Amendments to the Canada Labour Code

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The Canada Labour Code (the Code) in the areas of holiday pay, wage-related complaints, the period covered by payment orders, and review mechanisms, these amendments were enacted in December 2012.

These amendments are not industry-specific. Rather, they pertain to all federally-regulated employers. The most substantive amendments are presented in detail below.

1) Holiday Pay

Bill C-45 adds a defined time limit for paying vacation pay to an employee whose employment has terminated. Employers must now pay accrued vacation pay within 30 days of the employee’s termination.

Bill C-45 also simplifies the calculation of holiday pay. “Holiday pay” is now defined by a detailed formula: 1/20th of the regular wages earned in the four weeks prior to the holiday. For employees who earn commissions and have completed at least 12 weeks of employment, holiday pay is defined as 1/60th of the regular wages earned in the 12 weeks before the holiday. The previous requirement that employees work at least 15 days of the previous 30 in order to be entitled to holiday pay has been eliminated. However, the Code now provides for certain exclusions from entitlement to holiday pay, including employees who do not yet have 30 days of service, and employees employed in a continuous operation.

2) Complaints Under Part III

Bill C-45 sets out new timelines for non-unionized employees to make certain complaints under Part III of the Code, and clarifies the circumstances in which an inspector may suspend or reject such complaints.

Employees who remain employed by the employer must now make wage-related complaints within six (6) months from the last day on which the employer was required to pay those wages (claims of unjust dismissal, however, continue to be governed by a 90-day time limit). All other complaints must be made within six (6) months of the day on which the subject-matter of the complaint arose. These new time limits can be extended by the Minister or inspector, on application of party.

The Code also provides a list of circumstances under which an inspector may suspend or reject a complaint. A complaint may be suspended where the inspector is satisfied that the employee must take further, specific measures before the complaint may be dealt with, or where the inspector finds that any one of these circumstances exist:

    • the complaint is not within her/his jurisdiction;
    • the complaint is frivolous, vexatious or made in bad faith;
    • the complaint has been settled;
    • there are other means available to the employee to resolve the subject-matter of the complaint;
    • the subject-matter of the complaint has been adequately dealt with;
    • in a complaint other than a complaint of unpaid wages, there is insufficient evidence to substantiate the complaint; or
    • a collective agreement covers the subject-matter of the complaint and provides a third party dispute resolution process.

A decision to reject a complaint is reviewable by written request to the Minister, and the Minister’s determination is final and binding.

3) Payment Order Periods

Bill C-45 limits the period that may be covered by a payment order. In the case of a successful complaint, the amount of unpaid wages recoverable is limited to 12 months in arrears, and the amount of vacation pay recoverable is limited to 24 months in arrears.

4) Review Mechanism

Bill C-45 amends the Code to provide for a method by which payment orders or orders rejecting a complaint as unfounded may be reviewed by the Minister. The Minister’s ruling is now subject to a right of appeal, as provided for in other, unchanged sections of the Code.

This set of amendments also provides guidelines for procedural matters such as service of documents, content of appeal documents, and time limits for appeal.