Attention all Federal Employers! Changes to Canada Labour Code Are In Effect
There are important amendments that have been made to the Canada Labour Code (“Code”) that all federally regulated employers need to take note of. As of July 9, 2023, federally regulated employers must now:
- Provide written statements to employees;
- Reimburse reasonable work-related expenses; and
- Provide employees with materials regarding their rights.
Failure to adhere to these new obligations may lead to monetary penalties. More information about these changes is outlined below.
1. Employment Statements
Federally regulated employers must now provide written statements to employees containing the following information regarding their employment:
- The names of the parties to the employment relationship;
- The employee’s job title and a brief description of their duties;
- The address of the ordinary place of work;
- The employee’s start date;
- The term of employment;
- The duration of the probationary period (if any);
- A description of the necessary qualifications for the position;
- A description of any required training for the position;
- The employee’s work hours (including information on the calculation of those hours and rules regarding overtime);
- The employee’s wage rate (or salary) and overtime rate;
- The frequency of pay days and payment of any other remuneration;
- Any mandatory deductions from wages; and
- Information about how the employee can claim reimbursement of reasonable work-related expenses.
These statements must be provided to employees within the first 30 days of their employment (or in the case of employees who are already employed as of July 9, 2023, by October 7, 2023).
Where changes are made to the above-noted terms, statements must be provided within 30 days of the change.
Employers are required to provide additional copies of these statements, upon request. These statements should be retained by the employer for at least 36 months after employment ends.[1]
2. Expense Reimbursement
Federally regulated employers are now also required to reimburse employees for their reasonable work-related expenses. This obligation applies to expenses incurred on or after July 9, 2023. Reimbursement must be provided to the employee within 30 days after the employee submits a claim for payment.
While the Code does not define what “reasonable work-related expenses” are, the Canada Labour Standards Regulations (“Regulations”) do set out a number of factors to consider when determining whether expenses are “reasonable” and “work-related”.
The following factors go into the determination of whether or not an expense is “work-related”:
- Whether the expense is connected to the employee’s performance of work;
- Whether the expense enables an employee to perform work;
- Whether incurring the expense is required by the employer as a condition of employment;
- Whether the expense satisfies a requirement for the employee’s work imposed by an occupational health or safety standard; and
- Whether the expense is incurred for a legitimate business purpose and not for personal use or enjoyment.
The following factors ought to be considered when determining whether or not an expense is “reasonable”:
- Whether the expense is connected to the employee’s performance of work;
- Whether the expense is incurred to enable an employee to perform work;
- Whether it is incurred at the request of the employer;
- Whether any amount of expense is incurred beyond the amount necessary to enable the performance of the work;
- Whether the expense is one that is normally reimbursed by employers in similar industries;
- Whether the employer authorized the expense in advance;
- Whether the expense is incurred by the employee in good faith; and
- Whether the claim includes documentation, such as a receipt or invoice, that indicates that the expense was incurred.
Where such expenses are ineligible for reimbursement under either the Regulations, a collective agreement, or a written agreement between the employer and employee, then reimbursement is not required under the Code.[2]
3. Disclosure of Rights and Obligations under the Code
Federally regulated employers are also required to provide employees with any materials the Ministry of Labour makes regarding an employer and employee’s rights and obligations under Part III of the Code. This information must be posted in a readily accessible place and provided to employees no later than the later of:
- The day in which the Ministry makes these materials available;
- October 7, 2023; or
- 30 days after an employee starts work.
In addition, upon termination, the employer must provide materials about terminations to the employee no later than their last day of work.[3]
Upcoming Changes to the Canada Labour Code
In addition to the above, there are two amendments to the Code that are scheduled to come into force in the coming months:
1. Termination Notice/Pay
Effective February 1, 2024, federally regulated employers will have greater obligations under the Code upon an employee’s termination. Specifically, they will be required to provide employees with the following notice of termination or pay:
| Length of Continuous Employment | Notice Period |
| 3 months + | 2 weeks |
| 3 years | 3 weeks |
| 4 years | 4 weeks |
| 5 years | 5 weeks |
| 6 years | 6 weeks |
| 7 years | 7 weeks |
| 8 years + | 8 weeks[4] |
Employers must also provide terminated employees with a written statement setting out their wages, severance pay, vacation benefits, and any other pay and benefits arising from their employment. This statement must be provided to the employee no later than:
- Two weeks before their termination date (if the employee is being provided notice of termination);
- The termination date (if pay in lieu of notice is being provided); and
- As soon as possible but no later than two weeks before termination (if a combination of notice and pay in lieu is being provided).[5]
2. Menstrual Products
As of December 15, 2023, federally regulated employers will be required to provide menstrual products, including clean and hygienic tampons and menstrual pads, in each washroom (or in another location in the workplace, if it’s not feasible to provide in the washroom). Employers are also required to provide a covered container for the disposal of such products.[6]
Takeaways
It is important for federally regulated employers to update their employment contracts and practices to ensure they are compliant with these changes to the Code. Otherwise, employment contracts that provide less than these standards could be considered legally unenforceable and void.
In addition, expense reimbursement policies and practices must also be amended to ensure reasonable work-related expenses are provided.
If you’re a federally regulated employer and have questions or require assistance, contact a lawyer at Turnpenney Milne LLP today.
[1] Section 253.2 of the Canada Labour Code, RSC 1985, c L-2 (“Code”); section 3.1 of Canada Labour Standards Regulations, CRC, c 986 (“Regulations”).
[2] Section 238.1(1) of the Code and sections 23.1(1) and 23.1(2) of the Regulations.
[3] Section 253.1 of the Code.
[4] Note that these changes do not affect an employer’s obligation under the Code to provide severance pay. Section 235 of the Code still requires employers to provide employees who have completed 12 consecutive months of continuous employment the greater of: two days’ wages for each completed year of service, and five days’ wages. There are exemptions to the obligations to provide termination notice and severance pay. For advice about your specific case, please consult with Turnpenney Milne LLP.
[5] Section 485 of the Budget Implementation Act, 2018, No. 2 (S.C. 2018, c. 27).
[6] Regulations Amending Certain Regulations Made Under the Canada Labour Code (Menstrual Products): SOR/2023-78.