Reminder: New Canada Labour Code Termination Entitlements Now In Effect

In past Focus Alerts, we have discussed important changes to the Canada Labour Code (the “Code”), including with respect to termination entitlements. Federally regulated employers who are subject to Part III (Standard Hours, Wages, Vacations and Holidays) of the Code should take note that these particular changes recently came into effect on February 1, 2024. As a result, any termination of employment occurring on or after that date will be subject to the Code’s new requirements.

Interested readers can review our earlier article for detailed information pertaining to the Code’s new termination entitlements. Briefly, however, we would highlight the following:

New graduated notice entitlement:

  • The Code previously required that an individual whose employment was terminated be provided with a minimum of two (2) weeks’ notice of termination or pay in lieu, as long as that individual had completed at least three (3) months of continuous employment. This was the case unless that individual was terminated for just cause or as part of a group termination.
  • Now, however, the Code requires that employers provide such employees with a graduated notice of termination or pay in lieu based entirely on the length of the employee’s continuous employment. As a result, individual notice entitlements under the Code now range from two (2) weeks after at least three (3) months of continuous employment, to eight (8) weeks after eight (8) years or more.
  • It is important to note that these individual notice entitlements are unrelated to and will not alter an employee’s additional entitlement to severance pay pursuant to the Code.

New requirement for statement of benefits:

As of February 1, 2024, the Code now also requires that an individual whose employment is terminated be provided with a statement of benefits outlining their right to vacation benefits, wages, severance pay, and any other benefits and pay arising from their employment. The Code stipulates specific deadlines for the provision of this statement of benefits, depending on whether the employee is given working notice of termination or pay in lieu.

In Our View

If they have not already done so, employers who are subject to the Code’s new provisions should carefully review their employment contracts as soon as possible in order to ensure that any existing termination provisions provide for at least the new minimum required notice of termination. Provisions that do not do so risk being declared unenforceable in the event of litigation, at significant potential risk to the employer.

For more information, please contact Lauren Jamieson at 613-404-5058 or Kecia Podetz at 613-769-6207.

Related Articles

Bill 124 Unconstitutional for Unionized Employees Only, Ontario Court of Appeal Holds

Earlier this week, the Ontario Court of Appeal released its much anticipated decision upholding, in part, the Ontario Superior Court…

Federal Pay Equity Commissioner Allows Establishment of Multiple Pay Equity Plans at NAV CANADA

The federal Pay Equity Act presumes that an employer will establish a single pay equity plan for its employees, but…

New CRA Policy Provides Guidance Regarding the Determination of the Province of Employment for Full-Time Remote Workers

At the beginning of this month (January 1, 2024), a new Canada Revenue Agency (the “CRA”) administrative policy (the “Policy”) came…