Canada Labour Code

The federal government lists the Code as regulating federally regulated private-sector industries under Parts I to IV. Part I is Industrial Relations, Part II is Occupational Health and Safety and Part III is Standard Hours, Wages, Vacations and Holidays. A buyer meets the Code when the target business is on that federal footing rather than under a provincial employment standards act.

Provisions that matter in a sale

Two divisions of Part III are worth knowing by name. Division IX deals with group termination of employment, and Division XIV (s.240) provides a complaint for a person who has been dismissed and considers the dismissal unjust, subject to the conditions in that section and s.242(3.1); under s.167(3), Division XIV does not apply to managers. The Act defines a federal work, undertaking or business as one within Parliament’s legislative authority. See federally regulated employer for how that is checked.

• Ask whether the target is on the federal list before assuming a provincial statute applies
• Ask which Parts of the Code the seller has been following for staff
• Check complaints or orders under Part III against the seller

For one sector where this arises, see the guide to telecom and VoIP provider due diligence.