Federal employers should take note of changes to federal labour law, including longer termination notice periods and other new measures
The federal government announced that effective February 1, 2024, employees of federal Crown corporations (but not public service employees) and federally regulated private-sector companies will be entitled to longer termination notice periods.1
Section 230 of the Canada Labour Code, R.S.C. (1985), c. L-2 (the “Code”) currently states that an employer who lays off or terminates the employment of an employee who has completed three months of continuous employment with that employer is required to give the employee at least two weeks’ notice in writing (or two weeks’ wages in lieu of the notice), regardless of employment length.
However, amendments to the Code provide for longer notice periods effective February 1, 2024. Here is a comparative look at the changes:
|Minimum notice before February 1, 2024
|Minimum notice after February 1, 2024
|8 years or longer
It should be noted that these changes are distinct from the notice periods applicable to group layoffs2 and unjust dismissal within the meaning of the Code.
The severance pay provision in section 235 of the Code remains unchanged:
An employer who terminates the employment of an employee who has completed twelve consecutive months of continuous employment by the employer shall, except where the termination is by way of dismissal for just cause, pay to the employee the greater of (a) two days wages at the employee’s regular rate of wages for his regular hours of work in respect of each completed year of employment that is within the term of the employee’s continuous employment by the employer, and (b) five days wages at the employee’s regular rate of wages for his regular hours of work.
Moreover, these changes do not exempt the employer from recognizing the rights that employees in Québec may have under an individual employment contract, under a collective agreement or, as applicable, under the “reasonable notice” requirement set out in section 2091 of the Civil Code of Québec.
Mandatory benefit statement
In addition to the foregoing, effective February 1, 2024, federal employers must provide terminated employees with a written benefit statement indicating the following:
- Annual vacation pay;
- Severance pay;
- Other benefits (e.g. vehicle and/or cellphone allowance).
The benefit statement must be issued when employment is terminated if the employee is given pay in lieu of notice or two weeks prior to the effective termination date if the employee is given working notice.
Other changes to laws and related regulations
In addition to changes establishing graduated notice periods and the requirement to provide employees with a benefit statement upon layoff or termination, related laws and regulations stipulate as follows:
- Effective December 15, 2023, under the Canada Occupational Health and Safety Regulations, federal employers are required to provide employees with menstrual products (clean and hygienic tampons and menstrual pads);3
- Effective June 1, 2024, in accordance with the Accessible Canada Act and the Accessible Canada Regulations, employers are required to publish an accessibility plan. It should be noted that employers with more than 99 employees should have already published their plan after June 1, 2023, but will be required to publish an annual progress report effective June 1, 2024;
- Effective September 3, 2024, under the Pay Equity Act and the Pay Equity Regulations, federal employers with 10 employees or more are required to publish a pay equity plan.
In light of the foregoing and prior to February 1, 2024, employment contracts and collective agreements should be revised to reflect these changes and ensure compliance. In addition, employers who plan to lay off or dismiss employees must ensure that the process is well planned and must issue the necessary documentation at the right time.
If you have any questions, feel free to contact a member of our labour and employment law team.
1 Subsection 534(7) of the Budget Implementation Act, 2018, No. 2 (S.C. 2018, c. 27).
2 A group of 50 or more employees are laid off.
3 Section 9.17 of the Canada Occupational Health and Safety Regulations.