Changes Affecting Federally Regulated Employers

There have been many changes in recent months affecting employers governed by federal labour and employment laws. In September 2024, Stewart McKelvey will be hosting a webinar to review those changes and provide insights for employers. In advance of that webinar, a brief summary of the recent developments in the federal employment legislation follows.

I. Canada Labour Code

Termination requirements

As of February 1, 2024, federal employers are required to provide more generous statutory notice of termination, as well as other new requirements for termination statements.

Previously, federal employees of three or more months' service who were dismissed without just cause were entitled to a minimum of two weeks' notice. However, these amendments to the Canada Labour Code now require that federal employers follow a graduated notice entitlement scheme based on years of service, as set out below:

Additionally, federal employers must now provide a termination statement to each dismissed employee. The statement must outline the employee's wages, vacation pay, severance pay, and any other benefits including car or phone allowance.

Hours of Work provisions

Prior amendments to the Canada Labour Code in 2023 required federal employers to provide employees with 96 hours' notice of work schedules, 24 hours' notice of a shift change, 30-minute unpaid meal breaks every five hours of work, and eight-hour rest periods between work periods or shifts.

However, in recognition of the unique scheduling requirements of workplaces with continuous operations (i.e. 24 hours a day, seven days a week), updates were recently made to the Exemptions from and Modifications to Hours of Work Provisions Regulations for employers in certain industries. As of January 4, 2024, exemptions to the notice requirements took effect for specified classes of employees within the rail transportation, banking, and telecommunications and broadcasting sectors. Exemptions for the air transportation sector took effect on June 4, 2024.

Provision of menstrual products

As of December 15, 2023, federal employers must provide free sanitary pads and tampons for employees, as well as covered disposal containers, in all toilets regardless of the washroom's gender designation. These changes were made pursuant to the Regulations Amending Certain Regulations Made Under the Canada Labour Code (Menstrual Products).

Ban on replacement workers during strikes

The federal government continues to work towards a ban on the use of replacement workers during a strike or lockout, with the so-called "anti-scab" Bill C-58 unanimously passing in the House of Commons on May 27, 2024 and moving on to the Senate. The Bill would amend the Canada Labour Code to broadly restrict federal employers from using replacement workers, including newly hired employees, contractors, or employees of another employer, from performing bargaining unit work during a strike or lockout. Bill C-58 would also impose a penalty of up to $100,000 per day for the violation of these provisions.

Bill C-58 does provide some exceptions where replacement workers are necessary, such as for certain health and safety reasons or to prevent property or environmental damage.

Should Bill C-58 receive royal assent (as anticipated), the changes are expected to take effect 12 months after that date. A more detailed discussion of the implications of this legislation was included in our prior Thought Leadership piece.

II. Accessibility plans

Pursuant to the Accessible Canada Act and Accessible Canada Regulations, federal employers with 10-99 employees were required to publish an accessibility plan by June 1, 2024. Employers with 100 or more employees were previously required to have posted their plans by June 1, 2023.

Accessibility plans must show how an employer is taking steps to identify, remove, and prevent barriers to accessibility, and must be produced based on consultations with people with disabilities.

III. Pay equity plans

According to the Pay Equity Act and Pay Equity Regulations, federal employers with ten or more employees must publish a pay equity plan by September 3, 2024. However, employers are required to allow for 60 days for employee feedback in advance of the plan being published, so should have a draft plan prepared in June.

The preparation of a pay equity plan will require employers to identify and analyze compensation inequities between "predominantly male" and "predominantly female" job classes, and correct any pay equity gaps with increased compensation.

Employers with 100 or more employees, as well as unionized employers, are required to establish a pay equity committee to lead the development of the plan.

For additional details on Pay Equity Act requirements, please see our previous Thought Leadership pieces from 2021 and 2023, as well as our flow chart outlining the pay equity process.

IV. Modern Slavery Act disclosure requirements

Canada's much-discussed Modern Slavery Act has been in effect since January 1, 2024. The first deadline for supply chain transparency reports was May 31, 2024. In advance of that deadline, organizations had to determine whether they are subject to the reporting requirements. Our 2023 Thought Leadership piece discussed these requirements in more detail.

V. Looking forward: Budget 2024

On April 16, 2024, the federal government published Budget 2024: Fairness for Every Generation. The Budget contained several proposed legislative updates that will, if implemented, affect federal employers. While these initiatives are still in the early stages, employers should be aware that changes in these areas are on the horizon.

The right of employees to disconnect from work outside working hours has been an ongoing topic of discussion, and the federal government has now confirmed its intent to pursue legislative amendments in this area. While few details were provided in Budget 2024, it appears the planned amendments would not directly mandate a right for employees to disconnect, but rather require employers to devise and implement a policy. The anticipated approach sounds similar to requirements already enacted for provincially regulated employers in Ontario.

Budget 2024 also proposed amendments to the Canada Labour Code aimed at addressing the issue work misclassification (i.e., employees that are mislabelled as contractors or "gig workers"). One aspect of the initiative involves Employment and Social Development Canada (ESDC) and the Canada Revenue Agency (CRA) entering data-sharing agreements, in order to facilitate more accurate classifications. The proposed amendments would also create a statutory presumption in certain circumstances that a worker is an employee (i.e., putting the onus on the alleged employer to establish that the worker is actually an independent contractor). Additionally, the amendments, as proposed, would make it an offence for an employer to treat an employee as a non-employee, and would allow such individuals to file a complaint where they believe they are being misclassified.

Also in Budget 2024, the federal government announced its intention to amend the Employment Equity Act – specifically, to expand the designated equity groups. Few details were provided, but the government previously established commitments in December of 2023 which contemplated:

• Creating two new designated groups: "Black people" and "2SLGBTQI+ people";
• Replacing the term "Aboriginal Peoples" with "Indigenous Peoples", and revising the term's definition to ensure consistency with the United Nations Declaration on the Rights of Indigenous Peoples Act;
• Replacing the term "members of visible minorities" with "racialized people", and updating the corresponding definition; and
• Updating the definition of "persons with disabilities" to align with the Accessible Canada Act.

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