Employers and Employees Take Note: Bill 32, the Restoring Balance in Alberta’s Workplaces Act, will bring significant changes to the Alberta Employment Standards Code (“ESC”) and the Labour Relations Code (“LRC”)
In an effort to “support economic recovery, restore balance in the workplace and get Albertans back to work”[1], the Alberta government introduced Bill 32, the Restoring Balance in Alberta’s Workplaces Act (“Bill 32”) on July 7, 2020. If passed, Bill 32 will bring significant changes to the Employment Standards Code (“ESC”) and the Labour Relations Code (“LRC”). For the sake of brevity, this article addresses the proposed changes to the ESC. Further information on the changes to the LRC can be accessed here.
PROPOSED CHANGES TO THE ESC
Termination Pay and Layoffs
Employers are now able to layoff employees for up to 90 days within a 120-day period (up from the current 60 days in a 120-day period). Further, the 1 to 2-week notice period before a layoff can take effect will be removed. However, the layoff period may be extended if a collective agreement provides for a longer layoff, or the employer and the employee agree that the employer will either:
pay wages or an amount instead of wages to the employee; or
continue the employee’s benefits or pension contributions.
Significantly, the notice requirements for group terminations of 50 employees or more at a single location in a 4-week period have be modified such that an employer is only required to provide 4 weeks’ notice to the Minister (as opposed to the current 16 weeks’ notice). While employees must still be provided with individual notice of their termination, employees and unions are no longer entitled to advance notice of the terminations.
In addition to the increased layoff periods proposed by Bill 32, as provided by Bill 24: the COVID-19 Pandemic Response Statutes Amendment Act, 2020, employers are already permitted to layoff employees for up to 180 consecutive days “for reasons related to COVID-19”. This applies to employees who are already on a temporary layoff as of June 18, 2020, as well as employees who are laid off on or after that date.
However, as out in our previous article A Warning to Alberta Employers: Temporary Layoffs due to COVID-19 May Amount to Constructive Dismissal or Wrongful Termination, employers should be aware that, while employment standards legislation may permit employers to temporarily layoff employees, an employee otherwise maintains the right sue for constructive dismissal or wrongful termination if they are laid off in the absence of a collective bargaining agreement or employment contract that specifically allows for temporary layoffs.
As such, while the layoff extension periods provided by Bill 24 and proposed by Bill 32 may appear to give employers a right to layoff employees in response to the pandemic, this is not the case. The temporary layoff provisions in the ESC are meant to address those situations where a collective bargaining or employment agreement already allows for temporary layoffs; the ESC provisions do not give employers a statutory right to layoff employees where no prior right to layoff existed. As such, employers who may have laid off - or may be contemplating laying off - employees in response to COVID-19 should carefully consider whether they have such a right and consult with legal counsel prior to implementing any layoffs in order to avoid potential claims of constructive dismissal or wrongful termination.
Termination Pay
Under the proposed amendments in Bill 32, employers will have more time to provide an employee’s final pay. While employers must currently pay an employee their earnings, including termination pay, within 3 or 10 consecutive days (depending on whether or not termination notice or termination pay is required), under the proposed changes in Bill 32, employers will now be required to pay employees their final pay no later than:
10 consecutive days after the end of the pay period in which they were terminated, or
31 consecutive days after the last day of employment.
This will allow employers to avoid having to issue off-cycle payments and to issue final pay to employees in accordance with their normal payroll schedule.
Overpayments
Under the proposed amendments in Bill 32, employers can now recover overpayments paid to employees resulting from things such as payroll calculation errors. While an employer only has 6 months to recover overpayments and must provide an employee with advance written notice before doing so, employers will no doubt welcome this change as they currently have few options when seeking to recover overpayments from employees, including having to commence legal action.
Averaging Arrangements
Bill 32 proposes to replace the current ‘averaging agreement’ provisions of the ESC (which are used to schedule employees to work more than 8 hours in a day without incurring overtime by averaging the weekly hours an employee works over a specified period of time) with so-called ‘averaging arrangements’. Under the current scheme, employee hours can be averaged over a period of 1 to 12 weeks in Averaging Agreements. The proposed amendments to Bill 32 would increase the averaging period over 52 weeks. Some other notable changes proposed by Bill 32 include:
Allowing employers to start or change an hours-of-work averaging arrangement by giving employees 2 weeks’ notice, rather than getting employees’ consent first.
Removal of the requirement that an averaging agreement have an end-date.
Removing the requirement that employers pay daily overtime (unless such overtime included in an averaging agreement).
Application of an overtime threshold, regardless of whether daily overtime is included in an averaging agreement or not.
General Holiday Pay
While employees would still get general holiday pay if Bill 32 passes, the amounts they receive may change. In this regard, an employee’s average daily wage would not include vacation pay and general holiday pay. Rather, the average daily wage will be - at the employer’s election - the employee’s total wages averaged over the number of days they worked in the:
4 weeks immediately before the general holiday, or
4 weeks ending on the last day of the pay period that occurred just before the general holiday.
In addition, Bill 32 would allow employees to continue to accumulate vacation time while they are on a job-protected leave of absence (whereas the current provisions of the ESC allow an employer to reduce an employee’s vacation and vacation pay when the employee is absent from work).
Rest Periods
Bill 32 proposes to return the rest period provisions to their previous form. That is, employees must now work for 5 hours to qualify for a 30-minute break. In addition, employees who work more than 10 hours will be entitled to two (2) 30-minute breaks. Employers and employees remain at liberty to agree to break the rest period into two (2) 15-minute breaks.
Youth Employment
The changes in Bill 32 will make it easier for employers to hire 13 and 14-year-olds for certain types of jobs without first having to obtain a permit. The types of jobs contemplated by the legislation include light janitorial work in offices, coaching and tutoring. It also includes some jobs in the food services industry (so long as the youth is working with someone 18 or older).
Timeline for the ESC Changes
If passed, most of the changes in Bill 32 would take effect on November 1, 2020. However, the following changes would take effect August 15, 2020:
Changes to the requirements around group termination notice;
Length of temporary layoffs; and,
Flexible rules to apply for variances
This article provides a brief summary of some of the proposed legislative changes contained in Bill 32 (which may be reviewed in its entirety here).
We understand that these are stressful and unprecedented times. Members of Scott Venturo Rudakoff’s Employment Group have been assisting employers and employees navigate a myriad of employment-related issues created by the COVID-19 pandemic and would be pleased to discuss any employment issues or how Bill 32 may affect you or your business.
Prepared by Laura Bracco-Callaghan
No Legal Advice. This article is provided solely for information purposes. The information presented does not constitute legal or professional advice and should not be relied upon for such purposes or used as a substitute for legal advice.
[1] https://www.alberta.ca/restoring-balance-in-albertas-workplaces.aspx