Order Fixing April 1, 2019 as the day on which Certain Provisions of the Act Come into Force: SI/2019-4

Canada Gazette, Part II, Volume 153, Number 4

Registration

SI/2019-4 February 20, 2019

BUDGET IMPLEMENTATION ACT, 2017, NO. 1

Order Fixing April 1, 2019 as the day on which Certain Provisions of the Act Come into Force

P.C. 2019-64 January 31, 2019

Her Excellency the Governor General in Council, on the recommendation of the Minister of Labour, pursuant to subsections 402(5), (6) and (7) of the Budget Implementation Act, 2017, No. 1, chapter 20 of the Statutes of Canada, 2017, fixes April 1, 2019 as the day on which sections 357, 358, 361 and 362, subsections 363(1), (3), (4) and (7), 364(1) and (4), sections 366 and 367, subsection 368(2) and sections 369, 371, 372, 374, 375, 385, 388 and 389 of that Act come into force.

EXPLANATORY NOTE

(This note is not part of the Order.)

Proposal

To fix April 1, 2019, as the day on which sections 357, 358, 361 and 362, subsections 363(1), (3), (4) and (7) and 364(1) and (4), sections 366 and 367, subsection 368(2) and sections 369, 371, 372, 374, 375, 385, 388 and 389 of the Budget Implementation Act, 2017, No. 1 come into force.

Objective

To introduce a number of compliance and enforcement tools under Part III of the Canada Labour Code (the Code).

Background

The Code is an Act of Parliament that regulates industrial relations (Part I), occupational health and safety (Part II), and labour standards (Part III) in industries that fall within federal jurisdiction. The Code applies to employers and employees in federal Crown corporations (e.g. Canada Post Corporation) and federally regulated private sector industries, such as

• international and interprovincial transportation by land and sea, including railways, shipping, trucking and bus operations;
• airports and airlines;
• port operations;
• telecommunications and broadcasting;
• banks; and
• industries declared by Parliament to be for the general advantage of Canada — or of two or more provinces — such as grain handling, and uranium mining.

The provinces and territories have the jurisdiction to enact labour and employment legislation for all other industries that operate within their borders, such as manufacturing firms, restaurants and retail stores, timber and construction companies.

The Budget Implementation Act, 2017, No. 1, which received royal assent in June 2017, introduced a number of amendments to the Code to strengthen compliance and enforcement provisions, create additional incentives to comply, and enhance powers and responsibilities of officials.

Implications

The amendments included in this Order aim to modernize compliance and enforcement measures under the Code by clarifying existing provisions and introducing new tools and administrative procedures to create stronger incentives to comply.

This Order brings into force the following amendments:

• Power to determine wages and other amounts owed based on available evidence
  These amendments give Labour Program inspectors the power to determine wages and other amounts owed to an employee on the basis of available evidence if the employer has failed to keep pay and other records. This will strengthen the legal authority of inspectors to recover employees’ unpaid wages and other amounts to which they are entitled under the Code.
• Order to conduct an internal audit
  These amendments provide the Minister of Labour, or delegated officials, the power to order an employer to conduct an internal audit and to report, within a specified period, whether the employer is in compliance with one or more provisions of Part III and to indicate what steps have been taken to address any instances of non-compliance. This will help monitor compliance in federally regulated workplaces, encourage employers to voluntarily comply if any violations are identified, and help foster employers’ awareness of their labour standard obligations.
• Notice of voluntary compliance
  These amendments provide the authority for inspectors to issue a notice of voluntary compliance where an employer voluntarily pays to an employee amounts found owing by an inspector, without the need to issue a payment order. This will allow the employee to seek a ministerial review of the inspector’s decision if he or she is of the view that additional wages or other amounts are still owed.
• Extension of period that may be covered by a payment order
  These amendments increase the period that may be covered by a payment order, allowing for the recovery of unpaid wages and other amounts due for up to two years before the day on which a complaint was made, an employee’s employment was terminated or an inspection was started.
• Administrative fees on payment orders
  These amendments impose administrative fees on payment orders issued to employers who have failed to pay an employee’s wages or other amounts to which the employee is entitled. The amount of the administrative fee will be equal to the greater of either 15% of the amounts indicated in the payment order, or $200, payable with the other amounts owed.
  An employer who requests a review or an appeal of a payment order will have to pay to the Minister of Labour the administrative fee along with the amount indicated in the payment order. If a payment order is varied on review or appeal, the amount of administrative fees will be adjusted accordingly and any overpayment reimbursed to the employer.
• Security when requesting a review of a payment order
  These amendments give employers and directors of a corporation the option, with the consent of the Minister of Labour or delegated official, to give security, such as a bond or irrevocable letter of credit, in lieu of a monetary amount, when seeking the review of a payment order. Prior to these legislative amendments, an employer was required to pay the full amount of a payment order prior to requesting the review. This measure will give employers and directors of a corporation additional flexibility when seeking to have a review of a payment order.
• Order to debtor of corporate director
  These amendments allow a Labour Program regional director to issue an order to any person indebted to a director of a corporation (e.g. a director’s bank) to pay amounts owing to an employee directly to the Minister. Currently, inspectors have the power to issue payment orders to employers and directors of a corporation. Orders can also be issued by a regional director to any person indebted to an employer (e.g. a bank holding an employer’s accounts) to recover amounts owed to an employee.
• Modernization of service of documents
  These amendments update the language in the Code related to the service of documents to reflect existing postal practices and create regulatory authority to prescribe additional means through which orders and notices may be served.

Some employers will face increased financial and administrative costs and burdens as a result of the overall compliance and enforcement package (primarily due to the addition of administrative fees on payment orders). However, these costs should not affect law-abiding employers. The latter should also benefit from measures that will help ensure that they are not undercut by competitors who fail to comply with the Code’s requirements. Overall, these amendments are aimed at bringing clarity to existing enforcement measures, improving the recovery of unpaid wages, creating efficiencies where possible, and improving compliance.

Consultation

These amendments are the culmination of several rounds of consultations concerning the Code since the publication of the final report of the Federal Labour Standards Review Commission, Fairness at Work: Federal Labour Standards for the 21^st Century, released in 2006. The report highlighted a number of issues, including an overall need to improve compliance through improved enforcement tools and methods. Feedback from subsequent stakeholder consultations has highlighted the need to strengthen the ability of Labour Program inspectors to recover unpaid wages and proactively address compliance issues.

Additional consultations were held in October 2017 to April 2018 with a wide range of stakeholders regarding the coming into force and implementation of the compliance and enforcement amendments to the Code contained in the Budget Implementation Act, 2017, No. 1. Employer and employee representatives, interested individuals and community groups were given the opportunity to submit written comments by email. In-person consultation sessions were also attended by key business and labour organizations, advocacy groups, and academics.

The consultations revealed a consensus among stakeholders on the need to move forward with efforts to improve compliance and enforcement of the Code. Employee and employer representatives were generally supportive of efforts that will promote respect for labour standards and occupational health and safety requirements, improve working conditions and ensure that employees are getting timely payment of their wages. Stakeholders expressed the view that in order for the implementation of these amendments to be effective, there will be a need for the Government to provide detailed guidance to employers, employees and inspectors with respect to their individual responsibilities under the amended legislation.

Departmental contact

Judith Buchanan
Director
Labour Standards and Wage Earner Protection Program
Workplace Directorate
Labour Program
Employment and Social Development Canada
165 De l’Hôtel-de-Ville Street
Place du Portage, Phase II, 10th Floor
Gatineau, Quebec
K1A 0J2
Telephone: 819-654-4362
Fax: 819-997-5151
Email: judith.buchanan@labour-travail.gc.ca