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Changes to the Canada Labour Code
The Canada Labour Code, RSC 1985, c L-2 (the “Code”) applies to federally regulated employers in Canada. The following changes to Part III of the Code addressing Standard Hours, Wages, Vacations and Holidays came into effect on April 1, 2014:
New Complaint Mechanism
Prior to April 1, 2014, there was no formal complaint mechanism for filing a complaint in relation to unpaid wages or other amounts owing. There also was no formal complaint mechanism for filing a complaint in relation to other labour standard violations (other than a complaint of unjust dismissal).
There now exists a formal complaint mechanism for these complaints. The time limit for an employee to file a complaint under Part III of the Code has been limited to six (6) months. The time limit is calculated as follows:
- For a complaint relating to unpaid wages or other amounts owing – six (6) months from the last date on which the employer was required to pay the wages or other amounts.
- For a complaint of other labour standard violations – six (6) months from the date on which the subject matter of the complaint arose.
Note: the time limit for filing an unjust dismissal complaint (ninety days) remains unchanged.
Labour Program inspectors are now able to assist the parties in settling complaints. Inspectors may reject a complaint if it is frivolous, is outside the Labour Program’s jurisdiction, or can be resolved by other means.
Payment orders for wages, or other amounts, are limited to twelve (12) months from the date the complaint was made, or twelve (12) months from the date of termination, whichever is longer.
Payment orders for vacation pay are limited to twenty-four (24) months from the date the complaint was made, or twenty-four (24) months from the date of termination, whichever is longer.
Administrative Review Mechanism
There is now an internal administrative review process for an inspector’s decision.
- An employer who receives a payment order or an employee whose complaint is ruled “unfounded” can, within fifteen (15) days of receiving the notification, request that the Minister review the inspector’s decision. The Minister may confirm, amend or overturn the inspector’s decision.
- An employee who receives notification that his or her claim of unjust dismissal has been rejected can, within fifteen (15) days of receiving the notification, request that the Minister review the inspector’s decision. The Minister may confirm, amend or overturn the inspector’s decision.
What this Means for Employers
The changes to Part III of the Code limit the amount that is recoverable to an employee. The changes also introduce new time limits that should simplify the complaint process. The changes also eliminate the possibility of an order going back several years to when an employee was first hired. The changes should bring about greater efficiency to the complaints process and limit the quantum of employer liability in relation to a complaint.