Part IIOrderPublished: June 21, 2023

Graduated Termination Notice for Federal Workers

Order Fixing February 1, 2024 as the Day on Which Certain Sections of the Budget Implementation Act, 2018, No. 2 Come into Force: SI/2023-17

An order sets February 1, 2024 as the day certain 2018 Budget Implementation Act amendments to the Canada Labour Code come into force. Those amendments create a graduated minimum notice (or pay in lieu) for individual terminations based on length of service and require employers to provide a written statement of benefits on termination.

Published
June 21, 2023
Department
Unavailable
Section
Order Fixing February 1, 2024 as the Day on Which Certain Sections of the Budget Implementation Act, 2018, No. 2 Come into Force
Comment deadline
Unavailable
Effective date
February 1, 2024
Publication part
Part II

Summary

Summary#

This is an order that sets February 1, 2024 as the date when certain parts of the Budget Implementation Act, 2018, No. 2 take effect to change the Canada Labour Code. The changes introduce a graduated minimum notice (or pay in lieu) for individual terminations and require employers to give a written statement of benefits when someone is let go.

What it does#

  • Fixes February 1, 2024 as the coming-into-force date for sections 483, 485, and 522 of the Budget Implementation Act, 2018, No. 2, which amend Part III of the Canada Labour Code.
  • Creates a graduated minimum notice (or pay in lieu) for individual terminations based on length of continuous service:
    • Employees with at least 3 months but less than 3 years of service keep two weeks notice (no change).
    • At 3 years of service the minimum becomes three weeks, and then increases by one week for each additional completed year, up to a maximum of eight weeks.
  • Allows employers to give pay in lieu of notice, or a mix of notice and pay in lieu, equal to the wages the employee would have earned during the notice period.
  • Requires employers to provide a written statement of benefits on termination that lists vacation pay, wages, severance and other employment-related pay and benefits.
  • Does not change the separate rules for group terminations (for example, where 50 or more employees are terminated together); those are not part of this order.

Who's affected#

  • Employees and employers covered by Part III of the Canada Labour Code, i.e. federally regulated workplaces such as:
    • banks and some financial institutions,
    • telecommunications and broadcasting companies,
    • airlines, airports, railways, shipping, trucking and interprovincial bus operations,
    • port operations and grain handling,
    • some federal Crown corporations (but not the public service),
    • First Nations band councils and other industries declared by Parliament to be for the general advantage of Canada or more than one province.
  • Workers in provincially regulated workplaces (more than 90% of the Canadian workforce) are not affected by this federal order.
  • It is clear who is affected for federally regulated employers and their staff.

Why it matters#

  • Long-serving federally regulated workers will get more time or more pay when their job ends. Starting at 3 years of service, minimum notice increases and can reach up to eight weeks for very long service.
  • More notice can give workers extra time to look for new jobs or to retrain, which may reduce time spent unemployed.
  • Employers may face higher termination costs, but they can reduce cash outlays by giving working notice instead of paying in lieu.
  • The order simply sets the start date for changes that were approved in 2018; it gives employers and employees time to prepare before the rules take effect on February 1, 2024.

Key topics

Budget Implementation Act, 2018, No. 2Canada Labour CodeDivision X of Part IIIsections 483, 485 and 522individual termination of employmentgraduated notice of terminationpay in lieu of noticestatement of benefitsEmployment and Social Development CanadaLabour Programfederally regulated workplacesgroup termination of employmenttermination notice periods

Source: Canada Gazette

Official source