Federally regulated employees will soon be entitled to greater periods of notice of termination, or pay in lieu thereof, effective February 1, 2024.
Employees that are affected by these changes are those non-unionized employees in industries governed under federal jurisdiction, including banks, telecommunications, and international/interprovincial transportation, among others. These employment relationships are covered by the Canada Labour Code (“CLC”).
Currently, CLC employees are entitled to two weeks’ notice of termination after three months’ work. In addition to this, they are entitled to five days’ wages, or two days’ wages per year of service, whichever is greater, after 12 months of work as severance pay.
After the changes to the CLC come into force, federal employees will be entitled to two weeks of notice if they have worked for the employer for three months to three years of employment. After three years, they will be entitled to one week of notice per completed year of service, to a maximum of eight weeks. Employees will further be entitled to severance pay in addition.
Employees in Ontario are already entitled to periods of notice that increase as the employee’s tenure with the employer increases under Ontario’s Employment Standards Act. These changes will bring the federal period of notice more in line with current Ontario standards.
These changes have potential to increase the amount of notice that employees are entitled to. Employers should be alert to these changes when considering terminating contracts of employment. In addition, these changes may render some employment agreements unenforceable, resulting in employees being entitled to common law reasonable notice. Common law reasonable notice is typically much greater than what is provided for by legislation, so employers should be sure to review the relevant provisions of their contracts to ensure their agreements remain in compliance with the legislative minimums.
Written by Nicolas Guevara-Mann