In 2018, the federal government made significant changes to the Canada Labour Code (the "Code") through the Budget Implementation Act, 2018, (the "Act"). These recent amendments specifically impact notice provisions for federally-regulated employees under section 230 (1) and (2) of the Code. Below is a description of the changes made and a brief overview of how federally-regulated employers in Canada will be impacted.
Greater Termination Entitlements and Statement of Entitlements
As of February 1, 2024, the flat two-week notice of termination owed to federally-regulated private sector employees upon termination without cause will be revised as follows:
- Two weeks of notice after three consecutive months of continuous employment;
- Three weeks of notice after three consecutive years of continuous employment;
- Four weeks of notice after four consecutive years of continuous employment;
- Five weeks of notice after five consecutive years of continuous employment;
- Six weeks of notice after six consecutive years of continuous employment;
- Seven weeks of notice after seven consecutive years of continuous employment; and
- Eight weeks of notice after eight consecutive years of continuous employment.
Notice to Trade Union
If an employer is bound by a collective agreement that contains a provision authorizing an employee whose position becomes redundant to be displaced by another employee based on seniority, the employer must give the trade union and the employee being displaced at least the applicable number of weeks' notice set out above in writing.
Rights of Displaced Employee
Additionally, any employee who is displaced and whose employment is terminated is entitled to notice or wages in lieu of notice.
Written Statement of Termination
Once an employee's employment is terminated without cause, the employer is required to provide a written statement disclosing their vacation benefits, wages, severance pay, car allowance, cellphone allowance, and/or any other benefits and pay arising from their employment. Employers are required to give the written statement to employees before the following deadline:
- Employees receiving notice: No later than two weeks before the date of termination;
- Employees receiving wages in lieu of notice: No later than date of termination; and,
- Employees receiving a combination of notice and wages in lieu of notice: No later than two weeks before the date of termination.
The amendments mentioned above are an opportunity for federally-regulated private sector employers in Canada to review their employment agreements and make the necessary changes to ensure that they meet the minimum standard.
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.