Feds want to modernize labour standards

'As workplaces evolve, so too must labour standards': Minister

Labour standards changes may be on the way for federally regulated private-sector employers and their workers.

The federal government recently released a report on consultations it held last year and earlier this year on ways to update Part III of the Canada Labour Code to better reflect today’s work environment.

“It’s clear that ever-increasing global competition, rapid technological changes and socio-demographic shifts are fundamentally altering the way businesses operate and the way Canadians work,” said Employment Minister Patty Hajdu in a news release.

“As workplaces evolve, so too must the labour standards in those workplaces.”

Part III covers about 900,000 employees working for approximately 18,310 employers in industries such as banking, telecommunications and broadcasting, and international and inter-provincial transportation.

While the code only applies to federally regulated workplaces, changes to federal legislation can influence provincial governments to make similar amendments to their laws.

The report is based on responses from an online survey of the general public, as well as roundtable discussions and written submissions from various stakeholders, including employers, unions, academics, and labour policy experts.

It covers a variety of payroll-related topics, including leaves, vacation, hours of work, terminations, wages and benefits, and non-standard employment.

The report highlights differences in opinion among those consulted. While labour groups felt that federal labour standards should meet or exceed provincial/territorial standards, employer representatives said the government should make the standards more flexible to help businesses stay competitive and adapt to industry changes.

Some of the highlights include the following points:

Leaves: The report did not include proposals for additional leaves of absence; it focused on whether there should be paid leaves and how long employees should have to work for employers to qualify for leaves.

Labour advocates recommended that the government remove length-of-service requirements for leaves related to tragic events, sick leave, and maternity and parental leave.

Sixty-nine per cent of respondents answering the government’s online survey question about leaves said there should be no length-of-service requirement for leaves related to tragic events.

In contrast, employer representatives mostly argued for continued eligibility periods, saying that since leaves can be costly, they should be based on employee loyalty. They also noted that many employers provide leaves exceeding the code’s minimums.

There was also support for paid personal leave days among labour groups, experts, and survey respondents. Labour representatives generally called for seven to 10 days of paid personal leave per year, while 77 per cent of survey respondents said employees should have at least five paid days of leave a year.

Vacation: Labour groups suggested reducing the eligibility period for vacation, currently 12 months of employment. Among survey respondents, the most frequently selected eligibility period was six months.

Many of those consulted also wanted the government to reduce the eligibility period for the third week of vacation, which employees receive after six years of service. Sixty-one per cent of survey respondents said three weeks should be available after three years.

Hours of work: The report stated that there was unanimous agreement that the code’s hours of work and scheduling rules needed to be updated, but worker and employer representatives disagreed on how to do it. For instance, workers’ advocates suggested that employers be required to give employees advance notice of their work schedule, while employer groups called for more flexibility.

Meal breaks were also considered during consultations. The code does not require employers to provide employees with meal breaks; however, 91 per cent of survey respondents said employees should receive a 30-minute meal break for shifts that last at least five hours.

Terminations: Workers’ advocates recommended longer notice periods for individual terminations, with the amount of notice increasing the longer an employee works for an employer. This is common in many provinces’ labour standards laws.

Some labour advocates also recommended increasing severance pay entitlements to one week per year of service. Current severance pay requirements call for the greater of two days’ wages at regular rate for each completed year of employment or five days’ wages at regular rate.

For group terminations (50 or more workers in a four-week period), employer representatives said the current 16-week notice requirement is too long. They suggested eliminating it or having it apply only when a much higher number of workers are affected.

Minimum wage: About three-quarters (76 per cent) of respondents said there should be a separate federal minimum wage rate, with most suggesting it be at least $15 and indexed to inflation.

In contrast, employer groups recommended continuing with the current practice of using the minimum wage rate that applies in the province/territory in which federally regulated workers are employed. They said this made sense because the cost of living and labour market conditions vary from jurisdiction to jurisdiction.

Benefits: While consultation participants agreed that benefits were an important job feature, they had differing views on them, especially around the idea of portable benefits, which would allow employees to keep their benefits even if they changed employers.

Among survey respondents, 37 per cent agreed with portable benefits and 49 per cent did not.

Some employer groups also opposed the idea, with one organization saying that compensation packages are an important recruitment and retention tool that should be left up to employers and employees to work out.

They added that portable benefits would not make sense for all workers since many temporary and part-time employees choose to work this way so that they do not have to pay into a benefit plan.

There was also a suggestion from an employer group that Ottawa set up a government-sponsored benefits bank to provide a minimum set of benefits for independent contractors.

There were also calls from some labour representatives for amendments to the code to require equal treatment when it comes to benefits for temporary and part-time employees doing the same work as their full-time counterparts. 

Non-standard employment: The consultations also examined issues that workers in non-standard employment face, including those working part-time, in temporary work, and dependent contractors (those who may rely on one business for work, but who are not employees).

“We heard regularly during the consultations that, as the nature of work changes, many workers are not being hired as traditional employees and as a result are missing out on some of the protections provided by statutory labour standards,” the report said.

“For example, research shows that temporary and part-time employees may not be paid the same wages as their full-time counterparts and may have difficulty qualifying for certain entitlements and protections.”

Workers’ advocates called for the government to add equal wage protection to the code to ensure that employers pay part-time, casual, and temporary workers the same as their full-time employees when they do the same job.

Labour groups also raised concerns that some employers are intentionally misclassifying workers as independent contractors. They suggested that the code make misclassification an offence and that in the event of a dispute, it be up to employers to prove that a worker is an independent contractor and not an employee. 

Other issues discussed included the need for a broader definition of the term “employee” to include dependent contractors and for stronger successor rights to ensure workers do not lose seniority entitlements when their employer changes due to contract retendering.

While the report did not indicate which suggestions the government would adopt, Hajdu said there were some areas where it could quickly make changes and others that would need more study.

She did not specify which amendments could occur right away, but said there would have to be more research on issues such as non-standard employment, minimum wage and benefits.


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