Federal Post
Reminder: Significant Amendments to the Termination Provisions of the Canada Labour Code Are Coming Into Effect on February 1, 2024
Date: November 28, 2023
Amendments to the Canada Labour Code (Code) which come into effect on February 1, 2024 will require employers to provide individual employees with a graduated notice of termination based on their consecutive years of continuous employment. The amendments will also require employers to provide individual employees with a statement of benefits upon termination. These Code amendments were enacted by the Budget Implementation Act, 2018, No. 2 (see our previous FTR Now Federal Government Proposes Significant Workplace Law Reforms).
The current termination provisions in the Code provide for two weeks’ notice of termination or wages in lieu of notice.
The incoming amendments will enact a graduated notice system similar to that used under provincial employment standards legislation. An employee will be entitled to the following notice or wages in lieu of notice at the employee’s regular rate of wages (or a combination of both notice and wages in lieu):
- two weeks’ notice, if the employee has at least three consecutive months of continuous employment
- three weeks’ notice, if the employee has at least three consecutive years of continuous employment
- four weeks’ notice, if the employee has at least four consecutive years of continuous employment
- five weeks’ notice, if the employee has at least five consecutive years of continuous employment
- six weeks’ notice, if the employee has at least six consecutive years of continuous employment
- seven weeks’ notice, if the employee has at least seven consecutive years of continuous employment
- eight weeks’ notice, if the employee has at least eight consecutive years of continuous employment
The new termination provisions will not apply to employees whose employment is terminated for just cause or to employees whose employment is terminated as part of a group termination and who therefore receive group termination notice.
Where the position of an employee becomes redundant under the terms of a collective agreement, the employer must give at least the applicable notice set out above to both the union and employee.
These changes to the notice requirements do not impact the existing severance pay obligations under the Code.
Effective February 1, 2024, employers will also be required to provide each employee whose employment is terminated with a statement of benefits setting out the affected employee’s vacation benefits, wages, severance pay and any other benefits or pay arising from their employment. For employees whose employment is terminated with notice or a combination of notice and wages in lieu of notice, the statement must be given prior to termination within specified time frames. For employees whose employment is terminated with wages in lieu of notice, the statement must be given to the employee not later than the date of termination.
Key Takeaways
Federally regulated employers should ensure that all terminations are conducted having regard to these new provisions. For new employment offers, federally regulated employers should review their offer letters and employment agreements to ensure that they comply with these amendments.
If you have questions about these amendments, please reach out to your regular Hicks Morley lawyer.
The article in this client update provides general information and should not be relied on as legal advice or opinion. This publication is copyrighted by Hicks Morley Hamilton Stewart Storie LLP and may not be photocopied or reproduced in any form, in whole or in part, without the express permission of Hicks Morley Hamilton Stewart Storie LLP. ©
