Canada: Canada Implements Significant Reforms To Basic Federal Employment Standards

Last Updated: September 13 2019
Article by Stephen Shore and Jordan Romano

Canadian employers subject to federal regulation will want to take note of changes to the Canada Labour Code that came into force on September 1, 2019. These reforms apply to a large number of minimum employment standards with vacation, breaks, leaves of absences, and predictive scheduling impacted, among others. As a result of the far-reaching nature of the changes, they will have a significant impact on federally regulated workplaces.

Notably, the changes are taking effect at a very interesting time, occurring on the cusp of the Canadian federal election and well into a calendar year. On this latter point, many employers have expressed concern about how to approach changes that impact annual entitlements, since only one-third of the calendar year remains after September 1, 2019. This article outlines the most significant changes to the Code that will affect federal employers.

Hours of Work and Predictive Scheduling

Work Schedule: There is a new requirement to provide 96-hours' written notice of an employee's work schedule, subject to certain exceptions and alternate time frames that may exist under collective agreements.

Shift Changes: There is a new requirement to provide 24-hours' written notice of shift changes. This is concerning for employers that rely on shift flexibility to manage production schedules or spikes in demand.

Overtime: An employee is now able to enter into an agreement with his or her employer to be granted time off of not less than 1.5 hours with pay for each hour of overtime worked. Employees will also have the right to refuse overtime for certain personal responsibilities. (While this change is causing worry among some employers, it may prove to be less of a concern once federal regulators clarify their definition of "certain personal responsibilities.")

Rest Periods: There are new provisions requiring unpaid 30-minute breaks. There is also a requirement for rest periods of at least eight hours between work periods/shifts, subject to exceptions for certain emergencies.

Flexible Work Arrangements

Requesting a Change: There is a new requirement that after working for six months, an employee will have the right to request, in writing, a change to hours worked, work schedule, location, and other terms and conditions to be prescribed. An employer must respond to a request for a flexible work arrangement in writing within 30 days of receiving the request. An employer can grant a request in whole or in part, or may refuse such a request if

  1. it would result in additional costs that would be a burden to the employer;
  2. it would have a detrimental impact on the quality of work;
  3. the employer could not reorganize the work among other employees; or
  4. there would be insufficient work for the requesting employee.

Leaves of Absence

Service Requirements: An employee is no longer required to attain six months of continuous service to qualify for maternity (pregnancy), parental, critical illness, and child death/disappearance leaves of absence.

Family Violence Leave: An employee who is a victim of family violence or a parent of a victim of family violence may soon take a leave of up to 10 days every year. If an employee has continuously worked for the employer for three months, the employee will be entitled to paid leave for the first five days of the leave.

Bereavement Leave: An employee is now eligible for up to five days of bereavement leave (the first three of which will be paid for an employee with at least three consecutive months of service) in the event of the death of a member of his or her immediate family.

Personal Leave Days: An employee is now entitled to a new personal leave of up to five days per calendar year, including three days with pay. An employer may request supporting documentation no later than 15 days after an employee returns to work and the employee must provide it if reasonably practicable. This leave may be taken to deal with

  1. personal illness or injury (in addition to medical leave);
  2. responsibilities regarding the health or care of a family member;
  3. responsibilities regarding the education of a family member who is less than 18 years of age;
  4. an urgent matter concerning the employee or a family member;
  5. attending one’s Canadian citizenship ceremony; or
  6. additional reasons prescribed by regulation.

Vacation Entitlement

Vacation Periods/Interruptions: With the upcoming changes, vacation is to be taken in one period unless the employer approves more than one period of vacation. An employee may also interrupt or postpone a vacation to take a leave of absence or a sick leave.

Entitlements: Employers should also take note to changes in vacation entitlements, which will be increased to the following:

  1. After 1 year of service – 2 weeks and 4 percent vacation pay (unchanged)
  2. After 5 years of service – 3 weeks and 6 percent vacation pay (currently after 6 years)
  3. After 10 years of service – 4 weeks and 8 percent vacation pay (new entitlement)

Holiday Pay: The change eliminates the 30-day service requirement for holiday pay. Also, holiday pay is now calculated as equal to at least 1/20 of the employee's wages (excluding overtime earnings) for the 4-week period immediately preceding the week in which the holiday occurs.

Substitution of General Holidays: An employer is permitted to substitute any other day of work for a general holiday if the substitution has been approved by an employee in writing, or in the case of a substitution that affects more than one employee, by at least 70 percent of the affected employees, or by the employees' trade union.

Continuity of Employment

Deemed Continuity of Employment: There have been changes to the Code provisions that deem employment to be continuous where an employee is employed in connection with a federal work or undertaking. These provisions will now apply to situations in which the transfer has been from a provincially regulated employer to a federally regulated employer. They will also apply in situations where work is being transferred through a retendering process by which a second employer performs services for the federal work carried out by a first employer.

Responding to the Changes After September 1, 2019: What Employers Can Expect

Employers may need to review policies and procedures to reflect changes specific to personal leave days and vacation entitlement.

Personal Leave Days: Federal regulators have supported the view that an employee will be entitled to the full annual personal leave entitlement for what remains of the 2019 calendar year. That means an employee will be entitled to 5 personal days (3 paid) that can be taken between September 1 and December 31, 2019. There is no consideration for the fact that eight months of the year have passed. This may represent an unforeseen cost for an employer that must track new types of leave and paid days based on the new annual maximums. That said, an employer with an existing policy providing paid sick leave or paid personal leave may be able to leverage such plans to avoid the pyramiding of the new days on top of those already provided.

Vacation Entitlements: Federal regulators have advised that an employer must start accruing at the new vacation percentage rates based on length of service on all eligible earnings starting September 1, 2019. For example, the accrual for an employee with greater than 10 years of service must be at least 8 percent for the vacation year, which includes September 1, 2019.

There has been less guidance provided regarding vacation time and many remain puzzled as to whether an extra vacation week is available to a qualifying employee for the current vacation year. We continue to track this issue.

Final Thoughts

It is anticipated that federal regulators will soon update any related publications to reflect these sweeping changes. Guidance and/or interpretation materials relating to these changes are also expected in order to allow federally regulated employers sufficient time to review impacted workplace policies and procedures.

Ogletree Deakins will continue to monitor developments with regard to the Canada Labour Code and will provide updates regarding the implementation of key changes.

Stephen Shore is a partner is the Toronto office of Ogletree Deakins.

Jordan Romano is a 2019 graduate of the University of Western Ontario Faculty of Law and is currently an articling student awaiting admission to the Law Society of Ontario.

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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