Canada: Key Changes To Employment Standards Regulations

Last Updated: December 18 2017
Article by James C. Lingwood

Last week, the government (by Order in Council 441/2017) amended the Employment Standards Regulation (AR 14/97) and thereby provided some greater certainty as to how the changes to the Employment Standards Code will impact employers.

The Alberta Legislature recently passed Bill 17 which made significant changes to the Labour Relations Code and to the Employment Standards Code.

The amendments to Alberta's Employment Standards Code left unanswered a number of questions such as how the new legislation might apply to specific industries, how time should be calculated for overtime averaging agreements, and how parental leave was expected to align with employment insurance benefits.

The amendments to the regulation provide answers to many of the questions raised, and provide employers and employees with a new framework and set of responsibilities. We provide a summary of some key changes employers will not want to overlook:

Administrative Penalites

The new scheme allows employment officers to fine employers with "administrative penalties" for breaches of the Employment Standards Code and regulation. The penalty may be appealed by an employer to an "appeal body".

The minimum amount of the fines range from $500 to $6,000. The minimum fine is determined by which provision(s) is(are) breached and by whether the employer is a "repeat offender" or fails to comply with a direction to fix the contravention.

Creation of Flexible Averaging Agreement

One of the most important aspects of the amendment is the creation of "flexible averaging agreements". These agreements are only available for full-time employees who work 35 hours or more hours per week and must be requested by the employee.

The agreements can only be for 1 or 2 weeks. They allow employees to bank flex time to be used on a one hour off for one hour worked basis. An employer and employee can agree to an extended daily overtime threshold - meaning that additional hours can be worked over the normally scheduled hours up to that threshold (up to a maximum of 10 hours per day) without overtime being owed. Any "flex time" worked up to that threshold can be taken as paid time off (on a 1:1 ratio) during the 1 or 2 week averaging period. The agreement does have to be formally documented.

This is a poor replacement for the past overtime agreements which were much more flexible, but it still provides some advantage to employees who want the ability to work some longer days and to have time off in lieu. It is also an advantage to employers who are otherwise required to provide time off in lieu at a rate of 1.5 hours for every hour of overtime.

AVERAGING AGREEMENTS

The Basics

Effective January 1st, 2018, the amendments to the Employment Standards Code will eliminate compressed workweeks and introduce the requirement for "hours of work averaging agreements". These are in addition to the Flexible Averaging Agreements.

The new legislation allows an employee (or several employees) to enter into a written averaging agreement. An averaging agreement allows an employer to average an employee's hours of work over a period of one to 12 weeks for the purpose of determining an employee's entitlement to overtime pay.

Scheduled hours of work must still remain at or below 12 daily hours (each day) and 44 weekly hours (averaged across the averaging period).

Calculating Overtime Under an Averaging Agreement

The regulation provides some important clarifications as to how these agreements will operate. The first important clarification is the entitlement to daily overtime. The changes to the regulation explain that an employee under an averaging agreement is entitled to daily overtime in two scenarios:

  • If the employee is scheduled to work less than 8 hours in a day (under an averaging agreement), then the employee will be entitled to receive overtime only when the employee works more than 8 hours in that day (not merely when the employee works more than scheduled).
  • If the employee is scheduled to work more than 8 hours in a day (under an averaging agreement), then the employee will be entitled to receive overtime only when the employee works more than the scheduled number of hours in that day.

The regulation also explains that an employee is entitled to weekly overtime when the average number of hours worked per week (averaged across the period of the averaging agreement) exceeds 44 hours per week.

As always, an employee is entitled to the greater of the total daily overtime or the weekly overtime. For example, if an employee was on a 5 week averaging agreement to work 44 hours per week, but ended up working 46 hours per week (with no daily overtime) then the employee would be entitled to 2 hours of overtime for each of the 5 weeks (i.e. 10 hours).

Overtime is calculated and paid every pay period, which means that the calculation of overtime may occur in the middle of an averaging agreement. This is not an issue for paying employees on the basis of daily overtime – which should be done. If ,at the end of an averaging agreement, the employee has greater weekly overtime than the daily overtime he or she received, then the employer must make up the difference.

Fixed Work Schedule

One question facing employers prior to these amendments was whether or not an employer need only identify the number of hours to be worked in a week or whether the averaging agreement had to specify a work schedule.

The new regulations confirm that the latter is true – an averaging agreement must specify a single work schedule (whether it is for a group of employees or an individual employee). This means that an averaging agreement must identify all work days and the number of hours to be worked on each of those work days for each week in the schedule.

Employers are entitled to make temporary changes to the work schedule provided that the employer notifies the employee at least two weeks in advance of the day(s) affected. If an employer fails to provide notice, an employee is entitled to overtime for any hours over 8 in a day, irrespective of what the schedule states.

An employer does not need to provide notice of a change to an averaging agreement work schedule where there is an accident, where urgent work is necessary, or where other unforeseen or unpreventable circumstances brought about the need for a change.

Make-Up for Missed Shifts

If an employee works an unscheduled day to make up for his or her absence on a scheduled day during an averaging agreement, the "make up day" is treated as if it was the missed day.

Cancelling Averaging Agreements

As mentioned, the averaging agreements require both employee and employer consent. As a corollary, either the employee or the employer may cancel the agreement at any time. The cancellation takes effect 30 days after the employer or employee provides notice to the other party.

Posting Agreements

Employers are required to post any averaging agreement (or amendment to such an agreement) on the employer's website (if it has one) and at least one conspicuous place in the workplace (where it can be viewed by employees affected) before the averaging agreement (or amendment to an averaging agreement) takes effect.

The employer must also provide a copy to each employee under the agreement.

Maternity Leave & EI

The amended regulation has increased the period before the expected delivery date during which an expectant mother may commence her maternity leave and the amount of this leave. Maternity leave is now 16 weeks and may commence at any point during the 13 weeks immediately prior to the expected delivery date.

The period of parental leave has been increased to 62 consecutive weeks. This must occur within the 78 weeks after the child's birth or adoption, and must commence immediately following the last day of maternity leave in the case of the employee/mother.

Group Terminations

Fortunately the regulations have confirmed that an employer does not need to give a notice of group termination (notification to the Minister of Labour if an employer intends to terminate 50 or more employees within a 4 week period) if the employees are being dismissed as part of a seasonal business or where the employees are being let go at the end of a fixed-term or fixed-task contract. This will be beneficial to those employers in seasonal businesses as well as those employers engaged in construction and similar task-based ramping up and down of a workforce.

Variances

Some employers will be pleased to note that the regulations allow them to submit a request to the Director of Employment Standards for variances from certain legislated requirements. These include:

  • Extending hours of work beyond the 12 hour daily maximum
  • Extending the maximum number of consecutive work days
  • Extending "hours of work averaging agreements" beyond the 12 week maximum
  • Reducing the minimum amount payable to an employee who is called in to work for 2 or 3 (depending on the type of employee) consecutive hours

Before granting a variance, the Director will consider:

  • the employer's compliance with employment standards and occupational health and safety legislation
  • the reasons for the request
  • whether there is union/employee support and
  • the impact the variance could have.

In addition, the Minister of Labour has the power to grant a variance or exemption from any part of the Employment Standards Code and the regulations. The Minister of Labour will consider the same factors as the Director.

Restrictions on Youth Employment

Employers are now subject to restrictions on when and for how long young persons may be employed. 13 and 14 year olds may not be employed for more than 2 hours on a school day, for more than 8 hours on any other day, or at any time from 9pm through to the following 6am.

15 year olds may not be employed from 12am through to 6am.

15, 16, and 17 year olds may not be employed from 9pm through to 12am at retail businesses (including places where food and drink are sold), gas stations, and hotel/motels unless they are accompanied by another employee who is at least 18 years old.

After 12am (through to 6am), 16 and 17 year olds may not be employed at retail businesses at all. However, they may be employed at other businesses during this time if the parent or guardian provides the employer with written consent and the 16/17 year old is accompanied by another employee who is at least 18 years old.

Job-Protected Leaves

As promised by the Ministry, the regulations now provide a lengthy list of "family members" for the purposes of the family responsibility and person leave provisions provided in the Employment Standards Code.

Critical Illness Leave

While the amendments to the Employment Standards Code allowed for unpaid leave for parents of a critically ill child (up to 36 weeks), the regulation has extended this benefit to those who must care for a critically ill adult family member (up to 16 weeks).

Changes to Definitions of Insurance Agents & Securities Salesmen

Previously, employers of salesmen (under the Securities Act) and 100% commission-paid insurance agents were excluded from the requirement to provide certain minimum benefits to those employees, namely hours of work records, holiday and vacation pay and minimum wage.

As a result of the changes, employers of "Salesmen" under the Securities Act are no longer excluded from these obligations. Instead, only those employers who are either a "dealer" or an "adviser" (under the Securities Act) are excluded from these obligations for employees who make trades in securities/derivatives for that dealer or adviser.

In addition, while entirely commission-based insurance agents (those holding an insurance agent's certificate) were previously excluded, the definition has been expanded to include those holding a "restricted insurance agent's certificate" where the employee is paid entirely by commission.

Ranching and Farming Operations

The amendment has some special provisions for employees and employers in farming and ranching operations. These provide for unique periods of rest and holiday pay:

  • Periods of rest (4 days of rest for every 28 consecutive work days)
  • Holiday pay required for employees not working on a general holiday (4.2% of wages, vacation pay and general holiday pay earned by the employee in the previous four weeks)
  • Employees working on a general holiday are entitled to regular pay plus either:
    • an equivalent day off with holiday pay (4.2% of wages, vacation pay and general holiday pay earned in the previous four weeks) within 30 days (or longer where agreed); or
    • Holiday pay on that day – in addition to regular pay – calculated as 4.2% of wages, vacation pay and general holiday pay earned by the employee in the previous four weeks.

Note that the amendments to the Employment Standards Code do not treat all farm workers as "employees" under the Code and regulations and there are certain exceptions for family members and owners of the operations.

Deductions from Earnings

Previously, employers were entitled to deduct an employee's wages/earnings to cover the cost of providing, using, repairing, or laundering clothing (which the employer required the employee to wear) – so long as the deduction did not result in an employee receiving less than minimum wage.

The Government has altered this to make a blanket prohibition on employers deducting wages/earnings to cover the cost of providing, repairing, using, or cleaning clothing which the employer requires the employee to wear. Employers seeking monies to cover these costs must receive payment directly from employees and not through reductions to pay.

In addition, the Act and Regulations now make it clear that employers are prohibited from making deductions from an employee's pay for "faulty work", even with an authorization. "Faulty work" includes any act or omission of an employee that results in a loss to the employer.

While these are some of the most critical changes, we stress that these represent a summary and should not be taken as legal advice. We strongly encourage employers with questions relating to the application of any of these changes (or any employment-related advice) to seek independent legal guidance.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
James C. Lingwood
Events from this Firm
19 Dec 2017, Webinar, Calgary, Canada

McLennan Ross previously conducted a webinar on June 6, 2017 about the passage of Bill 17, during which we reviewed the changes to the Employment Standards Code and the Labour Relations Code. During that webinar, we identified a number of issues which would depend upon the language of the Regulations, which had not yet been developed.

17 Oct 2018, Webinar, Calgary, Canada

We have been preparing for legalization day since Bill C-45 was first introduced. With October 17th just around the corner, our Corporate, Labour & Employment, and Insurance groups have the answers to your questions.

24 Oct 2018, Webinar, Calgary, Canada

A written employment agreement is an often ignored best practice for non-union employers. A written agreement can be a critical risk management tool if it properly sets out duties, rights and expectations both during the employment relationship and after it ends.

Similar Articles
Relevancy Powered by MondaqAI
Ogletree, Deakins, Nash, Smoak & Stewart
Borden Ladner Gervais LLP
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Ogletree, Deakins, Nash, Smoak & Stewart
Borden Ladner Gervais LLP
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions