After five years of waiting, the individual notice of termination amendments first introduced in the Budget Implementation Act, 2018, No. 2 are finally coming into force.
Effective February 1, 2024, federally regulated employers will have to provide employees with increased individual notice of termination entitlements. Currently, the Canada Labour Code (Code) provides that employees who have completed three or more continuous months of employment are entitled to two weeks of notice of termination or pay in lieu of notice (unless the employer has just cause to terminate the employment relationship). Once these amendments come into force, employees will be instead entitled to graduated notice of termination based on the length of the employee’s service with their employer. Specifically, federally regulated employers will be required to provide the following notice of termination:
|Length of continuous employment
|At least 3 consecutive months
|At least 3 consecutive years
|At least 4 consecutive years
|At least 5 consecutive years
|At least 6 consecutive years
|At least 7 consecutive years
|At least 8 consecutive years
While employees do have other entitlements under the Code related to termination of employment, including severance pay entitlements and enhanced entitlements in the context of a group termination of employment, these entitlements are unaffected by the upcoming amendments.
In addition to the new graduated notice of termination scheme, starting February 1, 2024, federally regulated employers will also have to provide dismissed employees with a written statement of benefits. This written statement must set out the employee’s vacation benefits, wages, severance pay and any other benefits or pay arising from the employee’s employment. The requirement to provide a written statement to employees is not an entirely new one, as federally regulated employers have had an obligation to provide such a statement to employees in the context of a group termination of employment. With the introduction of these amendments, the Labour Program seeks to equalize entitlements amongst all employees whose employment is terminated.
The coming into force of the long-awaited increased individual notice of termination obligations is part of the Federal Labour Program’s larger “Forward Regulatory Plan” for 2023 to 2025, through which the Labour Program has announced it will be introducing 16 regulatory initiatives that are currently under development. We continue to monitor these regulatory initiatives for federally regulated employers, and will publish updates as new information becomes available.