What employment law issues might be involved in running a bawdy house? Given the Supreme Court of Canada’s recent decision in Canada (Attorney General) v. Bedford, 2013 SCC 72, Canada’s prostitution laws have been struck out as being invalid.  However, the invalidity has been suspended for one year to give Parliament an opportunity to introduce new legislation regulating prostitution. One of the Supreme Court’s primary concerns was that the current laws may limit the ability of prostitutes to work in a safe environment.

Assuming that Parliament decides to permit non-exploitive bawdy houses in some form, I thought it might be interesting to consider some of the employment law issues that may arise.  Some of these are, of course, very similar and applicable to other types of employment.

1.  Independent Contractor vs Employee:  If running a bawdy house is legal, there may be questions as to the legal relationship between the bawdy house and the prostitute.  I have discussed some issues relating to independent contractors here.  Although most prostitutes may prefer to be treated as independent contractors, that may not always be the proper characterization of the relationship.  If the prostitute is actually employed by the establishment, that would, of course, trigger income tax withholding and deductions, including CPP and EI and the various protections under the applicable emloyment standards legislation.  Prostitutes working for a legal bawdy house, as employees, would be entitled to a guaranteed minimum wage, vacation pay, termination and, if applicable severance pay and other protection under the relevant act, including various leaves.

2.  Health and Safety Legislation:

Health and Safety legislation across Canada requires employers to take appropriate safety measures to protect their employees.  The Supreme Court of Canada alluded to the issue of prostitute safety as being one of the main reasons for striking the current legislation.  Bawdy house proprietors who employ prostitutes may well be required, by law, to provide such protection as a receptionist, body guard, sound monitoring of rooms, screening measures, health testing and preventative safety measures.  Employers who do not take proper safety precautions can be fined significant sums.

3.  WSIB Protection:

Employed prostitutes who are injured on the job should be entitled to WSIB benefits and to the protection of the legislation including the right to return to work after an injury.

4.  Human Rights Protection:

Employed prostitutes should be entitled to protection from discrimination on any of the enumerated grounds under applicable Provincial human rights legislation.

5.  Common Law Notice Entitlement:

Prostitutes who are hired by a bawdy house without an employment contract (or with one that does not otherwise legally address this issue) will be entitled to reasonable notice of dismissal or compensation in lieu of that notice – just as any other dismissed employee.   There are exceptions, such as just cause.  As well, the employee would be required to try to mitigate his or her damages by finding another workplace.  Nevertheless, this could provide prostitutes with a measure of protection against arbitrary dismissal.

6.  Post Employment Restrictions: 

In most cases, it would be unlikely that an employer could prohibit  a prostitute from working as a prostitute for a certain time period after her or his employment ends with a specific employer.   An exception might be if the prostitute is a part owner of the bawdy house and is paid a significant sum of money for selling the business.   A more common scenario might be whether an employer could impose a non-solititation agreement for some period of time – to prohibit the prostitute from soliciting her clients for a period of time.  If this is set out in an enforceable employment agreement  and the time period is limited and reasonable, this type of restriction might be considered valid.

These are just some of the issues that might pop up with the new opportunity that at the Supreme Court of Canada has put forward.  It remains to be seen what type of legislation Parliament will enact and what type of prostitution regulation scheme it chooses to erect.  It may well be that Federal or even Provincial legislation could deal with many of these concerns directly in the body of the proposed act.