duties, hours of work, and compensation. It does not have to be a written contract.

Fiduciary Duty

A fiduciary duty is a legal obligation that requires one party to act in the best interests of another party. In the employment context, a fiduciary duty may arise in situations where an employee has significant decision-making authority or control over the employer’s assets. Typically, an employee needs to be a director or officer of the company to owe fiduciary duties.

Frustration of Contract

Frustration of contract occurs when an unforeseeable event occurs that makes it impossible for a contract to be performed. In the employment context, frustration of contract may occur if an employee becomes permanently unable to work due to an illness or injury.

Full and Final Release

A full and final release is a legal document that an employer may ask an employee to sign in exchange for a severance package or other form of compensation. By signing the release, the employee agrees to waive their right to bring any legal claims against the employer related to their employment, including wrongful dismissal, discrimination, or harassment. In effect, the release “releases” the employer from any further liability with respect to the employee’s employment.


Harassment is any unwelcome conduct, comments, or actions that create a hostile, intimidating, or offensive work environment. Harassment is prohibited under Ontario law and may give rise to a claim for damages.

Holiday Pay

Compensation for designated public holidays that an employee is entitled to receive under Ontario’s Employment Standards Act, which is equal to at least 1/20th of the employee’s total wages earned in the four-week period immediately preceding the holiday.

Human Rights Code

The Ontario Human Rights Code, RSO 1990, c H-19 (the “Code”) is a provincial law that prohibits discrimination on the basis of certain protected grounds, such as race, religion, sex, age, and disability. Employers that are provincially regulated (not banks, aerospace, or other federally related industries) must comply with the Code.

Independent Contractor

An independent contractor is a self-employed individual or business that provides services to another individual or company, often under a contract.

Whether any individual is, in fact, an employee or contractor is a complex legal question that depends on a number of factors.

See also Dependant Contractor.


Insubordination occurs when an employee refuses to follow a lawful and reasonable instruction from their employer. Insubordination can be grounds for discipline or termination, but it must be a serious and willful refusal to follow orders.

Just Cause

A legally recognized reason for terminating an employee’s employment, typically for serious misconduct or performance issues. An employee may still be entitled to notice, pay-in-lieu of notice, severance pay and other entitlements even if they are terminated for cause.

Length of Service

Continuity of Employment

The length of time that an employee has worked for an employer. It is an important factor in determining an employee’s entitlement to certain employment protections, such as notice of termination or severance pay. It does not always need to be consecutive service. There are times when length of service includes gaps or periods of time where the employee was not working for the employer.

Minimum Wage

The minimum wage is the lowest amount that an employer can pay an employee per hour of work. The minimum wage is set by the Ontario government and may vary based on the employee’s age and job classification.


Duty to Mitigate

In the context of wrongful dismissal in Ontario, mitigation refers to the obligation of a wrongfully dismissed employee to take reasonable steps to mitigate or minimize their damages by seeking new employment.

The duty to mitigate is a legal principle that is intended to ensure that the wrongfully dismissed employee’s make genuine efforts to find new employment. If the employee fails to make reasonable efforts to find new employment, the court or tribunal may reduce the amount of damages they are entitled to receive.

The employee is not required to accept any job offer that comes their way, but they are expected to make reasonable efforts to find new employment that is similar to their previous job, based on their skills, qualifications, and experience.

Non-Compete Clause

A non-compete clause is a provision in an employment contract that prohibits an employee from working for a competitor or starting a competing business for a certain period of time after leaving their job.

Non-Solicitation Clause

A non-solicitation clause is a type of restrictive covenant that can be included in an employment contract or a separate agreement between an employer and employee. The purpose of a non-solicitation clause is to restrict an employee’s ability to solicit the employer’s clients or customers, or to solicit other employees to leave the company and join a competing business.

Notice of Termination

Reasonable Notice

Notice of termination is the period of time that an employer must provide to an employee before terminating their employment without cause.

The length of notice period varies based on the terms of an enforceable employment contract or the employees age, length of service, position, and availability of other employment in the marketplace.

Occupational Health and Safety Act (OHSA)

The Occupational Health and Safety Act, RSO 1990, c O-1 (“OHSA”) is an Ontario law that outlines the health and safety requirements that employers must follow in the workplace. It establishes a worker’s right to a safe and healthy workplace, and outlines the responsibilities of employers to ensure the safety of their workers.

Overtime Pay

Overtime pay is compensation that employees receive for working more than their regular hours of work. In Ontario, employees are entitled to 1.5 times their regular pay for each hour of overtime worked, after working 44 hours in a workweek.

Pay Equity

Pay equity is the principle of equal pay for work of equal value. Employers in Ontario are required to provide equal pay for employees who perform work of similar value, regardless of gender.

Pay in Lieu of Notice

Compensation that an employer provides to an employee in lieu of providing the required notice period before terminating their employment, typically equivalent to the amount of wages that the employee would have earned during the notice period.


The person or business who starts a legal action or lawsuit against another party in civil court. The plaintiff is the person suing and the defendant is the person being sued.

Premium Pay

Additional compensation paid to employees for working under certain conditions, such as overtime, work on public holidays, or in hazardous or difficult environments. Sometimes referred to as “time and a half”.

Probationary Period

A probationary period is a trial period of employment during which an employer can assess an employee’s suitability for a position. In certain circumstances, an employer may terminate an employee without cause and without notice during the probationary period.

Record of Employment

A document that employers are required to provide to their employees upon termination of employment, which includes information about the employee’s employment history, including the reasons for their termination.

Regular Wages

The base pay that an employee receives for their regular hours of work, excluding any additional compensation or bonuses.



Any action taken by an employer against an employee in retaliation for the employee exercising their legal rights, such as filing a complaint or reporting illegal activity.

Retaliation is illegal and can include actions such as termination, demotion, or harassment.


Resignation is the voluntary act of an employee ending their employment with an employer. When an employee resigns, they are typically required to provide notice to their employer, and the terms of their resignation may be outlined in an employment contract.

Severance Package

A severance package is an offer that an employer may make to an employee who is being terminated without cause. The package may include a lump sum payment, continued benefits, and other forms of compensation.

Severance Pay

In common language, severance pay usually means the total amount of money your employer has to give you at termination. However, under Ontario law, ”severance pay” is only one (1) very specific form of compensation that an employer may be required to pay to an employee who has been terminated without cause.

Sexual Harassment

Sexual harassment is a type of harassment that involves unwelcome sexual advances, requests for sexual favors, or other verbal or physical conduct of a sexual nature in the workplace or in a professional setting. This behavior can include unwanted sexual comments, jokes, touching, or gestures, and can create an intimidating, hostile, or offensive work environment for the victim.

Sick Leave

Sick leave is time off from work that an employee takes due to an illness or injury. In Ontario, employers are required to provide a minimum of 3 paid sick days per year for employees, with additional sick leave days available under certain circumstances.

Statutory Holidays

Statutory leaves are periods of time off work that are protected by law. These may include leaves for pregnancy and parental leave, personal emergency leave, and domestic or sexual violence leave.

Temporary Layoff

A temporary layoff occurs when an employer temporarily lays off an employee due to a lack of work or other economic reasons. In Ontario, employers are required to comply with specific rules and regulations when laying off employees.


Dismissal; Layoff; Fired

A term used to refer to the end of the employment relationship by the employer. Employers must follow certain rules and requirements when terminating employees in Ontario.

Other words used include:

Undue hardship

This is a legal term used to describe an accommodation that would cause significant difficulty or expense for an employer. When an employee requests a workplace accommodation due to a disability or other protected ground, an employer must provide the accommodation unless it would cause undue hardship.

Vacation Pay

Vacation pay is a percentage of an employee’s gross earnings that is set aside by their employer to compensate them for time off work during their annual vacation. In Ontario, employers must provide at least 2 weeks of vacation time per year, with a minimum vacation pay of 4% of the employee’s gross earnings.


Compensation paid to an employee for their work, including regular wages, overtime pay, holiday pay, and any other additional compensation.

Without Cause

A termination of employment that is not based on the employee’s misconduct or performance issues, but rather due to changes in the employer’s business, restructuring, or other reasons unrelated to the employee’s job performance.

Workplace Investigation

A workplace investigation is an inquiry conducted by an employer to gather information and evidence about an incident or complaint in the workplace, such as allegations of harassment, discrimination, or misconduct. The purpose of an investigation is to assess the situation and make a determination about what, if any, corrective action should be taken.

Workplace Violence

Any act of violence, threat of violence, or harassment that occurs in the workplace.

Wrongful Dismissal

Wrongful dismissal occurs when an employer terminates an employee without providing the appropriate amount of notice (or pay-in-lieu of notice), severance pay, benefit continuation or where the employer breaches any of their obligations to the employee at the time of termination.