Policy initiatives augur a busy year for Canadian lawmakers, employers

Lawmakers busy with compassionate care leave, pension reform
By Sari Sanders
|Canadian HR Reporter|Last Updated: 05/21/2004

Canadian legislatures finished 2003 with a flurry of activity, but have mostly been quiet in the first few months of the year. Hard at work, however, were policy-makers, who have been producing a number of proposals and drafts for commentary.

A few themes, before we look at jurisdictional developments:

Compassionate care leave

Employment Insurance (EI) rules have been amended to allow employees, as of Jan. 4, to claim benefits for up to six weeks to take time off to care for a dying family member. Provinces are expected to amend labour laws to offer job protection to workers taking the EI leave, but not all have complied.

Alberta and British Columbia are holding out against the concept. Quebec and Saskatchewan already have compassionate care leave provisions. New Brunswick, Prince Edward Island, Nova Scotia, Manitoba, Nunavut and Yukon have all adopted compassionate care leave laws that harmonize with the new EI benefit. And Ontario is planning a compassionate care leave law for this spring.

Since its introduction, the compassionate care leave benefits program was expanded to include those caring for dying family members in other countries. The EI regulations have also been amended to provide for supplemental unemployment benefit plans (“Sub Plans”) in the case of compassionate care leaves. The amendments allow employers to supplement or “top up” the earnings of an employee taking a compassionate care leave, without the extra payments being treated as “earnings” to be subject to EI premiums or to be deducted from EI benefits.

Pension reform

There have been a lot of policy initiatives going on in pension reform.

Manitoba:

Last fall, the Manitoba Pension Commission released recommendations for reforms to the province’s Pension Benefits Act. Some of the proposed changes include: minimum standards, pension plan eligibility and membership, ancillary benefits, vesting, entitlement to pension benefits, the 50 per-cent rule, joint and survivor pensions, pre-retirement death benefits, portability, locking-in, shortened life expectancy, phased early retirement, flexible pension plans, multi-unit employer pension plans, unlocking for non-residents, pension committees, division of pension benefits, entitlement to surpluses, tests for solvency, and pension plan investments and loans. Comments on the recommendations were due at the end of March.

Alberta:

Alberta Finance released two discussion papers on proposed changes to the Employment Pension Plans Act, and received comments up to Jan. 31, 2004. Proposals include improved accountability to plan members, simpler and more flexible division of pension benefits upon marriage breakdown, and changes to the locking-in provisions of the Employment Pension Plans Regulation, which was last changed in May 2003.

CAPSA:

The Canadian Association of Pension Supervisory Authorities (CAPSA), has proposed a model pension law which it hopes would be adopted throughout Canada, therefore leading to simpler and more uniform pension standards. The model law is based on current best practices and legislative standards. Consultations on the model law are continuing through June 30, 2004.

CIA:

The Canadian Institute of Actuaries (CIA) has changed the rules for commuted pension values. The commuted value is the lump sum amount that actuaries use to cash out an individual’s pension entitlement upon death or termination of employment. The new rules, which do not apply to valuations upon marriage breakdown, will become effective on Sept. 1, 2004. Plan sponsors may see increased volatility in the value of individual pensions from month to month, as well as increased funding volatility for the plan. The changes will require plan sponsors to update all forms and administrative systems that rely on annuity tables. Plan sponsors will also need to consider the implications for funding valuations on or after Sept. 1, 2004.

Here are some other measures that have been introduced or completed at the provincial level.

Alberta

Bill 44, the Personal Information Protection Act (PIPA), came into force on Jan. 1, 2004. The new Act limits the personal information private-sector companies can collect to only what is necessary for conducting transactions with employees and customers. Companies must inform employees and customers how the collected information will be used, and individual consent must be obtained before disclosing personal information to another party.

Manitoba

The Manitoba government has introduced Bill 21, the Non-Smokers Health Protection Amendment Act, which would make Manitoba the first province in Canada to adopt a province-wide smoking ban. The ban would take effect on Oct. 1, 2004. The legislation will apply to enclosed public places and indoor workplaces. The goal is to drastically reduce exposure to second-hand smoke. Consultations continue with the hospitality industry, which has expressed serious concerns about the bill.

Nova Scotia

Effective Oct. 30, 2003, Nova Scotia’s overtime wage rate changed from 1.5 times the minimum wage to 1.5 times the employee’s regular wage, for hours over 48 hours in a week. Further amendments effective Dec. 12, 2003 sought to ameliorate the effects of that change. The work week for the construction industry was set at 55 hours, instead of 48, and some industries were given permission to average hours over a two-week period. The regulations also reinstate pre-existing exemptions for professionals, managers and supervisors.

Ontario

The Financial Services Commission of Ontario (FSCO) has announced a new policy toward applications for transfers of pension assets upon a sale or merger of a business.

Until the Supreme Court of Canada disposes of the appeal in

Aegon Canada Inc. and Transamerica Life Canada v. ING Canada Inc.

, the superintendent will treat the Ontario Court of Appeal’s decision as binding. Consequently, consent to a transfer of assets upon sale or merger will be considered if:

•none of the pension plans involved is subject to a trust; or

•all of the pension plans involved are defined contribution plans with no defined benefit liabilities of any kind; or

•the applicant can show that the

Aegon

decision does not otherwise apply.

Prince Edward Island

Bill 47, An Act to Amend the Employment Standards Act, was proclaimed in force as of Jan. 1, 2004. It was given royal assent back in May 2003. The act adds a definition of employees’ “extended family” and “immediate family,” and clarifies the circumstances under which bereavement leave may be taken. The act also adds Remembrance Day to the list of paid public holidays, as well as new unpaid three-day family leave periods and unpaid three-day sick leave periods for employees with at least six months’ service. Termination notice was increased to six weeks for employees with 10 to 15 years of continuous employment, and eight weeks for employees with more than 15 years’ service.

Quebec

A ban on all psychological harassment in the workplace will come into force on June 1. Under the Labour Standards Act, “psychological harassment” is defined as “any vexatious behaviour in the form of repeated and hostile or unwanted conduct, verbal comments, actions or gestures, that affects an employee’s dignity or psychological or physical integrity and that results in a harmful work environment for the employee.” It can also consist of a single incident that has a lasting harmful effect on the victim. Employers must “take reasonable action to prevent psychological harassment and, whenever they become aware of such behaviour, to put a stop to it.” (For more on Quebec's initiative, see the "Related Articles" link below.)

Sari Sanders is a lawyer and the head of Hewitt Canada’s research group. She may be contacted at (416) 225-5001 or sari.sanders@hewitt.com. HR Rulebook appears quarterly in Canadian HR Reporter.

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