Employment Law

Author: J. Geoffrey Howard

On July 18, 2019 the new Alberta United Conservative government took steps to “make Alberta open for business” by amending the Employment Standards Code (“ESC”) and the Labour Relations Code (“LRC”) to reverse changes made by the NDP government. These amendments include:

ESC – Statutory Holiday Pay Regime Revised

The rules on qualifying for statutory holiday pay (sometimes referred to as “general holidays”) were amended to introduce a two-part test:

  1. Employees must have worked 30 days in the year preceding the “stat”; and
  2. Have worked their last scheduled shift before and after the “stat”,

to be eligible for the stat holiday pay and related entitlements below.

The amendments re-introduces the unique-to-Alberta “regular” and “non-regular” workday distinction for stat holiday pay. Employees who are regularly scheduled to work on a stat holiday and work on that day receive either:

  • 1.5x their regular wage for hours worked and average daily wage; or
  • their regular wage rate for hours worked and a day off in place of the state with their average daily wage.

If the stat falls on what would be a regular work day for the employee and the employee does not have to work, the employee will continue to receive the “average daily wage”. The average daily wage is calculated as 5% of the employee’s wages, stat holiday pay and vacation pay earned in the 4 weeks immediately preceding the holiday.

Where a holiday falls on an employee’s regular day off (e.g. Canada Day falls on a Sunday) but the employee is required to work, the employee only receives 1.5 X their regular wage for hours worked with no extra day off in lieu. By contrast, employees who are not regularly scheduled to work on the date of the stat and who are not required to work the holiday do not receive any holiday pay or time off—which is not the case in many other provinces.

As with all employment standards, certain roles and occupations are exempt.

These amendments will take effect September 1, 2019. They do create opportunities for employers to save on stat holiday pay costs, including by avoiding stat holiday pay or providing days off for stats falling on days they do not operate and by offering the option of paying stat premium pay or providing a paid day off in lieu for those asked to work on a stat. Employers who plan to change their pay practises to take advantage of these changes should give advance written notice to affected employees.

ESC – Banked Overtime

Currently employers and employees can agree in writing that an employee can “bank” overtime instead of being paid overtime at the same rate as overtime pay is earned i.e. 1 hour of overtime worked generates 1.5 hours banked. Starting September 1, 2019 the Bill returns the “time banking” rate to 1 hour of banked time for 1 hour of overtime worked. All time banked prior to September 1, 2019 must still be paid out at the previous 1:1.5 rate.

This reinstates an Alberta anomaly where employees can “agree” to accept only straight time off rather than overtime pay at 1.5 regular rates—clearly a less costly solution for employers.

Employers who can afford to have employees take time off in lieu of overtime will want to sign up their employees to the new time banking regime. The prudent view is that employees under averaging agreements permitted under the old ESC rules should be replaced with new agreements on straight time overtime time banking. Employers should remember that either party can terminate time banking and averaging agreements on one month’s written notice.

ESC – New Reduced Youth Minimum Wage

On June 26, 2019, the government introduced a lower youth minimum wage rate of $13/hour, $2 below the $15 adult minimum wage. This applies to students under the age of 18 who attend school up to Grade 12, students at post-secondary or vocational school who work less than 28 hours/week when school is in session (hours in excess of 28 hours must be paid at regular minimum wage levels). When school is not in session, the minimum wage for students will be $13/hour, regardless of the number of hours worked.

LRC – Union Certification Vote Reinstated

The government has reinstated the pre-NDP requirement of a secret ballot to certify a union, eliminating the controversial “card check” certification based on showing 65% of employees have signed union cards. Unions will have to show 40% of employees in the proposed bargaining unit have signed union cards to get a vote. The union cards must be now have been signed within 90 days rather than 6 months. These amendments were deemed to be retroactively effective as of the first reading of the Bill on May 27, 2019.

Next Steps

Employers who want to take advantage of lower cost options now available such as lower youth wages or straight time-banking need to give advance notice to employees. They should also be aware that amending existing pay practises unilaterally with no advance notice will usually be a breach of contract and may even trigger a constructive dismissal thus getting legal advice is recommended. This is especially true if the change materially reduces an employee’s compensation (e.g. reducing wages from $15 to $13/hour).

If you have questions about these changes, feel free to contact Geoff Howard at: ghoward@meplaw.ca; 604 891-1184 and/or James Hsu at: jhsu@meplaw.ca; 604-891-1158.

To unsubscribe from these BC Employer Alerts, email nmorrow@meplaw.ca