Northern exposure: Employment law challenges in Canada’s remote regions

By Jeffrey R. Smith Oct 04, 2023

‘The scope of what you have to provide in terms of service is well beyond what you would for a normal employer’

Canada is one of the largest countries in the world, but its population is relatively small. That means there’s a lot of remote areas, particularly in the North. But there are still communities, people, and employers – and challenges for those employers in managing their workforces can be different from that of more populated regions to the south.

Unsurprisingly, the biggest employer in the North is the public service, with natural resource-related businesses such as mining companies also prominent. It’s a region with a high cost of living, limited amenities and services, and often difficult conditions, meaning that employers have to do more to attract and retain workers.

“When you’re working for the public service in any of the territories, or even in really remote northern parts of provinces, not only are you receiving a wage that helps offset the high cost of living, but you’re also getting either housing provided for you or heavily subsidized,” says Michael Penner, a partner at Kent Employment Law. Penner is based in Victoria, but specializes in labour and employment matters in Nunavut, the Northwest Territories, and the Yukon.

Employers in remote locations and the North often have to provide expensive benefits such as superannuation pensions and medical travel assistance, since most people have to travel by plane to larger centres in the South to get medical treatment for serious conditions. But even with those it can be difficult to retain employees, says Penner.

“In these remote locations, it’s very difficult, if you’re not a public service agency, to compete, because there’s almost no industry up there save for the mining industry, that can generate enough revenue to be able to pay a competitive wage and benefit package,” he says. “So oftentimes what happens is you have businesses that have exhausted the local talent pool and they have to bring up people from outside of the area, but they get there and realize that they can do better – basically, you’re kind of like the [minor leagues], losing your players to the big leagues all the time.”

“So it’s exceedingly consequential for the employer what you are doing to retain employees – the scope of what you have to provide in terms of service is well beyond what you would for a normal employer,” adds Penner.

Dismissal can be ‘catastrophic’

While attracting and retaining employees can be a challenge, the common arrangements in the employment relationship mean that terminating someone’s employment can have “catastrophic” consequences, according to Penner.

“That’s the biggest issue that I encounter, is just how much more impactful a termination is in the North or in a remote area, than it would be if, say, you’re a banking executive in the GTA,” says Penner. “If you are let go, it gets really awkward if you’re in the North with a spouse or family and they’re along for the ride – your whole family life is being completely up-ended.”

“When you’re terminated from your employment, your income stops immediately and you’re given a week to vacate your premises without any sort of assistance in the shipping costs,” he adds. “Often it’s so cost-prohibitive that you literally abandon your possessions because you have no money to pay to move the contents of your apartment back out, and you’re likely not able to mitigate locally.”

The mitigation challenge increases with the fact that many government and “quasi-governmental” public-sector employers have a no-hire list that includes anyone they fire – which precludes workers on the list from applying for any position with that employer for a period as long as two or three years, according to Penner.

“You could be fired from a position as a nurse in in one community and you can’t even be a janitor 1,000 miles away – as a fired employee, you have almost no option other than to completely leave the territory,” he says. “So that makes it very difficult to create any capacity to mitigate your circumstances other than completely leaving your place of residence, and you will likely never find comparable work or it’s never going to pay the same.”

Unique work environments, cultures

Private employers that do operate in the North and remote areas are generally in the natural resource industry. They often involve unique work environments – immersive work camps far away from communities – and certain types of individuals common in that line of work that present their own challenges.

“It used to be that, particularly on issues like harassment, there was a sort of trend in the law to say, ‘These are miners and they’re pretty salty, so we’ll give them a bit of a pass about the language they’re using,’ and if there are racial slurs or misogynist comments, that’s a boys-being-boys thing,” says Penner. “That era is long-gone and the law has changed, so you get these old boys where that’s the language they still use on a daily basis, and then all of a sudden they’re finding themselves in hot water with management.”

Penner says harassment and discrimination cases in these work environments can be tricky for employers, because management has to inform the employees of the new legal standards, but sometimes the manager might be just as “salty” as the workers.

“It’s hard if these workers are used to this guy swearing at them every day for the last 20 years and all of a sudden he cleans up his language, because they’re thinking ‘He might not be saying the words, but we know he’s thinking them’ – so it’s really a cultural thing that hasn’t caught up with the legal standard,” says Penner. “You’re dealing with a lag between the law around harassment and human rights that has been developed outside of the resource industry and then applying it there, so there’s going to be tension.”

Compliance support low

The Northern territories have similar employment standard frameworks as elsewhere in Canada, but the retention challenge and small population means that employment standards resources are generally understaffed, says Penner.

“Whether you’re an employee or an employer, you can’t expect immediate assistance if you have an issue that’s emergent,” he says. “In each of the territories, particularly for the public service, there is a mandate to hire and retain Indigenous people – which isn’t a problem per se, but it creates challenges with the hiring and retention process simply because the percentages that are statutorily required have never been met and, as a result, you have a vacancy rate. In the government of Nunavut, for example, I think over 30 per cent of the jobs are vacant.”

The small community element of the North also makes it difficult to keep employment disputes under wraps, says Penner.

“In the South, for any reasonably-sized enterprise, you can count on being virtually anonymous within your organization, but in the North there is no anonymity because the community is so small,” he says. “A complicating factor is that you will likely have close ties between individuals involved in any employment disputes that go outside the employment relationship – you’re going to encounter the person that’s harassing you at work, you are going to see them every day at the grocery store, you’re going to see them every day on the street, they might live across the road from you, you might know their relative – so when a problem emerges it’s very easy for it to become inflamed quickly.”

“Conversely, it’s far more difficult to cobble a solution together when the legacy of what has occurred is going to continue on a personal level between the parties,” adds Penner. “The chances of any workplace dispute being confidential between the parties involved is virtually zero.”

High stakes for both sides

The challenges of the North and remote areas make the stakes in the employment relationship high for both employers and employees.

“You have far more opportunity in the north, just simply because it’s so underdeveloped, but at the same time, the challenges are daunting,” says Penner. “But at the end of the day, decency will get you a long way, because the impact of severing the employment relationship is so much more catastrophic up there than it would be the South.”

“The investment that the employer has to make to keep an employee is so great that the stakes are high on both sides.”

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