Amendments to the Canada Labour Code provide certainty and restraint to the damages available to employees who file a wage claim under the CLC. Organizations subject to federal regulation of the workplace should be attentive to these changes.

As many employers governed by the Canada Labour Code ("CLC") have learned to their dismay, until now, the CLC did not impose any deadline for filing CLC complaints, nor was there any cap on the total amount of back wages that could be recovered/awarded. The employee's ability to prove the entitlement imposed the only practical limitation on recovery.  (As a matter of informal practice, because the CLC requires an employer to keep records for 3 years, often the records did not exist to support a longer look-back period.  But if the records were still in existence, then in theory, an ex-employee could complain years after a termination, and could seek amounts reaching back to day 1 of the employment relationship.) 

Happily for employers, Division 10 of the Jobs and Growth Act, 2012  came into force on April 1, 2014, and the following reforms are now in effect:

  • under new section 251.01 of the CLC, there is now a prescribed process for making complaints to an Employment and Social Development Canada - Labour Program (Labour Program) Inspector
  • under new sections 251.02, 251.03 and 251.05, Inspectors have broadened powers to facilitate settlements, suspend investigations, or reject complaints for certain enumerated grounds
  • under new section 251.01, subject to prescribed exceptions:
    • wage/payment recovery complaints must be made within 6 months from the latest date the amounts were required to be paid by the employer
    • all other complaints must be made within 6 months from the date the subject matter of the complaint arose
  • under amended section 251.1(2),  the "look-back" period for payment orders will be limited to amounts owing for the period starting 12 months prior to the date of complaint or date of termination or date of investigation, as the case may be
  • under amended section 251.1(2),  the "look-back" period for vacation pay claims is doubled to 24 months.

To review the Jobs and Growth Act, 2012, click here. 

These long-awaited reforms give federally regulated employers welcome relief from what was, in theory, open-ended exposure to claims, and at last bring the CLC into line with norms under provincial employment/labour standards legislation.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.