Upcoming Alberta Employment and Labour Law Changes

After a recent review of Alberta’s employment law, the Alberta government tabled Bill 17, Fair and Family-friendly Workplaces Act on May 24, 2017 to make a number of significant amendments to the Employment Standards Code and Labour Relations Code. If enacted, the majority of changes will take effect January 1, 2018.

Both the Employment Standards Code and Labour Relations Code have not been significantly updated in almost 30 years and according to the Alberta government, the nature of work and family life have changed a lot since then.

A bit of background: From March 13 to April 18, 2017, Albertans provided feedback to the Employment Standards and Labour Relations code reviews. All input were reviewed as part of the development of Bill 17. The government wants to have the legislation pass in time for it to go into effect in the new year.

Employment Standards Code changes

Amendments to the Employment Standards Code will have significant impact on employers’ policies, HR practices and payroll administrations. These amendments include among other things:

1. Changes to minimum wage and payment of wages

• Amendments will repeal the ability for employers to pay employees with disabilities less than minimum wage. Presently, this part of the law allows the Director to issue a permit authorizing an employer to pay a prospective employee who has a disability a wage less than the minimum wage—if the employment arrangement is satisfactory for both parties in the circumstances. No such permits have been issued for more than 10 years.
• The Code will be clarified to indicate which deductions would be allowed from wages, as well as explicitly prohibit deductions for faulty work and cash shortages (i.e., dine-and-dash and gas-and-dash scenarios).

2. Changes to leaves of absence from work:

• The qualifying period for entitlement to a leave of absence under the Code, such as maternity, parental and compassionate care leaves will be reduced from 52 consecutive weeks of employment to 90 days.
• Changes specific to maternity and parental leave will include:

• Extending the period of maternity leave from 15 to 16 weeks to account for the one-week waiting time for federal Employment Insurance (EI) benefits.
• Retaining the status quo for job protection for parental leave at 37 weeks, but allowing for a potential future increase to align with proposed federal Employment Insurance benefits.
• Allowing the employer to terminate an employee during the notice/entitlement period of maternity/parental leave only for situations where the business is closed or suspended.
• Restricting entitlement to maternity leave if pregnancy terminates more than 16 weeks before due date. An employee whose pregnancy terminates within 16 weeks of the due date would still be eligible for maternity leave; leave would end either 16 weeks after the leave began or six weeks after the pregnancy is terminated.
• Requiring that non-birth parents and adoptive parents taking parental leave to complete the leave within 53 weeks following the child’s birth or adoption as opposed to 52 weeks, to account for the one-week waiting time for federal Employment Insurance (EI) benefits.

• Changes specific to Compassionate care leave include:

• Extending the period of leave to 27 weeks, from the current 8 weeks, to better align with federal Employment Insurance (EI) benefits.
• Expanding caregiver status to include non-primary caregivers. Allowing for more than parents to provide care to a seriously ill family member.
• Making the leave available for multiple weekly installments within the period outlined in the medical certificate, rather than the current limit of two installments.
• Retaining the two weeks’ notice to an employer but changing the language to indicate that the leave can be taken as soon as reasonable.
• Reducing the return-to-work notice to 48 hours from the current two weeks.
• Clarifying the end date of the leave to be either the date of death of the family member or the end of the 27-week period (whichever is earlier), otherwise, the employer would be allowed to postpone the employee’s return for two weeks when leave ends and the employee then fails to return to work or provide proper notice.

• Several new leaves of absence available to employees will be introduced under the Code:

• Death or disappearance of child leave: providing for up to 52 weeks of unpaid leave for qualifying employees who are the parent of a child who has disappeared and it is probable that the disappearance is the result of a crime; or 104 weeks of unpaid leave for qualifying employees who are the parent of a child who has died and it is probable that the death is the result of a crime;
• Critical illness of child leave: providing for up to 36 weeks of unpaid leave for the purpose of providing care or support to a critically ill child;
• Long-term illness and injury leave: providing for up to 16 weeks of unpaid leave in a calendar year due to illness, injury or quarantine. Medical certificate and reasonable notice would be required. This would align with the federal Employment Insurance program;
• Domestic violence leave: providing for up to 10 days of unpaid leave in a calendar year to seek medical attention, obtain services from a victim services organization, obtain psychological or professional counselling, relocate temporarily or permanently, seek legal or law enforcement assistance and any other purpose provided for in the regulations;
• Personal and family responsibility leave: providing for up to five days of unpaid leave in a calendar year for the health of the employee or for the employee to meet his or her family responsibilities in relation to a family member. Includes attending to personal emergencies and caregiving responsibilities related to education of a child;
• Bereavement leave: providing for up to three days of unpaid leave in a calendar year due to the death of a family member; and
• Leave for citizenship ceremony: providing for up to a half day of unpaid leave to attend a citizenship ceremony to receive a certificate of citizenship.

3. Hours of work and overtime

Currently, an employer may require or permit an employee to work a compressed workweek, consisting of fewer work days in the work week and more hours of work in a work day paid at the employee’s regular wage rate. Amendments to the Code will replace compressed workweeks with hours of work averaging agreements.

• An employee or group of employees may enter into a written hours-of-work averaging agreement that provides that the employer will average an employee’s hours of work over a period of one to 12 weeks for the purpose of determining the employee’s entitlement to overtime pay or time off with pay. An hours-of-work averaging agreement may be part of a collective agreement.
• Scheduled hours of work must still remain at or below 12 daily hours and an average of 44 weekly hours.
• The agreement must provide a start date and end date, which must provide for a term that does not exceed two years. Averaging agreements will generally need to be renewed every two years, except that in the case of an agreement that is part of a collective agreement, the agreement terminates the day a subsequent collective agreement is entered into.

• Overtime agreements will require employers to provide 1.5 hours’ time off with pay for each hour of overtime banked (presently one hour for one hour basis). Time off with pay must be provided, taken and paid to employees within six months (presently three months) of the end of the pay period.
• Employees would require a minimum of a 30-minute break (paid or unpaid) for every five hours of consecutive employment. If agreed to by the employer and employees, breaks could be taken in two 15-minute installments.

4. Public holiday and vacation

• Amendments will relax the restrictions on holiday pay eligibility and clarify the formula by which holiday pay is to be calculated, including:

• Removing the requirement that an employee work for 30 work days or more to be eligible for holiday pay. Therefore, all employees would be eligible for general holiday pay.
• Allowing employees to be entitled to holiday pay even when the holiday falls on a day they are not normally scheduled to work.
• Changing how holiday pay is calculated. General holiday pay would be calculated simply as 5 percent of wages from the previous four weeks worked.

• Breaks of employment of less than 90 days will be deemed to be a period of continuous employment for the purpose of calculating minimum vacation entitlements.
• Employees will also be able to take vacation in half day periods. The Code would be clarified to indicate that employees must be paid 4 percent or two weeks of their total wages as vacation pay until they have been employed for five years, after which they must receive at least 6 percent.

5. Terminations and temporary layoffs

• The probationary period is changed from three months to 90 days. Breaks of employment of less than 90 days will be deemed to be a period of continuous employment for the purpose of calculating length of service for the purpose of termination pay or notice. If an employee’s wages vary from one pay period to another, termination pay will be calculated by averaging the employee’s wages during the previous 13 weeks instead of the previous three months.
• Employers will be better positioned to pay out employees upon employees providing notice of their intention to resign. Amendments would clarify options for employers when employees provide more notice of termination than required by the Code. Employers will be able to pay out an employee tendering their resignation by providing the employee with wages the employee would have earned if the employee had worked until the earlier end of the termination notice period the employee provided or the end of the termination notice period that the employer would have been required to give the employee. Currently, where an employee provides more notice than required and an employer wants to pay out the employee, the employer must provide pay in lieu to the end of the termination notice period that the employer would have been required to give the employee.
• Employers would be prohibited from forcing employees to use entitlements such as vacation or overtime during a termination notice period, unless agreed to by both parties.
• The proposed amendments to the group termination provisions are significantly more onerous on employers. Employers will need to provide at least 8–16 weeks’ notice to the Minister of a group termination, depending on the number of employees being terminated at a single location. Also, employers will need to provide the notice to either the bargaining agent or the employees, as applicable. When employers plan group terminations, requirements for providing notice to employees, unions and the Minister of Labour would be increased and scaled:
  o 50–100 employees: 8 weeks
  o 101–300 employees: 12 weeks
  o 301+ employees: 16 weeks
• The possibility of an indefinite temporary layoff would be eliminated by requiring layoffs be limited to 60 days within a 120-day period. Layoffs could be extended if wages and/or benefits are paid and the employee agrees. Moreover, the seldom used layoff provisions of the Employment Standards Code will generally require employers to provide advance written notice of one–two weeks and will codify certain existing requirements, such as including a copy of the applicable provisions of the Employment Standards Code in the notice. Layoffs will generally end after 60 days in any 120-day period rather than after 60 consecutive days. Waiver of the notice requirement for unforeseen circumstances beyond an employer’s control would be allowed. Recall notices from temporary layoffs would be required to be written. Termination pay would be calculated based on the previous 13 weeks of employment when the employee actually worked, not simply the calendar weeks preceding the termination.

6. Employment of minors

• New provisions are proposed regarding the employment of minors. Restrictions will be imposed on employers based on the type of work being performed by the employee and the employee’s age with particular emphasis on the health and safety of the employee.
• With the exception of artistic endeavours, youth under the age of 13 are not allowed to work. (Youth under 13 would be allowed to be employed in artistic endeavours, such as a theatre production, with a permit.)

7. Enforcement and administration

The Bill proposes significant changes to the administration of the Employment Standards Code, including the establishment of an appeal body, the mechanism for issuing variances or exemptions and authority for audits, investigations or inquiries, and the rules relating to complaints and orders.

• Administrative penalties will be introduced requiring the employer to pay an administrative penalty for a contravention or failure to comply with the Employment Standards Code or regulations. Administrative penalties will not exceed $10,000 for each contravention or failure to comply or for each day or part of a day on which the contravention or failure to comply occurs or continues.
• The time period to commence prosecution would be increased from one to two years.
• The permitting process would be streamlined by setting clear and enforceable criteria and setting time limits on permits. Criteria for permits would be published in regulation or policy.
• Employment Standards Officers would be given the authority to direct employers to conduct self-audits in a form prescribed by the Ministry.
• Publication of information regarding employers found to contravene the Code would be allowed.
• The ability of the Employment Standards Director to issue third-party demands would be expanded to include recovery of fees and costs owed to Employment Standards. In addition, the repercussions for failures to comply would be clarified.
• When necessary, collections would be allowed from a joint bank account as currently provided in the Civil Enforcement Act.
• The legislative time limit for Employment Standards Officers to issue orders, within reason, would be removed.
• Clarifications to the Code would be added that establish time periods for the recovery of earnings that are not dependent on when the order was issued, and to allow orders to capture a broader range of entitlements.

8. Exemptions and exclusions related to farms and ranches

Only those farms and ranches with paid employees who are not the owner or related to the owner will be affected by this legislation. Unpaid farm and ranch workers, such as relatives, friends and neighbours helping out will not be affected. Children doing chores or participating in activities such as 4-H, helping neighbours and friends, as well as recreational activities such as hunting on farmland will also not be affected.

• Farms and ranches: Family members would be exempt from all Employment Standards Code provisions. The definition of family member would be the same as the amendment to the Enhanced Protection for Farm and Ranch Workers Act.
• Greenhouses, nurseries, mushroom and sod farms would continue not to be considered farms under the Employment Standards Code.
• Standards outlined for youth under the Employment Standards Code would also apply to farms and ranches, after consultation on light work and hazardous work with agriculture and other stakeholders.
• General Holiday Pay would apply. If employees work a general holiday, they receive straight time pay and either:

• general play calculated at 4.2 percent of the previous 4 weeks wages;
• an alternate day off, agreed to by the employer and employee.

• Vacation and vacation pay entitlements in the Employment Standards Code would apply. Vacation pay would be calculated on total wages, not on a maximum of 44 hours per week.
• Four days of rest would be provided for every 28 days at the employer’s discretion if the employer and employee can’t agree on dates.
• Existing standards on hours of work and overtime would not apply.
• Minimum wage would apply.

Labour Relations Code

Following a review of the Labour Relations Code that included 340 written submissions from business, industry, organized labour, non-profits and the general public, as well as technical advice from respected labour lawyer and former Labour Relations Board Chairperson, Andrew Sims, Q.C., a series of proposed changes to the Code are included in Bill 17: The Fair and Family-friendly Workplaces Act. If passed, most of these changes are expected to come into effect on Royal Assent. Some changes would be delayed to enable the Labour Relations Board to adjust its procedures.

The following changes are proposed as part of Bill 17. They are intended to modernize Alberta’s Labour Relations Code and align it with current practices across Canada.

• In unfair labour practice complaints involving discipline, dismissal or other alleged intimidation of an employee, the employer would be required to prove the action it took does not constitute an unfair labour practice, rather than requiring the employee to try to prove that it does. In these situations, the employer is the only party that really knows and can explain why the action was taken.
• The definition of employee would be changed to include dependent contractors who only work for one employer. This change would allow contractors to unionize and bargain collectively.
• All provisions of the Code dealing with Market Enhancement Recovery Funds (MERFs) in the construction industry would be removed, which would allow for development of unrestricted MERFs in the future.
• The current provision of the Code that suspends the collection and remittance of union dues during an illegal strike would be removed.
• Restrictions on secondary picketing would be removed with new powers to regulate substituted.
• The process for certifying a new trade union—and decertifying bargaining units already in place—would be changed. If between 40 percent and 65 percent of employees sign cards in favour of a union, a board conducted vote would be required. If over 65 percent sign cards, no board conducted vote would be required. The Labour Relations Board would retain the ability to conduct a vote for any application should there be doubt as to the authenticity of the support, or in any other situation the Board feels a vote is necessary. The decertification process would mirror the certification process as far as possible.
• The restriction requiring employees in the construction industry to have worked for an employer for 30 days to participate in a union certification vote would be removed. In addition, employees would not have up to 90 days to reconsider their decision.
• In cases where employers have engaged in unfair practices, the Labour Relations Board would be able to grant certification of a union without the need for a vote. Similarly, the board would be able to revoke a union’s certificate if the union has engaged in unfair practices without the need for a vote.
• All collective agreements must be filed with the Director of Mediation Services.
• A loophole that allowed international parent unions of an Alberta building trade union to avoid the existing registration bargaining system and bargain with employers directly would be eliminated.
  • The current 90-day ban on labour making the same or a similar application for union certification to the Labour Relations Board would be clarified and imposed.
  • The preamble to the Labour Relations Code would have four major themes:
  o good employer/employee relationships foster prosperity;
  o employers, employees and unions benefit from clear labour laws;
  o the rights of freedom of association and free collective bargaining for workers who choose a union to represent them aid economic and social wellbeing;
  o the Labour Relations Code provides fair mechanisms to choose unions, fair bargaining structures and an equitable arbitration process to resolve disputes.

The following amendments are proposed as part of Bill 17. They are intended to align Alberta with current practices in Canada and to improve the efficiency and effectiveness of the overall labour relations system.

• First Contract Arbitration would be put in place to end difficult negotiations between an employer and a newly certified union.
• All continuing care facilities, including those operated by the non-profit sector and those that are privately owned, would be included within essential services provisions of the Labour Relations Code. Strikes would continue to be allowed, however, essential service agreements must be in place to continue operation of the facility during labour disruptions.
• Health care laboratories and blood supply services would be included within essential services provisions. Strikes would continue to be allowed, however, essential agreements must be in place to continue operation of the facility during labour disruptions.
• The Code would be updated to allow the Board to facilitate a union’s ability to communicate with employees working in remote or inaccessible places.
• When requested by a union, a collective agreement will have to provide for Rand Formula union dues checkoff for all employees in the bargaining unit. Religious exemptions will continue to apply. This automatic “dues check off” is already in place in most collective agreements. Exemptions would exist for those with religious objections that see the equivalent of dues directed toward a mutually agreed upon registered charity.
• The Labour Relations Board will have specific authority to refer disputes where there have been egregious unfair labour practices to arbitration. This would align Alberta with the 1996 Supreme Court of Canada decision on the Royal Oak Mine case.
• If a union had a review process approved by the Labour Relations Board, an employee would need to use that approved review process for complaints that the union did not fairly represent them, prior to taking such a complaint to the Labour Relations Board.
• The Labour Relations Board would be given new powers, including the ability to:
  o decide how and whether to publish any of its decisions to improve privacy protection for parties;
  o require a party to produce all documents related to a matter coming before the Board. It would also have the ability to restrict disclosure of certain sensitive commercial or labour relations information it received; review arbitration awards, rather than the courts;
  o manage proceedings that come before it, including the ability to defer a case where some other remedy may be available;
  o proceed with an application after the death or incapacity of a Chair or Vice-chair;
  o prohibit parties from making the same, or similar, applications by simply adjourning the matter indefinitely;
  o manage the matters that come before it, including the ability to defer a case where some other remedy may be available.
• Unions and employers would be allowed to ask for a supervised strike or lockout vote prior to the expiry of a collective agreement to be conducted after.
• Arbitrators would be able to extend the time available in a grievance matter even after the expiration of the time frame set in a collective agreement. They would also be able to make interim orders, expedite proceedings, set dates, work with the parties to resolve differences and apply solutions in accordance with other employment legislation.
• Electronic hearings and submissions would be allowed in grievance arbitration hearings.

How farms and ranches would be affected

Alberta’s Labour Relations Code would apply to the agricultural sector, and would give waged non-family employees the ability to unionize if they choose, and to bargain collectively.

Specific amendments would exclude family members from the Labour Relations Code and would allow government to appoint a Public Emergency Tribunal to end a dispute and arbitrate an agreement, if a strike or lockout could harm livestock or damage crops.

What should employers, unions, HR and Payroll professionals do?

The employer, union, HR and Payroll responsibilities at this stage is to stay informed by:

• Reading and becoming familiar on the upcoming changes found in Bill 17.
• Staying current on the proposed legislation to enact such provisions and the progression of the Bill in Legislature.
• Understanding the impact the proposed provisions will have in your workplace, HR practices and your budgets and bottom line.
• Preparing to update or add new policies/provisions to your HR manual or collective agreement