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Changes to the Employment Standards Code ("ESC")

07-Jul-20

By McLennan Ross Labour & Employment Team

Averaging Arrangements

1. A significant modification to the ESC is the change of averaging agreements within the existing ESC to “averaging arrangements,” with different and more flexible obligations. Averaging arrangements will be similar to the “compressed work weeks” that applied before the concept of averaging agreements was introduced in the 2017-18 ESC changes.

Employee agreement is no longer required to place employees on an averaging arrangement, though the arrangement must still be in writing. An employer can require work under an averaging arrangement prior to employment or on 2 weeks’ notice. The arrangement must also specify the work schedule with daily and weekly hours; however, it will be much easier to make changes to schedules under an averaging arrangement. Employers simply must specify the manner of amending the schedule and give notice when required. The averaging arrangement can also specify the overtime entitlements. The new averaging period for averaging arrangements will be 52 weeks instead of 12 weeks.

There will also be a 6-month right of complaint for non-compliance with the averaging arrangement.

Averaging arrangements will also be addressed in the regulations.

Averaging agreements have been cumbersome to work with, and these are welcome changes.

Holiday Pay

2. The definition of “average daily wage,” used for calculating holiday pay, has been removed. It will now be calculated by averaging the employee’s total wages in one of two periods the employer chooses over the number of days worked by the employee in the period:

a. the 4-week period immediately preceding the general holiday; or
b. the 4-week period ending on the last day of the pay period immediately preceding the general holiday.

Payment of Earnings upon Termination

3. When an employee’s employment ends, the employer will have more time to pay the employee’s earnings. The existing time limits (3 or 10 days after employment ends) caused logistics issues in managing normal payroll and payments. Under the new legislation, the employer must pay the employee’s earnings within one of the following periods:

a. 10 consecutive days after the end of the pay period in which the termination of employment occurs; or
b. 31 consecutive days after the last day of employment.

Deductions from Earnings

4. Consistent with Employment Standards practice in Alberta, but not previously included in the ESC, the new legislation will allow employers to deduct the following from earnings, upon providing notice:

a. a recovery of an overpayment of earnings paid to the employee resulting from a payroll calculation error, and
b. a recovery of vacation pay paid to the employee in advance of the employee being entitled to it,

up to 6 months after the overpayment was paid to the employee.

Hours of Work and Rest Periods

5. The hours of work maximum (usually confined to 12 hours), shift change requirements, and days of rest may now be overridden by a collective agreement.

Rest periods are restructured, though largely the same. For shifts between 5 and 10 hours, at least one 30-minute rest period is required. For shifts more than 10 hours, two rest periods are required of at least 30 minutes. Rest periods of 30 minutes can be paid or unpaid and broken into two 15-minute breaks. The amendments to the ESC also define when breaks will be taken if there is no agreement on a rest schedule.

Variances

6. Changes have been made to streamline the variance provisions of the ESC, including to provide for applications to the Director by employer associations or groups of employers and applications to the Minister by individual employers.

Layoffs

7. The maximum period before layoffs become permanent is being extended from 60 days within a 120-day period to 90 days with a 120-day period.

For layoffs related to COVID-19, the layoff period remains at 180 consecutive days of layoff.

The termination requirements under the ESC will not apply if different provisions for termination after temporary layoff are agreed to under a collective agreement.

Group Terminations

8. The group termination provisions will return to what they were before 2018, which is 4 weeks of notice, to the Minister of Labour only, when 50 or more employees are being terminated at a single location with a 4-week period.

This notice is not required in respect to employees who are employed on a seasonal basis or for a definite term or task.

The regulations may also now address circumstances when a group termination notice is not required.

The group termination requirement has been removed from the individual termination notice or pay in lieu of notice requirements. These are very positive changes that reduce the substantial costs related to group terminations under the changes made by the previous Government.

Coming into Force

9. Some parts of the new legislation come into effect on August 15, 2020, with others delayed to November 1, 2020.

For a summary of the Labour Relations Code changes, click here.

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