Vol. 148, No. 27 — December 31, 2014
SI/2014-106 December 31, 2014
JOBS AND GROWTH ACT, 2012
Order Fixing March 16, 2015 as the Day on which Sections 220 to 222 of the Act Come into Force
P.C. 2014-1450 December 12, 2014
His Excellency the Governor General in Council, on the recommendation of the Minister of Labour, pursuant to subsection 232(2) of the Jobs and Growth Act, 2012, chapter 31 of the Statutes of Canada, 2012, fixes March 16, 2015 as the day on which sections 220 to 222 of that Act come into force.
(This note is not part of the Order.)
The Order fixes March 16, 2015, as the day on which sections 220 to 222 of the Jobs and Growth Act, 2012 come into force.
The objective of the Order is to bring into force amendments to Part III of the Canada Labour Code.
Part III of the Canada Labour Code (the Code) was first enacted in 1965. It establishes minimum working conditions for employees and employers under federal jurisdiction (e.g. banking, telecommunications, and transportation across borders). These standards of employment include provisions on hours of work, minimum wages, general holidays, annual vacations, notice of termination, severance pay, and statutory leave (e.g. maternity, parental, compassionate care, bereavement and sick leave). It also includes provisions designated to assist employees in recovering unpaid wages and seeking recourse in case of unjust dismissal (e.g. investigation, inspection, adjudication, and prosecution).
In order to make compliance with Part III easier and less burdensome for both employers and employees, and to reduce the cost of administering the legislation, Part III of the Code has been updated to include a number of significant amendments. The Jobs and Growth Act, 2012, which received Royal Assent on December 14, 2012, resulted in a number of significant changes to Part III of the Code (the amendments), including those that will come into force on the date fixed by this Order.
Some of the changes that have already come into force include
- Establishment of a time limit to pay vacation pay on termination of employment, which ensures that the employers pay employees any vacation pay owed within 30 days (rather than “forthwith”) after the day on which the employment ends.
- Establishment of a statutory complaint mechanism that allows employees to file complaints in writing to an inspector from the Labour Program of Employment and Social Development Canada if they believe their employer has contravened any provision of Part III of the Code.
- Limits on the period that may be covered by a payment order made by an inspector to compensate amounts owed by an employer or director to an employee were put in place. A payment order will cover wages and other amounts owing for a period starting 12 months (or 24 months for vacation pay) before the date on which the complaint is made, the date on which employment was terminated, or the date on which inspection started (if a payment order results from proactive inspection).
- An administrative review mechanism for payment orders and notices of unfounded complaints was introduced to allow any person affected by an inspector’s payment order or a notice of unfounded complaint to request that the Minister reviews the inspector’s decision.
New amendments that will be brought into force with this Order
Part III provides federally-regulated employees with nine general holidays per year, each of which must normally be remunerated by the employer. However, the current method for calculating holiday pay for general holidays has been found to be unnecessarily complex and difficult to apply. Different formulae are used depending on whether an employee is paid on a monthly, weekly, daily, hourly, or some other basis, (such as by mileage), and whether or not the employee’s hours of work vary from day to day. Criticisms have also been raised that too many part-time workers are excluded from receiving holiday pay because of a requirement that employees must have worked at least 15 of the 30 days preceding the general holiday to qualify.
In order to qualify for holiday pay, employees will be required to have been employed with their employer for at least 30 days. However, employees will no longer be required to have worked at least 15 of the 30 days preceding the holiday to qualify. This will mean that more federally-regulated employees will qualify to receive at least some holiday pay.
To simplify the calculation of holiday pay, a single formula will be used that will apply to nearly all federally-regulated employees regardless of the payment schedule. For each general holiday, an employee shall be paid at least one twentieth of the wages that they earned, excluding overtime, in the four-week period immediately preceding the week in which the general holiday occurs.
An exception to this rule shall be made for employees whose wages are paid in whole or in part on a commission basis and who have worked for their employer for at least 12 weeks. They will instead receive at least one sixtieth of the wages that they earned in the 12-week period immediately preceding the week in which the general holiday occurs, also excluding overtime. The longer period is intended to even out the fluctuations inherent in their income scheme.
The new formula allocates holiday pay in proportion to hours worked, in contrast to the old method, which allowed workers who met a minimum requirement of hours worked to receive a full eight hours’ worth of hourly wages. Many part-time workers, who did not qualify under the old system, will now qualify for holiday pay. However, part-time workers who met the minimum requirement under the old system will now receive less pay for general holidays, which will be in proportion to hours worked. Full-time workers will still receive the same amount: the equivalent of a full day’s pay. There are some employers who may rely heavily on part-time employees who work less than 15 days every 30 calendar days, and those employers will now pay out more for holiday pay. The implementation of a single uniform formula will also simplify the process of determining what each employee receives as holiday pay; however, employers may incur costs to adapt their payroll systems.
The amendments stem from the consultations on Part III that followed the final report of the Federal Labour Standards Review Commission (the Commission), Fairness at Work: Federal Labour Standards for the 21st Century, released in 2006. The Commission made recommendations on a number of issues, including on how to improve on the method of calculating holiday pay. These amendments are in line with the recommendation made by the Commission. A submission to the report sent by one particularly large stakeholder group, the International Longshore and Warehouse Union, specifically requested the annulment of the special exception made in the legislation that determined how holiday pay was calculated for its members, arguing that they were disadvantaged in comparison with other employees within the federal jurisdiction.
In 2009, as part of a review of Part III of the Canada Labour Code, the Government held consultations with a wide range of stakeholders related to many issues, including a detailed proposal of how to update the provisions for holiday pay akin to what is being brought into force with this Order. These consultations were based on the Commission’s recommendations. Interested individuals and community groups were given the opportunity to submit written comments through the Labour Program’s Web site. Key business and labour stakeholders were also consulted, such as the Federally Regulated Employers in Transportation and Communications Organization, the Canadian Bankers Association, the Canadian Federation of Independent Business and the Canadian Labour Congress.
In addition, provincial and territorial labour officials were invited to share their views through the existing federal, provincial and territorial forum, the Canadian Association of Administrators of Labour Legislation. The new provisions are in line with holiday pay provisions of other jurisdictions, namely those of British Columbia, Ontario and Saskatchewan. Several other jurisdictions, such as Alberta, Manitoba and New Brunswick, also use a similar formula to calculate holiday pay.
The consultations revealed a general consensus among stakeholders on the need to move forward with legislation to modernize Part III. These amendments are in line with the government’s goal of making compliance with Part III of the Code easier and less burdensome for employers and employees and reducing the cost of administering the legislation.
Labour Standards and Wage Earner Protection Program
Employment and Social Development Canada
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