Bill C-86 brings major changes

Just as employers in provinces such as Alberta and Ontario have seen major changes to labour laws, federally regulated employers will similarly be impacted with the passage of Bill C-86 in reforming the Canada Labour Code.

The Budget Implementation Act, 2018, No. 2, passed third reading on Dec. 3, 2018, and is an extensive law covering everything from income tax to the criminal code and copyright law. But there is also plenty for federally regulated employers to absorb when it comes to HR-related issues such as scheduling, temporary help agencies, leaves of absence, pay equity and terminations.

The changes are significant, even if there are no major surprises, said Fiona Martyn, an associate at MacLeod Law Firm in Toronto.

“They do change the landscape for federally regulated employers.”

The new rules layer onto what was already a tough regime, according to Matthew Demeo, an associate at McCarthy in Toronto.

“What’s surprising is just the fact that the Canada Labour Code already was probably the most robust employment standards regime in the country in terms of protections granted to employees and restrictions on employers, and so the collective effect of all these changes in Bill C-86 is it now takes the Canada Labour Code well out of step with really any other jurisdiction in Canada.”

Employers should certainly take the time to get up to speed on the extent and breadth of these changes, he said, “and then consider what changes will be required to not only their policies, but also their practices on a day-to-day basis, and how to best implement those.”

Scheduling changes

When it comes to scheduling, Bill C-86 involves a significant overhaul, as employers would be required to provide employees with at least 96 hours’ written notice before implementation of a schedule. And employees would be able to refuse a shift if that notice was not provided, said Demeo.

However, the provision would not apply in the case of emergency, if a collective agreement provides an alternate time frame, or if the changes were requested by the employee.

“The most amount of consideration typically, we find, needs to go into the scheduling provisions because it requires employers to take a careful examination of what they do currently, and then what they may need to do going forward in order to comply,” he said. “And it adds a layer of extra rigidity which may hamper employers’ ability to respond to the changing needs or demands of their business.”

That change is a bit of a surprise, according to Najeeb Hassan, a partner at Roper Greyell in Vancouver.

“What’s really interesting is typically — and you see this in a lot of collective agreements — the remedy for lack of notice is overtime, so if you don’t give an appropriate amount of notice, there are overtime obligations. And… the purpose of that is usually to create a disincentive for abuse, so the employer’s not without thought, constantly changing schedules and creating havoc. This provision provides a remedy to employees so they can refuse the shift without reprisal, which I think is going to be challenging for employers because it’s going to create operational changes where customer needs and demands are such that the work needs to get done, but if the employee refuses a schedule change, that could be problematic.”

Temporary help restrictions

Bill C-86 would also prohibit an employer from paying employees differently for performing the same work on the basis of “employment status,” said Demeo. And temporary help agencies would be barred from paying employees less than what the employer pays its own employees performing the same job.

This approach has given employers some difficulty in the provincial regime, he said, “just having to actually look at everything and determining what actually is substantially similar or not. That certainly will be something that both federally regulated employers and temporary help agencies will need to look at.”

“Having to manage all these different classifications of employees and ensuring compliance will be an extra level of work for employers.”

The changes could put some agencies in a very precarious position, said Hassan.

“They’re prohibited from paying their employees a lower wage rate than a client paying its employees, and so the ultimate customer may choose not to engage if there’s no cost savings. So this is likely to result in an increase in costs to the (employer) that’s going to impact on their business, which could result in less desire to engage temporary help. It may result in the (employer) deciding to work short-staffed instead of bringing in temporary help.”

The changes will be costly for employers because agencies would be prohibited from charging fees for the placement, according to Martyn.

“They’re losing that source of income and then, at the same time, they would be required to pay temporary employees the same rate of pay as permanent employees if they’re performing the same type of work, so it’ll definitely make it more complex and costly for employers. So they’ll probably reconsider whether or not they should use temporary agency workers.”

Leaves, vacations expanded

When it comes to leaves of absence, Bill C-86 would remove the existing service requirement that an employee complete six months of continuous service before being entitled to various leaves, according to Demeo.

In addition, there would be a personal leave of five days — with the first three paid after three months of continuous employment — for issues such as personal illness, health care or care of family members, or education-related responsibilities.

A leave for victims of family violence would remain at 10 days but the first five days would be paid, he said.

And a “medical leave” would replace a sick leave but remain a 17-week entitlement and along with covering personal illness or injury, it would cover organ or tissue donation, or medical appointments during working hours.

The medical leave expands the scope of what would classify as a medical leave, said Demeo.

“It just broadens employees’ eligibility to take this kind of leave, even if it is for things such as organ or tissue donation, more things that could be a reflection of choice rather than an actual requirement for the employee.”

The medical leave broadens the scope of use, and is now available for medical appointments, said Hassan, “which some employers permit; but many employers treat that as unpaid time, or they require employees to make those appointments outside of their work hours.”

The leaves will definitely be challenging for employers to accommodate, especially those that have high turnover rates, said Martyn.

“That will be costly to employers for sure because it’s not only the cost of those paid leave days, but it’s also the cost of replacing the missing staff for those extra leave days that people will be entitled to take.”

With Bill C-86, vacation time and pay entitlements would also be increased so employees with one year of service would receive two weeks’ vacation and four per cent vacation pay; employees with more than five years of service would get three weeks’ vacation and six per cent vacation pay; and employees with more than 10 years of service would get four weeks’ vacation and eight per cent vacation pay.

“Longer-service employees now have entitlement to four weeks... so that’s an additional cost that’s going to be imposed on most employers,” said Hassan.

“The challenge… isn’t necessarily just the imposition of the cost, but there’s been no opportunity to plan for it, so most employers would… have an accrual or bank or something of that nature. So… those employees are now entitled to an additional week of vacation and two per cent pay. Whereas before they would have been capped,” he said.

“(Before), some employers might have provided a benefit of that nature, but they would have planned for it.”

Pay equity requirements

The bill also devotes quite a bit of space to the issue of pay equity.

It would create a federal Pay Equity Act that requires employers to establish pay equity plans, while unionized and large employers would have to establish a pay equity committee. A pay equity commissioner would also be established to administer and enforce the act, and to promote compliance, while an administrative monetary penalty system would be introduced, said Demeo.

“The proactive nature of the changes, it’s going to require employers to actively put regimes and measures in place in order to comply to actually meet the legislative requirements,” he said.

“It’ll definitely require employers to do more in terms of actually meeting the compliance measures set out in the legislation, even if they were, in all effects and purposes, compliant with pay equity prior to Bill C-86.”

The objective of the pay equity plan is to provide men and women with equal pay when they’re performing the same sort of work, said Martyn.

“Within those plans, employers would be expected to identify and evaluate why there may be differences in compensation between male and female jobs of equal value; and then unionized and large employers… would be required to establish a pay equity committee and the committee would need to be composed of at least three members.”

Terminating employment

When it comes to termination of employment, the Canada Labour Code’s two-week notice provision would be replaced with a graduated notice regime that’s more similar to provincial employment standards legislation, said Demeo.

“Redundant employees,” who are part of a group termination, would be entitled to at least eight weeks’ notice.

This shouldn’t be too much of a change since it’s a common standard in other jurisdictions, he said.

“There’s more in terms of compliance at least with respect to group terminations that will need to be done and provided to employees, and a lot more steps will have to be done in advance, well in advance, in order to ensure compliance with the new requirements. But the graduated individual notice system is not something that will throw too many employers off.”

Employees with at least three months of service would have to be given two to eight weeks’ written notice of termination; two to eight weeks’ pay in lieu of notice at their regular rate of wages for their regular hours of work; or a combination of the two, equivalent to at least two to eight weeks depending on length of service, said Martyn.

“It’s not surprising because it is in line with what is happening with provincially regulated employers, but it’s still a big adjustment.”

Bill C-86 also expands on the changes to the adjudication of unjust dismissal complaints that were first implemented in Bill C-44 and provide that such complaints would be referred to the Canada Industrial Relations Board (CIRB) instead of an adjudicator.

“Adjudicators are now going to have the authority to suspend or dismiss a complaint where the complaint is frivolous, vexatious or not made in good faith, or where the substance of the complaint is dealt with in another proceeding, whereas in the past, that authority didn’t exist,” said Hassan.

“That’s a positive change because it ensures that where a complaint really is designed to harass or embarrass an employer, and it’s not really made in good faith, the adjudicator can deal with it upfront.”