Liberals to exempt ‘select employers’ from elements of new Labour Code on September 1

Update: The original version of this article said exemptions will not be effective until after the October election. Following publication, Véronique Simard, press secretary for Labour Minister Patty Hajdu, told The Logic that some companies have already been granted temporary exemptions, effective September 1.

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The federal Liberals are granting exemptions to large companies from new provisions in the Labour Code, The Logic has learned. 

Sweeping changes to the Labour Code received royal assent in December 2018 and will take effect the day before Labour Day. The policy will impact about 904,000 employees—around six per cent of Canada’s workforce—and 18,310 federally regulated employers. 

Companies in industries including banking and telecommunications, as well as agriculture and ground, air and marine transportation wrote to Ottawa in recent weeks raising concerns about the updates to the code. Submissions obtained by The Logic detail concerns about competitive pressures and requests from a number of companies for either exemptions to the law or delays in the implementation of rules on everything from having to pay workers for bereavement leave to providing 24 hours’ notice for a shift change. 

On Tuesday, Véronique Simard, press secretary for Labour Minister Patty Hajdu, told The Logic that the government would launch consultations after the election to determine which exemptions to grant. After publication of this story, Simard said that while post-election consultations are still planned, “select employers” would get exemptions starting September 1 to the following provisions: “96 hours’ written notice of work schedules; 24 hours’ written notice of shift change; 8-hour rest period between work periods or shifts; and 30-minute break within every five consecutive hours of work.” She did not say which companies would get exemptions.  

“We have heard from employers operating in 24/7 environments that the advance scheduling requirements and right to refuse overtime may be challenging,” said Simard. “Recognizing these challenges, we will put in place regulations that exempt certain classes of employees from the new hours of work provisions.” She declined to specify which types of companies or classes of employees would be exempted. 

Once the federal election has concluded, the government intends to hold consultations focusing on new scheduling requirements and the right for employees to refuse overtime work. But they could also extend to other changes, including paid time off and eight-hour minimum breaks between shifts. Any changes made will be implemented in 2020. 

The government’s consultations will focus on new laws requiring employers to give workers their schedules at least 96 hours before their first shift and to provide 24 hours’ notice of a shift change, as well as the right for employees to refuse to work overtime. 

However, the government may also consider exempting employers from other changes to the Labour Code, said Simard. 

Purolator and UPS both sent letters to the government—which The Logic has reviewed—in which they argue that complying with the new provisions would cause serious hardship for them. Purolator says doing so would “pose a threat to the continuity of our business.” 

Derrick Hynes, president and CEO of FETCO, an association representing the interests of 31 federally regulated companies including UPS and Purolator, said the changes the companies have asked to be exempted from “pose substantial operational challenges to these organizations in such a way that it’s going to make it extremely difficult for them to meet the needs of their customers.” 

Hynes said the rules could disadvantage the delivery companies at a time when they’re trying to compete—as well as partner—with one of the biggest companies in the world. “If an organization the size of Amazon wants to have its package delivered within 24 hours, I think it’s fair to say that that package is going to be delivered one way or the other. Our hope is that it’s delivered by employees of the organizations that we represent.”

Other employers similarly argue that the changes to the Labour Code will significantly hinder their operations. In submissions reviewed by The Logic and first reported by the Calgary Herald, WestJet claims the nature of the airline business means the company regularly deals with delays—some predictable and some not—that require employees to be flexible with their schedules. It argues that giving 24 hours’ written notice of a shift change; giving employees like pilots and cabin crew 30-minute breaks for every five hours they work; and permitting employees to refuse to work overtime will threaten its ability to compete in the airline business.

Purolator, UPS and WestJet all reference their collective bargaining agreements as a reason for not needing to comply with the changes. However, Purolator also wants to be exempted from giving paid time off to non-unionized workers who don’t have employee status—under the new rules, those workers are entitled to three days of paid personal leave per year.

In their respective submissions, Purolator and UPS both asked the government to exempt them from requiring 96 hours’ notice for scheduling and 24 hours’ notice for shift changes, from rules around paid personal leave, as well as the right for employees to refuse overtime work if they have family responsibilities to attend to. 

The courier companies said variability in their business—including weather and road conditions—makes it hard to predict scheduling. “It is also impractical to mitigate those potential service failures given the over 3000 couriers that are on the road every day,” Purolator wrote in its submission. 

According to Hynes, the majority of FETCO members have asked for exemptions, either individually or as “industry clusters,” though he would not specify which companies. 

Among those asking for exemptions is a grain business operating in Canada. Western Grain Elevator Association, which represents over 95 per cent of Western Canada’s bulk grain exports, claims the Labour Code changes will results in lost revenues, late fees from shipping partners and “lost confidence in Canada as a reliable supplier.” 

The forthcoming changes also include 17 weeks of unpaid medical leave, as well as unpaid leave for jury duty. Employers will have to ensure workers take a minimum eight-hour rest period between shifts, as well as allow unpaid breaks for medical reasons and let employees breastfeed or pump breast milk. Employees will also be given three weeks of paid vacation after five years of employment, rather than the existing six-year threshold. 

According to Simard, exempt companies will continue to follow their “existing hours of work rules” until new regulations are finalized. “All employees will still benefit from broad protections supporting work-life balance that are coming into force on September 1, 2019,” said Simard. “No employee will be worse-off or lose any of their existing entitlements.”