Introduction

Employers should be aware of proposed changes which would provide federally regulated employees with new entitlements and corresponding employer obligations relating to leaves, hours of work, pay equity, vacation, termination of employment, reimbursement of work-related expenses, information related to employment, and compliance and enforcement, among other proposed changes.

Bill C-86, the A second Act to implement certain provisions of the budget tabled in Parliament on February 27, 2018 and other measures (the “Proposed Act”) was brought forward for its first reading on October 29, 2018. The Proposed Act is an omnibus bill over 800 pages in length that would amend legislation including the Canada Labour Code (the “CLC”) and the Employment Insurance Act (the “EIA”), and would enact new legislation such as the Pay Equity Act (the “PEA”).

A comprehensive review of the proposed changes along with the new PEA follows below. The proposed changes continue to be debated in the House of Commons and are subject to change. Miller Thomson will continue to monitor the Proposed Act and provide further updates.

New Legislation: the Pay Equity Act

The Proposed Act would require all federally regulated employers with 10 employees or more, including parliamentary employees, to provide men and women employees with equal pay for work performed which is of equal value. This requires employers to establish and maintain a pay equity plan to identify and correct any differences in compensation between men and women employees in predominantly female or male job classes for which work of equal value is performed.

A Pay Equity Commissioner would have the ability to exercise most of the powers and duties relating to administration and enforcement under the PEA. These duties would include annual reporting to Parliament on administration and enforcement, facilitating the resolution of disputes, conducting compliance audits, investigating disputes, objections and complaints, making orders and imposing administrative monetary penalties for violations of the PEA.

Proposed Changes to the Canada Labour Code

Leaves

The Proposed Act would eliminate the minimum length of service requirements for sick leave, maternity leave, parental leave, leave related to critical illness, general holiday pay, and leave related to death or disappearance of a child.

The minimum length of service requirements for reserve force member leaves would also be reduced from six to three months. Reserve force members would be entitled to take a leave of absence to take part in certain activities and operations.

Employees who divided their parental leave would be entitled to an increased amount of aggregate parental leave from 63 to 71 weeks. Similarly, employees who divided their leaves would be entitled to an increased amount of aggregate maternity and parental leave from 78 to 86 weeks.

Employees would also be entitled to take the following new paid and unpaid leaves of absence:

  • five day paid leave for victims of family violence;
  • five day personal leave (three days paid);
  • court or jury duty leave; and
  • medical leave of up to 17 weeks due to:
    • personal illness or injury;
    • organ or tissue donation; or
    • medical appointments during work hours.

Employees continue to accumulate pension, health and disability benefits and seniority during a medical leave. Employers would have to continue to pay the contributions required for employees to accumulate these benefits during the medical leave unless the employees failed to pay their contributions, if any, within a reasonable time.

Hours of Work

The Proposed Act would provide employees with the following new break and rest period entitlements:

  • unpaid break of 30 minutes for every five hours of work;
  • minimum eight-hour rest period between work periods or shifts; and
  • unpaid breaks for breastfeeding, pumping breastmilk or medical reasons

Employers also would have a new obligation, subject to the terms of any relevant collective agreement, to provide employees with at least 96 hours of advance written notice of their work schedule. If such notice was not provided, employees would have a right to refuse this work subject to exceptions. For example, an employee could not refuse this work if the employee needed to work in order to deal with a situation that the employer could not have reasonably foreseen and that presented, or could reasonably be expected to present, an imminent or serious threat.

Minimum Age

The Proposed Act would raise the minimum age for employment from 17 to 18 years of age except in rare circumstances. For example, employees under 18 years of age could only be employed in an industrial establishment under certain conditions prescribed by regulation.

Equal Treatment

The Proposed Act would require employers to provide employees with equal rate of wages if:

  • the employees work in the same industrial establishment;
  • the employees perform substantially the same kind of work;
  • the performance of that work requires substantially the same skill, effort and responsibility; and
  • their work is performed under similar working conditions.

To comply with this new equal rate of wages obligation, employers would increase but could not lower an employee’s rate of wages. Employers would not have to increase an employee’s rate if the difference in rate was due to seniority, merit or the quantity or quality of each employee’s production.

Employees would have the right to request a review of their rate of wages.

Vacation

The Proposed Act would reduce the length of continuous service requirement for three weeks’ paid vacation from six to five years. It would also provide employees with four weeks’ paid vacation after 10 or more years of service.

Transfer and Retendering

The Proposed Act would treat an employee’s length of service as continuous regarding a federal work, undertaking or business if:

  • contract retendering occurred within the federal sector; or
  • the employee’s employment was transferred within the federal sector or from a provincially regulated employer to a federally regulated employer.

Temporary Help Agencies

The Proposed Act would provide temporary help agency employees who perform work in the industrial establishments of their employers’ clients with a rate of wages not less than the rate the client pays to its employee if:

  • they work in the same industrial establishment;
  • they perform substantially the same kind of work;
  • the performance of that work requires substantially the same skill, effort and responsibility; and
  • their work is performed under similar working conditions.

To comply with this new rate of wages obligation, employers could increase but could not lower an employee’s rate. Employers would not have to increase an employee’s rate if the difference in rate was due to seniority, merit or the quantity or quality of each employee’s production.

Employees would have the right to request a review of their rate of wages.

Employers could not charge their employees fees for becoming employees, being assigned work for clients, completing any assignment or job preparation duties or establishing an employment relationship with a client. Employers also could not prevent their employees from establishing an employment relationship with a client and could not charge that client a fee for establishing an employment relationship with the employee if the employee’s first assignment with the client started more than six months before the day the client established the employment relationship with the employee.

Termination of Employment

The Proposed Act would provide employees with at least three months of service with:

  • two to eight weeks’ written notice of termination;
  • two to eight weeks’ pay in lieu of notice at their regular rate of wages for their regular hours of work; or
  • a combination of the two, equivalent to at least two to eight weeks depending on length of service.

The aforementioned entitlements would not apply to employees whose employment was terminated for just cause or as part of a group termination of employment.

For group terminations of 50 or more employees within any four-week period, employers would have to provide either:

  • at least 16 weeks’ written notice of a group termination of employment (before the termination date of the first employee in the group to have their employment terminated) first to the Minister and then immediately to the group employees by providing a copy of this written notice to:
    • the trade union representing the group employees; or
    • unrepresented group employees directly or by posting the notice in a conspicuous place within the industrial establishment where they work.
  • at least 48 hours’ written notice of a group termination of employment, where the employment of all the group employees was terminated on the same day, to the Minister and then to the group employees by providing them with:
    • at least 16 weeks’ pay in lieu of notice; and
    • written notice to the trade union representing the group employees and directly to unrepresented group employees.

In addition, employers would have to provide the group employees with:

  • at least eight weeks’ written notice of termination, pay in lieu of notice, or a combination of the two; and
  • transitional support measures if pay in lieu of notice or a combination of pay in lieu of notice and written notice was provided.

If written notice or a combination of written notice and pay in lieu of notice was provided, employers could not change any term of the group employees’ employment without their written consent and would have to pay them their regular rate of wages for their regular hours of work until their termination date.

Reimbursement of Work-Related Expenses

The Proposed Act would provide employees with reimbursement for reasonable work-related expenses.

Information Related to Employment

The Proposed Act would require employers to:

  • provide their employees within the first 30 days of their employment with a written employment statement as well as materials that the Minister makes available and that contain information respecting employers’ and employees’ rights and obligations;
  • provide employees with their updated employment statement within 30 days after any change was made to it;
  • provide employees with any updated materials within 30 days after they were made available;
  • post and keep posted the updated materials in readily accessible areas where they are likely to be seen by employees;
  • provide terminated employees with the updated materials with respect to termination no later than the termination date;
  • retain a copy of terminated employee employment statements for 36 months after the termination date; and
  • provide copies of terminated employee employment statements upon request.

Compliance and Enforcement

The Proposed Act would amend the various compliance and enforcement processes by, among other things:

  • establishing a new Head of Compliance and Enforcement;
  • broadening the scope of health care practitioners who could issue medical certificates;
  • prescribing the scope of complaints;
  • prescribing the deadlines and extension periods for making complaints;
  • prescribing that no order could be made, process entered into or proceeding taken in court to question, review, prohibit, or restrain the Board’s proceedings; and
  • acknowledging that an order of the Board could be filed and registered in the Federal Court and would have the same force and effect as if it were a judgment obtained in that Court.

Proposed Changes to the Employment Insurance Act

The Proposed Act would increase the amount of parental benefits paid if these benefits are divided between claimants under the EIA from 35 to 40 weeks and from 61 to 69 weeks depending on their election.

Conclusion

The Proposed Act contains extensive amendments to several pieces of legislation including the CLC and the EIA and enacts legislation including the PEA. The Proposed Act received first reading in the House of Commons on October 29, 2018 and debate continued throughout the week.

These changes will not have the force of law until approved by Parliament.