Small province, big changes

Revamp of P.E.I.’s employment standards legislation could limit employer’s options terminating long-serving employees
By Jeffrey R. Smith
|Canadian HR Reporter|Last Updated: 08/09/2007

Prince Edward Island, concerned that its employment standards legislation is out of step with the rest of Canada, is looking at making some significant changes.

Last year, the province’s employment standards board appointed a review panel — consisting of an employer representative, a labour representative and a chair — that reviewed the existing legislation, looked at other jurisdictions and sought input. In the fall, it handed in a report,

Enhancing Standards in the Island Workplace

, recommending some major changes including:

• reducing the standard work week by four hours (from 48 to 44);

• increasing paid holidays (including making Thanksgiving a statutory holiday) and vacation pay;

• extending parental, compassionate care and bereavement leave;

• easing the qualifications for maternity leave and sick leave;

• allowing employees to bank overtime hours;

• a requirement of eight weeks’ notice for a group termination of 10 or more employees;

• requirement of just cause for suspension or termination of employees working 10 years or more; and

• transfer of service time in the event of a sale of the business.

The report was given to P.E.I.’s Department of Community and Cultural Affairs and Labour for review.

The provisions for expanded leave, group terminations and the requirement of just cause for suspending or dismissing 10-year employees could cause difficulties for some employers if passed into law, notes Murray Murphy, labour and employment lawyer at Stewart McKelvey’s Charlottetown office.

“Expanded leaves will present a challenge for employers to remain competitive,” says Murphy.

Leaves will force employers to manage their workforce more efficiently to ensure they don’t lose productivity, he says. As for group terminations and the requirement of just cause for 10-year employees, this brings a new, large-scale concept to P.E.I.’s mostly small-scale employers.

“P.E.I. doesn’t have a large manufacturing base so there haven’t been large-scale issues like there have been in other provinces,” says Murphy.

But it’s not all bad news for employers on the Island. Some of the recommendations could be beneficial.

“Banking of overtime hours would be beneficial to both the employer and the employee,” says Murphy. “It strikes a balance by giving options to the employee and allowing the employer to be flexible.”

There will also be cost savings to the employer in not having to pay overtime rates when employees choose this option, he says.

Sales of businesses could also be smoother with the automatic transfer of service time in the event an employer is sold, says Murphy.

“It would be much easier to deal with the employment aspects of the sale of businesses,” he says. “There is no previous legislation governing this area, only common law.”

Roy Doucette, the acting director of labour and industrial relations for the province, says it’s difficult to predict which recommendations will make it to legislation but agrees the increased leave provisions would be a challenge for many employers to implement. He points to the provision for extra sick days and family days for 10-year employees, which would be unique from other provinces. However, he agrees some of the report’s recommendations can benefit employers. For example, the provision to allow different minimum wages for different classes of employees could bring savings to certain employers.

Although the recommendations are meant to improve the lot of the P.E.I. workforce, there could still be further improvements from the worker’s point of view, says Carl Purcey, president of the P.E.I. Federation of Labour.

“P.E.I. is last in Canada for employment standards, work hours and holidays,” says Purcey. “So it can’t get any worse.”

However, he has concerns about the minimum wage provision. Having lower minimum wages for certain employees isn’t fair as it creates and enforces a system of classes for employees, says Purcey. He’d rather see the minimum wage be standard across the board as in other provinces. And while the new length of the work week and vacation time are improvements, they are still below what is available in the rest of Canada.

Although the report was published in September 2006, the new government in P.E.I. will have to review it and it’s been opened to further submissions until Aug. 29.

Jeffrey R. Smith is editor of Canadian Employment Law Today, a sister publication to Canadian HR Reporter that looks at employment law from a business perspective. For more information visit www.employmentlawtoday.com.

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