On Hire Labour Agreement Template for Canada

An On Hire Labour Agreement is a specialized contract that governs the relationship between a labor hire agency, host employer, and temporary worker in Canada. This tri-party arrangement allows businesses to access skilled workers through agencies while ensuring compliance with Canadian employment standards and protecting all parties' rights and obligations.

When do you need this document?

You need an On Hire Labour Agreement when your business engages workers through a labor hire agency for temporary, project-based, or seasonal work. This document is essential for construction companies hiring tradespeople for specific projects, manufacturing facilities requiring additional staff during peak production periods, or healthcare organizations supplementing their workforce with agency nurses. The agreement is also necessary when you need specialized skills for short-term assignments, such as IT consultants for system upgrades or accounting professionals during busy tax seasons. Additionally, if your organization operates in federally regulated industries like banking, telecommunications, or interprovincial transportation, this agreement ensures compliance with the Canada Labour Code.

Key legal considerations

Several critical legal elements must be addressed in your On Hire Labour Agreement to ensure enforceability and compliance. The agreement must clearly define the relationship between all parties, establishing whether the worker is an employee of the agency or the host employer, as this affects liability and obligations under employment standards legislation. Compensation structures, including wages, benefits, and overtime calculations, must comply with minimum wage requirements and pay equity standards in your jurisdiction. The document should address workplace safety responsibilities, particularly which party bears liability for occupational health and safety compliance and workers' compensation coverage. Termination clauses must align with notice requirements under provincial Employment Standards Acts, and any restrictive covenants must be reasonable in scope and duration to be enforceable. Privacy provisions are also crucial, as the agreement must comply with PIPEDA requirements for handling personal information of workers.

Legal requirements in Canada

Canadian law imposes specific requirements on On Hire Labour Agreements that vary by jurisdiction and industry. Under the Canada Labour Code, federally regulated employers must ensure that temporary workers receive the same employment standards protections as permanent employees, including minimum wage, overtime pay, and statutory holidays. Provincial Employment Standards Acts set additional requirements for minimum wages, maximum hours of work, and mandatory leave entitlements that must be reflected in the agreement. The Canadian Human Rights Act prohibits discrimination in employment arrangements, requiring equal treatment regardless of employment status. Your agreement must also address workers' compensation obligations, as provincial legislation typically requires coverage for all workers, regardless of their employment relationship. Tax obligations under the Income Tax Act must be clearly allocated between the agency and host employer, particularly regarding source deductions and T4 reporting responsibilities. Finally, if unionized workers are involved, the agreement must respect collective bargaining rights and any applicable collective agreements.