Policy vs Practice in Canadian Workplaces: What Employers Must Do to Ensure Policies Are Actually Followed

Having workplace policies is not enough. When daily decisions contradict written rules, employers face disputes, wage claims, and enforcement gaps. Learn what Canadian employers must do to close the gap between policy and practice.

Introduction

Most Canadian employers have a written overtime policy. It says overtime must be pre-approved. It is clearly documented in the employee handbook.

And yet, a manager sends a message at 9:30 PM asking an employee to finish a report. The employee works an extra two hours. No pre-approval. No documentation. No overtime recorded.

Here is the problem: under Ontario Regulation 285/01, section 6(1), work is deemed to be performed for the employer where it is "permitted or suffered to be done by the employer" — or where it is "in fact performed by an employee although a term of the contract of employment expressly forbids or limits hours of work or requires the employer to authorize hours of work in advance."

The policy exists. The practice does not match it. And legal risk is assessed based on what actually happened in practice, not only what the written policy said.

This gap — between what a policy says and what actually happens on the ground — is one of the most dangerous compliance risks for small and mid-sized employers. It does not show up in a handbook review. It shows up during a dispute.

Sources

• https://www.ontario.ca/document/your-guide-employment-standards-act-0

When This Applies

This is relevant to your workplace if any of the following occur:

• Managers make informal exceptions to written rules — "just this once" approvals that become patterns
• Overtime work happens without pre-approval or documentation
• Discipline is applied inconsistently — some employees are warned, others are not
• Harassment or workplace complaints are handled informally instead of through the documented process
• Remote employees work outside scheduled hours without tracking

Sources

• https://www.canada.ca/en/services/jobs/workplace.html?lang=en
• https://www.ccohs.ca/oshanswers/legisl/intro.html

Where the Breakdown Happens

The following areas are where written policies and daily practice most commonly diverge:

• Overtime — Work is performed outside scheduled hours without approval or recording — often triggered by after-hours messages from managers
• Discipline — Progressive discipline steps are skipped, or consequences vary depending on the employee or manager involved
• Harassment — Complaints are handled through informal conversations instead of the documented investigation process
• Remote work — After-hours work is untracked, and expectations around availability are unclear or inconsistent
• Attendance — Late arrivals or absences are handled differently across teams, creating inconsistency in enforcement

In each case, the policy exists — but the daily operation of the business does not follow it.

Sources

• https://www.canada.ca/en/services/jobs/workplace.html?lang=en
• https://www.ccohs.ca/oshanswers/legisl/intro.html

Example: The Overtime Policy That Is Not Enforced

A company's handbook states that all overtime must be pre-approved in writing by a supervisor before the work is performed. This is a common and reasonable policy.

In practice, a team lead regularly messages employees after hours asking them to complete urgent tasks. The employees comply. The work is not recorded as overtime. No pre-approval is obtained.

Three months later, an employee files a wage complaint. They provide screenshots of after-hours messages and evidence of work completed outside scheduled hours.

The employer's defence — that overtime was not pre-approved — is significantly weakened by the pattern of practice. This principle has been tested in court. In the federally regulated context, the class action Fulawka v. Bank of Nova Scotia (2010 ONSC 1148; affirmed 2012 ONCA 443) involved approximately 31,000 customer service employees across Canada who challenged the bank's overtime pre-approval policy. Because Scotiabank is a federally regulated employer, the case was decided under the Canada Labour Code — but the principle it illustrates applies broadly.

The bank required management pre-approval of overtime hours. Employees argued they were required to work overtime to fulfill their roles, and that the workplace culture discouraged them from requesting overtime pay. The Ontario Superior Court found that under the Canada Labour Code, the word "permitted" in the overtime provision means overtime work that is "allowed" or "not prevented" by the employer. The court ruled that if the employer does not prevent the overtime from being worked, the overtime must be paid at overtime rates. Pre-approval is not a precondition for payment.

A similar principle exists under Ontario's Employment Standards Act. Ontario Regulation 285/01, section 6(1), deems work to be performed for the employer even where a contract expressly forbids or limits hours, if the work was in fact performed.

The Fulawka court also found that the employer's recordkeeping practices did not comply with the Code, because the Code requires employers to keep a record of hours worked each day and amounts paid in overtime. Inaccurate records that failed to capture actual hours worked were not sufficient.

Ontario's own guide to the Employment Standards Act confirms that activities such as reviewing or drafting emails from home can count as working time, even where a disconnecting-from-work policy is in place.

The takeaway: actual workplace practice can significantly weaken an employer's ability to rely on the written policy.

Sources

• https://www.ontario.ca/document/your-guide-employment-standards-act-0
• https://novascotia.ca/lae/employmentrights/
• https://laws-lois.justice.gc.ca/eng/acts/l-2/index.html

What Employers Must Do

Closing the gap between policy and practice requires deliberate, ongoing action:

1. Train managers on how policies are applied — not just what the policies say, but what managers must do (and must not do) in daily operations. A manager who messages employees after hours and expects a response is effectively directing overtime, regardless of what the handbook says.
2. Enforce documentation requirements — if a policy requires written approval, that step must actually happen before the work occurs. If it does not, the employer's ability to rely on the policy is weakened.
3. Align daily decisions with written policy — every exception that is not documented can undermine the policy it contradicts.
4. Monitor for patterns of informal practice — regular check-ins with managers can reveal gaps before they become disputes. Look for patterns: after-hours communication, unrecorded tasks, inconsistent discipline.
5. Standardize workflows across teams — if one manager enforces a rule and another does not, the inconsistency becomes the employer's problem. Employees who are treated differently under the same policy have a basis for complaint.

Sources

• https://www.canada.ca/en/services/jobs/workplace.html?lang=en

Common Mistakes

These are the patterns that most frequently widen the gap between policy and practice:

• "Just this once" decisions — a single exception may seem harmless, but repeated exceptions can undermine the employer's ability to enforce the written rule consistently. Over time, these exceptions can effectively create an informal standard that contradicts the written policy.
• No documentation of exceptions or deviations — if it is not recorded, it becomes difficult to defend the employer's position in any defensible way. Employment standards legislation across provinces requires employers to maintain records of hours worked and wages paid.
• Relying on manager discretion without oversight — managers who are not trained on policy application will default to convenience, not compliance. Managers are agents of the employer — their actions can create obligations.
• Ignoring small inconsistencies — the gap between policy and practice does not start with a major failure. It starts with small, repeated deviations that go unaddressed until they become a pattern.

What Is at Risk

When policies are not consistently followed in practice, employers face:

• Inconsistent enforcement that weakens the employer's position in disputes — if a policy is applied to one employee but not another, it becomes difficult to defend the policy as a standard
• Employee complaints and grievances — inconsistent treatment across teams or individuals can contribute to disputes, complaints, and in some cases human rights or employment-law risk, depending on the facts
• Wage and hour claims where undocumented work creates liability — as the Fulawka decision illustrates, employers who do not prevent overtime and do not maintain accurate records of hours worked may be liable for unpaid wages
• A weakened ability to rely on written policies during investigations, terminations, or employment standards complaints — a written policy that is routinely contradicted in practice provides limited protection

The risk is not that the policy is poorly written. The risk is that the policy is well written — and the workplace does not follow it.

A workplace policy is only as strong as its daily enforcement. If managers do not follow it, if exceptions are not documented, and if practice contradicts the written rule, the policy offers limited protection. For Canadian employers, the question is not whether you have a policy — it is whether your workplace actually follows it.

Sources

• https://www.canada.ca/en/services/jobs/workplace.html?lang=en
• https://www.canada.ca/en/canadian-heritage/services/rights-workplace.html

Related Reading

• Cross-Province Employees in Canada: What Employers Must Do
• Policy Version Control in Canada: What Employers Must Do
• Use our Compliance Checklist to identify gaps between your policies and current requirements

Canada Policy Manual generates province-specific policy manuals aligned with monitored government sources. If your policies need to reflect what each jurisdiction actually requires — not just what your handbook currently says — explore your province at free policies.

Sources

• https://www.canada.ca/en/services/jobs/workplace.html?lang=en

Key Takeaways

• A written policy provides limited protection if daily workplace practice contradicts it.
• Even if a contract expressly forbids or limits overtime hours, if the work was in fact performed, it must be compensated.
• If an employer does not prevent overtime from being worked, it must be paid at overtime rates.
• Managers act as agents of the employer — their informal decisions and after-hours messages can create legal obligations.
• Closing the policy-practice gap requires thorough documentation, monitoring for patterns, and standardizing workflows across teams.
• The most common compliance failure is not that the policy is missing — it is that the policy is well written and the workplace does not follow it.