Vol. 148, No. 27 — December 31, 2014
SOR/2014-305 December 12, 2014
CANADA LABOUR CODE
Regulations Amending the Canada Labour Standards Regulations
P.C. 2014-1460 December 12, 2014
His Excellency the Governor General in Council, on the recommendation of the Minister of Labour, pursuant to section 190 (see footnote a), subsection 203(2) (see footnote b) and section 264 (see footnote c) of the Canada Labour Code (see footnote d), makes the annexed Regulations Amending the Canada Labour Standards Regulations.
REGULATIONS AMENDING THE CANADA LABOUR STANDARDS REGULATIONS
1. Subsection 13(3) of the French version of the Canada Labour Standards Regulations (see footnote 1) is replaced by the following:
(3) L’employeur doit donner à chacun de ses employés qui a droit à un congé annuel un préavis d’au moins deux semaines l’informant de la date du début de son congé annuel, à moins qu’ils n’aient déjà convenu d’une date.
2. The portion of section 17 of the Regulations before paragraph (b) is replaced by the following:
17. For the purposes of subsection 210(2) of the Act, the regular rate of wages of an employee whose hours of work differ from day to day or who is paid on a basis other than time shall be
- (a) the average of the employee’s daily earnings exclusive of overtime hours for the 20 days the employee has worked immediately preceding the first day of bereavement leave; or
3. The portion of section 18 of the Regulations before paragraph (a) is replaced by the following:
18. For the purposes of section 197 of the Act, if the hours of work of an employee whose wages are calculated on a daily or hourly basis differ from day to day, or if the employee’s wages are calculated on a basis other than time, the regular rate of wages for a general holiday shall be
4. (1)Subsection 19(2) of the Regulations is replaced by the following:
(2) When an employee of an employer who is a member of a multi-employer unit is entitled to wages for multi-employer employment, the employee is entitled to and shall be paid by the multi-employer unit an amount equal to their basic rate of wages multiplied by one twentieth of the hours, exclusive of overtime hours, that they worked in the four-week period immediately preceding the week in which a general holiday occurs.
(2) Subsection 19(6) of the Regulations is replaced by the following:
(6) For the purposes of paragraph 206(1)(a), subsections 206.1(1), 206.4(2), 206.5(2) and (3), 210(2), 230(1) and 235(1), paragraphs 239(1)(a) and 240(1)(a) and subsection 247.5(1) of the Act, if an employee is engaged in multi-employer employment, that employee is deemed to be continuously employed.
5. Subsection 20(2) of the Regulations is replaced by the following:
(2) The regular hourly rate of wages for the purposes of section 174 and subsections 197(1) and (3) and 205(2) of the Act may be the rate agreed on under a collective agreement that is binding on the employer and the employee.
6. (1)Paragraph 24(2)(h) of the Regulations is replaced by the following:
- (h) with respect to any leave granted to the employee under Division VII of the Act,
- (i) the dates of commencement and termination, and of any interruption, of the leave,
- (ii) a copy of any notice concerning the leave or any interruption of the leave, and
- (iii) a copy of any medical certificate submitted by the employee in respect of the leave or interruption;
(2) Paragraph 24(2)(j) of the English version of the Regulations is replaced by the following:
- (j) when hours of work are averaged under section 6, any notice concerning the averaging of hours of work, details of any reductions in the standard and maximum hours of work made under subsections 6(7), (8) and (9) and the number of hours for which the employee was entitled to be paid at the overtime rate of wages established under section 174 of the Act;
(3) Subsection 24(5) of the Regulations is repealed.
7. Item 5 of Part I of Schedule I to the Regulations is amended by replacing “Port Coquitlam, British Columbia” with the following:
- Port Coquitlam Operation
- Port Coquitlam, British Columbia
8. Part I of Schedule I to the French version of the Regulations is amended by replacing “matériel tracté” and “wagons” with “wagon porte-rails” and “wagons porte-rails”, respectively, in the following provisions:
- (a)item 47;
- (b)item 56; and
- (c)item 70.
9. Item 64 of Part I of Schedule I to the French version of the Regulations is amended by replacing “Siège social du triage” with “Bureau général — Gare de triage”.
10. Part V of Schedule I to the Regulations is repealed.
11. Schedule II to the Regulations is amended by adding the following after “Compassionate care leave”:
Leave related to critical illness
Leave related to death or disappearance
12. Paragraph (i) of Schedule III to the Regulations is repealed.
13. Note 2 of Schedule III to the Regulations is amended by replacing “subsections 170(3) and 172(3)” with “sections 170 and 172”.
COMING INTO FORCE
14. These Regulations come into force on March 16, 2015.
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Regulations.)
The Jobs and Growth Act, 2012 (Bill C-45), which received Royal Assent on December 14, 2012, but has not yet been brought into force in its entirety, amended the Canada Labour Code (the Code). The Code was amended to establish a single general formula for calculating holiday pay for all employees of federally regulated employers, replacing the various formulae that have been used to date.
Additionally, the Helping Families in Need Act (Bill C-44), which also received Royal Assent on December 14, 2012, introduced two new unpaid leaves related to critical illness and death or disappearance. Because these amendments are not yet reflected in the Canada Labour Standards Regulations (the Regulations), there is a potential for confusion due to legislative gaps, outdated references to the Code, and outdated provisions that must be addressed by regulatory amendment.
Lastly, a review of the Regulations by the Standing Joint Committee for the Scrutiny of Regulations (SJCSR) identified a number of issues that have an impact on clarity and consistency of the French and English text of the Regulations.
1. Holiday pay provisions
Part III of the Code sets employment conditions such as hours of work, payment of wages, general holidays, protected leaves, and rights on the termination of employment for employees in industries under federal jurisdiction (e.g. interprovincial and international transportation, chartered banks, and telecommunications).
Division V of Part III of the Code addresses general holidays, of which there are nine per year that, once the qualifying requirement is met, are normally remunerated by the employer. Until now, different formulae have been used to calculate the amount to be paid to an employee for each general holiday depending on whether they are paid on a monthly, weekly, daily, hourly, or some other basis. This system has been criticized as being confusing for employers, specifically when determining which formula applies. Furthermore, to qualify for holiday pay according to the current provisions of the Code, an employee must have worked at least 15 of the 30 days preceding the general holiday. This requirement excludes many part-time workers from being eligible for holiday pay.
Division VI of the Code defines “multi-employer employment” as “employment in any occupation or trade in which, by custom of that occupation or trade, any or all employees would in the usual course of a working month be ordinarily employed by more than one employer,” and was created specifically to cover those working in the longshoring industry. Longshoremen in Canada typically work for “multi-employer units,” large amalgamations of a number of different companies that characteristically have a centralized payroll system. Division VI further grants the regulation-making authority to modify the provisions contained in other divisions of the Code to ensure that, as far as practicable, these employees are entitled to the same rights and benefits as other employees of federally regulated employers. Subsection 19(2) of the Regulations delineates a special formula for determining the holiday pay for employees of multi-employer units, and subsection 19(3) provides another formula for workers classified as having multi-employer employment but working for a company that is not part of a multi-employer unit. Longshoremen’s unions have long voiced that these provisions are, in practice, disadvantageous and have called for them to be amended to be more equitable with the general holiday provisions extended to other employees covered by Part III of the Code.
The Jobs and Growth Act, 2012 declared that employees of federally regulated employers would receive holiday pay under a single, common formula. When this amendment comes into force, for each general holiday, employees shall be paid holiday pay equal to one twentieth of the wages that they earned, excluding overtime pay, in the four-week period immediately preceding the week in which the general holiday occurs. Employees paid on commission will receive one sixtieth of the wages they earned, excluding overtime pay, over a 12-week period to reflect the fact that their wages can fluctuate greatly. In other words, all employees will receive holiday pay in proportion to the number of hours they worked leading up to the general holiday. Furthermore, the requirement that employees work at least 15 days in the 30 days preceding the general holiday will be removed, which will allow many part-time workers to qualify for holiday pay. To qualify for holiday pay employees will continue to be required to have been employed by their employer for at least 30 days.
2. Unpaid leave related to critical illness and leave related to death or disappearance
Division VII of the Code outlines the preconditions and prescribed limits for some unpaid leaves of absence. This division contains provisions for maternity leave, parental leave, and compassionate care leave. Recently, the Helping Families in Need Act amended the Code and included two new unpaid leaves: leave related to critical illness and leave related to death or disappearance. The new provisions, which have already come into force, allow for the parents of a child who is critically ill to take up to 37 weeks of leave to care for their child; the parents of a child who has disappeared and it is probable that the child disappeared as a result of a crime, up to 52 weeks of leave; and the parents of a child who has died as the result of a probable crime, up to 104 weeks of leave. The leaves can be shared between both parents, who may choose to use the leave simultaneously or consecutively. Parents also have the right to interrupt their maternity or parental leave and take one of the two new leaves of absence when circumstances allow, resuming their maternity or parental leave following the interruptions.
The objective of this proposal is to ensure consistency between the Code and the Regulations with respect to the new holiday pay formula and the two new leaves of absence, and to address a number of issues identified by the SJCSR.
As a consequence of the amendments to the Code made by the Jobs and Growth Act, 2012, the following amendments will be made to the Regulations:
- Since the definition of “regular rate of wages” contained in section 17 is no longer required for the calculation of holiday pay contained in section 196 of the Code, reference to subsections 196(2) and 196(3) of the Code will be removed from section 17.
- Section 18, which defines “regular rate of wages” for the purpose of determining wages earned when working on a holiday, where the hours of work of an employee whose wages are calculated on a daily or hourly basis differ from day to day, or where the employee’s wages are calculated on the basis other than time, will be amended to refer to the appropriate section of the Code as amended by the Jobs and Growth Act, 2012.
- Subsection 19(2), which contains the provisions for holiday pay pertaining to employees holding multi-employer employment, as explained above, will be amended to allow these workers to receive holiday pay in a way that is similar to that of other employees in federally regulated industries.
- Subsection 20(2), which defines “regular hourly rate of wages” for various purposes, will also be amended to refer to the appropriate sections of the Code as amended by the Jobs and Growth Act, 2012.
- Schedule III (the Notice of Modified Work Schedule), paragraph (i) will be repealed to reflect the fact that the revised provisions of the Code do not provide for exceptions to the holiday pay nor do they require a count of the number of days for which an employee was entitled to wages in the 30 days preceding the holiday, as the case was before.
To accommodate the amendments to the Code introduced by the Helping Families in Need Act, the following changes will be made to the Regulations:
- Subsection 19(6) of the Regulations will be amended to ensure employees engaged in multi-employer employment are covered by the new leaves: leave related to critical illness and leave related to death or disappearance. As maternity and parental leaves can be interrupted by the leaves related to critical illness and death or disappearance, paragraph 24(2)(h) of the Regulations needs to be amended to include the keeping of records pertaining to any period of leave and/or interruption granted under Division VII of the Code.
- Leave related to critical illness and leave related to death or disappearance need to be added to Schedule II (Notice Related to the Canada Labour Code — Part III).
Finally, several amendments to the Regulations will be made based on the comments submitted by the SJCSR:
- Changes will be made so that the English and French versions are more consistent with each other in subsection 13(3) and in Schedule I, Part I.
- Paragraph 24(2)(j), which contains record-keeping provisions that pertain to the calculation of averaged hours of work, will be amended to appropriately refer to section 174 of the Code, which pertains to overtime pay.
- Subsection 24(5), which provides for the confidentiality of medical records of an employee, will be repealed, as this provision has been made redundant by the Personal Information Protection and Electronic Documents Act.
- Schedule I, Part V, will be repealed as Canadian Airlines has not been in operation since its acquisition by Air Canada in 2000.
- Schedule III, Note 2, will be amended to refer to the relevant regulatory provisions.
Once the amendments to the Code come into force, the single, overarching formula for calculating holiday pay will come into effect. Removing the supplementary method in the Regulations for calculating holiday pay for employees whose hours of work differ from day to day, or who are paid on a basis other than time, will therefore result in a reduction in time spent calculating holiday pay. The “One-for-One” Rule applies and results in a reduction of annualized costs (an “OUT”) of $955,027, (see footnote 2) or $111 per affected employer.
Following consultations, the Labour Program assumes that only smaller businesses (see footnote 3) would benefit from the repeal of these Regulations, given that larger businesses generally have automated payroll systems to perform this calculation. The repeal of these Regulations would reduce the time a payroll clerk working for a small business would spend identifying employees whose holiday pay would be calculated as per the existing Regulations, and subsequently calculating the holiday pay owed to them.
Of 10 246 federally regulated small employers, the Labour Program estimates that 84% (8 607 employers) are in industries that have employees whose holiday pay would have been calculated as per the Regulations that are being repealed (air transportation, rail transportation, road transportation, and broadcasting and telecommunications, as well as miscellaneous employers). The Labour Program assumes that each affected small-sized employer would spend 12 minutes less per biweekly pay period (26 per year) to perform this calculation. It also assumes that these calculations would be performed by clerical staff with a wage rate (including overhead) of $25.30 per hour.
These assumptions were presented during consultations with a number of employer associations whose members range from large to small employers. These include the Federally Regulated Employers – Transportation and Communication, the Canadian Airports Council, the Canadian Payroll Association, the Canadian Trucking Alliance, and the Canadian Bankers’ Association. The larger employers confirmed that the repeal of these Regulations has minimal impact on their business. The Labour Program did not receive any contradicting feedback from smaller employers, who are primarily affected by the repeal of these Regulations.
Small business lens
The small business lens does not apply, as the total cost of the proposal is less than $1M and small businesses are not disproportionately impacted.
The idea of simplifying the holiday pay calculation was initially raised in a 2006 report by the Federal Labour Standards Review Commission (the Commission) [Fairness at Work: Federal Labour Standards for the 21st Century], which recommended a method comparable to what has been introduced in the Jobs and Growth Act, 2012. The Commission based this recommendation on Quebec legislation, where the same pro-rated formula had been established and met with favourable results. Stakeholders had been invited to make submissions for the report, and one group, the International Longshore and Warehouse Union, specifically denounced the special rules set out for the payment of holiday pay to employees holding multi-employer employment provided in section 19 of the Regulations. This criticism is being directly addressed by this proposal, which offers the group holiday pay equivalent to what is offered to other employees through the Code.
Small scale consultations with stakeholders were also held during an Occupational Health and Safety Committee meeting in November 2013. The amendments as introduced in the Jobs and Growth Act, 2012 were presented, and at that time, stakeholders asked that they be given adequate time between the final publication of the amendments in the Canada Gazette and the coming into force date of the amendments to the Code. As a result, all federally regulated employers will be given until March 2015 to update their payroll systems in preparation for the new holiday pay formula. Further conversations were also held with the Federally Regulated Employers – Transportation and Communications (FETCO), which has confirmed that all their members, including multi-employment employers in the longshoring industry, have been made aware of the amendments to the Code.
In October 2014, several associations representing industries within the federal jurisdiction that employ workers paid by commission, or on some basis other than time, were contacted and invited to provide feedback in order to estimate how the modifications to the Regulations might affect their costs. Although it was indicated that employers would incur costs to bring their payroll systems up to date, the effect on their ongoing costs would not be substantial. These associations included FETCO, the Canadian Bankers’ Association, the Canadian Airports Council, the Canadian Trucking Alliance, the National Airlines Council of Canada, the Canadian Payroll Association, the Canadian National Railway, and the Canadian Pacific Railway. The response reaffirmed that the stakeholders’ main concern was about being given adequate notice of the coming into force date of the amendments for the purpose of updating their payroll systems. They were reassured that the changes would not come into force until March 2015.
The Jobs and Growth Act, 2012 introduced a single, overarching method for determining holiday pay in order to reduce confusion and keep this benefit equitable for all employees within the federal jurisdiction. With this proposal, the Regulations will be brought in line with the Code by updating references and removing an unnecessary exception to the general formula for employees whose hours of work differ from day to day or who are paid on a basis other than time. Due to the special nature of their wages, an exception will remain for employees in the longshoring industry, but the formula will be modified to closely resemble the general formula. This proposal is expected to result in an annualized reduction in costs for businesses of $955,027.
The Helping Families in Need Act introduced new rights to take leaves of absence. This proposal amends the language of the Regulations to clearly align them with the amendments already made to the Code and accommodate the new leaves of absence.
The miscellaneous amendments addressing the recommendations of the SJCSR will improve the clarity and technical accuracy of the Regulations while removing redundancy.
Implementation, enforcement and service standards
Stakeholders affected by these changes requested a window of time between the date of official publication of the order in council enabling the relevant sections of the Jobs and Growth Act, 2012 (and the associated Regulations pertaining to the new holiday pay provisions), and the date of their coming into force, which is planned for March 2015. They have been assured a suitable notice period to update their payroll systems to provide holiday pay in accordance with the new method of calculation.
A communication initiative will be undertaken by the Labour Program to inform the stakeholders of the upcoming changes to holiday pay practices. Labour Program officers will be trained to provide assistance to the employers as required.
Labour Standards and Wage Earner Protection Program
Employment and Social Development Canada
Place du Portage, Phase II, 10th Floor
165 De l’Hôtel-de-Ville Street
- Footnote a
S.C. 1993, c. 42, s. 20
- Footnote b
R.S., c. 9 (1st Supp.), s. 9
- Footnote c
S.C. 2012, c. 31, s. 229
- Footnote d
R.S., c. L-2
- Footnote 1
C.R.C., ch. 986
- Footnote 2
A forecasted impact time period of 10 years beginning in the year the OUT will be repealed, and calculated at a 7% discount rate.
- Footnote 3
Businesses with fewer than 100 employees.