Canada Labour Code challenging

Most employers more generous than minimum: Survey

About 10 per cent of the Canadian workforce is federally regulated, while 90 per cent fall under provincial laws, but there seems to be a common misperception among employers that provincial employment standards legislation overrides Canada Labour Code (CLC) legislation, says Annie Chong, manager of the payroll consulting group at Carswell, a Thomson Reuters business (and publisher of Canadian HR Reporter).

“Some employers out there actually will compare the two pieces of legislation and determine whichever is the greater is what (they’re) going to follow,” she says. “That, of course, would be incorrect. In fact, your employees are covered under the CLC or the provincial employment standards.”

The CLC covers all federally regulated employees, no matter what province, and if an employer is unsure, it should submit a query to the CLC for a specific ruling, says Chong.

More than one-third (35.8 per cent) of Canadian organizations are legislated both by provincial or territorial employment standards and federal labour standards, according to a survey of 87 webinar participants by the Canadian Payroll Association (CPA) and Carswell.

That means a payroll professional has a real job to do in balancing the requirements of provincial legislation with federal legislation, says Steven Van Alstine, vice-president of compliance programs and services at the CPA.

That challenge is exacerbated when 36.3 per cent of employers operate in five or more provincial or territorial jurisdictions and 45.7 per cent operate under a collective agreement (with 13.8 per cent operating under five or more agreements).

However, most employers provide better than the minimum requirements of the CLC, according to the survey.

“You can always do better but not less than the legislation,” says Chong.

Seventy-nine per cent offer more than the nine legislated statutory holidays, 85 per cent pay more than the two weeks of vacation required for one year of employment and the three weeks after six years, and 30 per cent pay more than the required two weeks’ wages in lieu of notice (though 44 per cent don’t).

“A lot of employers out there probably do way better than the minimum requirement because two weeks and the severance calculation, as you can see, doesn’t amount to a lot of money in the event of a termination and termination today is probably not as easy as it used to be,” says Chong.

In addition, 67 per cent of the respondents say they provide for banking of overtime — “quite a significant number,” says Van Alstine.

In 2006, the federal government began consultations on possible ways to modernize the CLC. While it published a discussion paper in 2009 — with suggestions around hours of work, taking time off in lieu of overtime, increasing rest periods from 24 to 32 consecutive hours and increasing vacation entitlement for long-serving employees — there has been very little activity since, says Chong.

Canada labour code

3 most challenging areas of the code

When it comes to Canada Labour Code legislation, the three most challenging areas to administer are termination (38.3 per cent), statutory holidays (28.4 per cent) and leaves (12.3 per cent), according to a survey of 87 webinar participants by the Canadian Payroll Association and the payroll consulting group at Carswell, a Thomson Reuters business.

Termination of employment

There are three categories: individual termination, group termination and layoffs. When an employee is told his services are no longer required, he must receive working notice or be paid an amount equal to wages in lieu of notice. No notice is required if the employee has worked there for less than three months but if he has, it should be two weeks’ notice, in writing and served in person or by registered mail.

A group termination occurs when 50 or more employees are terminated in any four-week period. They must receive two weeks’ notice and the employer must give 16 weeks’ notice and provide a copy of the notice of the termination to the Minister of Labour, Minister of Human Resources and Social Development Canada and Canada Employment Insurance Commission, along with any trade union or union affected. However, employers do not have to provide notice to seasonally employed workers or people who can elect to work or not when requested.

Severance pay is a payment over and above the pay in lieu of notice. Employees are entitled to severance pay after 12 months of continuous employment with the same employer. The pay is the greater of five days regular pay, excluding overtime, or two days’ wages, excluding overtime for each full year of service.

Statutory holidays

There are nine recognized statutory holidays but certain conditions must be met for employees to be paid for these holidays. They must have been employed for at least 30 days and earned wages for 15 of the 30 calendar days immediately preceding the holiday. Part-time employees also qualify even if they didn’t work the 15 days.

When the holiday falls on a regularly scheduled workday and employees work that day, they must receive either regular daily wages plus one-and-a-half times the regular pay or regular rates for hours worked and have another day off with pay. If the holiday occurs on a regular workday and is not worked, employees are entitled to regular daily wages. If the wages vary, they are entitled to an average of the daily wage, not including overtime, for the 20 days worked immediately before the holiday. If the holiday falls on a non-working day, entitled employees are given another day off with pay at a mutually agreed upon time. When worked by non-entitled employees, they receive one-and-a-half times the regular rate for hours worked.

Employee leave

Vacation leave: An employee who has completed one full year of employment is entitled to two weeks, to be taken within 10 months of entitlement. That will increase to three weeks after six years with the same employer.

Vacation pay is calculated as a percentage, four or six, based on the gross wages an employee earned during the year. Gross wages equal vacationable earnings, regular salary, overtime pay, commissions, work-related bonuses, previous vacation pay and statutory holiday pay.

Bereavement leave: Employees are entitled to bereavement leave on any of their normal working days that fall during the three days immediately following the date of the death. So if a death occurs on a Friday and the worker’s regular days off are Saturday and Sunday, the leave only applies to the following Monday. The three days are provided with pay only if the employee completed three consecutive months of continuous employment.

Compassionate care leave: This is an unpaid leave of absence up to eight weeks to care for or support a family member where a medical practitioner has stated in writing a family member is gravely ill with a serious condition and has a significant risk of death within 26 weeks.

Maternity/pregnancy leave: Maternity leave is given to employees with six consecutive months of employment at the same employer. It equals 17 weeks without pay and can start up to 11 weeks before the expectant date and finish 17 weeks after the delivery date.

“An employer cannot force a pregnant employee to take a leave unless (it) can demonstrate the employee is unable to perform the essential duties of her job,” says Annie Chong, manager of the payroll consulting group at Carswell.

Parental leave: Parental leave is 37 weeks unpaid and available to employees who have or will have care and custody of a newborn child or newly adopted child and who have completed six consecutive months with the same employer. The employee must provide four weeks’ notice and indicate the length of leave requested.

For both leaves, the employee must be reinstated in the same position or a similar position, with the same benefits and wages. Employers cannot dismiss, suspend, demote, discipline or lay off an employee for being on maternity leave.

Sick/work-related illness or injury leave: Employees who have completed three consecutive months of employment are entitled to this leave for up to 12 unpaid weeks. The employee must provide a medical certificate within 15 days after returning to work, if requested, and employers are required to continue health, pension and disability benefits while he’s on the leave. An employer cannot penalize a person for taking this leave.

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