Canada: Changes To Termination Notice Period For Interprovincial And Cross-Border Trucking Companies As Of February 1, 2024 – Gardiner Roberts LLP

Federally regulated trucking companies should be aware of
changes to the termination provisions under Part III of the
Canada Labour Code (“Code“)
that are coming into effect as of February 1, 2024.

The Code applies to all road transportation services, including
trucks and buses, that cross provincial or international borders.
In other words, if you operate, or are employed by, a trucking
company that performs services interprovincially and/or to the
United States of America, that company would be subject to the
Code.

Previously, employees with three consecutive months or more of
continuous employment were entitled to two weeks’ notice or pay
in lieu of notice upon being terminated without cause. Once the new
provisions come into effect on February 1, 2024, such notice period
increases to three weeks. The notice period continues to increase
by one week for each additional year of service completed
thereafter, up to a maximum of eight weeks. Employers who provide
notice before February 1, 2024 will not be required to follow the
new provisions.

The new provisions also require federally regulated trucking
companies to provide a written statement of benefits to employees
who are terminated. The statement must set out the employee’s
vacation benefits, wages, severance pay and any other benefits and
pay arising from their employment with the employer as of the date
of the statement. The statement must be given to the employee as
follows:

1. If the employee is given advance working notice of termination,
   no later than two weeks before the date of the termination; or




2. If the employee is given pay in lieu of notice, no later than
   the date of the termination.

General Considerations for Federally Regulated Trucking
Companies

In order for a person to gain the protection afforded to
employees under Part III of the Code, a worker must have status as
an employee. It is therefore important that federally regulated
trucking companies that engage both employee drivers and
owner-operators (i.e., independent contractors) ensure that they
have in place well-drafted owner-operator and/or employment
agreements. In addition to written agreements, trucking companies
(especially those that engage owner-operators) must ensure that
they examine the totality of their relationships with their own
owner-operators to determine if a person is truly an owner-operator
or if they may inadvertently be classified as an employee.

Considerations for Federally Regulated Trucking Companies that
Hire Employees

Federally regulated trucking companies should consider auditing
their employment agreements to ensure that the agreements provide
at least the minimum notice of termination provided under the Code.
This is especially important in light of recent case law
(Waksdale v. Swegon North America Inc., 2020 ONCA 391)
which effectively heightens the risk that contracting out of the
minimum standards required by the Code may render the
termination clauses in an offending employment contract
unenforceable. If a termination clause in an employment agreement
is rendered unenforceable, this could increase the amount of pay in
lieu of notice payable to an employee upon termination without
cause.

Considerations for Federally Regulated Trucking Companies that
Engage Owner-Operators

Federally regulated trucking companies that engage
owner-operators should have in place a carefully drafted
owner-operator agreement that clearly identifies the owner-operator
as being an independent contractor. Apart from having a written
contract, federally regulated trucking companies should ensure that
their interactions with an intended owner-operator is not at risk
of being characterized as an employer-employee relationship. If an
owner-operator is classified as an employee, that owner-operator
would then be entitled to notice or pay in lieu of notice under the
Code. Trucking companies should therefore ensure that
owner-operators own their own trucks, have the ability to control
when they work, are responsible for their own fuel and insurance
expenses, and pay for their own truck maintenance, among other
things. A PDF version is available to download here.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.