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Canada: Ten Key Differences Between Canadian And U.S. Employment Laws

Termination of Employment

Canadian employers are required to give employees at least statutory notice of termination or pay in lieu, and may be required to give lengthier notice or pay in lieu as provided under common law or contract. In the United States employment is generally "at will" and notice of termination by an employer is required only by contract or company policy.

Severance Policies

Severance plans or policies are uncommon in Canada because they set a floor, not a ceiling, on severance since they do not override rights to statutory or reasonable notice. Further, in the absence of a collective agreement, notice and severance entitlements are generally determined on an individual basis and are not affected by severance payments made to other former employees of a company. Hence, there is little reason for a standardizing document such as a severance plan. Severance policies or plans are more common in the United States, where companies generally adopt written severance plans. Most severance plans require that the severed employee execute a release of claims as a prerequisite to receiving severance payments. The employer may amend the plans from time to time.

Employment Litigation

Employment litigation in Canada tends to result in predictable damage awards and, as a consequence, is generally settled quickly and easily. In the United States, employment litigation against employers tends to be asserted as a claim of human rights discrimination, which employers feel compelled to defend against. This may generate large and unpredictable damage awards, which makes this litigation costly and more difficult to settle.

Consideration

Continued employment does not generally constitute valid consideration in Canada. Accordingly, if restrictive terms are added to a Canadian employee’s contract of employment (such as a post-employment non-competition covenant), fresh consideration, such as a raise or an option grant, should be provided. In the United States, state law governs whether continued employment is sufficient consideration for post-employment non-competition agreements. Further, material adverse changes to the terms and conditions of a Canadian employee’s employment can only be made on reasonable notice. In the United States, absent a written agreement or statutory rights (e.g., minimum wages, overtime pay) employment terms are generally subject to modification at will and without prior notice.

Restrictive Covenants

Canadian courts generally enforce non-competition and non-solicitation covenants that are reasonable (given the business interest to be protected) in time, geographic scope and nature of the protected business if they do not unduly limit an employee’s ability to secure employment. U.S. courts will enforce non-competition agreements that are reasonable in time and scope, but the restriction must generally be based on protecting the trade secrets or other proprietary rights of the company. Canadian courts do not "blue pencil" or modify restrictive covenants, so a covenant that is too broad will be struck out completely. In the United States, some states will modify the terms of a restrictive covenant, particularly if the covenant contains a blue pencil clause.

Compensation Disclosure

The new compensation disclosure rules in the United States are now in effect. Similar disclosure rules were proposed in Canada and were due to be in effect from December 31, 2007, but the Canadian regulators recently announced that the proposed rules may be changed significantly and will not take effect until December 31, 2008.

Options

In Canada, the usual tax treatment of a stock option is that the difference between exercise price and fair market value is taxed to the employee at effective capital gains rates at the time the underlying share is disposed of. The company is not entitled to a deduction. This is similar to the tax treatment of an incentive stock option for U.S. purposes. Canada has no equivalent of a non-qualified option.

Restricted Stock

Grants of restricted stock are taxed to Canadian employees at the time of grant. Grants of restricted stock are taxed to U.S. employees at the time the restrictions end. For a Canadian employee to obtain tax treatment comparable to U.S. tax treatment of restricted stock grants, Canadian companies instead grant restricted share units, which are notional units with value equivalent to the company’s shares. However, there are deferral or deductibility limitations on these types of vehicles, depending on the structure chosen.

Changes to Post-Retirement Benefits

In Canada, it is difficult to reduce post-retirement benefits without notice and almost impossible to reduce these benefits for existing retirees. In the United States, there is more flexibility in making changes to these benefits.

Human Rights

In both Canada and the United States, discrimination in employment is prohibited on specified grounds such as colour, gender, ethnic origin, religion/creed, age and in some states, sexual orientation. The most significant differences between the two regimes relate to discrimination based on disability. In both jurisdictions, disability-based discrimination is prohibited by legislation (in the United States under the Americans with Disabilities Act and in Canada under human rights codes and the Canadian Charter of Rights and Freedoms), and employers have a duty to accommodate the disability. In Canada, however, the duty to accommodate disability obligates an employer to accommodate an employee’s disability to the point of undue hardship to the employer as a whole, and alcoholism and drug addiction are recognized as disabilities at law that require accommodation. Workplace drug and alcohol testing in Canada are correspondingly restricted. In the United States, alcoholism and drug addiction (in recovery) are recognized as disabilities. Pre-employment drug and alcohol testing is more common in the United States in certain industries.

 

UK LAW ARTICLED UPDATES

December 10 2007 Enews
* TUPE and new terms of employment
* Tribunals must consider compliance with dismissal procedure

November 26 2007 Enews
* Home working trial a reasonable adjustment?
* Employee not entitled to work
* Employer could exercise mobility clause in a redundancy situation
* Drunkeness at work through alcoholism is contributory conduct

November 12 2007 Enews
* Employee did not acquire rights
* Redundancy consultation
* Companies could face prosecution for employee collisions

October 29 2007 Enews
* Retirement age is lawful
* Pension amendments were justified
* No religious discrimination

October 15 2007 Enews
* Redundancy trial periods
* Sickness absence form was not a grievance
* No grievance required for discriminatory dismissal

October 1 2007 Enews
* Equal Pay - What's New?
* Changes to legislation coming into effect today

September 17 2007 Enews
* Employee who could not acknowledge disability
* Employee dismissed for breaching no-smoking policy
* Tribunal Cases rise by 15%
* Immigration Update: The International Graduates Scheme (IGS)

August 7 2007 Enews
* Dyslexic police officer was "disabled"
* ACAS reports fewer tribunal applications
* Calculating increased holiday entitlement

July 23 2007 Enews
* When an employee leaves without giving notice
* Implying PILON clauses into contracts
* New legislation on the horizon

July 11 2007 Enews
* Statutory dismissal procedures: when a grievance is really an appeal
* New Green Paper on a Single Equality Bill
* Increase in statutory holiday entitlement - the latest update

June 11 2007 Enews
* Without prejudice, but with limits
* Disability discrimination - using expert evidence to disprove a physical impairment
* Agency Workers held to be employees of the agency

May 29 2007 Enews
* Adjustments were not enough
* Returning from maternity leave - what is the "same job"?
* New consultation on additional paternity leave

May 14 2007 Enews
* Equal pay and victimisation
* Extending probationary periods
* Age discrimination during recruitment

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** WORLD'S TOP TEN LAW FIRMS BY REVENUE (2010).WELL DONE FROM INORBITS DEC.2011 (DLA WILL BE IN IN 2011 LIST)

Baker & McKenzie 100 Largest Law Firms in the World Business picture Baker & McKenzie Revenue: $2,104.0m. Headquarters: US

Skadden, Arps, Slate, Meagher & Flom 100 Largest Law Firms in the World Business picture Skadden, Arps, Slate, Meagher & Flom Revenue: $2,100.0m. Headquarters: US

Clifford Chance 100 Largest Law Firms in the World Business picture Clifford Chance Revenue: $1,874.5m. Headquarters: UK

Linklaters 100 Largest Law Firms in the World Business picture Linklaters Revenue: $1,852.5m. Headquarters: UK

Latham & Watkins 100 Largest Law Firms in the World Business picture Latham & Watkins Revenue: $1,821.0m. Headquarters: USA

Freshfields Bruckhaus Deringer 100 Largest Law Firms in the World Business picture Freshfields Bruckhaus Deringer Revenue: $1,787.0m. Headquarters: UK

Allen & Overy 100 Largest Law Firms in the World Business picture Allen & Overy Revenue: $1,644.5m. Headquarters: UK“

Jones Day 100 Largest Law Firms in the World Business picture Jones Day “Revenue: $1,520.0m. Headquarters: USA“

Kirkland & Ellis 100 Largest Law Firms in the World Business picture Kirkland & Ellis “Revenue: $1,428.0m. Headquarters: USA“

Sidley Austin 100 Largest Law Firms in the World Business picture Sidley Austin Revenue: $1,357.0m. Headquarters: USA“

** Switzerland's world rated professional services provider KPMG has announced soaring revenues of $22.7bn (£14.5bn) for its combined member firms, driven by increased sales in emerging markets such as Brazil and India.The firm reported a 10.1 per cent increase in revenue in US dollars for the year ending September 30, 2011. The results were driven by member firms seeing work grow in financial services, healthcare, energy, infrastructure and government.- "ranks in the Big 4 audit league with the excellent PwC,Deloittes and Ernst & Young. These results are spectacular and proof that 138,000 world staff in 150 countries is doing a lot right and that's not a bad slogan for KPMG..."Doing a lot right" with its "Cutting Through Complexity"...Well done from Inorbits." Dec.2011

** SPECIAL ARTICLE ON "SUBTLE HOTEL BUSINESS" THAT CONTRIBUTES WELL TO WORLD GROWTHS.WELL DONE CHINA FROM INORBITS (DEC.2011)

The year's end is always a busy season for various conferences, meetings and parties by businesses and institutions, and this year will be no exception.

As major venues for all business events, various hotels in China are keen to attract the big buyers, most of whom are from social and government organizations, according to the Alliance of China Conference Hotels.

China holds tens of millions of conferences every year, generating a business of close to 1 trillion yuan ($157 billion). And the industry is still growing at a pace of 20 percent a year, said the alliance in its latest blue book of conference economy in China.

The report, as the first overview of the conferences industry in China, looked into 8,270 conferences held in more than 2,000 hotels in 39 major cities.

Conferences and exhibitions have become new economic growth engines for local economies, the report said. But experts see uncertainties in the boom that is mainly supported by public spending.

Corporate meetings account for 49.9 percent of the total in China at present. The remaining majority was made up by various activities of different levels of government organizations and public institutions, according to the blue book.

The country's 1.26 million public institutions in the country have formed a unique conference market. Meanwhile, working conferences of governments at all levels also contribute a lot.

They prop up more than one third of the total amount of conferences in China, said an official with the alliance.

It is an understandable phenomenon because the public institutions, with sufficient funds from public expenditure, actually complete most of their work via conferences, whereas the clubs, most of which adopt market principles, have to be cautious about their spending, the report said.

Meanwhile, conferences with themes related to the humanities make up a dominating proportion of more than 65 percent, twice as much as that of physical sciences. The structure is quite the reverse overseas, where only one third are humanities conferences.

However, with the advancement of reforms of public institutions, it is likely that element will decline significantly over the next few years, the blue book added.

"Conferences have become the new engine for regional economic growth, and much importance is attached to them by local governments," said Xu Jingsheng, secretary-general of China Tourist Hotels Association.

Toyota** Germany's magnificent car manufacturer BMW and Japan's superb Toyota said they have forged a partnership in which the two will conduct joint battery research for next-generation green cars and BMW will supply diesel engines to Toyota."We think that this collaboration will allow for development of next-generation batteries to be done faster and to a higher level," Takeshi Uchiyamada said at a press conference in Tokyo. In addition to the research on lithium-ion batteries, the two car makers will discuss other possible environmental-technology projects. -"this is brilliant entrepreneurship by giants delivering to the consumer in a big way.Like it.Well done from Inorbits."Dec.2011

** US' superb coffee giant Starbucks plans to expand further in the UK, creating 5,000 UK jobs over the next five years. The company intends to increase the number of drive-through coffee outlets, typically found at motorway service stations, from nine to 200.It also plans to open another 100 High Street coffee shops. -"great news. This company, a top tier Inorbits brand continues to shine. Additionally, on Green policies, some of its initiatives around the world are superb.Well done from Inorbits." Dec.2011

** UK's regarded pub owner and brewer Greene King has joined its rivals in reporting higher half-yearly profits, but warns that it sees a tough year ahead.Suffolk-based Greene King said pretax profits were up 5.6% at £77.2m, following good results from Marston's. - "excellent results. UK has choice and select quality. Greene King has clearly delivered with sterling figures.Well done from Inorbits." Dec.2011

** UK's regarded pubs chain and brewer Marston's says its continuing expansion means it will need another 1,000 employees next year.The company said it had build 19 new pubs this year and planned to build 25 a year from 2012.Marston's, which has more than 2,000 pubs across the country, brews Pedigree and Banks's ales. It said food sales were up 5% on a year ago and made up 42% of total sales. Pre-tax profits rose 54% to £80.8m. - "clearly showing a national expansion plan of quality and depth and if branding takes off in a big way, international sales could surge. Delivering like top brewers Greene King, M&B, and JD Wetherspoons.Well done from Inorbits." Nov.2011

** Italy's regarded fashion house Prada's profits have soared in the third quarter; boosted by increased sales in the Asia-Pacific region.Prada said it made a net profit of 273m euros ($364m; £234m) in the three months to the end of October, a 75% jump from year earlier. The jump in profits comes amid concerns that a global slowdown may hurt sales of luxury brands. The Italian group's brands include Prada, Miu Miu, Church's and Car Shoe.Sales during the period grew by 25% to 1.73bn euros. "superb and deserving this second Inorbits feature.Well done from Inorbits." Nov.2011

** US' superb aircraft maker Boeing has signed its biggest commercial order after signing a deal worth $21.7bn (£14bn) with Indonesian airline Lion Air.Indonesia's largest private carrier has placed an order for 230 short-haul 737 planes.The deal includes an option for another 150 aircraft worth an estimated $14bn.It comes just days after Boeing announced a deal to sell 50 of its 777 jets to Emirates Airlines for a list price of $18bn.The US planemaker said the Lion Air order, when finalised, would be its largest ever "by both dollar volume and total number of airplanes".- "add the recent Singapore Airlines deal worth some $2.4 billion and the order book strength hits new heights. Continuing to shine. Well done from Inorbits." Nov.2011

** France's superb Vivendi, Europe's biggest telecom and entertainment group, has reported profits boosted

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