Employees working in banks, airlines, telecommunications, railways, interprovincial transportation and other federally regulated industries are generally governed by the Canada Labour Code, rather than Ontario’s Employment Standards Act, 2000.
The distinction matters. Federally regulated employees may have important rights relating to termination notice, severance pay, unjust dismissal, protected leaves and workplace harassment. In some cases, those protections are substantially different from the rights available to provincially regulated employees. For a plain-language overview, see our federally regulated employees page.
Are You a Federally Regulated Employee?
The Canada Labour Code generally applies to employees working in federally regulated industries, including:
- Banks and federally regulated financial institutions;
- Airlines and airports;
- Railways and marine transportation;
- Telecommunications and broadcasting companies;
- Interprovincial trucking and transportation businesses;
- Postal services; and
- Certain federal Crown corporations.
Simply working for a large or national company does not necessarily mean that you are federally regulated. The nature of the employer’s operations usually determines whether federal or provincial employment law applies.
Graduated Termination Notice Under the Canada Labour Code
The Canada Labour Code provides graduated minimum notice of termination, based on an employee’s length of service.
After three consecutive months of employment, an employee is generally entitled to at least two weeks’ written notice of termination or pay in lieu of notice. Once an employee has completed three years of service, the minimum increases to one week for every completed year of employment, up to eight weeks.
These are minimum statutory requirements. Depending on the employee’s contract and circumstances, additional compensation may also be available.
Employees should therefore avoid assuming that their employer’s first offer represents everything they are owed. Before signing a release, consider having the package reviewed by an experienced wrongful dismissal lawyer.
Federally Regulated Employees May Also Receive Severance Pay
Under section 235 of the Canada Labour Code, an employee who has completed at least 12 consecutive months of employment may also be entitled to statutory severance pay.
The minimum severance entitlement is generally the greater of:
- Two days’ regular wages for each completed year of employment; or
- Five days’ regular wages.
Termination pay and severance pay are separate entitlements. Depending on the circumstances, an employee may be entitled to both.
Unjust Dismissal Protection Can Be Especially Powerful
One of the most important protections available to federally regulated employees is the unjust dismissal process under sections 240 to 246 of the Canada Labour Code.
A non-unionized employee who has completed at least 12 consecutive months of employment may be able to challenge their dismissal. Certain employees, including managers and employees dismissed because of a genuine lack of work or discontinuance of a function, may be excluded.
Where a dismissal is found to be unjust, the Canada Industrial Relations Board may order remedies that are not ordinarily available in a wrongful dismissal lawsuit, including:
- Reinstatement to employment;
- Compensation for lost income; and
- Other measures necessary to remedy the dismissal.
An unjust dismissal complaint generally must be filed within 90 days of the dismissal. Missing that deadline can seriously limit an employee’s options. Federally regulated employees should therefore obtain advice promptly after losing their jobs.
Workplace Harassment and Violence Obligations Remain a Priority
Part II of the Canada Labour Code and the Work Place Harassment and Violence Prevention Regulations impose significant obligations on federally regulated employers.
Employers must maintain a workplace harassment and violence prevention policy, assess workplace risks, provide training and establish a process for responding to reported incidents. The federal definition of harassment and violence can include conduct that could reasonably be expected to cause offence, humiliation, physical injury or psychological injury.
Employees experiencing bullying, sexual harassment, threats or other inappropriate conduct may have rights under the Canada Labour Code, the Canadian Human Rights Act and their employer’s internal policies.
More information about workplace discrimination and accommodation is available through Pelsmakher Law’s human rights and discrimination services.
Mass Terminations Carry Additional Requirements
Where an employer terminates 50 or more employees at a single industrial establishment within a four-week period, the group termination provisions of the Canada Labour Code may apply.
These rules can require the employer to:
- Provide at least 16 weeks’ notice to the federal Labour Program;
- Notify affected employees or their union;
- Establish a joint planning committee;
- Provide employees with statements setting out their wages, vacation pay, severance and other benefits; and
- Satisfy the individual termination requirements for each employee.
Employees affected by a restructuring or mass layoff should have their individual severance offers reviewed, even where the employer has complied with the group notice process.
What Should a Federally Regulated Employee Do After Being Terminated?
After receiving a termination letter or severance package:
- Do not sign the release immediately.
- Preserve your employment contract, termination letter, pay records, bonus documents and benefits information.
- Confirm whether your employment is federally or provincially regulated.
- Determine whether the 90-day unjust dismissal deadline applies.
- Obtain legal advice about your termination, severance and potential complaint options.
Pelsmakher Law assists employees across Canada with severance reviews, wrongful dismissal claims and workplace disputes. We can assess whether the Canada Labour Code applies, identify applicable deadlines and explain the remedies that may be available.
To discuss your circumstances, book a consultation with Pelsmakher Law.
Frequently Asked Questions
What employees are governed by the Canada Labour Code?
The Canada Labour Code generally covers employees in federally regulated industries such as banking, airlines, telecommunications, railways, interprovincial transportation, postal services and certain Crown corporations.
How much termination notice does a federally regulated employee receive?
After three consecutive months of employment, an employee is generally entitled to at least two weeks’ notice or pay in lieu. Employees with at least three years of service generally receive one week per completed year, up to eight weeks.
Are termination pay and severance pay the same thing?
No. Termination pay replaces the required notice period. Statutory severance pay is a separate entitlement that may apply after an employee completes 12 consecutive months of employment.
Can a federally regulated employee challenge a termination?
A qualifying non-unionized employee with at least 12 months of service may file an unjust dismissal complaint under section 240 of the Canada Labour Code. A complaint generally must be filed within 90 days. Federally regulated employees are also entitled to seek common law reasonable notice of dismissal.
Can an unjustly dismissed employee be reinstated?
Yes, depending upon the circumstances of your dismissal, you may be entitled to reinstatement with lost wages, even if a severance package is offered.
Should I sign a federal severance package immediately?
Employees should generally obtain legal advice before signing a release. The offer may not include all statutory, contractual or common-law entitlements, and signing can prevent the employee from pursuing additional compensation.
This article provides general information only and does not constitute legal advice. Employment rights depend on the specific workplace, employment agreement and circumstances. Contact Pelsmakher Law for advice relating to your situation.
