As of February 1, 2024, federally regulated employees will benefit from new entitlements upon termination of their employment further to changes to the Canada Labour Code. These changes are important for employers and employees alike to be aware of.
These changes are part of a larger campaign to introduce new regulatory initiatives that will impact federally regulated employers and employees under the Canada Labour Code. Many of these initiatives are still under development and are planned for gradual release through the end of 2025.
Federally Regulated Employees
A federally regulated employee is an employee who works in an industry or workplace which is regulated by the Canada Labour Code. While not an exhaustive list, some federally regulated industries are:
- Air Transportation
- Television and Radio Broadcasting
- Some Crown Corporations
- Some Mining and Processing Industries
- Postal Services
- Port Services and Marine Shipping
- Rail and Road transportation that crosses Provincial or International borders
A Change in Working Notice or Pay in Lieu Thereof
For a federally regulated employee terminated before February 1, 2024, if their employment was terminated without cause, under the Canada Labour Code, all they would be entitled to would be two weeks working notice or pay in lieu of the same, after having employed for at least a three-month period.
However, this will change as of February 1, 2024, when federally regulated employees will be entitled to entitlement to notice or pay in lieu of that increases over years of service, to a maximum of 8 weeks’ notice or pay in lieu, after 8 years of service. These entitlements will not impact any other entitlements under the Canada Labour Code, including statutory severance pay equal to two days pay for each year of completed service.
Written Statement of Benefits
Another change which will impact federally regulated employees who are terminated on or after February 1, 2024, is that they will be entitled to a written statement of benefits which outlines their wages, severance amount, vacation time owed and any other benefit or monies they are entitled to at the time of their termination.
There are specific deadlines within which a federally regulated employer must furnish a written statement of benefits to a terminated employee which are dependent on the circumstances of the termination.
Impact on Employment Contracts of Federally Regulated Employees
These changes to the Canada Labour Code can have significant implications for employers and employees alike. If an employment contract has been entered into prior to the changes that go into effect on February 1, 2024 and there is a termination clause that contains the minimum entitlements under the Canada Labour Code that existed at the time, that clause may become unenforceable after February 1, 2024 as it would fail to meet the legislative minimum standards.
If you are a federally regulated employer seeking advice on litigation avoidance or are a federally regulated employee seeking legal advice on your entitlements after termination and the implications these new changes to the Canada Labour Code have on your employment contract, contact the lawyers at Taylor & Blair LLP today for a consultation.