Employment Standards Legislation and Your Business
Our earlier blog post stated that most employee-employer relationships are contractual. That's true, but we also have to consider what kind of laws our legislators have put forward that affect those relationships!
In this blog post, we will be examining the Province of Alberta's Employment Standards Code to illustrate what kind of responsibilities and rules are imparted onto employers in the Province. As noted in previous posts, employee-employer relationships are mostly contractual, but that doesn't mean you're free to contract for everything under the sun - there are rules to follow. In the other provinces and territories, there are similar pieces of legislation to Alberta's Employment Standards Code (Employment Standards Acts in Ontario and BC for example). The separate provinces have their own nuances to the relationship. However, the broadest of the rules are similar and it may be fruitful to have a general understanding of the outline. Employees or Independent Contractors? Before you get too far into this post, make sure you know if an employee is a right fit for your business!
The Employment Standards Code
Employment Standards legislation sets out the minimum obligations for employers in Alberta; the corresponding Regulations that are attached to the Code set out exemptions to these general rules. It's important to note that the Code only sets out minimums - the base floor that an employer has to stand by. The common law (i.e., what our courts across the country have established) has, on a general basis, much more stringent requirements imposed onto employers. Of course, you can contract out of the common law using employment agreements, but you cannot do the same for legislation. That is illegal!
Section 3 of the Code states that the provisions found in the Code do not impact the civil remedies (injunctions) an employee has. They are free to pursue both civil and common law (damages) remedies.
The important parts of the Code highlighted below include Divisions 3, 4, 6, 8 and the accompanying Regulations.
Division 3: Hours of Work
These sections lay out the typical features of the "40-hour workweek".Section 18 of the Code delineates the legally required breaks that employers must give to their employees, subject to extenuating circumstances like collective agreements and emergencies.
- If an employee works between 5 to 10 hours in one period, they are legally entitled to a rest period of at least 30 minutes, paid or unpaid.
- If the employee works for a period of over 10 hours, they are entitled to 2 rest periods.
The next section (section 19) lays out the days of rest an employee is entitled to between shifts. Depending on consecutive work weeks, the employer has to provide at least one day of rest for every week worked.
Division 4: Overtime and Overtime Pay
The Code also sets out the rules surrounding overtime - what happens when an employee works over the rules set out in the workweek? Section 21 of the Code necessitates that overtime hours are the greater of the total of an employee's hours of work more than 8 hours on each workday in the week OR the hours of work above 44 hours in the week. If an employee exceeds that time, then the employer is, at the minimum, entitled to pay an employee overtime that 1.5 times the employee's wage rate. Section 23 provides employers and employees with an opportunity to be flexible with overtime. Overtime agreements can be created that would allow the employee to take paid time off work instead of being paid out the full 1.5 hours.
Division 6: Vacation
Section 34 of the Code entitles employees to enjoy a basic vacation for services rendered. An employer must provide an annual vacation to an employee of at least 2 weeks for the first 4 years of their employment and bump that up to 3 weeks after 5 years of employment. The rest of the section also outlines the rules regarding vacation pay, and how vacation is to be given. Vacation pay is similar to the entitlement of the vacation, being set at 4%, with the pay increasing to 5% after 5 years of consecutive employment. Vacation is generally supposed to be given in one unbroken period, but the employee can request in writing to break that up into separate periods.
Division 8: Termination
The Code mandates that under most circumstances, employers must provide notice of termination to an employee if the service relationship concludes. Employees that have been terminated for just cause, worked less than 90 days, under extraordinary circumstances beyond the employer's control, or for other specific scenarios do not need to be provided such notice. The minimum notice required depends on the employee's length of tenure. Again, these are minimums, and prudent employers may provide more notice than what is set out in the Code.
- 1 week notice for employees who have worked between 90 days and 2 years;
- 2 weeks notice for employees who have worked between 2 - 4 years;
- 3 weeks notice for employees who have worked between 4 - 6 years, and subsequently until...
- 8 weeks notice for employees who have worked for more than 10 years.
Besides, the employer has the right to temporarily lay off employees with a written layoff notice (provided there is no collective agreement that indicates a contrary intention). The employer has no right at common law to temporary lay off an employee unless the possibility of this was agreed upon before. Additionally, if an employee is laid off for more than 60 days in a 120-day period, the employee is deemed to have been terminated and thus termination provisions would apply.
Employment Standards Regulations
The Regulations are accompanying legal documents that seek to clarify and supplement the main premises set out in the Code. Some important takeaways from the Regulations include:
- The Employer is not required, for supervisors, managers, or those employed in a capacity concerning matters of a confidential nature, to maintain the keeping of employment records and overtime hours;
- No notice of termination is required for a myriad of workers that are employed in the construction and construction-adjacent industries;
- Vacation and vacation pay exemptions to certain classes of salespersons;
- The provincial minimum wage exclusions for certain classes of employees like students in formal courses of training, extras in film studios, and others.
These exceptions may have implications for your small business or start-up, as salespersons are often required to push your product to market and much of the work performed in start-ups by employees often see that they work over the typical "9 - 5" workweek.
How can a lawyer help?
If you’re going to be hiring employees or contractors any time soon, we recommend chatting with a good lawyer. You will be able to get advice that's tailor-made to the nuances of your company and employees.