Order Fixing February 1, 2024 as the Day on Which Certain Sections of the Budget Implementation Act, 2018, No. 2 Come into Force: SI/2023-17

Canada Gazette, Part II, Volume 157, Number 13

Registration
SI/2023-17 June 21, 2023

BUDGET IMPLEMENTATION ACT, 2018, NO. 2

Order Fixing February 1, 2024 as the Day on Which Certain Sections of the Budget Implementation Act, 2018, No. 2 Come into Force

P.C. 2023-523 June 1, 2023

Her Excellency the Governor General in Council, on the recommendation of the Minister of Labour, under subsection 534(7) of the Budget Implementation Act, 2018, No. 2, chapter 27 of the Statutes of Canada, 2018, fixes February 1, 2024 as the day on which sections 483, 485, and 522 of that Act come into force.

EXPLANATORY NOTE

(This note is not part of the Order.)

Proposal

This Order, pursuant to subsection 534(7) of the Budget Implementation Act, 2018, No. 2 (BIA 2018 No. 2), fixes February 1, 2024, as the date on which sections 483, 485 and 522 of that Act come into force to amend Part III of the Canada Labour Code (the Code).

Objective

The objective of this Order is to fix the date when amendments to the Code come into force to establish a graduated notice of individual termination of employment for employees in federally regulated workplaces.

Background

Part III of the Code establishes basic labour standards (e.g. payment of wages, protected leaves) for persons employed in federal Crown corporations (but not the public service), and federally regulated private-sector industries such as

Other workplaces, which encompass over 90% of the Canadian workforce, are under provincial labour jurisdiction.

Part III of the Code outlines certain obligations employers have when terminating the employment of individuals. Currently, employers must provide a minimum of two weeks’ notice of termination, or two weeks’ pay in lieu of notice, to an employee who has completed at least three months of continuous employment with the employer. The individual termination provisions do not apply where the termination is for just cause. When a group of 50 or more employees have their employment terminated together in what is termed a “group termination of employment,” other rules apply.

BIA 2018 No. 2 introduced a number of amendments to the Code in recognition that the nature of work is changing, and that a modern set of federal labour standards will better protect Canadian workers and help employers recruit and retain employees. BIA 2018 No. 2 received royal assent on December 13, 2018, and included amendments to the individual termination of employment provisions, contained under Division X of Part III of the Code. Amendments to Division IX of Part III, covering group termination of employment, were also contained in BIA 2018 No. 2, but are not part of this Order.

The amendments to the individual termination of employment provisions will require employers to provide individual employees with a graduated notice of termination based on the length of an employee’s continuous employment. For up to three years of employment, the entitlement remains unchanged, requiring two weeks’ notice for employees who have completed at least three months of continuous employment. Once the employee has completed three years of continuous employment, the notice period increases to three weeks. The notice period continues to increase by one week for each additional year of service completed thereafter, up to a maximum of eight weeks. In lieu of notice, employers can provide termination pay equivalent to the wages that the employee would have earned during the notice period, or a combination of notice and pay in lieu.

The amendments will also establish a requirement for employers to provide a statement of benefits to employees whose employment is terminated. This statement must outline an employee’s rights to vacation benefits, wages, severance pay and any other benefits and pay arising from their employment. Since this entitlement already exists for employees included in a group termination, this amendment will equalize the right to a benefits statement for all employees whose employment is terminated.

Implications

As a result of this Order, employees who have completed at least three years of continuous service will be entitled to a longer notice period when their employment is terminated. Alternatively, they will be entitled to additional pay in lieu of notice, or a combination of notice and pay in lieu. Providing workers with longer notice before the end of their employment may reduce the time they spend unemployed by giving them the chance to start searching earlier for a new job. Employees with at least the minimum three months of continuous service, but less than three years, will still have the same two-week notice period.

Providing a graduated notice of individual termination of employment recognizes that the position and wage level of long-serving employees may make it more difficult for them to find an equivalent job after a termination of employment. Long-serving employees may also require retraining or new skills. Providing greater notice, or pay in lieu, will provide more support to employees as they search for new work.

Amendments establishing a graduated notice of individual termination of employment will align federally regulated employees with workers regulated under provincial and territorial labour standards, which all provide employees with a graduated increase in the minimum termination notice period based on their length of service.

The increased benefit for employees will have a cost impact to employers. However, employers concerned with paying higher amounts of termination pay can mitigate their costs by providing notice instead. When terminations of employment are unforeseen and employers cannot provide the full notice period, the new provision allows them the flexibility to give a partial notice period along with some termination pay.

The coming-into-force date of February 1, 2024, will provide stakeholders with a longer notice period to implement the changes to the provisions.

Consultation

These changes were part of a larger package of amendments modernizing federal labour standards that were introduced in BIA 2018 No. 2 and were preceded by extensive consultations that took place between May 2017 and March 2018. Consultation activities included an online forum with over 60 academics and experts, four targeted Ministerial roundtable meetings with stakeholders, and an online public consultation with a survey in which over 3 100 individuals, employers, unions and organizations participated. The Department also received 25 written submissions and 23 personal stories.

In the survey, respondents indicated that the changing nature of work included more insecure and precarious employment. Throughout the consultations, employees expressed concern about loss of employment, and finding comparable employment if they lost their job.

Employee groups recommended that the length of notice should be extended, or that there should be “reasonable notice” before an employee’s employment is terminated based on the total length of their employment. They were also in favour of requiring a benefits statement to inform employees of their rights in writing. Employers and employer groups did not raise any concerns about the length of notice or the requirement for a benefits statement.

While the new individual termination of employment provisions were also discussed during regulatory consultations between June and August of 2019, stakeholders did not raise specific issues with the individual termination amendments.

Contact

Annic Plouffe
Acting Executive Director
Labour Standards and Wage Earner Protection Program
Employment and Social Development Canada — Labour Program
Place du Portage, Phase II, 10th Floor
165 De l’Hôtel-de-Ville Street
Gatineau, Quebec
K1A 0J9
Email: EDSC.DMT.ConsultationNTModernes-ConsultationModernLS.WD.ESDC@labour-travail.gc.ca