Employee relocation to another province

How an employee's move can mean legal issues for employers

BY Richard B. Johnson 28 Mar. 2024

In our increasingly mobile world, employees are more frequently moving from one province to another. While this may historically have necessitated a resignation and search for re-employment, remote work is now more prevalent than even thanks in part due to COVID-19.

Having the ability to retain valuable talent and expertise despite an interprovincial move is an enviable prospect. However, there are very important legal implications that come with such changes, particularly in relation to employment contracts.

Many employers will use an employment contract that refers specifically to the employment standards legislation of the province in which the employee works. For example, an Ontario employer employing staff in that province may have a contract that refers and accords explicitly with the vacation pay and time off entitlements, overtime and severance requirements of the Ontario Employment Standards Act, 2000. Likewise in BC with reference to that province’s Employment Standards Act. These contracts often contain a clause that stipulates that the agreement is governed by the laws of the Province of Ontario, BC or what-have-you.

During COVID-19, many employees relocated to a place of comfort for lockdown such as a family home or some other preferrable location. Those moves often meant that employee left the province and, as COVID waned, they simply failed to return to their original province (and the one referred to in their employment agreement).

Potential issues with relocated employees

While these types of relocations can be great, they pose some unique problems for employers, including:

Employees are not permitted to contract out of the minimum employment standards legislation. As such, references in an employment agreement that stipulate that an employee is entitled to BC minimum overtime standards are no longer applicable when the employee has moved to Ontario, for example. Therefore, it is critical that the legislative standards referred to in the employment agreement truly reflect the standards in the province in which the employee works.
Similarly, the clause stipulating which provincial laws will apply should refer to the province in which the person resides and works.
An even more distressing situation for many employers can arise when the employer was diligent to ensure that the employment agreement has a clear clause limiting the severance entitlements on dismissal to the minimums of the BC Employment Standards Act (or some other specifically referenced provincial employment standards legislation). However, those clauses are unlikely to provide a valid severance limitation when the employee moves provinces because the statutory obligations of the new province take precedence over the statute referenced in the contract (since you cannot contract out of the provincial standards). As such, the employee is likely but unintentionally entitled to common law reasonable notice. Rather than the intended severance limit of eight or 10 weeks, the employer is then told that the employee’s entitlements are in the nature of somewhere between one and 24 months at common law.
An often overlooked aspect of having employees move out of province is workers’ compensation coverage. Many jurisdictions require that the employer register and obtain workers’ compensation coverage for any employees working within a given province. Therefore, if an employee moves from one province to another and keeps being employed by the company, the employer needs to have workers’ compensation coverage in place from day one.
Likewise, there are several other potential occupational health and safety requirements, like bullying and harassment policies, workplace committees, training, and/or employee notices that might need to be instituted depending on the province to which the employee has moved.

As set out above, there are several important considerations to bear in mind when you have employees working permanently in other provinces. However, there are also solutions.

Legal solutions for out-of-province employees

While each situation and provincial requirements will require specific consideration, there are some potential solutions that can help to alleviate some of the above concerns:

Prior to the move, ensure to have an employment agreement in place that will address the terms that will apply to the employee when the move takes place (and make sure that the terms are valid and appropriate for the new province).
Inquire as to the provincial requirements for workers’ compensation and where it is mandatory for the number of staff you will have in that province.
Consider how you can use your existing health and safety policies and materials so that they can be modified to pass muster in the new province.
An ounce of prevention is worth a pound of cure! Even an hour or two of advice with good employment counsel can be highly effective in flagging important issues and next steps to minimize liability and headaches.
You may want to consider whether it is viable to use an independent contractor relationship with your talent in other provinces instead of employment relationships. An independent relationship, if set up and maintained in the correct ways, could alleviate many of the concerns that come with having employees in other provinces.

In my experience, the above are some of the common considerations that can arise when staff move provinces while maintaining their employment. However, these issues often have relatively straightforward solutions.

With careful planning, thorough review of contracts and policies, and some sage legal advice, employers can navigate employee relocation to another province while minimizing liability, ensuring compliance with applicable laws, and maintaining a healthy and mutually-beneficial work relationship.