Amendments to the Canada Labour Code recently received Royal Asset and will come into force on a date to be fixed by an order of the Governor in Council. These amendments primarily relate to the “minimum employment standards” provisions in Part III of the Code. While the minimum standards remain unchanged for the most part, the way those standards are to be enforced will be significantly altered. These amendments will therefore be of interest to federally regulated employers and their employees.
- Unpaid vacation pay: Employers will be required to pay unpaid vacation pay to an employee within 30 days of termination. Currently the Code does not set a specific deadline for paying unpaid vacation pay.
- Calculating holiday pay: Employers will be required to use a new formula for calculating “holiday pay”. For most employees, holiday pay will be calculated as 1/20th of the wages (excluding overtime) earned by the employee during the four weeks preceding the general holiday. For employees paid at least in part on a commission basis, the calculation will be based on 1/60th of the wages (excluding overtime) earned by the employee during the twelve weeks preceding the general holiday.
- Qualifying for holiday pay: The existing requirement that an employee must work at least 15 of the previous 30 days in order to be entitled to holiday pay will be eliminated. However, an employee will not be entitled to holiday pay during his or her first 30 days of employment, unless the employee actually worked on the holiday, in which case he or she will be entitled to time and a half for the hours worked.
- Limitation periods: The amendments will introduce more certainty with respect to the limitation periods that apply to complaints and payment orders under Part III of the Code. Generally speaking, employees will have six months to bring a complaint regarding unpaid wages or other amounts. In most cases, a payment order made by an inspector will be limited to the 12-month period prior to the date of the complaint or termination. The time limit for payment orders relating to vacation pay will be 24 months.
- Review mechanism: Employers or employees will have access to a new level of review when an inspector makes a payment order or rejects a complaint. The review, which must be applied for within 15 days, will be heard by a referee appointed by the minister. The referee will have the power to confirm, rescind or vary the decision of the inspector.