Canada: 2019 Brings New Rules For Federally Regulated Employers

Last Updated: January 15 2019
Article by James C. Lingwood

In 2018, provincially regulated employers saw significant changes to provincial employment standards legislation such as found in Bill 17 (Alberta), Bill 176 (Quebec). and Bill 148 (Ontario).

Not to be outdone, Parliament has introduced a massive piece of omnibus legislation in Bill C-86 (the Budget Implementation Act, 2018, No. 2) which received royal assent last month. Buried within Bill C-86's changes to tax, customs, banking and pension legislation are significant modifications to the Canada Labour Code and the creation of pay equity legislation.

The changes will impact employers engaged in federal undertakings such as those whose business enterprises are in telecommunications, aviation, navigation and shipping, interprovincial transport, pipelining, and banking (to name a few).

The following summary provides employers with an introduction to some of the most noteworthy changes to employment legislation in the federal sphere:

Amended Leaves of Absence

Medical Leave (Effective September 1, 2019): Bill C-86 replaces 'sick leave' with medical leave. Employees are entitled to a leave of absence of up to 17 weeks as a result of any personal illness or injury, organ or tissue donation or to attend medical appointments. Employees must provide 4 weeks' notice of the intended absence stating the start date and expected duration of the leave. Where notice cannot be given 4 weeks in advance, the employee must provide as much notice as possible.

Where the leave of absence is three days or longer, the employer is entitled to require the employee to provide a medical certificate which certifies that the employee was incapable of working during the absence.

Upon written request by the employee, the employer must inform the employee in writing of every employment, promotion or training opportunity that arises during the employee's medical leave of absence.

Employers are prohibited from considering a medical leave, or an intention to take such a leave, in decisions regarding promotions and training. Employers must not dismiss, suspend, layoff, discipline, or demote employees due to a medical leave or intended medical leave.

Personal Leave (undetermined effective date): Currently, the Canada Labour Code provides employees who have 3 months of employment to 3 days of absence for family obligations. Under Bill C-86, employees will be entitled to up to 5 days (annually) of "personal leave" for illness, certain family responsibilities, urgent matters, and attending citizenship ceremonies. Employees need no longer work 3 months to be entitled to such leave but where they have three months of continuous service then the first three days of personal leave are paid.

Family Violence Leave (undetermined effective date): Employees who have completed three months of employment will be entitled to paid leave for the first five days of leave if they are victims of family violence.

Leave for Court or Jury Duty (Effective September 1, 2019): Employees will be entitled to an unpaid leave of absence to attend court to appear as a witness, act as juror or participate in a jury selection process.

Leave for pregnant or nursing women (Effective September 1, 2019): Employees will be entitled to an unpaid leave during the twenty-four weeks following birth if the employee provides the employer with a certificate from a health care practitioner that she is unable to work due to pregnancy or nursing.

Paternity/Maternity Leave (Effective September 1, 2019): Employees will no longer need to have six months of prior service in order to quality for maternity or paternity leave.

Changes to Vacation & Holiday Pay – Effective September 1, 2019

Vacation Pay: Currently employees are entitled to either two or three weeks of paid vacation depending on length of service. Bill C-86 will increase the number of weeks of paid vacation as follows:

  • Two weeks paid vacation (or 4% vacation pay) for employees who have completed one year of employment;
  • Three weeks paid vacation (or 6% vacation pay) for employees who have completed five years of employment;
  • Four weeks paid vacation (or 8% vacation pay) for employees who have completed ten years of employment.

Holiday Pay: Employees will no longer be required to have 30 days of service to receive holiday pay. Holiday pay must be at least equal to 1/20th of the employee's wages (excluding overtime earnings) earned during the four-week period preceding the week in which the holiday occurs.

New Work Breaks & Rest Periods – Effective September 1, 2019

Breaks During 5+ Hours of Work: Except in certain emergencies, employers will have to provide each employee with an unpaid break of at least 30 minutes during every five consecutive hours of work. The break must be paid if the employee is required to be available to work during that time.

Rest Between Shifts: Except during certain emergencies, employees will have to be provided a rest period of at least 8 hours between work periods/shifts.

Breaks for Medical Reasons: Subject to possible future regulations, employees will be entitled to unpaid breaks as required for medical reasons. Employers can require employees to provide a medical certificate stating the length and frequency of the needed breaks.

Breaks for Nursing: Subject to possible future regulations, employees will be entitled to unpaid breaks to nurse, or to express breast milk.

Notice Required for Implementing Work Schedules – Effective Date to Be Fixed

Except in cases of an emergency, employers will have to provide employees with at least 96 hours advance notice of any work schedule. Where an employer fails to provide such notice, an employee is entitled to refuse any shift occurring less than 96 hours after that employee receives the schedule. Employers and unions can agree otherwise, as can employees who have requested a Flexible Work Arrangement.

Deeming Employment Continuous Following Retendering – Effective September 1, 2019

Contractors engaged in bidding work on federal undertakings should be aware of the consequences and obligations following a successful bid.

Presently, the employment of an employee is deemed to be continuous where a business is transferred to a new employer. Bill C-86 will have the effect of expanding that principle so that employment will be deemed continuous when individuals are employed birst by one contractor/employer, and then by another following a retendering process leading to the awarding of a contract.

Equal Pay for Equal Work – Date to Be Fixed – No Earlier than September 1, 2019

Bill C-86 will prohibit employers from paying their employees differently if such employees share certain work characteristics (including working in the same industrial establishment, performing substantially the same kind of work that requires substantially the same skill, effort and responsibility under similar working conditions).

Differential pay will be allowed based on seniority, merit, quantity or quality of production, and any other criterion that is prescribed by regulation. However, an employer will have to demonstrate that the distinctions relied on are valid and employees will have a right to make a written request for a review of their rate. Employers receiving such a request will have 90 days to either increase the rate of wages or provide a statement explaining why the employer's distinction is valid.

Employers are prohibited from decreasing the rate of pay for any employee to comply with the equal pay obligation.

Pay Equity Legislation– Effective on Date(s) to be set by Governor in Council

Bill C-86 also establishes a new Pay Equity Act which will require employers with 10 or more employees to establish pay equity plans within three years of the time the legislation comes into force. Review and update of the plan must occur every 5 years. Employers with over 99 employees, and those with more than 10 employees and a collective bargaining relationship will also have to create pay equity committees.

Employers (or committees) will be required to conduct a review of positions in scope of the plan and solicit employee feedback. The legislation creates an arduous obligation on employers to assess whether there are 'predominately female' or 'predominately male' job classes and conduct valuation of work and compensation. Employers will be required to submit an annual statement to the Pay Equity Commissioner and maintain records. The Pay Equity Commissioner will monitor and ensure compliance with the Pay Equity Act.

The Commissioner will be appointed as a member of the Canadian Human Rights Commission and will oversee a dispute resolution mechanism. Where dispute resolution fails, the Commissioner may dismiss or refer matters to the Canadian Human Rights Tribunal. The Canadian Human Rights Commission will hear disputes relating to the Pay Equity Act and is directed to form a 'Pay Equity Division' to deal with complaints of discrimination related to pay equity.

Temporary Agency Prohibitions – Effective on a Date to Be Fixed by Governor in Council

Temporary Help Agencies are employers who send employees to perform work at clients' facilities. These agencies will be prohibited from charging employees fees for becoming an employee, for placing (or attempting to place) them with a client, for job preparation services, and for securing employment for them with a client. They will not be allowed to prohibit their employees from obtaining assignments or establishing employment relationships with their clients.

In addition, the proposed legislation will prevent such agencies from paying their employees less than what an employee of the client company is paid for the same work.

Termination of Employment

Unjust Dismissal (Effective no earlier than September 1, 2019): Currently employees can claim unjust dismissal and claim both damages and reinstatement. Bill C-86 will allow employers to apply to the Canada Industrial Relations Board to summarily dismiss or suspend certain unjust dismissal complaints. Furthermore, the Bill prohibits persons from making unjust dismissal complaints if they have already made a complaint of reprisals or genetic tests based on substantially the same facts, unless the previous complaint has been withdrawn.

Group Terminations (Effective no earlier than September 1, 2019): In addition to the 16 weeks' notice employers are already required to provide to the Minister, employers will be required to simultaneously provide notice to individually affected employees' trade unions (or to the employees themselves if they are not represented by a union). In addition, employees will be entitled to individual notice of at least 8 weeks. Employers will be able to provide wages in lieu of some or all of the 8 week notice requirement.

New Notice Periods (Effective on a Date to be Fixed): Currently, section 230 the Canada Labour Code requires that an employer provide two weeks' written notice of termination without cause (in addition to severance pay under section 235). Bill C-86 modifies section 230 and will increase notice based on length of service. Employers will be required to provide notice ranging from two weeks to eight weeks depending on length of service.

The foregoing represents some of the more critical changes facing federally-governed employers in the coming months.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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