In the fall of 2018, the Federal Government introduced Bill C-86, the Budget Implementation Act, 2018 ("Bill"). This Bill, which primarily implements the 2018 federal budget plans, introduced a large variety of legislative changes to a number of laws. Included amongst the proposed changes is the modernization of labour standards in the Canada Labour Code and the introduction of the Pay Equity Act.

The Bill received Royal Assent on December 13, 2018, and despite its adoption into law, it is uncertain when a number of changes to federal labour standards will come into force. Most of the changes affecting federal undertakings take effect upon, either a government order in council at a future date, or on September 1, 2019. Therefore, it will be important for employers to monitor any changes and ensure that their practices comply with these new changes.

Pay Equity Act (In Force at a Future Date)

The adoption of the Bill ushers in a new framework for pay equity for federal employers. The objective of the new statutory regime is to eliminate systemic gender-based discrimination in compensation practices through proactive means. Specifically, the Pay Equity Act requires federally regulated employers with 10 employees or more to develop a pay equity plan that examines their compensation practices to identify and redress any differences in compensation between employees in the same job class. It is important to note that as long as they do not discriminate on the basis of gender, employers will be able to establish different pay rates if their systems of compensation contemplate seniority, geographic area of a workplace, merit-based compensation, etc.

The Pay Equity Act, also creates the position of Pay Equity Commissioner, tasked with ensuring the administration of and compliance with the Act. The Commissioner has a range of powers that will allow the investigation and audit of remuneration practices of employers and unions and the ability to impose monetary penalties for violations of the Act. The Act also contemplates a dispute resolution mechanism where the Commissioner may facilitate the resolution of disputes raised by employees or their unions with respect to pay equity.

Notice of Termination Period (In Force at a Future Date)

As part of the Government's modifications of the Canada Labour Code ("Code"), employers will need to provide a greater notice of termination, or pay in lieu of notice to employees. Currently, the Code contemplates two weeks of notice for the termination of an individual's employment. Under the new legislative changes, the notice of termination period will be based upon years of service:

3 months but less than 3 years of service

2 weeks' notice

3 years but less than 4 years of service

3 weeks' notice

4 years but less than 5 years of service

4 weeks' notice

5 years but less than 6 years of service

5 weeks' notice

6 years but less than 7 years of service

6 weeks' notice

7 years but less than 8 years of service

7 weeks' notice

8 years of service or more

8 weeks' notice

There are also new termination considerations when employers effect a "group termination." Employers will provide 8 weeks of notice of termination, or pay in lieu thereof, in such cases.

New Leaves and Breaks

There are also a number of new breaks and leaves under the Code. Specifically, employees will be entitled to a 30-minute unpaid break for every five consecutive hours of work, a rest period of at least eight consecutive hours between shifts, and unpaid breaks necessary for nursing or expressing breast milk.

Changes to leave provisions include:

Personal Leave

5 days (3 paid days)

In force at a future date

Victims of Family Violence Leave

5 days (paid after 3 months of service)

In force at a future date

Medical Leave

Up to 17 weeks unpaid.

Replaces sick leave and includes leaves for organ donation or medical appointments.

After more than 3 days, the employer can request a certificate from a health care practitioner

In force on September 1, 2019

Court or Jury Duty

No maximum (unpaid)

In force on September 1, 2019

In addition to these new leaves, the Bill includes the elimination of most minimum service requirements. In other words, employees will be eligible for leaves (including maternity and parental leave) and holiday pay without having been employed for a minimum period of time.

Parental Leaves and Benefits (In Force on March 17, 2019)

Another piece of legislation affecting employee rights is the Employment Insurance Act. Its amendments will encourage parents to share parental leave by providing an additional eight weeks of Employment Insurance if both parents share the leave. The Code's amendments also reflect these changes.

Additionally, because there is no minimum service requirement for these leaves, employers may need to reconsider their parental leave policies.

Vacation (In Force at a Future Date)

Presently, the Code provides for a minimum of two weeks of vacation and vacation pay equivalent to 4% of the employee's wages in the first six years of service. After six years of service, the vacation increases to three weeks and vacation pay is equivalent to 6% of the employee's wages. With the new changes in the Code, this increase will take place after five years of service. After 10 years of service, there will also be an additional increase of the minimum of vacation to four weeks and vacation pay to 8% of the employee's wages.

Other Changes

There are a number of other changes contemplated in the Bill that may have an impact upon an employers' policies or practices. A sampling of these changes include:

  • Scheduling: employers need to provide notice of schedule changes 96 hours before the next shift, failing which employees may refuse the change for 96 hours;
  • Provision of information: employers will need to provide "a written statement" prescribed by the regulations under the Code, relating to employee rights, within 30 days of the publication of such statements.
  • Equal Pay: Employers must provide equivalent wages to employees who perform the same job, regardless of "employment status," i.e.: part-time, casual, seasonal or full-time. There are some exceptions based on the employer's approach to remuneration.
  • Temporary Help Agencies face certain prohibitions regarding charging fees to their employees, and preventing the employee from contracting with their client. They are also subject to the equal pay provisions of the Code that apply to their clients.

With the adoption of Bill C-86 into law, federally regulated employers will have to reconsider many of their practices and policies. For all questions related to these legislative changes for employers, the Gowling WLG Employment, Labour & Equities Group would be pleased to assist. Find out more about our Employment, Labour & Equities Group and how to contact a specific lawyer.