Employers will also be required to provide employees with statement of benefit
The new rule requiring federally regulated employers to give longer notice of termination for employers who have spent a long time in their employ is set to take effect Feb. 1.
Under the new rule in the Canada Labour Code, when an employer terminates the employment of an employee who has completed at least three years of employment, they must either:
- provide the employee with written notice equivalent to at least 1 week per completed year of employment, up to a maximum of 8 weeks of notice or
- pay the employee their regular wages in lieu of notice
A combination of notice and wages in lieu of notice will also be permitted, according to the federal government.
This does not apply if an employee:
- has not completed three consecutive months of continuous employment
- terminates their own employment
- is dismissed for just cause
- is on a temporary lay-off that does not constitute a termination of employment
- has signed an employment contract that provides a specific end date and that the work ends on that specified date
In 2023, the Ontario government proposed to amend the Employment Standards Act to ensure remote workers get a longer notice period in case of a mass layoff.
Wages, benefits
Ottawa also noted that effective Feb. 1, 2024, employers will also be required to provide employees with a statement of benefits, at the time of termination of employment, that details their:
- wages
- vacation pay
- severance pay
- any other benefits and pay arising from their employment
“These amendments are a marked departure from the current notice of termination provisions under the Code,” said partner John D.R. Craig and associate Liam Billings of the Mathews Dinsdale & Clark law firm.
Currently, s. 230(1) of the code requires federally regulated employers to provide at least two weeks’ notice of termination or pay in lieu to employees it intends to terminate on a later date.
The applicable notice period does not increase with length of service, “in contrast to many provincial jurisdictions,” said Craig and Billings.
“Moreover, the current Code provisions on unjust dismissal, severance pay, and mass termination are unchanged and continue to apply as before,” they said. “Federally regulated employers should be sure to revisit their employment contracts, collective agreements, and termination practices by February 1, 2024 to ensure compliance.”
In a previous case, the Ontario Superior Court of Justice awarded a seven-month notice period to a general manager employed with a hospitality company for three years. The employee was terminated in December 2021, during the Omicron variant surge and the accompanying lockdowns.
Generally, courts have been reluctant to give more than 24 months’ reasonable notice to dismissed employees. However, some recent decisions out of Ontario raised the question, is the 24-month cap on reasonable notice over?
