Understanding the Canada Labour Code
by Jim Park
Back in the early 1980s, a tugboat captain in Tampa, Fla. crashed his boat
into a bridge piling under the Howard Frankland Bridge, which crosses Old Tampa
Bay. The barge wasn't badly damaged, but the helmsman took out a piling causing
a section of the bridge to collapse into the water below. Several motorists
were killed in the crash, and the tugboat was struck by falling debris and sunk.
The tab for all the damage, including the rerouting of traffic around the fallen
span for more than a year afterward, was in the hundreds-of-millions-of-dollars
The captain survived the accident, as did his crew, but their pay was withheld
for causing the accident. They should have been paid right up until the moment
the boat slipped beneath the waves, but the employer disagreed. The case was
eventually decided in favor of the sailors.
acknowledging that there are differences between the labor laws of the State
of Florida and our own, this little tale serves as an illustration of the havoc
you could cause, and still be entitled to pay for time on the job. Like the
labor statutes in Florida, the Canada Labour Code does not permit unauthorized
deductions from wages, for any reason, under any circumstances, no how. Period.
The bottom line, says David Leroux, is that other than statutory deductions,
an employer may not tamper with a person's pay cheque.
"If they wish to take something from the person's pay cheque, they have
to have a signed authorization to do so, with specific amounts indicated,"
he says. Leroux is technical advisor on labor standards with the Client Education
& Training Branch of Human Resources Development Canada's Labour Program.
Leroux says that unauthorized deductions continue to represent a significant
number of the investigations undertaken by his department. In recent years,
Labour Canada has been conducting an education and awareness campaign that's
been successful in reducing the number of complaints, but there's still a way
to go, he says.
This is where damage to the truck or damage to goods comes up, over and over
again. The Code recognizes that employees are protected from having monies deducted
from wages to pay for such damages, but as Leroux points out, authorized deductions
are permitted. That assumes - under certain conditions - that some kind of an
agreement has been arrived at between the employer and the employee, <it>without
Meaning, "Sign this or you're fired" doesn't count as an agreement
arrived at without coercion.
When an inspector is called in to investigate a claim, part of the investigation
could revolve around how the agreement was arrived at. If it can be determined
that some form of coercion or 'encouragement' was used, an inspector can still
issue a payment order against the employer.
If an employer still feels that an employee owes money, for something other
than a statutory deduction (such as Income Tax, CPP, E.I. etc.), or something
the employee has authorized in advance, then the only route is civil action,
such as small claims court.
The Canada Labour Code goes a long way in protecting your rights to be paid
for work done, but it doesn't prohibit an employer from using some other legal
means to right what may still be perceived as a wrong. So, you see, it can cut
Adding to the aforementioned complexity in the way drivers are paid is the
"performance or safety bonus." Are bonuses part of the wage package,
and subject to protection under the Code, or not? Leroux says bonuses are a
bit of a gray zone, where each case must be considered on its own merit.
If a performance bonus were to start at say $1000, with amounts deducted as
violations occur, could the employer 'deduct' $100 from your bonus for leaving
a load lock on a loading dock, or for bending a bumper?
"In some cases, a bonus may be considered 'wages,' while at other times
it would not," he says. "In the case where it is wages, it too would
be protected from unauthorized deductions."
Watch this space in the future: Leroux is presently working on a document that
will clarify the issue, and when he's finished, you'll see it here first.
Workers not covered by the Code, such as owner-operators, are not granted the
same protection afforded to employees. The terms of the owner-operator contract
are all that stand between you and an unfair deduction. But in the case of an
owner-operator employing a driver, the owner-op would be considered an employer
for the purposes of the Code, and subject to all the same obligations that any
other employer would be, including the restrictions that prohibit arbitrary
and unauthorized deductions from their employee's earnings.
The Fine Print
According to Leroux, another major bone of contention regarding payment of wages
is determining the amount an employee is due for certain work performed. The
trucking industry struggles under one of the most complex remuneration schemes
in the land. With pay in various sectors based on percentages, miles traveled,
hours waited, flat-rated items on a schedule, etc., it's seldom clear exactly
what is owed to you on pay day.
Leroux says that in instances where his people are called to intervene in a
dispute, the employer's policy and procedures manual (or the conditions of employment
manual) is one of the places they start looking for 'standard practice'. That,
he says, should spell out how pay will be determined, and what, if any, mileage
program the carrier uses to pay drivers. And the manuals should speak to any
other options for determining pay, such as legitimate and billable waiting time,
flat fees for border crossings, trailer drops, bonuses, etc.
"It's not wise to rely on word of mouth," Leroux cautions. "If
you're in any doubt about how you'll be paid, or what services you're obliged
to perform, check it out in the manual. It should all be there."
When you get right down to it, the more there is in writing, the less chance
there will be of confusion and misinterpretation. From the policy and procedures
manual to the records of hours worked, Leroux can't over-stress the importance
of keeping proper records. And of course, the reverse side of that is, you have
an obligation to read and understand the rules and policy stuff.
Interestingly, just because the employer commits a certain policy to writing,
and you agree to it in writing, it doesn't mean it's the rule. If it contravenes
the Code, it's bunk.
The Code sets out specific obligations for employers, outlining what kinds
of records must be kept, including records of hours worked ("hours worked,"
by the way, is broader in scope that it sounds, records should cover all forms
of remuneration, and records of all duty-related activities) . You might do
your boss a favor and suggest the he or she visit the website listed below,
and download pamphlet # 14 - Keeping of Records. It's a plain language version
of an otherwise pretty hard to read legalize-laded official interpretation of
Quite often, Labour Canada inspectors end up playing a sort of mediator's role
if those records and manuals don't make it clear enough, or don't exist at all.
In cases where records can't be found or prove inadequate (there are fines in
place for non-compliance on the employer's behalf), any records the <it>employee</it>
might have kept will be considered. The employee will be asked to swear out
an affidavit, under oath, attesting to the accuracy of those records. The records
may then be presented to the employer to agree or refute, and that's frequently
where the discussion ends - with agreement between the parties.
But the employer could disagree with the records. At that point, the investigator
could issue a formal payment order, which the employer could then decide to
pay or appeal. The avenue exists - if it goes to that stage - where a referee
could be appointed to settle the dispute. Of course, that's hardly the norm,
but because of that possibility, Leroux urges all employers to issue formal
payment guidelines (conditions of employment or company contract), and he urges
all employees to read and understand the terms and conditions of those documents
at the time they're hired, and on a regular basis after that.
By far, the biggest irritant in this whole discussion has to be that carriers
often calculate pay using a mileage and routing program, while employees watch
the hubodometer to see how much they're making. If ever there was a recipe for
conflict, this is it.
"We've got no problem at all with the use of these programs because they
are a recognized standard in the industry for determining mileage," says
Leroux. "All we're asking is everyone be made well aware that so-and-so
is the standard, right from the start."
If you know there's a shortcoming in the standard mileages, or that routing
requirements will add unpaid miles to the trip, raise the issue with your employer
in advance to head off a potentially unpleasant confrontation.
The issue of deductions from wages is actually pretty straightforward, yet
it remains one of the most frequently reported difficulties to Labour Canada
As Dave Leroux puts it - in 25 words or less - "Other than statutory deductions,
an employer may not tamper with a person's pay cheque."
But just so you'll know, here's the skinny on deductions from that pay cheque,
directly from Pamphlet 13 - Deductions From Wages, Part III of the Canada Labour
Code (Labour Standards).
For information only. For interpretation and application purposes, please refer
to Part III of the Canada Labour Code (Labour Standards), the Canada Labour
Standards Regulations, and relevant amendments.
1. If my employee owes me money, can I just take it out of his pay?
Not without written authorization from the employee. If the employer and
employee agree that the money is owed and the employee agrees to have the money
deducted from his pay, obtaining a written authorization is easy. However, when
the parties disagree, the employer can't use his position to unilaterally decide
that the money is owed and pay himself out of the employee's wages. Normally,
parties who disagree about money owed are required to go through the civil court
process to have the matter judged by an impartial third party. The Code sets
out what amounts can be deducted from an employee's wages.
2. What can be deducted from an employee's pay cheque?
a. deductions required by federal or provincial law such as taxes and employment
b. deductions authorized by a court order such as child support garnishment
or by a collective agreement such as union dues
c. overpayments of wages
d. specific amounts authorized in writing by the employee*
* even with a written consent, an employer can't deduct amounts for property
damage or loss of money if any other person had access to it.
3. Can I simply have my employee sign a statement that he will be responsible
for any damage he causes?
A blanket authorization is not valid. In order for a written authorization
to be valid, it has to show the exact amount being deducted, and be signed at
the time that the deduction is made. In this way, the employee understands what
he is signing and how/when it will affect him.
4. What about monthly insurance premiums? Does the employee have to sign
an authorization every month?
No. For regular payments such as charitable donations, savings plans contributions,
medical and dental plan premiums, life insurance and long term disability premiums,
pension plan or RRSP contributions, the signed authorization should set out
the amounts of the deductions, the purpose and the frequency of the deductions.
5. What if my employee refuses to sign an authorization to deduct tickets
he received under the Highway Traffic Act?
Tickets and fines can only be deducted from an employee's wages if that employee
gives written consent. If the employer feels that the employee is responsible
to pay them, an alternative is civil court.
6. Can the employee be forced to sign an authorization?
The employee's consent must be voluntary. In the event of a complaint investigation,
the inspector will look at the circumstances under which the authorization was
signed. If it is found that coercion was used, the inspector may find that the
authorization is not valid.
HRDC Labour Program
Regional Offices, District Offices
Alberta, Northwest Territories & Nunavut Region
Calgary District Office - 780-310-0000, then 427-3731
Edmonton District Office - 780-427-3731
All other Alberta locations - 780-310-0000, then 427-3731
NWT/NU - 800-897-5629
British Columbia & Yukon Region
Vancouver District Office - 604-872-4384
Kelowna District Office - 250-762-3018
Winnipeg Regional Office - 204-983-3493
Brandon District Office - 204-726-7936
Winnipeg District Office - 204-983-6375
Toll free - 800-838-2033 (within Manitoba and area codes 807 and 819)
New Brunswick Region
Regional Office, Moncton - 506-851-6640
Regional Office, St. John's - 709-772-5022
Nova Scotia Region
Halifax District Offices - 902-426-4995
Sydney District Office - 902-564-7130
Regional Office - 416-954-2891
Toronto District Office - 416-954-5900
Ottawa, North and East District Office - 613-946-2800
Southwestern District Office - 519-645-4047
Prince Edward Island Region
Charlottetown - 902-566-7171
Montreal District Office - 514-283-2214
Québec District Office - 418-648-7707
Regina District Offices - 306-780-5408
Saskatoon District Office - 306-975-4303