Question Period Note: IMPLEMENTATION OF CHANGES TO THE CANADA LABOUR CODE CONCERNING INTERNS

Implementation of recent changes to the Canada Labour Code through the Budget Implementation Act, 2017, No. 2 (Bill C-63), to limit unpaid internships

• Internships are one of the important ways that young Canadians can develop the skills and practical, hands-on experience they need to transition to employment and find good quality jobs. There is no question that interns need to have appropriate protections when they are in the workplace.

• As announced in Budget 2017, Bill C-63 introduced changes to amend the Canada Labour Code to prohibit unpaid internships in federally regulated sectors where the internship is not part of a formal educational program.

• For those internships that are part of an educational program, the student intern will be protected by certain labour standards protections such as maximum hours of work, weekly days of rest and general holidays.

• These legislative changes to the Code require supporting regulations in order to come into force. Draft regulations published in the Canada Gazette, Part I on June 8, 2019 establish the process for determining that a student placement can be unpaid, the labour standards protections for students in work-integrated learning, and related administrative requirements.

• Legislative and regulatory changes will come into force at the same time in 2020 through an Order in Council.

• Internships are short-term, workplace-based learning experiences. They can play an important role in complementing classroom training with real world learning, facilitating transition to paid employment and helping deepen the pool of talent that employers rely upon.

• Internships can raise concerns about the potential for abuse and exploitation, especially when they are unpaid:
 interns may be expected to work excessive hours or perform dangerous work that could lead to illness, injury or death, and they may encounter sexual or other forms of harassment; and
 unpaid interns may be doing work for which they should be paid.

Original amendments under the previous government

• The previous government introduced amendments to the Code to protect interns and restrict unpaid internships, which were included in the Economic Action Plan 2015 Act, No. 1 (Bill C 59), and received Royal Assent on April 23, 2015. These amendments specified that Parts II and III of the Code apply not only to employees, but also to any person who is not an employee but who performs activities whose primary purpose is to enable the person to acquire knowledge or experience (i.e. “interns”).

• Amendments to Part II of the Code extended to interns the same occupational health and safety protections as employees. These came into force on September 14, 2015.

• Amendments to Part III of the Code would have permitted unpaid internships under two circumstances:
 when the internship is part of a program offered by a secondary or post-secondary educational institution or vocational school, or an equivalent educational institution outside Canada;
 when the internship meets six specific criteria (the internship’s duration is of four months or less, benefits accrue primarily to the intern, the internship is properly supervised, the internship is not a prerequisite to getting a permanent job, the intern does not replace any employee and the intern is informed that the internship is unpaid).

• The adoption of supporting regulations was required before changes concerning labour standards protections for interns could come into force. However, during regulatory consultations, many stakeholders expressed strong opposition to the new legislation.
 Employers and employer organizations stressed that overly strict regulations would dissuade employers from offering meaningful internships;
 Labour and student organizations generally called for all labour standards protections to be provided to interns, including the minimum wage, with a possible exception for unpaid internships that are part of an educational program.
 A few stakeholder groups voiced their objections to permitting non-educational unpaid internships under any circumstances.

• Following consultations, a decision was made to put the development of regulations on hold in order to amend the legislation.

New provisions concerning labour standards protections for interns (not yet into force)

• The 2017 Federal Budget announced the federal government’s commitment to limit unpaid internships in federally regulated workplaces. The Budget stated that only internships that are part of an educational program may be unpaid and that these student interns would receive labour standards such as maximum hours of work, weekly days of rest and general holidays.

• Following the Budget 2017 announcement, the Budget Implementation Act, 2017, No. 2 (Bill C-63) introduced amendments to eliminate provisions that would have allowed non-educational unpaid internship. As a result of this change, unpaid internships will only be allowed if they are part of the requirements of a formal educational program.

• These amendments respond to concerns raised by student and intern groups, as well as labour organizations. They also reflect the Government’s position that interns should be paid for the work that they do and that the only justifiable exception is if an intern earns academic credit for their internship—in which case the intern can be unpaid.

Supporting regulations needed for implementation

• A series of consultation sessions were held in September 2018 with representatives from business and labour groups representing federally regulated employers and employees, student and intern associations, educational institutions and associations, and other organisations. The consultations were based on a policy intent paper circulated in August 2018. A total of 17 organisations participated and six written submissions were received. Labour Program officials responsible for the administration and enforcement of Part III of the Code (i.e. technical advisors and inspectors across the country) were also consulted.

• The proposed regulations were pre-published in the Canada Gazette, Part I on June 8, 2019 and the public comment closed on July 7, 2019. Pre-publication offers another opportunity for stakeholders and the general public to provide feedback on the proposed regulations.

• Further to the pre-publication of the proposed regulations, the Labour Program received three stakeholder submissions; overall the feedback is positive and will not require immediate changes to the proposed regulations. Some technical changes are, however, needed to finalize the regulations.

• The new provisions will come into force in 2020 once necessary regulations have been developed.

• The proposed regulations list the labour standards protections under Part III that apply and specify how these provisions are to be adapted. The proposed labour standards protections include:
 A limit of 40 hours/week and eight hours/day, with at least one day of rest per week;
 Right to a modified work schedule;
 Nine general holidays within a calendar year;
 Maternity-related reassignment;
 Protected leaves (i.e. personal leave, leave for victims of family violence, leave for traditional Aboriginal practices, bereavement leave, medical leave, and leave for work-related illness and injury); and
 Protections against genetic discrimination and prohibited reprisals.

• The proposed regulations also include a few additional labour standards protections, which were recently introduced under the Budget Implementation Act, 2018, No.2 (Bill C-86), including:
 Unpaid breaks for every period of five hours of work;
 Unpaid breaks for medical reasons or nursing;
 96 hours advance notice of a schedule; and
 8-hour rest period between shifts.

• The proposed regulations also include protections against sexual harassment, until the related provisions under Part III are consolidated into a new framework for the prevention of harassment and violence under Part II (under Bill C-65, An Act to amend the Canada Labour Code (harassment and violence), the Parliamentary Employment and Staff Relations Act and the Budget Implementation Act, 2017, No. 1). This will ensure that there is no gap in coverage for student interns.

• Implementation of the proposed regulations will require the development of new guidance materials to inform employers, student interns, and educational institutions and associations. The Labour Program is currently preparing policy guidelines for employers as well as various information materials for dissemination to educational institutions, employers and student interns.

• The Minister of Employment, Workforce Development and Labour’s mandate letter includes commitments to amend the Code to address emerging issues such as unpaid internships and to ensure that Canadians continue to have a robust and modern set of federal employment standards.

• Part III of the Canada Labour Code (the Code) currently applies only to employees. When new provisions under Budget Implementation Act 2017, No.2 (Bill C-63) come into force, all interns in the workplace will receive labour standards protections.
 Interns outside educational programs (for example, recent graduates, individuals engaged in learning activities due to a career change, or students who are not fulfilling the requirements of an educational program) will be treated as employees and will therefore be covered by the same labour standards protections.
 Student interns (i.e. those who fulfil the requirements of an educational program) may be unpaid but will be entitled to certain labour standards protections, such as maximum hours of work, weekly days of rest and general holidays. Secondary, post-secondary and vocational educational institutions, or the equivalent outside Canada, will be covered.

• Original amendments concerning internships were passed by the previous government in 2015 and would have allowed unpaid internships under certain circumstances, outside a formal educational program. The current government took a different policy stance and amended the original amendments to limit unpaid internships to those that are part of an educational program.

• According to the Federal Jurisdiction Workplace Survey (FJWS), in 2015 there were 13,195 interns in federally regulated workplaces. Of these, 10,849 (82%) were paid while 2,346 (18%) were not paid. The majority of unpaid internships were in the telecommunications and road transportation industries. The FJWS did not identify whether or not these internships were associated with educational programs. Furthermore, about 30% of companies with unpaid interns reported offering some type of compensation, such as reimbursement of expenses, stipends or a combination thereof.

• It is expected that approximately 1,250 to 1,350 unpaid student interns will be performing activities in the federally regulated private sector annually for the next ten years.