Labour Code Changes – Deemed Continuous Employment & Temporary Help Agencies

This is the second post in our series addressing important amendments to the Canada Labour Code (the “Code”) as a result of Bill C-86 receiving royal assent. These changes will affect federally regulated employers.

In our first post, we discussed Upcoming Amendments to the Employment Leave Provisions, including changes to medical leave, personal leave, family violence leave, leave for court or jury duty, leave for pregnant or nursing women, and paternity/maternity leave.

In this post, we discuss changes to when employment will be deemed continuous after a sale or transfer, as well as changes affecting temporary help agencies.

Deeming Employment Continuous

Currently, the Code provides that employment is deemed continuous when a business merges with or is sold, leased or transferred to a new employer.

Effective September 1, 2019, Bill C-86 will expand the continuous employment provisions in the Code.

As part of this expansion, employment will be considered continuous where a provincially regulated work, undertaking or business becomes a federally regulated work, undertaking or business due to the transfer.

Additionally, continuation of employment will apply when a contract is awarded from one employer to another employer as a result of a retendering process. Employment will be deemed continuous where the contract retendering occurred within the federal sector or from a provincially regulated employer to a federally regulated employer.

This provision will be particularly important for those bidding to take over work on federal undertakings, as the successful bidder may inherit the employees and related employment liabilities from the previous employer.

Temporary Agency Provisions

Temporary help agencies that send employees to perform work at clients’ facilities will be subject to a number of new provisions in the Code.

Temporary help agencies will be prohibited from paying their employees less than what their clients’ employees who perform the same jobs receive.

There is an exception where there are objective reasons to justify a different wage rate, such as seniority, merit and productivity levels. Temp agency employees will also have the right to request a review of their wages, and the temporary help agency will be required to respond.

In addition, the Code will expressly prohibit actions that deter or prevent a temp agency employee from becoming an employee of one of the agency’s clients.

Temporary help agencies are also prohibited from charging employees fees for becoming employees of a client, being assigned work for clients, completing any assignment or job preparation duties or establishing an employment relationship with a client.

An effective date has not yet been provided for the temporary agency amendments.

Our team of labour and employment lawyers can answer questions and help your organization prepare for the upcoming changes to the Canada Labour Code.

Note: This article is of a general nature only and is not exhaustive of all possible legal rights or remedies. In addition, laws may change over time and should be interpreted only in the context of particular circumstances such that these materials are not intended to be relied upon or taken as legal advice or opinion. Readers should consult a legal professional for specific advice in any particular situation.