On November 1, 2020, several changes to Alberta’s Employment Standards Code came into effect. Changes include payment of earnings after termination, deductions, averaging arrangements for calculating overtime, rest periods and calculating general holiday pay. These changes are detailed in Bill 32: Restoring Balance in Alberta’s Workplaces Act, 2020. Remember the government’s red-tape inquiry? Bill 32 is a response to issues raised.
Bill 32 also includes changes to the Labour Relations Code, the Police Officers Collective Bargaining Act, the Post-secondary Learning Act, the Public Education Collective Bargaining Act and the Public Service Employee Relations Act. This article will only address changes to the Employment Standards Code. For more information on the other changes, see the Government of Alberta’s webpage.
Some of the provisions in Bill 32 came into effect on August 15, 2020:
- The layoff period was increased from 60 days to 90 days, within a 120-day period. If an employee does not work for more than 90 days in that period, their employment automatically terminates. The employer must pay the employee termination pay.
- The layoff period due to COVID-19 is 180 consecutive days. This means an employer can layoff an employee for 180 consecutive days for reasons due to COVID-19 and still recall them.
- For group terminations or layoffs of 50 or more employees within a 4-week period at a single location, employers must give the Minister written notice at least 4 weeks before the first termination. Before, there were different notice periods based on the number of employees being laid off. These rules do not apply to seasonal employees or those employed for a definite term or task.
Bigger changes came into effect on November 1, 2020.
Payment on Termination
One of the biggest changes is when an employee gets their final pay once their employment ends. The Code used to say that if an employee quit, the employer had to pay within 10 days of the last day of work. If an employer terminated the employee’s employment with cause, the employer also had 10 days to pay up. If an employer terminated without cause, the employer only had 3 days to pay up.
Now, an employee is entitled to 30 minutes of rest if they work more than 5 hours but less than 10 hours.
Now, the Code gives more power to the employer. Regardless of how an employee’s employment ends (quits, without cause, with cause), the employer can choose from two periods to pay:
- 10 days after the end of the pay period in which the termination occurs, or
- 31 days after the last day of employment.
From an employer’s perspective, these periods likely address administrative and cash flows concerns that the previous rules may have caused. However, now an employee may be waiting a long time for monies owed to them! Say for example, an employee is paid monthly and is terminated right after payday, and the employer chooses the first option. That employee may be waiting around 40 days for their final pay cheque.
Section 12 of the Code sets out what an employer may deduct from an employee’s earnings. Previously, the only deductions allowed were:
- statutory deductions (income taxes, CPP contributions, EI premiums)
- money owing by law or under a judgment or court order (such as garnishing accounts)
- amounts owed under a collective agreement (such as union dues)
- any other amount the employee agreed to in writing (with exceptions)
These deductions are still allowed, along with two new ones:
- overpayment of earnings due to a payroll calculation error (but only within 6 months of the overpayment)
- vacation pay paid in advance of an employee being entitled to it
For these new deductions, an employer must give an employee written notice beforehand. As well, these new deductions only apply to overpayments or advances paid November 1st or after. No retroactive deductions!
One of the biggest changes is when an employee gets their final pay once their employment ends.
The old hours of work averaging agreements are now called averaging arrangements. Averaging arrangements average out an employee’s hours over a period for the purpose of calculating overtime. One of the biggest changes is shift in power from the employee to the employer. Now, an employer can “require or permit” an employee or group of employees to work an averaging arrangement. Employers can adopt an arrangement by giving two weeks’ notice and do not need employees’ consent first. Again, if a collective agreement applies, it governs.
The length of an averaging arrangement has increased from 12 weeks to 52 weeks. The arrangement must be in writing, include a schedule of daily and weekly hours of work, and does not need an end date. It can also say how an employer can change the schedule, including the amount of notice given to the employee. Based on the language of the new subsection 23.1(4), the notice period can be shorter or longer than the 24 hours’ notice usually required. Employees still need 8 hours of rest between shifts.
Before November 1st, employees were entitled to 30 minutes of rest for every 5 hours worked. So if an employee worked a five hour shift, they got a 30-minute break (or two 15-minute breaks), paid or unpaid. For 10 hours, they got two 30-minute breaks.
Now, an employee is entitled to 30 minutes of rest if they work more than 5 hours but less than 10 hours. Breaks can still be split into two 15-minute periods and can be paid or unpaid. So an employee working a five-hour shift is not entitled to a rest period. But if they work 5 hours and 1 minute, they are. For employees who work more than 10 hours, they are entitled to two 30-minutes breaks. Again, a collective agreement may say otherwise and takes priority.
General Holiday Pay
The change here is calculating average daily wage for general holiday pay. First, vacation pay and general holiday pay are no longer included in the calculation. Second, an employer can choose from two periods for averaging an employee’s total wages over the number of days worked in the period:
- The 4-week period immediately before the general holiday. So if a holiday falls on a Monday, the period is the 28 days ending on the Sunday before.
- The 4-week period ending on the last day of the pay period immediately before the general holiday. So if the holiday falls on a Monday and the last pay period ended the Friday before, the period is the 28 days ending on the Friday.
No doubt this change makes it easier for an employer to calculate general holiday pay. However, the employer’s choice could affect an employee’s pay.
A Few Others
The provision setting out when an employer has to give notice of a layoff has been repealed. Presumably, an employer can give an employee a layoff slip effective immediately.
For “greater certainty”, subsection 34(2) has been added regarding vacation entitlements. When an employee is away on certain leaves (maternity, parental, reservist, compassionate care, death or disappearance of a child, critical illness of a child, long-term illness and injury and others listed in division 7.6 of the Code), the time away is included when calculating the employee’s years of employment to figure out how much vacation time they get.