On April 1, 2014, several important changes to Part III of the Canada Labour Code (the "Code") came into force.

The Code applies to employers and employees in federally regulated industries (such as aerospace, telecommunications, and banking) across the country. It also applies to businesses in the Yukon and Northwest Territories and to First Nations reserves. Part III of the Code establishes minimum employment standards and provides for enforcement mechanisms for unpaid wages and benefits. It is administered by the Labour Program of Employment and Social Development Canada (the "Labour Program").

Code Amendments Benefit Both Employees and Employers

The federal government has indicated that the purpose of the amendments is to make compliance with Part III of the Code easier and less burdensome for both employers and employees, and to more closely align the Code with provincial employment standards legislation.

The amendments are briefly summarized as follows:

  • Time Limit for Payment Orders. Claims for unpaid wages and vacation pay must now be filed within six months of the date on which the employer was required to make the payment. Payment orders are now limited to 12 months for wages, and 24 months for vacation pay, from the date of termination or the date on which the complaint is made. Previously, there was no time limit either for filing complaints or for the claim period; employees could bring complaints at any time and could claim years' worth of wages or vacation pay.
  • Expanded Complaint Process. Employees can now file a complaint with the Labour Program if they believe their employer has contravened any part of Part III. Complaints must be filed within six months of the non-payment or violation. Previously, only complaints relating to unpaid wages or unjust dismissal could be made.
  • Internal Review. Employees or employers who disagree with an inspector's decision can now request an internal review. Previously, appeals of an inspector's decision were made directly to referees appointed by the Labour Program.
  • Vacation Pay on Termination. Employers must now pay any outstanding vacation pay within 30 days of termination. Previously, employers were required to pay vacation pay "forthwith" after termination, and had 30 days to pay all other amounts owing.

Impact on Federally Regulated Employers

The new limitations periods are of significant benefit to all federally regulated employers. They will serve to significantly limit potential liability for claims and will provide some clarity and certainty within the complaint process. The expanded scope of the complaint process may result in more complaints being filed. However, of benefit to employers is the internal review mechanism, which will be more efficient and less burdensome than the previous system of appeals to referees.

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