If your company is a federally regulated employer, you need to be aware of changes coming to the Canada Labour Code on February 1, 2024. The recent changes include new termination notice requirements which being the federally regulated sector in line with the provinces.
How do I know if my business is federally regulated?
Most businesses in Canada are regulated by provincial statute. These changes do not apply to provincially regulated businesses. Whether your business is federally regulated depends on the types of goods or services that it provides. The following list is provided by the Federal Government, if your business falls in one of the following categories, it is likely federally regulated:
- air transportation, including airlines, airports, aerodromes and aircraft operations
- banks, including authorized foreign banks
- grain elevators, feed and seed mills, feed warehouses and grain-seed cleaning plants
- First Nations band councils and Indigenous self-governments (certain activities).
- most federal Crown corporations
- port services, marine shipping, ferries, tunnels, canals, bridges, and pipelines (oil and gas) that cross international or provincial borders
- postal and courier services
- radio and television broadcasting
- railways that cross provincial or international borders and some short-line railways
- road transportation services, including trucks and buses, that cross provincial or international borders
- telecommunications, such as, telephone, Internet, telegraph and cable systems
- uranium mining and processing and atomic energy
- any business that is vital, essential or integral to the operation of one of the above activities.
More details can be obtained directly from the Government of Canada by clicking or tapping here.
What are the Canada Labour Code Notice Changes?
Currently the Canada Labour Code has a flat two-week notice period for a termination without cause and the notice period does not increase based on years of service of the employee. As of February 1, 2024, the Canada Labour Code will adopt a system similar to the provinces with a graduated approach based on years of service. The entitlements are as follows for employees with:
- 3 consecutive months of service will be entitled to 2 weeks of notice.
- 3 consecutive years of service will be entitled to 3 weeks of notice.
- 4 consecutive years of service will be entitled to 4 weeks of notice.
- 5 consecutive years of service will be entitled to 5 weeks of notice.
- 6 consecutive years of service will be entitled to 6 weeks of notice.
- 7 consecutive years of service will be entitled to 7 weeks of notice.
- 8 consecutive years of service will be entitled to 8 weeks of notice.
What’s Staying the Same?
Employees covered by the Canada Labour Code are still entitled to the same severance pay, this requirement remains unchanged. Severance pay under the Canada Labour Code must be paid to each employee with 12 consecutive months of service. The amount of severance pay is the greater of:
- 5 days’ wages at regular wage rate; or
- 2 days’ wages for each full year of employment worked before the termination date also calculated at the employee’s regular wage rate.
Requirements related to unjust dismissal also continue to apply. Federally regulated employers should be aware that the Canada Labour Code contains only the minimum standards on termination. Employees may still be entitled to common law termination notice based on the employee’s age, years of service, character of employment, and availability of similar employment.
If you need assistance with employee relations or legal advice in Ontario or anywhere in Canada, or employment law support, or human resources, please do not hesitate to contact Bridge Legal & HR Solutions at (647) 794-5442 or admin@bridgelegalhr.ca.
