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Is nepotism in the workplace illegal?

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Favouritism and nepotism can sap the morale of a workforce. It gives the impression that not everybody plays by the same rules. However, the nature of human interaction and interpersonal relationships can make it difficult for employers to identify and address nepotism and favouritism.

At what point does praising and rewarding a high performing employee become favouritism? When is hiring a family member into the organization ‘preferential’? Is there anything employers can do to reduce nepotism and favouritism in the workplace?


What is the difference between nepotism and favouritism? Favouritism is used broadly to talk about cronyism, nepotism, sexual favours and ‘back scratching’. Nepotism is generally restricted to favours to friends and family.


What is nepotism in the workplace?

Simply put, nepotism in the workplace means giving advantageous opportunities to family or friends at work. There are innumerable examples of it: a business owner inviting their son or daughter for a summer internship; hiring a family member to a position that denied internal promotion; or awarding a contract to a firm owned by a family friend.


Ingredients for nepotism (or favouritism)

A person in a position of power and influence in the organization offers jobs and ‘leg ups’ to family and friends. This may or may not be to the direct detriment of employees existing or prospective.

With favouritism one or more employees receive special treatment from decision-makers. It can include being invited to closed meetings, being granted additional perks, choice of work or working hours, bigger raises and even promotions.


Keeping it in the family: studies have shown that in Canada there is 40% chance that a child will be employed at the same place where their parents work.


Examples of blatant nepotism and favouritism

  • Hiring a family member who does not meet qualification or experience requirements for a job
  • Letting certain employees (family, friends or favoured staff) break rules or convention (such as additional leave, faster promotions, bigger raises)
  • Taking specific employees out for lunch and having business discussions while excluding equally qualified peers
  • Exchanging sexual favours for career advancement
  • An executive promotes an employee he or she trusts into a hiring position, then using them to hire family and friends indirectly


The Globe and Mail reported that nearly 20% of student job positions in the federal public service sector were filled by friends or relatives of hiring managers.


How does nepotism affect the workplace?

It is a misconception that nepotism can affect the workplace only negatively. A family member or friend may:

  • Be highly skilled and experienced
  • Bring new opportunities and investment to the organization
  • Help introduce a happier and more jovial atmosphere
  • Become a valued friend and colleague, like any other employee

Anecdotally, many people have reported that otherwise terse and strict bosses have become more mellow and empathetic after their child completed an internship/employment role at the company.

Conversely, nepotism can also become a cause for negativity.

  • Unsuited family and friends may reduce productivity
  • They may not be motivated to drive the organization forwards
  • Regular employees may feel frustrated for not being promoted
  • Respect for the organization’s employment policy may decrease

Every incident of nepotism is different and must be assessed individually.


Read more

Sexual harassment and dismissal | Equal pay in Canada | Passed over for promotion?


Why is nepotism bad?

Favouritism and nepotism has the potential to cause a loss of productivity. If under-qualified family members or friends are given the best assignments, the organization will lose out on business opportunities. Unmotivated employees may then spend their time gossiping, reducing overall productivity.

Worst of all, if the favoured person doesn’t perform to the same expectations as other employees, it will affect the morale of the workforce. Regular employees will feel frustrated and resentful about missing out on growth within the organization.


Policy to fight nepotism

An organization can have a policy regarding nepotism or nepotism may be checked by other policies such as hiring, promotion, appraisals, policies for work allocation and more.


Is nepotism in the workplace illegal?

No, nepotism in the workplace is not illegal in Ontario.

However, the Ontario Human Rights Code ‘prohibits discrimination on the basis of family status’. Nepotism in the workplace can be challenged if it ‘deprives individuals of a significant right or benefit’. This means every case must be assessed on its merits.

An example of that can be choosing to lay off employees who have worked with the organization longer before a family member or friend who joined much later.

In B. v. Ontario (Human Rights Commission), the Supreme Court of Canada ruled that ‘adverse treatment based on the identity of one’s spouse, child or parent is prohibited by the OHRC. In that case, the complainant (B.) had been dismissed after his boss had an altercation with the complainant’s wife and daughter.

However, exceptions to protection from nepotism are also permitted. These include:

  • Exceptions for people aged 65 years and over
  • Family/friend hiring if it is shown to be in line with the policies of the organization

Anti-nepotism can flow the other way too. An organization cannot discriminate or exclude individuals on the basis of family status. Examples of this are in caregiving, where caregivers have been denied grants or funding solely because they were related to the elderly or disabled.

Are you facing a nepotism lawsuit? Speak to Soni Law to understand what case the complainant may have. We will help you resolve the dispute frugally, while implementing measures to prevent lawsuits from arising in future.


How should you deal with nepotism at work?

(As an employee)

When you encounter nepotism at work the most important thing is to not jump to conclusions. Simply hiring a family member or friend does not mean they are unqualified or unskilled. Consider the situation objectively, rather than have a negative outlook from the very off.

If you think your workplace is being affected by nepotism, here’s what you should do:

Document it – Keep a record of instances when you have witnessed favouritism. Tangible and quantifiable evidence is essential for building a case. (eg. handing over an important client to a family member with a poor track record)

Bring attention – Tell your supervisor/manager if nepotism is affecting your work. Speaking to colleagues who are at the same level as you will only result in gossip.

Objective case – If required you should be able to make a dispassionate and objective case. If you are seen to be emotional or playing the ‘it’s unfair card’, you will not be taken seriously.


(As an employer)

If you receive a complaint of nepotism, you should act upon it formally, it is best to speak to an employment lawyer before acting on it. Regardless, you must acknowledge the complaint and diligently investigate the concern. What starts out as an off-hand remark about favouritism can snowball into an expensive lawsuit.


At Soni Law we help employers address nepotism and favouritism concerns at the workplace. Our lawyers help business owners and hiring managers create anti-nepotism policies that fulfil human rights requirements and protect them from employment-related lawsuits. We also defend organizations before labour boards, human rights tribunals and courts in Ontario. Schedule a free, no-obligation consultation with a team of experienced Toronto employment lawyers.

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About Post Author


Rahul founded Soni Law Firm, a boutique employment, labour, and human rights law firm, with the goal of taking his Downtown Toronto litigation experience and making it accessible to Ontario’s Main Street employees and employers.