Thank you, Mr. Chair. Thank you for the opportunity to present the main points of division 10 of part 4 of the Budget Implementation Act.
I will speak mainly in English, but I will also answer any questions in French. Please feel free to ask questions.
Basically, division 10 amends part III of the Canada Labour Code. Part III is the legislation that sets minimum employment standards for employees in federally regulated enterprises. That includes employees in banking, transportation, telecommunications, broadcasting, and a few other industries, such as grain handling, uranium mining, etc.
The proposed amendments are basically aimed at making compliance with part III standards and requirements easier and less burdensome. It is also aimed at reducing the cost of administering the legislation. There is a whole series of amendments, but they can be grouped in four broad categories, which I will go through one by one.
The first broad category, or the first objective, is to simplify the calculation of holiday pay. Currently, under part III, employees are entitled to up to nine general holidays per year, each of which must normally be paid by the employer.
The difficulty, as we see it right now, is that there are actually numbers of different formulas for calculating holiday pay for employees, depending on how they are generally paid. There are different formulas depending on whether they are paid on a monthly basis, a weekly basis, or a daily basis, whether their hours of work vary from day to day, whether their earnings vary from day to day, and whether they are paid on a mileage basis as opposed to a time basis, etc. There is a large number of different formulas, which is extremely complicated. We've heard from employers, employees, and inspectors that they find the current system extremely difficult to administer.
Another difficulty is that there are currently a certain number of eligibility requirements for holiday pay, one of which is also very difficult to administer. Right now, to be entitled to holiday pay, employees must have been employed by their employer for 30 days, but they must also, as a general rule, have earned wages for 15 days in the 30 days preceding the general holiday. Now, there are exceptions to this rule and exceptions to the exceptions. Basically, what we've found is that it is extremely difficult to determine who is entitled to general holidays, and, once that's been determined, to calculate the actual amount due.
Again, from an administrative point of view, that is very complicated. From a fairness point of view, it's also a bit of an issue, because some employees will be entitled to holiday pay and others will not, and their conditions of employment are not necessarily that different from one another. Again, that has proven to be a significant issue.
What this bill proposes is to put in place a new standard method for calculating holiday pay for a general holiday. It would be as follows. The holiday pay would be an average of the four weeks of earnings in the four weeks preceding the week of the holiday.
For commission-paid employees, the calculation would be over a longer period; it would be over a 12-week period, quite simply because commission-paid employees tend to have some variation in their earnings, so we would want to make sure that we try to find a proper equilibrium to calculate their holiday pay. This would certainly simplify the calculation.
In addition to this, we would eliminate one of the current eligibility requirements. Employees would no longer need to have earned earnings over 15 days in the preceding 30 days. This will actually increase the number of employees covered by holiday pay provisions and will certainly make it much easier to calculate the amount due.
In the second broad category of amendments, we are establishing in the code a statutory complaint mechanism for all complaints not related to unjust dismissal. Right now, the code provides a complaints mechanism for unjust dismissal, but it is completely silent on any other types of complaints.
This has proven to be a problem, because we've basically set a complaint mechanism in policy, but it does not have any legal weight. Again, it creates some confusion, because employees, in some cases, don't know how they're supposed to proceed to file complaints. On our side as well it is difficult to administer because, given that it is a policy and it has no statutory backing, it is difficult to determine when we can actually reject complaints, when they must be accepted, or what kind of timeline should be set down, etc.
What we are trying to do now is set out an explicit complaint mechanism, which is what virtually all jurisdictions in Canada have. Right now, only the federal jurisdiction in Nunavut does not have a complaint mechanism for most types of labour standards or employment standards complaints.
The mechanism would set down explicitly under what circumstances complaints can be accepted or rejected. It would specify actual timelines for filing complaints. The legislation proposes that employees have six months from the occurrence of the violation to make their complaint, although this would be subject to some exceptions that we can go into as part of the clause-by-clause consideration, if you wish.
What the complaint mechanism will also specify are the specific grounds under which complaints can be rejected. They could not be rejected based on any ground other than those specified in the legislation. It would also provide a review mechanism for employees, so if their complaint is rejected by an inspector, they can ask for a second opinion. They can ask somebody to review that decision to make sure there is no arbitrariness in the rejection of complaints.
The third broad category of amendments is with respect to payment orders. Currently under the code, where an inspector finds that an employer has not paid wages to an employee, the inspector can issue a payment order. This is an order to pay wages that are due. There is a fairly complicated mechanism for reviewing that, and I'll be going into that afterward, but one of the difficulties we've faced is that it's difficult to know what kind of period should be covered by a payment order. By policy, we set down that payment orders basically should only cover 12 months of wages, or wages in the 12-month period preceding the complaint. Again, that was set by policy and does not have any particular legal weight.
Again, in some cases there were complaints, because it was believed that it should have covered a longer period. Also, in some cases it was difficult to determine how far back to go in determining whether wages are due, because somebody can make a complaint and say that they haven't been paid wages, and the inspector will start looking six months back, twelve months back.... The employee can say to please continue looking back until the inspector finds something they're owed. So the difficulty right now is that there is no specific standard or specific idea in terms of how long a period this should cover.
What the code would provide for now is an explicit timeline for the coverage of payment orders. That would be 12 months from the date of the complaint or, where an employee has ceased to be employed—if the employee has been fired and then files a complaint—it would be 12 months from the date of termination of employment. With respect to vacation pay, that could go back 24 months. The reason for this is that vacation pay tends to be earned in one year and paid the year after, so we want to make sure we're covering all vacation pay at the same time. Again, the idea is to clarify what the requirements are in that regard.
In the last broad category—and there were actually a few small miscellaneous things that I'll be discussing afterward—we are proposing to add a review mechanism for payment orders and notices of unfounded complaints. Again, payment orders, as I explained, are those orders for the payment of wages. Where an inspector finds that no wages are owing, the inspector will issue a notice of unfounded complaint to the employee, and this can also be appealed.
What we are proposing is to bring in an administrative review mechanism for payment orders and notices of unfounded complaints. Under the current system, any employee, employer, or corporate director who wishes to appeal a payment order or notice of unfounded complaint, can bring it immediately to an external referee.
That is a process that can be time-consuming, certainly, and somewhat costly, especially when we are dealing with purely factual issues. Sometimes mistakes are made when payment orders are issued. Rather than go through the whole system of appointing a referee, going through hearings, etc., what we're proposing is to bring in an administrative review mechanism so that factual errors can be corrected immediately, or at least as soon as possible. Basically, it would be done by people delegated by the minister, probably senior officials with expertise in labour standards matters.
We would keep the current mechanism for appeals to referees, external referees, but this would be limited to issues of law and jurisdiction, or issues that are viewed as so complex that they actually merit going directly to a referee as opposed to going through the administrative review mechanism.
The last couple of things to mention are that there are a few other minor technical amendments, one of which is to specify the timeline for payment of vacation pay on termination of employment. Currently, the requirement is somewhat vague; it does not set a specific timeline, so we would amend that to provide a 30-day deadline for payment of any vacation pay owing on termination of employment. That 30-day deadline corresponds to the current timeline for paying severance pay and termination pay for employees; again, employers could pay vacation pay exactly at the same time as severance and termination pay, which is a bit of a confused issue right now.
Other than that, there are a few consequential amendments to other provisions, just to make sure the whole system can work. We can go through the clause-by-clause and address some of these issues separately.
