Federal Government releases report on consultations to modernize Canada Labour Code

The Canada Labour Code (“Code”) minimum standards for wages, hours of work, and other general working conditions, were established in the 1960s at a time when standard employment (i.e. full-time employment with decent wages and benefits) was the norm.  For the most part, these standards have remained unchanged notwithstanding the dramatic rise in non-standard employment since the 1970s.  Non-standard employment includes temporary and part-time work, usually without benefits, and is characterized as being low income, unstable, and precarious. Given this context, the federal government (Employment and Social Development Canada) conducted a ten-month consultation period with a broad range of stakeholders, to discuss how to modernize the Code to better address these realities and the challenges that employees face.

The consultations focused on the following policy areas:

  • improving access to leaves and annual vacation;
  • further supporting work-life balance;
  • better protecting employees in non-standard employment;
  • updating termination of employment provisions; and
  • good wages and benefits.

In terms of improving access to leaves and annual vacations, the key area of discussion was whether and how to adjust the length of time a worker must be employed before being able to access the various statutory leaves and vacation entitlements.  Although the physical and mental benefits associated with leaves and vacations were agreed to by the various stakeholders, employer groups pointed out that they are costly and access should be based on time-demonstrated loyalty of the employee.

The discussions around work-life balance focused on paid personal leave, whether employees should get breaks, how many hours employees should be off work each day and whether employees should have the “right to disconnect” (i.e. to not check or respond to work e-mails outside of work hours).  The right to disconnect has been a subject of discussion since France legislated the right in 2016.  The policy rationale for the right to disconnect is generally based on concerns about unpaid overtime, and employee burnout.

As can be expected, employer and labour groups were largely divided on the issue.  The report noted that employer groups were clear that it is a well-established labour relations principle that determining job duties is a fundamental management right.  These groups were able to further point out that the workplace has evolved, and many employees no longer work the traditional 9-5 work day.   The report stated:

While 93% of respondents stated that employees should have the right to refuse to respond to work-related communication outside of working hours, we heard strong arguments that any attempt to establish such a right in legislation would go too far.

The consultation report remained vague on whether the right to disconnect would be the subject of future regulation, only stating, “Based on what we heard, issues such as the right to disconnect … could merit further study.”

In terms of protections for workers in non-standard employment, the consultations focused on the disparity in wages between full-time workers and temporary, casual, seasonal or part-time workers doing the same job, the misclassification of employees as self-employed or independent contractors, contract retendering issues and worker voice.  Although no commitments were made, the report did discuss the notion of mandating equal pay regardless of employment status (i.e. temporary, part-time or full-time), and making misclassification an offence with a presumption of “employee status”.

What the government may do to update the termination provisions in the Code is also uncertain.  Labour groups recommended increasing the notice of termination requirements by replacing the current standard of two weeks’ notice of termination for any employee with at least three months of continuous employment with the same employer, with “reasonable notice” based on the total length of employment.  Labour groups also recommended increasing the severance pay requirements from two days’ pay for each complete year of service to one week per year of service.  For both notice of termination and severance pay, labour groups recommended that the total length of employment should include recurring periods of employment with the same employer.

Employer groups seemed to focus on the group termination provisions of the Code and expressed concern that 16 weeks is too long. The consultation report notes that there were suggestions to remove the 16-week notice period requirement, however, at least one labour group stated that the 16-week notice period was appropriate since the adjustment period may be more difficult for group layoffs. There was also a recommendation to introduce a requirement that a dismissed employee be informed of their rights in writing.

Labour and employer groups were split in terms of how eligibility requirements for the unjust dismissal regime should be adjusted. Employer groups noted that in increasingly complex workplaces, it takes a significant amount of time to train an employee before the employee’s aptitude can be assessed.  Their view was that the 12-month eligibility requirement should be extended, with one employer suggesting between two and five years.

Labour groups noted that the 12-month eligibility period leaves shorter-term employees with no protection from unjust dismissal, as the cost of making an unjust dismissal claim in court is prohibitive. These groups suggested reducing the 12-month period to 3 months.

This divergence between employer and labour groups was also demonstrated in the report’s discussion of wages and benefits. Some of the policies briefly discussed in the report include a federal minimum wage and a federal benefit bank for independent contractors.  The government was fairly non-committal on these policies only stating that they could merit further consideration.

The full report on the consultations can be accessed at the following: https://www.canada.ca/en/employment-social-development/services/labour-standards/reports/modernizing-federal-standards.html


In our view

The report states that Part III of the Code applies to approximately 904,000 employees and over 18,000 employers.  As a result, any amendments will have a significant impact to a considerable portion of Canada’s workforce, and to federally-regulated employers.  At this stage, it is difficult to ascertain what may be included in future legislation. However, the government has committed to ensuring a modern and robust labour standard regime.  Employers under federal jurisdiction should be aware that changes will be coming. We will continue to keep Focus readers informed of any future developments.

For further information please contact Jacques A. Emond at 613-940-2730 or Steven P. Williams at 613-940-2737.

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