NLIS 2
December 6, 2001
(Labour)

 

Government announces changes to labour standards legislation

Labour Minister Anna Thistle is pleased to announce that government is making significant changes to the province's Labour Standards Act. The act establishes minimum conditions and basic terms of employment in the province.

"Government is introducing legislation which is responsive to the needs of business and labour," said Minister Thistle. "The amendments represent the most comprehensive reform of labour standards legislation in nearly thirty years, and bring Newfoundland and Labrador's Labour Standards Act in line with the rest of Canada. I am confident that the changes will have positive impacts on both employees and employers, as we received consensus from both business and labour representatives on all amendments."

The amendments to the Labour Standards Act have come as a result of an extensive consultative process, including public input into the report of the Labour Standards Review Board, consultation with the Newfoundland and Labrador Federation of Labour and the Newfoundland and Labrador Employers' Council, and a roundtable with key business and labour stakeholders. Minister Thistle expressed her appreciation to Marilyn Tucker, president of the Newfoundland and Labrador Employers' Council, and Elaine Price, president of the Newfoundland and Labrador Federation of Labour, for their leadership and vision on this major public policy initiative.

"I commend the Minister of Labour for adopting a collaborative approach to build stakeholder consensus on the legislative changes required to respond to the changing nature of work in this province," said Elaine Price. "I also thank the Department of Labour for its support in facilitating the consensus building process. Initiatives such as this contribute to an improved industrial relations environment by encouraging labour and employers to work together."

"Newfoundland and Labrador needs to be able to compete both on a national and international market, and positive labour-management relations are key to that. Bill 54 shows that we have both the will and the ability to achieve better labour relations. We are very pleased with the outcome of this initiative, and we look forward to working together again in 2002 to help further this agenda," said Marilyn Tucker.

The amendments will help improve employee-employer relations and will provide more flexibility in the workplace. "This legislation demonstrates a commitment to helping workers and employers balance work and family responsibilities, and places Newfoundland and Labrador among the leaders in the country in addressing labour standards matters," added Minister Thistle.

Media contact: Rebekah Winsor, Communications, (709) 729-1741.


BACKGROUNDER

The Labour Standards Act (the Act) and Regulations establish minimum conditions and basic terms of employment in the province, including minimum wage, hours of work and overtime rates of pay. The act applies to the majority of the province's workplaces, particularly those operating in a non-unionized environment, which is approximately 60 per cent of Newfoundland and Labrador's labour force.

In February, 2000, the former Minister of Environment and Labour appointed a Labour Standards Board, consisting of Jim Oakley as chairperson, Janet Kelly as employer representative and Greg Pretty as employee representative. Their mandate was to seek public input on labour standards legislation. The board held public meetings throughout the province and submitted its report to the minister in June, 2000. 

Government is pleased that the board submitted a report that was responsive to the needs of labour and business stakeholders. Since receiving the report, government has consulted with the Newfoundland and Labrador Federation of Labour, the Newfoundland and Labrador Employers' Council, and other key business and labour stakeholders. The review board and stakeholder consultation process has given rise to 30 proposed amendments to the Labour Standards Act. 

Highlights of the changes being introduced include:

Remembrance Day Proclaimed Paid Public Holiday

The Labour Standards Act currently provides five paid public holidays: New Year's Day, Good Friday, Canada Day, Labour Day, and Christmas Day. An amendment to the act will add Remembrance Day as the sixth paid public holiday. In addition, amendments will be introduced to ensure that part-time and shift workers will receive the benefits of paid public holidays. 

Overtime Pay

Under the current legislation, overtime pay must, as a minimum, be paid at one and a half times the provincial minimum wage, regardless of the employee's regular hourly wage. The amendment changes the minimum requirement to one and a half times the employee's regular hourly wage. This change will provide improved compensation for employees currently paid at the minimum wage overtime rate and brings the province's legislation in line with most other provinces.

Government announces changes to labour standards legislation

Several of the changes to the Labour Standards Act will improve flexibility in the workplace and accommodate family responsibilities:

  • Unpaid sick leave will be broadened to include leave required to attend to family responsibilities, including child and elder care, and increased from five days to seven days;

  • Bereavement leave will be broadened to include the death of a daughter-in-law or son-in-law, and vacation leave may be extended by one day when bereavement leave entitlement occurs during vacation; and,

  • Employees will have the option, on agreement with the employer, to take time off in lieu of payment for overtime. Currently, the act allows overtime to be addressed through cash compensation only. 

Notice of Termination

The legislation introduces a new approach to the obligation of employers and employees to provide notice of termination of an employment relationship. Currently, employers and employees are required to provide one week notice of termination for employment which is less than two years, and two weeks notice for employment relationships of two years or longer. 

The amended act will provide a graduated scale for notice of termination, which is tied to the number of years of an employment relationship. Specifically, the amendment provides: one weeks notice if employed between three months and two years; two weeks if employed between two and five years; three weeks if employed between five and 10 years; four weeks if employed between 10 and 15 years; and six weeks if employed over 15 years. 

This change provides appropriate recognition of the commitment employees and employers have made to an employment relationship, and to the length of time employers and employees alike may require to adjust to the termination of an employment relationship. Graduated notice of termination requirements are found in most other provinces. 

Protection for Unpaid Employee Wages

Currently, when a business becomes insolvent, employees can be left without being paid for their final weeks of work. In these circumstances, workers may face the double problem of losing a job as well as not getting paid for work actually performed. Amendments will increase protection for employee's wages:

  • In the event of business insolvency, the current maximum of $2,000 for employee wage protection among unsecured creditors will increase to a maximum of $7,500. 

  • Company directors will be personally liable for wages that are earned by employees, and remain unpaid at the time of a business insolvency. A maximum liability of two months unpaid wages per employee will apply. This liability will not apply where company directors can demonstrate that they have exercised due diligence in their responsibilities to the company. However, in those circumstances where employers or company directors have knowingly allowed a business to operate to the point of insolvency, without any planning for paying outstanding wages, the directors will be liable. Currently, there is no such provision in the act.

  • In the current act, an employee can recover unpaid wages that were owing in the six months previous to making a complaint under the act. An amendment will extend this timeframe to two years.

These changes bring protection against loss of unpaid wages to levels comparable elsewhere in Canada. 

Summary

The amendments being made to the Labour Standards Act represent significant improvements with positive impacts on both workers and employers. All amendments will take effect on July 1, 2002, with the exception of the change to the minimum rate of overtime pay, which will become effective on April 1, 2003 to allow affected employers to adjust.

In addition to the improvements reflected in the current reform package, the Minister of Labour has committed to annual consultations with business and labour to review and discuss labour standards matters.

The Department of Labour will make available in the near future educational materials to better inform and educate employers and employees about the amendments to the Labour Standards Act.

2001 12 06                       11:45 a.m.


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