Do employees of an unlicensed cannabis dispensary have any rights?

Ravenlaw gratefully acknowledges the contribution of this post by articling student Megan Fultz

Cannabis is set to be legalized in Canada on October 17, 2018, but the Federal Government has continued to stress that, until that time, the law will be enforced. In the meantime, numerous marijuana dispensaries are operating, only a small portion of them legal and licensed by Health Canada.

Workers at these unlicensed dispensaries have rightfully questioned what legal rights they have while the sale of cannabis remains illegal. This post will consider the various sources of a worker’s rights, and whether those rights extend to employees of an illegal enterprise.

Statutory employment rights

Workers in Ontario have rights under several employment-related statutes, including in areas of health and safety, human rights, and minimum employment standards. None of these statutes exclude employees on the basis that they work for an illegal enterprise, and therefore should apply equally to employees of an unlicensed cannabis dispensary.

This is consistent with the position the previous Ontario government took on this issue. Janet Deline, spokesperson for the former Ontario Ministry of Labour, stated in a Toronto Star article last year that all workers are entitled to certain government protections, even those working in unlicensed businesses. She was quoted saying, “When a Ministry of Labour Health and Safety inspector conducts an investigation, the focus is on the possible hazard and the health and safety of workers in the workplace, not whether or not the company is licensed.”

Therefore, a worker at a dispensary could likely enforce his or her rights under the Employment Standards Act, the Occupational Health and Safety Act, and the Human Rights Code. 

Statutory labour rights 

Workers in Ontario also have the right to join a union under the Labour Relations Act. That right, too, is not contingent on whether the employer is operating within the bounds of the law, meaning workers at a dispensary could exercise those rights and join a union.

In 2017, forty employees of a “Canna Clinic” unionized under Unifor. Katha Fortier, Unifor’s Assistant to the President, believes this is a first in Canada. These workers at Canna Clinic are primarily concerned with staff training and a safe work environment, issues that will continue to be relevant even after legalization. In response to this development, Janet Deline from the Ministry of Labour confirmed that, “Law enforcement and labour relations are totally separate areas in government.” 

Rights under an employment contract 

In addition to statutory rights, employees have rights under their employment contract, whether or not the contract is in writing. These rights can be enforced through a claim in court. It is unclear whether a court would enforce an employment contract in an unlicensed dispensary.

There is a long-standing, general principle of contract law which prohibits the enforcement of contracts that contemplate committing an illegal act. As this principle has evolved, courts have moved away from implementing a hard line of unenforceability for all illegal contracts. Courts consider: the serious consequences of invalidating the contract, the social utility of those consequences and a determination of the class of persons for whom the prohibition was enacted. There are certainly strong policy reasons not to apply this principle to an employment contract, particularly in light of the unequal bargaining between employers and employees. A strict application of this principle would ultimately benefit the employer—i.e. the entity operating the illegal enterprise—by permitting the employer to avoid its obligations to the employee. 

While not a court ruling, a 2016 decision of the Ontario Workplace Safety and Insurance Appeals Tribunal discussed how the doctrine of illegality applied in the context of undocumented workers. The Tribunal held:

The doctrine of illegality does not exist to give one party to an illegal contract…an advantage over the other party… There is a public interest not in prohibiting employment arrangements but instead in ensuring that such arrangements comply with the employment laws of the province and that rights under these arrangements be enforceable. The potential for exploitation of individual workers would be considerable if employment laws were not enforceable.

However, the Tribunal was careful to distinguish employment contracts that violated labour laws from contracts in pursuit of an “illegal objective” such as “theft, gambling, prostitution or smuggling, etc.” Based on this distinction, it is possible courts would not enforce employment contracts in unlicensed marijuana dispensaries, as the ‘objective’ of those contracts is itself illegal.


Employees in unlicensed dispensaries appear to be entitled to the same statutory protections as other workers, as well as the same opportunity to unionize. It is less clear whether these employees could pursue a claim in court for breach of their employment contracts. All things considered, workers in unlicensed dispensaries remain incredibly vulnerable. These establishments are regular targets of police raids and robberies, while frontline workers continue to face the possibility of criminal charges themselves.

[This article is for informational purposes only and does not constitute legal advice, which cannot be given without consideration of your individual circumstances.]




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