Changing Workplaces Review Final Report: Sweeping Changes to Ontario Employment Law Coming

On May 23, 2017, the Government of Ontario released the Changing Workplaces Review final report by authors C. Michael Mitchell and John C. Murray. It contains 173 recommendations that recommend significant changes to Ontario employment law aiming to create better workplaces with decent working conditions and widespread compliance with the law. The authors consulted with workers, unions and businesses for two years on a wide range of work-related issues. This was the first independent review in Canada to consider specific legislative changes to both employment standards and labour relations in a single manner.

The following is a brief overview of what has been recommended to employers, HR and payroll professionals, Unions and other interested stakeholders and what they need to be aware of—including what you need to do to prepare for these significant changes to your workplace practices.

1. Creation of a “Workplace Rights Act”

Presently, employee workplace rights are established by the Employment Standards Act, 2000 (ESA), the Labour Relations Act, 1995 (LRA) and the Occupational Health and Safety Act (OHSA). The Final Report suggests that these Acts should be combined into a single Act entitled the “Workplace Rights Act.” This is similar to what Saskatchewan did a few years back with the Employment Act.

It has also been recommended that the Ontario government start an education program for employees and employers with respect to the proposed Workplace Rights Act and the rights and obligations of employees and employers under each part of the Act.

2. Recommendations on employment standards

  • Raising minimum wage: Raising the minimum wage up to $15 per hour was not a part of the Final Report, as had been previously speculated. However, that does not mean it will not be part of the government’s plan when implementing the recommendations.
  • Vacations: Increasing vacation entitlement to 3 weeks per year after 5 years of employment with the same employer, and making a corresponding amendment to the vacation pay provisions (i.e., at least 6 percent vacation pay). The Final Report notes that “Ontario is not currently on par with other Canadian jurisdictions.” Currently, in Ontario, vacation time and pay does not increase with length of employment like other jurisdictions.
  • Hours of work and overtime:
    • Trigger for overtime should remain at 44 hours per week.
    • Elimination of the requirement to get Ministry of Labour (MOL) approval for employees to work 48 to 60 hours a week (while maintaining MOL approval for weekly hours above 60) and the elimination of a blended overtime rate. Also, the MOL enshrine in law its current policy that employee consent can be obtained electronically.
    • MOL should be open to considering varying the 11-hour rule on a sectoral basis, if appropriate.
    • An option for obtaining group consent to work overtime, or for other hours of work rules, through a secret ballot vote, if it is appropriate for that sector.
    • Overtime averaging should only be allowed where it would allow for flexibilities; like a compressed work week, continental shift or other flexibilities in employee scheduling desired by employees, or to provide for employer scheduling requirements where the total number of hours worked does not exceed the threshold for overtime over the averaging period.
  • Personal emergency leave (PEL) and paid sick leave:
    • Elimination of the 50-employee threshold and that the PEL provisions of the ESA be made available to all Ontario employees.
    • Bereavement leave be removed from the ESA’s PEL provisions and be made an independent entitlement for up to three unpaid days for the family members covered by the current PEL provisions. This entitlement not being limited by an annual restriction, and it should be applicable to all employers.
    • PEL provisions be amended to provide an annual entitlement of seven days, and be expanded to include domestic violence as a reason for absence.
    • Require employers to pay for doctor’s notes if they request them from an employee.
    • Extension of PEL to all employees so that everyone has a basic right to time off in the case of personal emergency, when it comes to paid sick leave.
  • Family medical leave and Crime-Related Child Death or Disappearance Leave:
    • Increasing current Family Medical Leave provisions from 8 weeks in a 26-week period to 26 weeks in a 52-week period, to parallel the recent federal Employment Insurance Act amendments.
    • Expanding Crime-Related Child Death or Disappearance Leave to include the death of a child (non-crime related). The amount of leave offered being the same (a leave of up to 104 weeks).
  • Public holiday pay: Part X of the ESA be entirely reviewed and revised and be replaced by statutory provisions that are simpler and easier to understand and apply. “The Public Holidays law is extremely long, complex, and results in one of the most common contraventions,” notes the Final Report. Apart from that, no changes to public holiday rules have been recommended.
  • Part-time, casual, temporary, seasonal and contract employees: A new rule limiting differential pay for these groups of employees unless there are objective grounds such as seniority, merit or other objective factors that justify a difference in pay. The Final Report, however, does not recommend extending the principle to the treatment of benefits and pensions. “Instead, we recommend that the government initiate an urgent study as to how, at least a minimum standard of insured health benefits can be provided across workplaces, especially to those full-time and part-time employees without coverage, the self-employed and including small employers. We also recommend working with the Federal Government to review the private pension system and considering public programs such as the Guaranteed Income Supplement to assist low earning Ontarians.”
  • Review of existing exemptions and exclusions from basic standards: “The existing exemptions should be reviewed expeditiously.” Some recommendations include:
    • Eliminating exemptions linked to students (student minimum wage rate and exemption for the “three-hour rule”).
    • Phasing out liquor servers’ minimum wage over three years. Per the Final Report, in part, because it establishes dependence on tips for servers.
    • Revisiting the exemption for managerial and supervisory employees so that both salary and job duties are considered. The Final Report recommends, the salary figure be 150 percent of the general minimum wage (currently $11.40), converted to a weekly salary of $750 per week, on the basis of a 44-hour work week, which is the threshold for the payment of overtime.
    • Interns and trainees: Currently, interns and trainees are employees for purposes of the ESA and entitled to the minimum standards set unless several conditions are met. The Final Report recommends eliminating this exclusion.
    • Crown (government of Ontario) employees: To date, only certain parts of the ESA apply to employees of the Crown or a Crown agency, and to their employer. The Final Report recommends eliminating this partial exclusion.
  • Who is an employer and who is an employee: The “intent or effect” test be repealed. The ESA’s “related employer” provision allows separate but related legal entities to be treated as one employer if the requirements set out in section 4 are met. Per the Final Report, the “intent or effect” test has had the effect of undermining the original purpose. Adding the term “dependent contractor” to the definition of “employee” in the ESA. Where there is a dispute about whether a worker is an employee, the person receiving the worker’s services has the burden of proving the worker is not an employee and an obligation to provide all relevant evidence.
  • Temporary help agencies:
    • Limiting the amount of time during which an assignment employee can be paid less than the workers the client hired directly. The Final Reports recommends a qualifying period of six months before there is a requirement for equal pay. The Final Report recognizes that abuse of such rule is possible. For instance, a client employer terminates the relationship the day before the 6-month qualifying period ends, and then brings the agency employee back after a short period, such that the requirement for equal treatment is never operational. To that effect, the Final Report deems that there should be a minimum reasonable period of time (i.e., not less than three months) before the employee can be brought back.
    • The Final Report also suggests that applying the temporary layoff rules to assignment workers when an assignment to a client is terminated by the client, is not suitable, and therefore recommends an alternate scheme. Per the Final Report, “the agency should provide the requisite notice to the agency employee as soon as the client employer wants to end the assignment, with obligations to pay the equivalent amount if notice is not given. The payment obligation would not be required if the assignment worker is assigned to work for another client within a period of 13 weeks.”
    • In addition, when it comes to workplace safety for assignment employees, the Final Report suggests that all aspects of the risk and liability, including the responsibility for injuries suffered in the workplace, should be with the client employer, not the agency.
  • Scheduling and the three hour rule:
    • A sector specific approach to the regulation of scheduling, prioritizing the retail and fast food sectors for review. To implement this, the Final Report recommends the development of a policy framework and the use of sectoral committees. Note: The ESA does not incorporate rules regulating work schedules.
    • In addition, the Final Report suggests a new rule that provides an employee, after 1 year of service, the right to request (in writing) that the employer decrease or increase their hours of work, give them a more flexible schedule or alter the location of their work. “The employer should be required to give the employee an opportunity to discuss the issue and provide reasons in writing if the request is refused. There should be no appeal of an employer’s decision on the merits and the employer’s obligation to respond should be limited to one request per calendar year, per employee.”
    • The “three-hour rule”: Amending the ESA to provide that, when an employee who regularly works more than 3 hours a day is required to report to work but works less than three hours, he or she must be paid three hours at the employee’s regular wage.
  • Temporary foreign workers:
    • No termination of employment, whether for reprisal or for other alleged reasons, should be effective unless and until an order is made by a neutral adjudicator permitting such termination.
    • Increased protection for employees who seek to enforce their rights.
    • An office of Director of Enforcement be created which could seek significant administrative penalties of up to $100,000 per infraction. The Final Report also stresses the importance of priority of reprisal complaints alleging termination of employment. “The Ministry should not only announce to the public that reprisal complaints alleging termination of employment will be given priority but it should also develop tight timelines to deal with complaints which should be investigated and completed within a matter of days.”

3. Recommendations on labour relations

All of the following groups of employees that are currently excluded from the LRA collective bargaining and should be covered:

    • Domestics;
    • Hunters and trappers;
    • Members of the architectural, dental, land surveying, legal or medical profession employed in a professional capacity; and
    • Agricultural and horticultural employees. With a possible limited exception warranted to exclude some or all persons employed on a “family farm.”

    However, the Final Report does recommend that certain restrictions on strikes and lock-outs involving members of these particular professions may be appropriate.

  • Acquisition of bargaining rights: Preservation of the secret ballot vote process for certification provided there are appropriate remedies for employer misconduct, and given that the following recommendations are also agreed to:
    • Where the true wishes of the employees are unlikely to be ascertained because of employer misconduct, remedial certification and first contract arbitration should follow unless the union bargains in bad faith or otherwise disqualifies itself from first contract arbitration.
    • “mediation-intensive” model introduced in British Columbia in 1993 should be considered as a reasonable model for Ontario that could significantly improve labour relations success in first contract negotiations, including after remedial certification.
    • To permit a decertification or displacement application to have priority over the intensive mediation or first contract arbitration process would undermine the recommended remedial approach, and such applications should be untimely until those processes are completed.
    • Provided they have appropriate support in a proposed bargaining unit, unions should be able to obtain contact information for employees in the proposed unit in advance of a certification application.

    The Final Report expresses that unions should have the information they need to effectively communicate with the employees. “A union should be required to demonstrate that approximately 20% of the potential bargaining unit supports collective bargaining through joining the union in order to acquire the right to be provided with the information. A similar standard could be applied to employees seeking to de-certify a union. We recommend a number of measures to avoid this threshold from becoming the subject of extensive litigation. We also recommend measures to prevent the union from obtaining the list just by applying for it when it has no entitlement to it, and penalties if the union uses the list for improper purposes.”

  • Electronic membership evidence and electronic voting: The OLRB to update its rules and practices to permit electronic submission of information, including electronic membership evidence. Also, give OLRB power to conduct votes outside the workplace, including telephone and internet voting.
  • Consolidation and amending of bargaining units: The OLRB has the power to modify bargaining unit structures, if content that the bargaining unit or units are no longer suitable for collective bargaining in the circumstances. The Final Report declines the idea that this should be restricted to cases where the same union is involved.

    The Final Report also recommends that the OLRB has the power in sectors or industries where employees have been historically underrepresented by unions, to consolidate existing and/or newly certified bargaining units involving the same employer and the same union, to contribute to the development of effective collective bargaining relationships in these sectors or industries. The OLRB would be given particular powers to implement such a model. For instance, direct that the terms of a collective agreement apply in the varied or consolidated unit.

  • Broader-based bargaining: Proceeding with one model involving franchisees of the same franchisor; this would include requiring franchisees of the same franchisor to bargain together. The OLRB would be given certain powers to implement the model. For example, to direct that the terms of a collective agreement between a franchisee and union could be extended to apply, with or without modifications, to a newly certified bargaining unit.

    The Final Report also recommends inquiries and further consideration of broader based bargaining models in respect of specific sectors (i.e., government-funded homecare and the arts and entertainment sectors).

    In addition, further consultations on three issues related to broader based bargaining have been recommended, specifically: 1) accreditation of employer’s organizations outside the construction industry, 2) the compulsory formation of a council of unions, and 3) multi-employer certification.

  • Related and joint employers: Assigning persons by temporary help agencies to perform work for clients of the agency be deemed to be employees of the client rather than the temporary help agencies for the purposes of the LRA.
  • Remedial powers of the OLRB: A broad power to make substantive interim orders on all matters that come before it, pursuant to the Statutory Powers Procedure Act. Per the Final Report, “it is imperative that the OLRB be granted the power to issue interim relief in order to protect the constitutional rights of employees to organize and form unions.” Currently, the OLRB has the power to make interim orders where workers are terminated or disciplined during an organizing campaign and certain conditions are met.
  • Prosecutions and penalties: Increasing the maximum fines for contravention of the LRA to $5,000 for individuals and $100,000 for employers and unions.
  • Right of striking employees: Amending the LRA so as to eliminate the six-month time period for striking employees to make an application to return to work. Also, amending the LRA to provide for arbitration of the refusal to reinstate an employee at the conclusion of a strike or lock-out, or any discipline of an employee by an employer during the course of a legal strike or lock-out or after the expiry of a collective agreement.
  • Successor rights: Applying successor rights to the building services industries (specifically, security, food services and cleaning) and government-funded home care. Also, a regulation-making authority should be added to the LRA to allow for the possible expansion of coverage to other services or sectors in the future.

4. Powers of Inspectors and enforcement

The Final Report suggests that the government should consider some blending of the roles of enforcement officers in occupational health and safety and employment standards over time, sharing of information between regulatory programs and joint strategic approaches to enforcement.

  • Targeted inspections: Increasing the use of targeted government inspections particularly in sectors where there are large numbers of vulnerable and precariously employed employees, and focusing at the top of industry structures where decisions are made that influence compliance by those lower in the chain.
  • Law enforcement agency: Moving MOL closer to becoming more of a traditional law enforcement agency and less an agency involved in customer service; this includes moving away from a complaint dominated system of enforcement.
  • Education and outreach: The MOL’s ESA 2000 Policy and Interpretation Manual, which is no longer available for purchase through an external publisher, be posted online so that the policies and interpretations of the Director of Employment Standards can be accessed. The Final Report also supports an internal responsibility system for ESA matters, similar to the system in the occupational health and safety context. “We recommend that the Ministry encourage but not require that employers establish such a system.”
  • Remedies and penalties:
    • Amount for tickets to increase from $295 to $1,000.
    • Penalties for notices of contravention should be raised from $250/$500/$1000 to $350/$700/$1500, respectively.
    • New provision allowing the OLRB to issue administrative monetary penalties up to $100,000, per contravention.
    • OLRB has authority to order employers to pay the costs of an investigation, and that employees be paid interest on their unpaid monetary entitlements.
    • ESA be amended to provide for undertakings enforceable by the OLRB to be entered into on a voluntary basis between the MOL and an employer.
  • Access to justice:
    • Developing and publishing a list of lawyers who are prepared to provide pro bono assistance to employees and employers.
    • Developing and publishing a list of worker advocacy groups, trade unions, legal clinics and others who are prepared to provide assistance to employees.
    • Removing the requirement that employees contact their employers before filing a claim.

For more, the final copy of the Report can be viewed here.

Next steps

The Ontario government has reviewed the recommendations and will be announcing its formal response within the next week. Labour Minister Kevin Flynn said in a statement, “Action is needed in order to ensure the benefits of our strong economy are shared by every Ontario family… Our government is committed to making the important changes necessary to make a meaningful difference in people’s lives.”

What should employers, HR and Payroll professionals do?

Although it is not a done deal yet, change is coming. It is inevitable. The employer, union, HR and Payroll responsibilities at this stage is to stay informed by:

  • Reading and becoming familiar on the upcoming changes.
  • Staying current on the final recommendations retained by the Labour Minister and proposed legislation to enact such recommendations.
  • Understanding the impact the final recommendations will have in your workplace, HR practices and your budgets and bottom line.

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