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On December 13, 2018, Bill C-86, the Budget Implementation Act, 2018  received Royal Assent. Bill C-86 has a wide ambit given that it primarily implements the February 2018 federal budget plan. Among other things, Bill C-86 makes numerous amendments aimed at “modernizing” the labour standards in the Canada Labour Code (“CLC”). To help federally regulated employers navigate the many changes to the labour standards, we have outlined the key changes to be aware of and what to do about them.


Overall, the Bill C-86 amendments to the federal labour standards vary in their subject matter and reach, closely reflecting Ontario’s Bill 148. Most of Bill 148, introduced by the Liberal government, has been reversed or modified by the current PC government. Employers will need to keep abreast of the effective dates for the changes under Bill C-86 to ensure that they maintain compliance. At this point, the timing for implementing these changes is not entirely clear, but all of the changes will likely be rolled out in 2019. We will monitor progress and will provide an update when the timeline becomes clear.

Misclassification: Misclassifying individuals as non-employees is now expressly prohibited. Further, the employer will bear the onus of proving an individual is not an employee.

What to do: 

  • Review arrangements with independent contractors and other service providers to identify potential risk.
  • Consider making changes to the arrangement and the terms of the contract where risk is identified.
  • Keep in mind that reviewing contracts is not enough for a proper risk assessment ‒ the employer’s day-to-day expectations and the economic realities of the arrangement, among other factors, need to be taken into account.

Equal pay for equal work: As a general rule, pay rate differentials based on “employment status” are prohibited. The general rule requires equal pay where employees work in the same industrial establishment under similar working conditions and perform substantially the same kind of work, requiring substantially the same skill, effort and responsibility. Despite the general rule, exceptions permit employers to establish distinct pay rates on the basis of seniority or merit systems, systems measuring the quantity or quality of each employee’s production, or any other prescribed criterion.

Temporary help agency employees will also be entitled to the same pay rate as employees of the client in the circumstances described above. The exceptions described above also apply in the case of temporary agency employees. In addition, actions that deter or prevent an employee from becoming an employee of a client of a temporary help agency are expressly prohibited, including fees charged to the employee or the client for establishing an employment relationship.

What to do: 

  • Review and update policies and practices relating to pay rates.
  • Review and revise job descriptions to better differentiate among classes of employees as appropriate.
  • Audit your workforce to assess whether the new equal pay rules are met.

Termination: Individual notice of termination requirements are increased based on length of service. Notice entitlement begins at 2 weeks for employees with 3 months of service and increases to up to 8 weeks for employees with at least 8 years of service. Employers will have the option of providing sixteen weeks of wages, in lieu of sixteen weeks of notice to the Minister of Labour, where the employer terminates the employment of at least 50 employees (provided that notice to the Minister is given at least forty-eight hours before the group termination).

What to do: Employers who have not already done so should budget for increased costs associated with terminations or layoffs in 2019 and beyond.

Continuous employment: The continuous employment provisions are expanded; in particular, there will be continuous employment where an employee is employed in connection with the operation of a work, undertaking or business, both before and after a lease or transfer from one employer to another, if the work, undertaking or business is federal, or if it becomes federal due to the lease or transfer. As well, there will be continuous employment for employee contracts transferred to another employer as a result of a re-tendering process.

What to do: Increased entitlements to vacation time and vacation pay, notice of termination, etc. may apply where employment is deemed to be continuous under the new provisions. As such, employers should factor this possibility into their budget planning for 2019 and beyond.

Leaves: As outlined below, new leaves have been added, along with incremental changes to existing leave entitlements.

What to do:

  • Develop guidelines for determining what kind of leave pertains and whether the leave needs to be paid or unpaid.
  • Prepare for workforce continuity issues as a result of the increased leave entitlements, e.g., cross-train staff on work assignments and budget for retaining replacement workers based on forecasted need.
Leave type Current CLC Bill C-86
Maternity 6 months’ service required for eligibility No service requirement for eligibility
Paternity 6 months’ service required for eligibility No service requirement for eligibility
Personal Up to 5 days for illness, injury, health-related family responsibilities, education-related responsibilities for family members under 18, urgent matters, citizenship conferral, or prescribed reasons – first 3 days paid for employees with 3 months’ service
Medical 17 weeks unpaid for sick leave – 3 months’ service required for eligibility – employer may require health care practitioner’s certification for absence Up to 17 weeks unpaid for personal illness or injury, organ or tissue donation, or medical appointments during work hours – no service requirement for eligibility – employer may require health care practitioner’s certification for absence of 3 days or longer
Court or jury duty Leave to act as a witness, juror or to participate in jury selection, no maximum leave period specified – no service requirement for eligibility
Reservist No maximum leave period – 6 months’ service required for eligibility Maximum leave period of 24 months in 60-month period – 3 months’ service required for eligibility

Other incremental changes:

Entitlement Current CLC Bill C-86
Vacation 2 weeks’ vacation and vacation pay of 4% of wages (all employees); 3 weeks’ vacation and vacation pay of 6% of wages after 6 years’ service 2 weeks’ vacation and vacation pay of 4% of wages after 1 year of service; 3 weeks’ vacation and vacation pay of 6% of wages after 5 years’ service; 4 weeks’ vacation and vacation pay of 8% of wages after 10 years’ service
Holiday pay 30 days’ service required for eligibility No service requirement for eligibility
Breaks Unpaid 30-minute break during every work period of 5 consecutive hours
Rest periods Rest period of at least 8 consecutive hours between work periods or shifts
Medical and nursing breaks Unpaid breaks as necessary for nursing/expressing breast milk
Notice of work schedule Written work schedules must be provided at least 96 hours before the start of the first work period or shift under the schedule – employees may refuse work that starts within 96 hours from the time the schedule was provided
Working age 17 years is the minimum age for working without regulatory restriction 18 years is the minimum age for working without regulatory restriction
Expenses Employees are entitled to reimbursement of reasonable work-related expenses

Communicating information to employees: Employers must post the most recent version of any materials that the Minister makes available and that contains information respecting employers’ and employees’ rights and obligations under the CLC. Employers must also, within the first 30 days of employment, provide employees with a copy of such materials.

  • Many thanks to Marc Di Pierdomenico for his assistance with this article.