Last week, the federal government passed Bill C-44, Budget Implementation Act, 2017, No. 1 (“Bill C-44″), introducing a new administrative monetary penalty system under Part IV of the Canada Labour Code (the “Code“) and broadening the authority of inspectors, among other things.
The changes are set to come into force in the new year on January 1, 2021, and include the following:
- New Penalty System: Under Part IV, federally regulated employers will be subject to administrative monetary penalties up to $250,000 for contraventions of provisions under Part II (Occupational Health and Safety) and III (Standard Hours, Wages, Vacations and Holidays) of the Code. The specific violations that would give rise to an administrative monetary penalty have not yet been published but will be identified by regulation on December 23, 2020. Particulars regarding the new administrative penalty system include:
- any person who fails or contravenes the Regulations established under Part IV will be held liable to a penalty set by Regulation;
- any penalty amount set by Regulation cannot exceed $250,000;
- removes certain defences to a person named in the violation, particularly a person or department cannot argue that they exercised due diligence to prevent the violation, or that they “reasonably and honestly” believed in “the existence of facts that, if true, would exonerate the person or department”;
- where a corporation commits a violation, liability for the administrative monetary penalty will apply to individuals who “directed, authorized, assented to, acquiesced in or participated in the commission of the violation”; and
- for employers that have received an administrative monetary penalty, the Minister may make public the legal name of the employer, the nature of the violation and the monetary penalty amount imposed.
- Streamlined Review and Appeal Process: Part IV also creates a framework under which employers who have been found to have contravened the Code can request a review or appeal of the decision within 30 days of receiving notice of a contravention. If an employer is not satisfied with the results of the initial review, the employer may appeal the decision to the Canada Industrial Relations Board (“CIRB“). Any decision rendered by CIRB is final.
- Increased Inspection & Compliance Order Authority: Inspectors now have increased authority to issue compliance orders where an employer is found to have contravened provisions of Part III of the Code (Standard Hours, Wages, Vacations and Holidays), the corresponding regulations, and conditions related to excess hour permits.
These amendments are primarily procedural but should not be taken lightly. If ignored, federally regulated employers could face significant fines and risk their names being made public. It’s important to note that a contravention of the Code that continues for multiple days will be treated as a separate contravention for each day it continues. If this occurs, an employer may be subject to a fine in the upper range of the maximum fine limit.
In light of the above, employers should take proactive steps to ensure their workplaces are compliant with the Code. By reviewing workplace policies and practices now, employers can avoid facing such enforcement measures in the future. Employers who are alleged to have contravened the Code should contact legal counsel to discuss their options.
Many thanks to Dorna Zaboli for her assistance in drafting this article.