Are You a Federally Regulated Employee? Your Rights Are Different

Most Ontario workers are covered by the provincial Employment Standards Act. But a significant group is not, and they often do not realize it. Federally regulated employees play by a different and, in one important respect, stronger set of rules.

Are you a federally regulated employee?

It depends on your employer's industry, not your job title. Federally regulated sectors include:

• Banks (chartered banks, though not all financial services).
• Telecommunications and broadcasting.
• Air transportation and airports.
• Railways and interprovincial or international trucking and bus lines.
• Shipping and marine transport.
• The federal public service and many Crown corporations.

Why does it matter?

Because your entire framework of rights changes. Your notice, severance, leaves, and complaint processes come from the Canada Labour Code and are administered federally, not from the ESA and the Ontario Ministry of Labour. Advice based on the ESA can simply be wrong for you, which is why it is worth knowing which side of the line you are on.

The unjust dismissal protection

This is the big one. Under the Canada Labour Code (Part III, sections 240 to 246), a non-managerial employee with at least 12 months of continuous service can file an unjust dismissal complaint if they are dismissed without cause. You have to file within 90 days of the dismissal (section 240(2)), so the clock is tight. Unlike the provincial system, where an employer can usually let you go without cause as long as it pays proper notice, the federal regime can require the employer to justify the dismissal.

The Supreme Court settled how powerful this is in Wilson v. Atomic Energy of Canada Ltd. (2016 SCC 29). The Court held that the Code's unjust dismissal scheme displaces the old common law rule that an employer can fire without cause just by paying severance. In other words, for eligible federal employees, paying a package is not enough: a without-cause dismissal can be overturned outright. Since 2019, these complaints are decided by the Canada Industrial Relations Board rather than individually appointed adjudicators.

What can you claim?

Remedies for unjust dismissal can go beyond money. Under section 242(4) of the Code, the decision-maker can order reinstatement to your position, compensation for lost wages, and any other thing needed to remedy the dismissal. That reinstatement power is what makes the federal regime distinctly stronger than the provincial one, where getting your job back is not on the table.

You also keep the Code's baseline entitlements on any termination. Section 230 requires two weeks of notice or pay in lieu once you have completed three consecutive months. Section 235 adds severance pay after 12 months of continuous service: the greater of two days' wages per year of service or five days' wages. These are floors that stack on top of, not instead of, an unjust dismissal remedy.

What should you do if you were dismissed?

1. 1.Confirm whether your employer is federally regulated, since it changes your options.
2. 2.Note your length of service, as the 12-month threshold matters.
3. 3.Do not sign a release on the spot.
4. 4.Get advice promptly, because federal complaints have time limits. A free review can tell you which regime applies and what you can claim.

If it turns out you are provincially regulated after all, your path runs through wrongful dismissal and severance instead. Either way, the first step is knowing which system governs you.

About the Author

Carmen Reyes

Legal Writer, Mirza Law

Carmen Reyes is a legal writer at Mirza Law in Toronto. She writes about constructive dismissal, workplace changes, and how Ontario employees can protect themselves when their job changes under them.

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