We previously reported on the proposed changes to the Employment Standards Code ("ESC") and the Labour Relations Code following the introduction of Bill 32, Restoring Balance in Alberta's Workplaces Act ("Bill 32").
Bill 32 received royal assent on July 29, 2020 and a majority of the key changes affecting the workplace came into effect on August 15, 2020 and November 1, 2020. This blog is a reminder to Alberta employers that the amendments to the ESC will have an impact on employers' policies and practices, in particular their payroll practices including deductions and the calculation of holiday and vacation pay, as well as to hours of work averaging agreements.
The following changes in the ESC came into effect as of November 1, 2020:
Payroll and Pay Calculations
- Termination Pay
- Upon termination, an employer is able to pay employees their
final pay based on either of the following two periods:
- 10 consecutive days after the end of the pay period in which they were terminated, or
- 31 consecutive days after the last day of employment.
- This change is significant as employers were previously required to pay earnings within 3 days of termination, which caused employers to run costly off-cycle payments.
- Upon termination, an employer is able to pay employees their final pay based on either of the following two periods:
- Employers no longer need to obtain written consent to deduct overpayments due to payroll errors (for overpayments that occurred on or after November 1) or vacation pay provided in advance. While employers are required to provide written notice of the deduction, this change simplifies repayments and alleviates the need to commence costly legal proceedings against employees who refuse to repay overpayments. Employers can only deduct for errors that occurred within 6 months prior to the deduction.
- For overpayments that occurred prior to November 1, 2020, deductions must include a written authorization from the employee as per the previous rules.
- Hours of Work Averaging Arrangements
- Employers and unions may alter employment standards rules for hours of work, notice of work times, days of rest, and overtime hours under hours of work averaging arrangements.
- Employers may unilaterally implement compressed work weeks by providing 2 weeks' notice. This change is a substantial departure from the former requirement, which required employee consent (or majority consent in the case of a HWAA between group of employees and an employer) to enter into an hours of work averaging agreement.
- Arrangements are able to have an averaging period of up to 52 weeks (instead of 12 weeks under the former legislation) and no longer need to have an end date. Additionally, under an hours of work averaging arrangement, employers will only need to calculate overtime based on the average weekly threshold of 44 hours/week rather than the greater of daily and average weekly thresholds.
- Holiday Pay
- Calculation of holiday pay is simplified as employers are no
longer required to include vacation pay or general holiday pay in
calculating average daily wage. Additionally, depending on which
calculation better aligns with an employer's pay cycle, the
average daily wage can be calculated having regard to an
employee's total wages averaged over the number of days they
worked in the:
- Four weeks immediately before the general holiday, or
- Four weeks ending on the last day of the pay period that occurred just before the general holiday.
- Vacation Calculation
- Bill 32 clarifies that time spent on a job-protected leave counts towards length of employment and is used to determine the number of weeks for annual vacation.
- Calculation of holiday pay is simplified as employers are no longer required to include vacation pay or general holiday pay in calculating average daily wage. Additionally, depending on which calculation better aligns with an employer's pay cycle, the average daily wage can be calculated having regard to an employee's total wages averaged over the number of days they worked in the:
The following changes in the ESC came into effect as of August 15, 2020:
Termination and layoffs
- Employers have increased latitude to manage temporary changes to workforce size with the maximum length of layoffs being expanded from 60 to 90 days within a 120 day period. However, this change does not impact temporary changes to the layoff provisions allowing for COVID-19 related layoffs to be up to 180 consecutive days.
- Under the previous rules, employers were required to provide 1-2 weeks advance notice of the layoff (or pay in lieu of notice). Bill 32 removes the requirement to provide advance notice for a temporary layoff. However, the ESC still requires employers to provide notice, which must be in writing, state that it's a temporary layoff notice, state its effective date and include sections 62-64 of the ESC.
- Group termination notice to employees is no longer required but employers must provide individual termination notices to affected employees. Additionally, notice to the Minister of Labour is still required, but in all cases will be 4 weeks instead of the former requirement for up to 16 weeks of notice.
The following key changes to the Labour Relations Code came into effect as of July 29 to September 30, 2020:
- Specific timelines for certification and revocation processes are removed. Instead, such applications must be processed as soon as possible, and generally no later than 6 months after the date of application.
- The Labour Relations Board's ability to issue remedial certification is limited to specified circumstances, such as when there is no other remedy sufficient to counteract the impacts of the employer's misconduct and the true wishes of employees cannot be determined.
- Employers may require the Labour Relations Board orders on illegal strikes and picketing to be filed with the courts, which may assist in enforcement of same.
Complaints (reverse onus)
- If a complaint is made against an employer, the employer will have a reverse onus only when the complaint is about an employee being unfairly terminated.
Collective agreements in Construction Sector
- A collective agreement applying to employees in the construction sector will continue to apply despite a change in union until the collective agreement expires.
Lockouts and Picketing
- The Labour Relations Board will have additional criteria to
determine whether picketing is lawful.
- Unions will need advance permission to picket at locations other than their employer.
- Picketing may be prohibited where it obstructs or impedes a person from crossing a picket line.
- During an illegal strike, the Labour Relations Board may direct the employer to suspend employees' payment of union dues.
The following changes to the Labour Relations Code will come into force on proclamation:
- Collective agreements will be able to be renewed prior to expiry. The Labour Relations Board will oversee this process to make sure an agreement is only renewed early if employees consent.
- Employees will no longer be required to pay union dues associated with certain political activities or other causes, such as general social causes or uses, charities or non-governmental organizations, organizations or groups affiliated with or supportive of a political party. Employees will still be required to pay union dues that are used for core union activities, such as collective bargaining and representing members' interests.
Union Financial Reporting
- Unions will have to provide financial statements to their union members as soon as possible following the end of each fiscal year. Additionally, union members will be able to follow a complaint process to seek relief if their union fails to comply with financial reporting obligations.
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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.