Labour and Employment Law Blog

On June 20, 2024, the Budget Implementation Act received Royal Assent. The Act amended a number of federal statutes, including the Canada Labour Code (the “Code”), which applies to federally regulated employers such as airlines and banks. Most relevant are the changes regarding presumption of employee status and disconnecting from work.

Presumption of Employee Status

The Code now includes a presumption that “a person who is paid remuneration by an employer” is an employee. Previously, the burden of proof was on the individual to show that they were an employee, rather than an independent contractor or some other type of relationship. Now, in any proceeding under the Code (other than a prosecution) the burden of proof will be on the employer to show that a person is not an employee. Further, the Code explicitly prohibits employers from treating an employee as a non-employee, meaning it is a contravention of the Code to misclassify an employee as an independent contractor.

The amendments will not change the legal test for determining whether a worker is an employee or an independent contractor. However, the amendments may result in more challenges to a worker’s status. Federally regulated employers may want to review their arrangements to ensure that all workers engaged as independent contractors are properly classified and documented.

Disconnecting from Work

Although this amendment is not yet in force, all federally regulated employers will be required to implement a policy on disconnecting from work. The policy must include:

• A general rule respecting work-related communications outside of scheduled hours of work, including the employer’s expectations and any opportunity for employees to disconnect from means of communications;
• Any exceptions to the rule and their underlying rationale;
• The effective date of the policy; and
• Any other elements that may be prescribed by regulation.

Employers will be permitted to exclude certain employees from the application of the policy, such as managers. If the workplace is unionized, the employer and union may agree that the collective agreement adequately addresses these requirements.

When the amendments are brought into force, employers will have one year to implement a Disconnecting from Work Policy.  Employers must consult employees (or the union, if the workplace is unionized) in the development and updating of its policy and provide them with at least 90 days to provide comments. Once implemented, employers must update the policy every 3 years.

On or before the effective date of the policy, employers must post a copy of the policy visibly in the workplace, and provide a copy to every affected employee within 30 days.

Note that this amendment does not create a positive right for employees to disconnect from work after hours – it merely creates a requirement for employers to explain the procedures around limiting after hours communications, similar to Ontario employment standards legislation, which also requires such a policy.

Key Takeaways for Federally Regulated Employers

• Employers should review their arrangements to ensure that all independent contractors are classified correctly.
• The requirement to have a Disconnecting from Work Policy is coming soon – employers may wish to start considering how these requirements will apply to their workplace and preparing their policy.