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Employment Law Updates from the Federal Sphere

Policies and Procedures | Updates and Announcements

Many new requirements have come into effect for Canadian employers over the last several years. For example, in 2022 alone, many employers in Ontario have had to prepare and implement new workplace policies with respect to Disconnecting from Work and the Electronic Monitoring of Employees, and employees in British Columbia became entitled to five paid days of personal illness or injury leave per calendar year. These are only some of the legal changes that came into effect this year, and there are many more changes poised to take effect in 2023 and beyond.

However, the provinces are not the only jurisdictions introducing significant changes. In this blog, we will highlight two changes coming into effect in the near future at the Federal level which could impact employers. 

Requirement for 10 Paid Sick Days Annually

On November 7, 2022, the Federal Government announced the final regulations that bring the ten days of paid sick leave into effect under the Canada Labour Code (first announced in 2021). This permanent change to the Canada Labour Code will provide workers in federally regulated industries (such as employees of banks and telecommunications companies) with up to ten days of paid sick leave per year.

As of December 31, 2022, federally regulated employees who have been continuously employed for at least 30 days will have access to three days of paid sick leave. As of February 1, 2023, employees will acquire a fourth day of paid sick leave and will continue to accumulate one day each month up to a maximum of 10 days per year.

Employees will be permitted to carry over their paid leave into the next calendar year, but every day carried over will reduce the number of days that an employee can accrue in the next year. Employers will be entitled to request that an employee provide a medical certificate to substantiate their entitlement to the leave, but only where the employee has taken five or more consecutive days of paid medical leave.

The regulations also establish a number of record keeping requirements for employers relating to the leave, including

  • the dates of commencement and termination of the leave;
  • the year of employment in respect of which the leave was earned;
  • the number of days of leave carried over from the previous year;
  • a copy of any written request for a medical certificate made by an employer; and
  • a copy of any medical certificate submitted by an employee.

This is a significant change to the current sick leave requirements and is certain to have an impact on federally regulated employers. It will be interesting to see if other jurisdictions introduce paid sick leave requirements in the future given the changes implemented by the British Columbia and Federal governments.

Amendments to the Competition Act

The Competition Act, Canada’s federal competition legislation which impacts all companies doing business in Canada, is not a piece of legislation that we typically find ourselves commenting on, as its provisions generally do not have an employment-law application. However, this past summer the Federal Government announced several changes to the Competition Act, one of which could impact employers in both the Federal and provincial/territorial spheres. 

As of June 23, 2023, it will be a criminal offence under the Competition Act for employers to enter into “wage fixing” or “no-poaching” agreements with other unrelated employers. A “wage fixing” agreement refers to an agreement between unaffiliated employers to “fix, maintain, decrease or control salaries, wages or terms and conditions of employment”. A “no-poaching” agreement refers to agreements to “not solicit or hire each other’s employees” between unaffiliated employers.

The potential penalties for violating these new provisions are steep, including imprisonment for up to fourteen years or a fine to be set at the discretion of the court, or both.

It is not unusual for employers in certain industries, such as Professional Employer Organizations or labour providers, to include non-solicitation clauses in their agreements with their clients to ensure that neither party can try to steal the other party’s employees. Similarly, employers who have secondment agreements allowing their staff to work for another employer may want to include such a clause to mitigate against the risk of losing their staff on a permanent basis. However, once these changes come into effect in 2023, employers may have to find other ways to retain their workers.

Key Take-Aways

Employers will want to review their policies and contracts (both with employees and with clients and other third parties) to ensure they are consistent with these changes. While employers have some time before these changes come into effect, they would be wise to start planning for them now.

We encourage you to keep an eye on our blog and subscribe to our Newsletter to stay on top of these and other upcoming legal changes. If you are an employer with questions about how these new requirements could impact your business, or you are an employee curious about how these changes could benefit you, don’t hesitate to contact us.  

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