In August last year, we wrote about the significant changes to the Canada Labour Code (the “CLC“) that would be coming into effect in 2024 which would materially impact an employee’s entitlements on termination. While August seems like only yesterday, 2024 is now here and the changes to the CLC will be taking effect as of February 1, 2024. The purpose of this blog post is to provide a brief refresher on the changes and how they will impact federally regulated employers and employees.
What is Changing?
New Termination Requirements
As of February 1, 2024, the CLC will require that an employer who dismisses an employee on a without cause basis provide them with notice or pay in lieu of notice in accordance with a graduated system which increases based on an employee’s consecutive years of service. The new requirements are as follows:
| Length of Consecutive Service | Notice Entitlements |
| At least three months | 2 weeks |
| At least three years | 3 weeks |
| At least four years | 4 weeks |
| At least five years | 5 weeks |
| At least six years | 6 weeks |
| At least seven years | 7 weeks |
| At least eight years | 8 weeks |
The notice requirements will be in addition to the existing requirement to provide an employee who has completed one year of service with Severance Pay, equal to the greater of two days wages at the employee’s regular wage rate for each completed year of service, or five days wages.
New Written Statement Requirement
Federally regulated employers will now also have to provide employees with a written benefits statement no later than two weeks before the effective date of termination (or on the date of termination if the notice provided is less than two weeks). This statement must set out an employee’s:
- vacation benefits,
- wages,
- severance pay, and
- any other benefits and pay
arising from their employment with the employer as of the date of the statement.
What Do Employers and Employees Need to Do?
Federally regulated employers need to ensure they are familiar with the new requirements and comply with them for all without cause dismissals which occur on or after February 1, 2024. As we noted in our previous post, employers will also want to review their employment agreements to ensure their termination clauses do not conflict with the new minimum standards and take steps to update them as necessary. We can assist you to assess and update your current employment agreements to ensure they are enforceable and effectively protect your business.
Federally regulated employees should take note that their minimum entitlements on dismissal are increasing as of February 1, 2024. If you are dismissed (particularly after February 1, 2024), please contact us before accepting any package being offered upon termination so that we can assist you to ensure it is fair, reasonable, and reflective of your entitlements at law.
