Backgrounder: Administrative monetary penalties and public naming of employers
The tools available in the Canada Labour Code to address non-compliance of Part II (Occupational Health and Safety) and Part III (Labour Standards)—such as Assurances of Voluntary Compliance (AVCs), directions, payment orders and prosecution—were mostly put in place in the 1960s. While these existing tools are important and still needed, more tools are needed for situations that are more serious than can be managed with voluntary compliance measures and existing directions and orders, but not as serious as those situations where criminal prosecution is the best option. Having different tools that are appropriate for different types of situations will help the Labour Program to ensure that hard-working Canadians work in safe and healthy workplaces where their rights are respected.
This is why the Government of Canada announced in Budget 2017 its intention to amend and modernize compliance and enforcement measures by introducing a new Part IV (Administrative Monetary Penalties) of the Code. The Budget Implementation Act 2017, No.1, which received Royal Assent on June 22, 2017, includes provisions to strengthen enforcement provisions of Part II and Part III of the Code and enact a new Part IV. Part IV provides for administrative monetary penalties and the public naming of employers that have committed a violation as additional compliance and enforcement measures to fill the gap between voluntary compliance measures and prosecution. Part IV also sets out the basic framework for the new Administrative Monetary Penalties System, covering matters such as review and appeal procedures.
The final Administrative Monetary Penalties Regulations are now published in Part II of the Canada Gazette and will come into force on January 1, 2021, alongside the legislation. The regulatory amendments aim to effectively implement provisions of Part IV of the Code, mainly the Administrative Monetary Penalties System, including:
- schedules designating and classifying violations;
- penalty amounts;
- the formula for calculating administrative monetary penalties;
- an early payment option; and
- the publication of the names of employers that have committed violations under Part II and Part III.
To provide employers with more time to adjust, monetary penalties for administrative violations—for example, not complying with record-keeping and reporting requirements—will not be imposed until January 1, 2022.
Other amendments to compliance and enforcement measures under the Code already in force:
On April 1, 2019, the following amendments came into force by Order in Council:
- a new power for inspectors to determine wages and other amounts owed based on available evidence;
- ability for inspectors to order employers to conduct an internal audit;
- ability for inspectors to issue a notice of voluntary compliance;
- extension of the period covered by a payment order;
- application of administrative fees on payment orders;
- ability for employers to pay a security when requesting a review of a payment order;
- ability for inspectors to issue an order to the debtor of a corporate director, such as a bank, for wages owed to an employee during their incumbency (this order may be issued if an inspector was not able to collect from the employer, debtor of the employer or director themselves); and
- the modernization of service of documents.
On July 29, 2019, adjudicative functions under Part III (Labour Standards) of the Code were transferred to the Canada Industrial Relations Board.
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