As of Jan. 1, the code has more teeth to address concerns of frequent non-compliance
The year 2020 is over and done, and I hope that everyone was able to make the best of the holiday season and enjoy some well-earned down time. At least we didn’t have to deal with the expiry of the IDEL (infectious disease emergency leave) in Ontario.
Readers will be forgiven if their attention has not been on recent amendments to the Canada Labour Code but for federally regulated employers, there are some changes that are important to be aware of. Failing to comply can now be much more costly.
Fines and personal liability
As of Jan. 1, 2021, the code has been given more teeth in order to address concerns of frequent non-compliance. Specifically, employers that violate aspects of Part III (Occupational Health and Safety) or Part IV (Standard Hours, Vacations and Holidays) of the code can be liable for fines of up to $250,000.
Additionally, officers, directors, supervisors and managers can be personally liable for financial penalties if they were part of or complicit in the violation.
Notably, when a violation occurs or continues over several days, each day will be deemed to be a separate violation. As a result, the penalties can add up quickly. Imagine, for example, a scenario where an employee is permitted to work excess hours over two work weeks. That could constitute ten violations.
In addition, the amendments to the code remove the “due diligence” defence, which can often be used in similar situations to avoid liability where an individual exercised due diligence to prevent a violation or reasonably and honestly believed that they were not breaching the code.
The changes to the code also incorporate a reputational risk, as the amendments provide that the names of violators can now be published along with details of the breach.
While this may not seem to be a significant concern at first glance, we see many employers that inadvertently breach employment standards legislation. Whether it is having people “agree” to work more hours than they are allowed, failing to pay vacation pay or holiday pay properly, or providing time off in lieu of overtime pay improperly, there are many ways in which this can happen.
Can you appeal?
There is a right to appeal a notice of violation, and it is important to be aware that the timelines are short. A party found to be in breach can request a review by the Minister of Labour within 30 days. The next avenue available would be an appeal to the Canada Industrial Relations Board, which can be brought within 15 days of the minister’s decision.
The bottom line
The bottom line is that all employers should ensure that they understand and comply with employment standards legislation. Taking that one step further, a fulsome understanding of the legislation can also allow you to act more strategically by taking advantage of lesser-known options such as overtime averaging. Federally regulated employers should now be even more mindful of the requirements of the code, as the potential risks of breaching it just got bigger.