Labour Code Changes – Termination

Published: February 21, 2019

Categories: Labour & Employment

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Author: Tom Richards

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

This post is part of a series of insights discussing the highlights of these amendments. Read the three previous posts:

In this installment we will cover some important changes to employer obligations as they relate to the termination of employees.

Notice Periods

The Bill modifies notice period entitlements for individual employees who are terminated without cause. It does this by introducing a new graduated notice system that is based on the number of consecutive months of an employee’s continuous employment:

Minimum Consecutive Months of Employment Notice Period
3 Months of Consecutive Employment 2 Weeks’ Notice
3 Years of Consecutive Employment 3 Weeks’ Notice
4 Years of Consecutive Employment 4 Weeks’ Notice
5 Years of Consecutive Employment 5 Weeks’ Notice
6 Years of Consecutive Employment 6 Weeks’ Notice
7 Years of Consecutive Employment 7 Weeks’ Notice
8 Years of Consecutive Employment 8 Weeks’ Notice

A terminated employee is also entitled to receive a statement of benefits in writing that sets out his or her vacation benefits, wages, severance pay and any other benefits and pay arising from his or her employment with the employer.

These changes come into effect on a day to be fixed by order of the Governor in Council.

Group Terminations

Generally speaking, the Code holds that a group termination occurs whenever 50 or more employees are terminated at a particular establishment within any four-week period.

The Bill changes an employer’s obligations when undertaking a group termination of “redundant employees.” A redundant employee is an employee who is terminated in a group termination. In order to facilitate a group termination, an employer is required to satisfy one of two options.

  1. First, an employer can elect to provide at least 16 weeks’ written notice of a group termination to the Minister, and then immediately to the employees or their union, as applicable.
  2. Second, if the employer chooses to provide the employees with at least 16 weeks’ pay in lieu of notice, the employer can elect to provide a minimum of 48 hours’ written notice of a group termination to the Minister and union or employees, as applicable.

Regardless of which of these two options the employer uses, in addition to the 16 weeks of notice or pay in lieu, an employer must also provide redundant employees with a combination of an additional 8 weeks’ written notice, pay in lieu or a combination thereof.

An employer must provide the redundant employee with transitional support services if it opts to use pay in lieu to fulfil a portion of that notice period.

A redundant employee is also entitled to receive a statement of benefits in writing that sets out his or her vacation benefits, wages, severance pay and any other benefits and pay arising from his or her employment with the employer.

These changes come into effect on a day to be fixed by order of the Governor in Council, but not earlier than September 1, 2019.

Unjust Dismissal

The Bill also expands the powers available to the Canada Industrial Relations Board (“CIRB”) in handling a complaint of unjust dismissal.

These powers create new mechanisms for summary dismissal of complaints before or at the CIRB. The practical effect of these mechanisms is further empowering the CIRB to dismiss complaints that are without merit.

An Inspector will gain the power to deem a complaint as withdrawn if, upon giving instructions to a complainant to refer a matter to the CIRB, the complainant fails to do so.

The Bill provides the CIRB with the power to suspend a complaint if it believes that the complainant must take additional measures before the Board can properly deal with it.

Additionally, the CIRB has the power to reject a complaint in whole or in part if it is satisfied that:

  • The complaint is not within its jurisdiction;
  • The complaint is frivolous, vexatious or not made in good faith;
  • The complaint has been settled in writing between the employer and the complainant;
  • There are other means available to the complainant to resolve the subject matter of the complaint that the Board considers should be pursued; or
  • The subject matter of the complaint has been adequately dealt with through recourse obtained before a court, tribunal, arbitrator or adjudicator.

These changes come into effect on a day to be fixed by order of the Governor in Council, but not earlier than September 1, 2019.

Summary

Many of the Bill’s amendments do not have a specified date upon which they come into effect. However, federally regulated employers should be mindful of these amendments and ensure their termination policies reflect these changes.

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.