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Budget 2023: Potential Amendments to the Canada Labour Code

The Government of Canada recently released its Budget for 2023 (the “Budget”). The Budget proposes certain amendments to the Canada Labour Code (the “Code”) that would strengthen worker protections and entitlements.

The Budget proposes changes to:

  • the prohibitions against misclassifying an employee as an independent contractor;
  • the use of replacement workers during a strike or lockout;
  • leaves of absence for pregnancy loss; and
  • leaves of absence for the death or disappearance of a child.

The proposals are part of broader Federal Government initiative to update the Code. For an overview of upcoming and possible changes to the Code, see our October 13, 2022 article here.

Employee Misclassification

In the Budget, the Federal Government proposes to amend the Code to improve job protections for federally regulated gig economy workers by strengthening prohibitions against employee misclassification. This builds upon the current prohibition on treating an employee as an independent contractor in order to avoid obligations under Part III of the Code. Contravening that section can result in administrative penalties.

The Government has not released the particular amendment proposals. However, in the Budget it states that it will be strengthening the prohibitions against employee misclassification. Therefore, it is likely that the amendments will: (i) expand the definition of employee and dependent contractor; and/or (ii) substantially increase the administrative penalties associated with misclassifying employees.

Replacement Workers and Maintenance of Activities

The Government had previously indicated that it was considering a ban on the use of replacement workers during work stoppages. From October 19, 2022 to January 31, 2023, it conducted a public consultation regarding a possible prohibition on replacement workers. With the consultation having concluded, the Government now appears ready to proceed with such a prohibition.

Additionally, the Government has proposed an improved process to review work activities that must be maintained to ensure the health and safety of the public during a work stoppage.

Leaves of Absence

Pregnancy Loss

The Budget proposes to create a new stand-alone leave for workers in federally regulated sectors who experience a pregnancy loss. While we do not know many details regarding this proposal, Bill C-3: An Act to Amend the Criminal Code and Canada Labour Code, provides useful context.

Bill C-3 introduced new unpaid leaves of absence for stillbirths. To qualify, the employee would have to experience a stillbirth, or have a spouse or common-law spouse that experienced a stillbirth. Therefore, it is likely that the new proposal will build on these provisions by either expanding on the scope of employees covered by the leave, or by allowing for a paid leave of absence. To that point, the Budget indicates that the new leave will apply to parents planning to have a child through adoption or surrogacy.

Death or Disappearance of a Child

Bill C-3 also introduced an unpaid bereavement leave for the death or disappearance of a child or the child of one’s spouse or common-law partner. The Budget proposes to introduce amendments to the Code to enhance the eligibility for this leave. Again, while details have yet to be released, it can be inferred that the scope of workers eligible to take this leave will be expanded.

If you have any questions about this topic, or any questions relating to workplace law generally, please do not hesitate to contact a Mathews Dinsdale lawyer.

The Firm gratefully acknowledge the assistance of Liam Billings, an Articling Student in the firm’s Toronto office.

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