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Charlie Herrera Vacaflor, Employment Law & HR Content Senior Consultant
(Last updated )
Charlie Herrera Vacaflor, Employment Law & HR Content Senior Consultant
(Last updated )
Recent amendments to the Canada Labour Code (CLC) introduced changes that directly affect the employment of federally regulated employees. The new mandates require employers to provide certain notice, statement, reimbursement, and entitlements to their staff when it comes to employment and termination.
Currently, several changes are already in effect since July 9, 2023. These involve federally regulated employers’ obligation to provide employees a written statement of employment, reimbursement for reasonable work-related expenses, and information regarding employers’ and employees’ rights.
Other significant changes involving termination rules will come into effect on February 1, 2024. Employers in federally regulated industries must be aware of these amendments and ensure their workplace policies are aligned with the latest updates.
Federally regulated employees in Canada are those who work in industries that fall under federal jurisdiction, rather than provincial or territorial laws. These industries are governed by federal laws, including the CLC.
Employees in federally regulated industries include:
Starting July 9, 2023, federally regulated employers are required to give employees a written employment statement. For existing employees, this must be done within 90 days of the effective date, while new hires must receive their statement in the initial 30 days of employment. If there are changes to the employment relationship, an updated statement must be provided within 30 days.
The new written employment statements must include:
Employers must retain copies of any employment statement for 36 months after an employee’s employment ends. Employers that fail to comply with the written statement requirements may face penalties ranging from $200 to $2,000.00.
Federally regulated employees now have the right to claim reimbursement for "reasonable work-related expenses." Employers are obligated to reimburse these expenses within 30 days of the employee submitting the claim.
To ensure fair reimbursement practices, employers should consider the following factors to determine if the submitted claim is a work-related or reasonable expense:
Work-related expense criteria:
Reasonable expense criteria:
Depending on business size, employers failing to meet the reimbursement obligation may face penalties ranging from $500 to $6,000.
Federally regulated employers now carry the responsibility of ensuring their employees are informed about their rights and obligations under the CLC. Here’s a breakdown of what employers need to know:
Employers must provide employees with copies of materials published by Canada's Minister of Labour about their rights and obligations under the CLC. These materials must be given within 90 days starting on July 9, 2023, or upon the initial publication by the Minister of Labour.
New employees must receive these materials within 30 days of starting their employment. For outgoing employees, employers must provide current materials from the Minister of Labour that relate to termination rights.
Failure to comply may result in penalties ranging from $200 to $2,000. The penalty amount is determined based on the size of the business.
Under the current amendments, termination notice periods for termination without cause or pay in lieu will change to:
Here is a breakdown of when you should provide notice based on the employee’s length of employment:
Employee’s additional entitlements to severance pay remain unchanged. If an employee has completed 12 consecutive months of continuous employment, they are entitled to severance pay, along with termination notice or pay in lieu. Severance pay is in the amount of:
Starting February 1, 2024, federally regulated employers must provide a written statement to terminated employees, detailing their vacation benefits, wages, severance pay, and any other employment-related benefits or pay as of the statement date. Employers must give the statement to:
Review and update your offer of employment and employment contract templates. Employers must keep these documents in line with the amendments and stay compliant with the changes.
Existing employment contracts must have an enforceable termination clause. Specifically, a termination clause that states that the employee is entitled to two weeks of notice upon termination will no longer be enforceable. This means employees are entitled to a reasonable notice of termination based on the current guidelines of the CLC.
Employees with less than 12 months of service (but more than three months) won’t receive greater entitlements under the amended section 230 of the CLC. The entitlement remains at 2 weeks of notice or pay in lieu.
Group terminations remain unchanged for employers managing 50 or more employees. In such cases, employees are still entitled to 16 weeks of notice, surpassing the new statutory minimums.
For managerial employees who have contractually agreed to greater termination benefits, these agreements take precedence over the new notice entitlements.
Our HR experts can help ensure your employment policies, documentation, and contracts are aligned with the latest regulatory changes. Whether it’s employment termination, calculating severance pay and entitlements, or 24/7 HR advice, we got you covered. Call today at 1 (833) 247-3652 to find out more.
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