The Canada Labour Code in 2026: A Complete Guide to Federal Employer Obligations

The Canada Labour Code (CLC) governs employment standards, occupational health and safety, and industrial relations for a specific set of industries that fall under federal jurisdiction.

Who Is Federally Regulated? Understanding the Scope of the Canada Labour Code

The Canada Labour Code (CLC) governs employment standards, occupational health and safety, and industrial relations for a specific set of industries that fall under federal jurisdiction. Although these industries represent approximately 6% of the Canadian workforce — approximately 1,020,000 employees across about 19,150 employers (roughly 6% of all employees in Canada) — they span some of the country's most critical economic sectors.

Federally regulated industries include:

If your organization operates in any of these sectors, the CLC — not provincial employment standards legislation — sets the floor for your workplace obligations. This distinction matters enormously because the federal regime now offers several protections that have no equivalent in most provinces, including unjust dismissal rights, 10 paid sick days, and the new pregnancy loss leave.

Employers who are uncertain about their jurisdictional status can consult the federal labour standards page for guidance. Misidentifying your jurisdiction can expose an organization to significant compliance risk, particularly as federal enforcement budgets expand in 2026.

New Federal Leaves Effective December 2025 and the 2026 Outlook

Significant amendments to Part III of the Canada Labour Code took effect on December 12, 2025, introducing and enhancing several leave entitlements. Employers must update their policies immediately if they have not already done so.

Pregnancy Loss Leave

Employees who experience a pregnancy loss — or whose spouse, common-law partner, or surrogate experiences one — are now entitled to job-protected leave. In the case of a stillbirth, the entitlement is up to 8 weeks of unpaid leave. For other forms of pregnancy loss, employees receive 3 paid days of leave. This leave also extends to intended parents in surrogacy arrangements, reflecting the evolving nature of Canadian families.

Enhanced Bereavement Leave

The existing bereavement leave framework has been expanded. When an employee suffers the death of a child — including the child of their spouse or common-law partner — they are now entitled to up to 8 weeks of unpaid leave. This leave may be taken beginning on the date of death and extending up to 12 weeks after the funeral or memorial ceremony, providing meaningful flexibility during an extraordinarily difficult period.

Placement of Child Leave

A new 16-week unpaid leave for the placement of a child through adoption or surrogacy will come into force on a date fixed by Order in Council. Employers should monitor for the official proclamation datee.

Paid Leave Baseline

For the pregnancy loss, bereavement, and placement of child leaves, the first 3 days are paid for employees who have completed at least 3 consecutive months of continuous employment with the employer. This paid-day entitlement is consistent with the approach taken for other federal leaves such as personal leave.

These amendments were enacted through legislative changes to the Canada Labour Code and reflect the federal government's commitment to modernizing workplace protections.

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Unique Federal Protections: Paid Sick Days, Unjust Dismissal, Flexible Work, and the Right to Disconnect

The federal labour standards regime now includes several protections that are either more generous than or entirely absent from most provincial frameworks.

10 Paid Sick Days

Federally regulated employees are entitled to 10 paid sick days per calendar year after 30 days of continuous employment. Employers cannot require a medical certificate for absences of fewer than five consecutive days unless there is a reasonable basis for doing so. Details are available on the relevant government website.

Unjust Dismissal Protection (Section 240 CLC)

After 12 months of continuous employment, a federally regulated employee who believes they have been terminated without just cause may file an unjust dismissal complaint. An adjudicator appointed under the Code has the authority to order reinstatement with back pay — a remedy that does not exist under most provincial employment standards statutes. This makes termination decisions in the federal sphere significantly more consequential for employers.

Right to Request Flexible Work Arrangements

Employees who have completed 6 months of continuous employment may formally request a change to their work schedule, location, or other terms. The employer must respond in writing within 30 days and, if the request is denied, must provide reasons for the refusal.

Right to Disconnect (Budget Implementation Act, 2024, No. 1)

The Budget Implementation Act, 2024, No. 1, which received Royal Assent in 2024, includes provisions requiring federally regulated employers to establish a written policy on the right to disconnect from work-related communications outside scheduled hours. As of February 2026, these provisions took effect on the dates noted below. Employers should prepare draft policies now and watch for the coming-into-force announcement on the relevant government website.

Federal Minimum Wage

The federal minimum wage is $18.15 per hour, effective April 1, 2026. The rate is adjusted annually based on the Consumer Price Index.

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OHS Obligations, Wage Theft Enforcement, Termination Rules, and the ESDC Complaint Process

Occupational Health and Safety (Part II of the CLC)

Part II of the Canada Labour Code imposes a general duty on every federally regulated employer to ensure the health and safety of every person employed by them. Key obligations include establishing a workplace health and safety committee (or a health and safety representative for smaller workplaces), investigating workplace hazards and refusals to work, and complying with the Canada Occupational Health and Safety Regulations. Employees have three fundamental rights: the right to know about hazards, the right to participate in health and safety decisions, and the right to refuse dangerous work. Detailed guidance is published on the federal government's labour standards page.

Wage Theft Enforcement and Non-Compete Restrictions

Budget 2025 allocated $77 million (for CRA worker-misclassification measures) over four years to combat worker misclassification and wage theft in federally regulated workplaces. Increased Administrative Monetary Penalties (AMPs) are expected in winter 2026 to strengthen deterrence. Additionally, Budget 2025 proposed a ban or restriction on non-compete agreements for federally regulated employers, with public consultations expected in early 2026.

Termination Notice Requirements

Part III of the CLC sets minimum notice periods based on length of service: employees with 3 months to 1 year of service are entitled to 2 weeks' notice, scaling progressively up to a maximum of 8 weeks' notice for employees with 8 or more years of continuous employment.

Filing a Complaint with ESDC

Employees who believe their employer has violated the Canada Labour Code may file a complaint with the Complaints related to unpaid wages, unjust dismissal, or leave denials are investigated by federal labour inspectors. For unjust dismissal, the matter may be referred to an independent adjudicator. Employers found in violation may face orders for compensation, reinstatement, or administrative penalties.

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Key Takeaways