Ontario: Broad Employment Standards Overhaul Proposed

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By Peter Menyasz

Ontario has proposed a broad overhaul of its employment standards and labor relations law, including an increase in the minimum wage to C$15 ($11.10) an hour, equal pay for equal work for part-time and temporary workers, and expanded access to card-based certification of union bargaining units.

Bill 148, the Fair Workplaces, Better Jobs Act, would significantly update the province's Employment Standards Act and Labour Relations Act, including a two-stage increase in the minimum wage that would be completed by Jan. 1, 2019. Most of the bill's provisions would take effect on Jan. 1, 2018.

The historic legislative update will improve working conditions, particularly for vulnerable employees, during a time when the province's economy is booming but workers are struggling to support their families on part-time, contract, or minimum wage work, the provincial government said June 6.

“These changes will ensure every hard-working Ontarian has the chance to reach their full potential and share in Ontario's prosperity,” Labour Minister Kevin Flynn said in a statement. “Fairness and decency must continue to be the defining values of our workplaces.”

‘Precarious' Work Situations

Bill 148 responds to the final report of the province's two-year Changing Workplaces Review, the first-ever independent review of 2000's Employment Standards Act and 1995's Labour Relations Act, the government said.

The report estimated that more than 30 percent of the province's workers were in “precarious” work in 2014, making it hard for them to earn a decent income and interfering with their opportunities for decent working conditions. Currently, more than half of the workers earning less than C$15 ($11.10) an hour are aged 25-64 and the majority are women.

Over the past 30 years, part-time work has grown to represent nearly 20 percent of total employment in the province, and in 2016 the median hourly wage was C$13 ($9.60) for part-time workers, compared to C$24.73 ($18.30) for full-time workers. The proposed legislation would provide higher pay for more than 25 percent of all workers in the province, according to the report.

The province's minimum wage is currently C$11.40 ($8.44) an hour, and the bill calls for a first-stage increase to C$14 ($10.36) Jan. 1, 2018.

The Ontario Legislature passed Bill 148 at first reading on June 1, then used a special order to have it referred for review by the Finance and Economic Affairs Committee before debate at second reading. The committee has announced hearings for June 23, July 10-14 and 17-21, and Aug. 21-25.

Unions, Employers Differ on Proposals

Labor unions welcomed the proposed employment standards and labor relations updates, while the business community warned that the proposed changes would harm the province's economy.

Unifor, Canada's largest union with more than 310,000 members of which more than 50 percent are in Ontario, called for all political parties to support the proposals and make a strong commitment to helping the province's at-need workers.

“Ontario workers have waited long enough for fairness on the job,” Jerry Dias, the union's president, said June 1 in a statement. “Basic decency at work should not be a partisan issue.”

The union said it will push for additional improvements to the proposed legislation, including simplified card check union certification for retail and fast food workers, an increase to three weeks of vacation for all workers and creation of paid leave for domestic violence survivors.

The Ontario Federation of Labour congratulated the government for its plan to increase the minimum wage and update employment standards.

“It is time to put legislation in place that will guarantee decent conditions in the workplace for all workers, as well as decent pay,” association president Chris Buckley said June 1 in a statement.

The Ontario Chamber of Commerce, however, said that Bill 148 calls for “unproven” reforms without provisions to protect against “unintended consequences” and warned that the changes would lead to job losses, higher consumer costs, and economic hardship.

Jointly with the Keep Ontario Working coalition, a group of industry associations representing various business sectors, the Chamber stressed that the government can't regulate prosperity.

“The reforms outlined in the Fair Workplaces and Better Jobs Plan thus far do not provide the balance needed to help ensure a competitive environment,” the Chamber said. “We must work cooperatively with government to identify the scale of the economic impact of these changes and help employers transition into any new policy regime.”

Bill Likely to Pass Too Quickly, Attorney Says

The legislature is in recess until Sept. 8, most of the employment standards changes are to take effect Jan. 1, 2018, and a provincial election is set for June 7, 2018, so the government will likely move quickly to adopt the bill, George Vassos, a partner with Littler Mendelson PC, said June 11.

“Likely too quickly for most employers,” Vassos told Bloomberg BNA. “All of this will likely be in place before the election in 2018.”

The Keep Ontario Working coalition has proposed that a comprehensive economic impact analysis of the proposed reforms be conducted, but it's unclear whether the government will heed its warnings, Vassos said. So far, the legislative committee is the only consultation the government has announced, he said.

There may, however, be room for employers to secure changes to some elements of the legislation, Vassos said. For example, the bill proposes requiring equal pay for equal work for temporary help agency workers, but the advisory group urged that this not be applied during the first six months of a temporary assignment.

“This is one area where the government might bend, especially if the advocacy is loud and compelling,” Vassos said.

In the meantime, it will be important for employers to provide appropriate employee training on any changes that are passed, Vassos said. Employers would also be well advised to review their existing independent contractor relationships and any potential misclassification problems, given the increased scrutiny those issues will receive, he said.

“Employers will also have to review hiring letters, employment contracts, policies, and handbooks to ensure compliance with the final amendments,” Vassos said.

The government's clear emphasis on enforcement, including the plan to hire 175 more employment standards officers by 2021, means increased scrutiny of employers, Vassos said.

“Every employer would be well advised to conduct an Employment Standards Act self-audit with respect to existing obligations even before we get to the Bill 148 amendments,” he said.

Jail Time?

Vassos noted that the Ministry of Labour announced June 6 a 30-day jail sentence and a C$25,000 ($18,500) fine for an employer that operated two businesses in Brampton, Ontario that failed to pay 43 workers a total of C$140,000 ($104,000) in wages.

“A jail term has been rare in the past,” he said. “We may well see more of this for employers who do not pay what is owed.”

Although Bill 148 only applies to employers operating in Ontario, the proposed changes respond to a labor and employment landscape that is largely similar across Canada and may lead to similar legislative changes in other provinces, Halifax-based law firm Stewart McKelvey LLP said in an analysis of the bill.

“Alberta has already followed in Ontario's footsteps by announcing a similar labor and employment overhaul, and it is plausible that significant revisions could follow in jurisdictions across Canada,” the analysis said.

Bill Addresses Misclassification of Independent Contractors

Other proposed employment standards changes in Bill 148, which would take effect as soon as the bill becomes law, include:

  •   a prohibition against employers misclassifying employees as independent contractors not entitled to employment standards protections and responsibility placed on the employer to prove that the individual isn't an employee;
  •   new shift scheduling and payment rules, including a minimum of three hours pay if a shift is cancelled within 48 hours of its scheduled start;
  •   a minimum of three weeks' paid vacation after five years of continuous employment;
  •   elimination of the restriction that the 10 days of statutory personal emergency leave only applies in workplaces with 50 or more employees;
  •   new leave of up to 104 weeks for the death of a child from any cause or for the crime-related disappearance of a child;
  •   an increase in available family leave to up to 27 weeks in a 52-week period from the current eight weeks in a 26-week period;
  •   a prohibition against employers requesting a sick note from an employee taking personal emergency leave;
  •   stronger provisions on joint liability of related businesses for funds owing under employment standards provisions;
  •   increased powers for employment standards officers to make payments directly to an employee and to award interest on unpaid wages or any fees unlawfully charged to employees;
  •   new provisions deeming an electronic agreement between an employer and an employee to constitute an agreement in writing;
  •   elimination of the requirement for employees to contact their employers before filing an employment standards claim;
  •   increased maximums for administrative monetary penalties to C$350/$700/$1,500 from C$250/$500/$1,000, depending on the offense;
  •   elimination of existing exclusions and exemptions, including application of standards to individuals who receive training for work through the employer, unless part of an experiential learning program offered by an educational institution; and
  •   a requirement for temporary help agencies to give employees at least one week's notice of early termination of an assignment scheduled to last more than three months or compensation for lost work unless the employee is offered at least one week's worth of other reasonable work.

The government has also committed to hiring an additional 175 employment standards officers over the next five years and to setting by 2020-2021 a requirement to complete all employment standards cases within 90 days of filing.

Extension of Card-Based Certification Proposed

Proposed labor relations changes, which would take effect six months after the bill becomes law, include:

  •   introduction for the first time of card-based union certification for employees working in home care and community services, building services, and temporary help agencies;
  •   changes to the certification process, including removal of certain conditions for remedial certification when there is employer misconduct, easier access to first contract arbitration, and a requirement for the Ontario Labour Relations Board to address first contract mediation and arbitration cases before displacement or decertification applications;
  •   new powers for the labor board to restructure bargaining units if existing units are no longer appropriate for collective bargaining or to consolidate newly certified units with existing units where all units are represented by the same union;
  •   new protection of employees from discipline or discharge without just cause between certification of a bargaining unit and conclusion of a first contract and between the date of a legal strike or lockout and the signing of a new collective agreement;
  •   elimination of the provision allowing an employee the right, under certain conditions, to return to work within six months after a lawful strike starts;
  •   extension of successor rights to the retendering of building services contracts and a new power for the government to use regulations to expand successor rights to other contracted services that are publicly funded; and
  •   an increase in maximum fines for violations of the Ontario Labour Relations Act to C$100,000 ($74,000) for organizations from C$25,000 ($18,500) and to C$5,000 ($3,700) for individuals from C$2,000 ($1,500).

‘Easier Not to Have an Employee'?

The employment standards changes will have a particularly negative impact on smaller businesses, whose profit margins tend to be quite limited, which could make the updated statute a “job-killer,” Ron Minken, head of Markham, Ontario-based Minken Employment Lawyers, said June 9.

“Very much so,” Minken told Bloomberg BNA. “It might be easier not to have an employee.”

In addition, the elimination of exemptions for lawyers, accountants, and other professionals will be hard on those businesses and could lead to lower employment levels, he said.

The proposals are an election move from Premier Kathleen Wynne’s government, which in the current economic climate wanted to provide something positive for a wide range of voters, Minken said.

Sara Kauder, a lawyer with the Minken firm, said the equal pay for equal work provisions will make it much harder for smaller employers to function, since many of them depend heavily on part-time and/or temporary employees.

The wage changes also leave an open question as to whether the government will move to provide those employees with benefits similar to those of full-time employees, Kauder told Bloomberg BNA.

“A lot of people currently aren’t eligible for benefits,” she said. “If all of these categories of work are deemed to be the same, what happens with all of the other kinds of perks?”

To contact the reporter on this story: Peter Menyasz in Ottawa at correspondents@bna.com

To contact the editor responsible for this story: Rick Vollmar at rvollmar@bna.com

For More Information

The text of Bill 148 is available here.

For more information on Ontario HR law and regulation, see the Ontario primer.

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