Welcome to 2020: A Federal and Ontario Employment and Labour Law Summary

We are almost at the end of the second month of 2020 and have compiled for you a number of upcoming employment and labour law changes and key compliance issues that federally regulated and Ontario employers need to consider in their HR and payroll practices.

Federally Regulated workplaces

Federally regulated employers will need to consider the following:

1. Canada Labour Code upcoming changes

There are a number of upcoming changes to the obligations of federally regulated employers under the Canada Labour Code coming into force in 2020, including the implementation of workplace harassment and violence framework, new compliance and enforcement measures, modernization of labour standards, and protections for interns.

I. Violence and harassment

A regime to eliminate and address workplace harassment and violence in federally regulated workplaces will be established under Part II of the Canada Labour Code.

The legislation will define “harassment and violence,” require employers to develop policies and investigate misconduct and expand employee rights by allowing complaints through an internal complaint resolution process. The intention is to encourage workplaces to prevent workplace incidents of violence and harassment, minimize illnesses and injuries, and provide a safe and healthy workplace.

II. Modernization of Part III of the Canada Labour Code

Further changes are planned to Part III of the Canada Labour Code to continue the modernization of labour standards.

The amendments that have already received legislated enactment but are waiting for in force dates include:

• In 2020, the Canada Labour Code will protect interns in federally regulated workplaces and limit unpaid internships to those that are part of a formal educational program. Unpaid interns that are part of a formal educational program will continue to receive occupational health and safety protections and will now receive certain labour standard protections such as maximum hours of work, weekly days of rest and general holidays.
• A set of changes including improving employees’ eligibility for labour standards, improving employees’ work-life balance, ensuring fair treatment and pay for those in precarious work and enhancing protections for employees whose jobs are terminated are coming into force in 2020 and include:
  • new mechanisms for unjust dismissal complaints;
  • changes to the termination of employment (group/individual) provisions;
  • equal pay for part-time, casual, temporary and seasonal employees; and
  • prohibitions related to temporary agencies.

III. The planned changes that will need a Bill to be tabled to amend Part III the Canada Labour Code

In addition to the Code changes which have already been passed and are coming in 2020, in February 2019, the federal government convened an independent Expert Panel on Modern Federal Labour Standards to study and consult on issues relating to a federal minimum wage, labour standards protections for non-standard workers, the right to disconnect, access and portability of benefits and a collective voice for non-unionized workers. The Panel reported back to the Minister and made several recommendations which were made public on December 19, 2019.

The Report contains 39 recommendations that impact Part III of the Canada Labour Code, some of which include:

• Establishing a freestanding federal minimum wage, adjusted on an annual basis;
• Including clear statutory definitions of “employee,” “independent contractor” and “dependent contractor”;
• Establishing a process to review existing regulations that set exemptions, exceptions and special rules to Part III of the Code;
• Clarifying that an employer cannot rely on a greater benefit with respect to one minimum standard to offset a lesser benefit with respect to another minimum standard;
• Requiring employers subject to Part III of the Code to consult with their employees or their representatives and issue policy statements on the issue of disconnecting instead of including a statutory right to disconnect in Part III of the Code at this time;
• Including a statutory definition of “deemed work” in order to clarify circumstances under which employees are deemed to be at work outside of their workplaces or worksites;
• Providing a right to compensation or time off in lieu for employees who are required to remain available for potential demands from their employer, or on standby;
• Including protection for “concerted activities” of employees in Part III of the Code; and
• Implementing specific steps to improve compliance, enforcement and operations.

The Panel also recommends that:

• Further consultation and awareness be done to ensure that part-time employees in the federally regulated private sector are, where appropriate, being enrolled in employer-sponsored pension plans;
• The federal government carry out stakeholder consultations and research into the potential for the development of a portable benefits model in the federally regulated private sector; and
• Further study be carried out with respect to legal barriers in Part I of the Code to union representation in the federally regulated private sector.

IV. Occupational health and safety changes: Administrative monetary penalty regime

Anticipated coming into force of the administrative monetary penalty regime under Part IV of the Code to promote compliance with Occupational Health and Safety (Part II) and Labour Standards (Part III) is planned. This will serve as a financial deterrent to non-compliance with associated penalties up to $250,000.

The program will also start publishing names of violators and offenders under Part II and Part III of the Canada Labour Code.

This also includes the establishment of a new head of compliance and enforcement who will assume the powers and duties of Labour Program inspectors and regional directors and will perform most functions related to administering and enforcing Parts II, III and IV of the Code.

New regulations will allow the Minister to extend the time limit for filing complaints under Part II of the Code.

2. Pay Equity Act

The new Pay Equity Act received royal assent on December 13, 2018, and will implement wage fairness by comparing jobs usually done by women with different jobs usually done by men. The Act is expected to come into force sometime in 2020.

The Act replaces the current complaint-based approach with a proactive system that requires employers to take steps in providing men and women with equal pay for work of equal value. Employers will be required to identify and correct gender discrimination that may be present in the compensation practices of federally regulated workplaces with 10 or more employees.

The Pay Equity Act aims to encourage wage fairness among genders by implementing the following provisions:

• the comparison of compensation for jobs usually done by women with that of jobs usually done by men,
• the replacement of a complaint-based approach with a proactive system which requires employers to actively address income disparity between men and women, and
• in organizations with 10 or more employees, the identification and correction of gender discrimination in the compensation practices of federally regulated workplaces.
  The legislation makes it clear that employers cannot terminate, harass or penalize employees for enforcing their pay equity rights, including being involved in or asking questions about pay equity processes and objecting to pay equity plans.

3. Employment Equity Act

Amendments to the Employment Equity Act are expected to come into force in the winter of 2020. Specifically, the Act is aimed at raising awareness of wage gaps that affect women, Indigenous peoples, persons with disabilities and members of visible minorities.

The purpose of the amendments is to transform the employment culture in Canada in order to reflect greater equality. Related provisions require federally regulated private-sector employers to create access to online information on wage gaps of employers in federally regulated workplaces in the private sector.

4. New obligations under CBCA when considering the best interests of the corporation

Budget Implementation Act, 2019, No. 1 (introduced as C-97), amendments to the Canada Business Corporations Act (CBCA) will require corporations to consider the interests of employees, retirees and pensioners when making decisions in the best interests of the corporation, as well as providing prescribed information relating to the well-being of employees, retirees and pensioners at shareholder meetings. The terms “retirees” and “pensioners” will be defined by regulation.

These provisions are not yet in force and are expected in force in 2020.

5. Accessible Canada Act

On July 11, 2019, the federal Accessible Canada Act (introduced as Bill C-81) came into force. The Act is accessibility legislation which impacts certain federally regulated employers. Its stated purpose is to benefit all persons, especially persons with disabilities, with a “Canada without barriers” in specified areas, including employment and the built environment. Among other things, the Act establishes the Canadian Accessibility Standards Development Organization. Its mandate includes developing accessibility standards which set out how organizations can identify, remove and prevent barriers, and making recommendations on the standards to the Minister.

The accessibility standards will be established by regulation in 2020 and the coming years. The first standard under the ACA is the federal transportation standard which will come into force at various dates starting June 25, 2020.

Ontario

Ontario employers will need to consider the following:

1. Accessibility for Ontarians with Disabilities Act (AODA)

On December 31, 2020, private sector organizations with 20+ employees and non-profit organizations with 20+ employees are required to file an accessibility compliance report that informs the government of Ontario of an organization’s status in terms of compliance with all provincial accessibility requirements.

The Ontario Accessibility Directorate under the Ministry for Seniors and Accessibility has published some of the requirements that the accessibility compliance report will cover:

• Allowing service animals and support persons for people with disabilities
• Training your staff on accessible customer service
• Accessible employment practices (recruitment, policies and workplace information)
• Accessible design of public spaces (public use eating areas, recreational trails, parking lots and waiting areas)

Learn how to file your Accessibility Compliance Report at ontario.ca/AccessibilityReport.

By January 1, 2021, private sector and non-profit organizations with 50+ employees and designated public sector organizations must make websites and web content accessible. This means that all new internet websites and web content must conform with WCAG 2.0 level AA, excluding live captioning and audio description.

This applies to any website which is directly or indirectly controlled by an organization to the extent that the organization maintains overall control over functionality, content, and the appearance of the website, and is subject to meeting requirements set out in the Information and Communication Standard under the AODA. However, internal websites are excluded from this provision.

Organizations should review the deadlines above and confirm their organization’s compliance.

In addition, Ontario has developed a new framework informed by the recommendations made by the Honourable David C. Onley in the third legislative review of the Accessibility for Ontarians with Disabilities Act (AODA), as well as input from key partners, organizations and people with disabilities. The Advancing Accessibility in Ontario framework will make a positive difference in the daily lives of people with disabilities and will help the province’s work in four key areas:

• breaking down barriers in the built environment
• government leading by example
• increasing participation in the economy for people with disabilities
• improving understanding and awareness of accessibility

Further information on the other key areas in Advancing Accessibility in Ontario will be announced in 2020.

2. Minimum wage

The Ontario government is expected to review the minimum wage and see if they will lift the freeze and increase the minimum wage on October 1, 2020. The minimum wage for Ontario workers is expected to be adjusted from the current rate of $14 per hour to reflect the annual inflation rate published under the consumer price index.

3. Pay Transparency Act

At the time of publication, no coming-into-force date has been set for the Pay Transparency Act. However, the sweeping effects of this piece of legislation may come into force in 2020. The Act applies to both public and private sector employers and requires a proactive approach to enhance pay transparency and pay equity, and promote gender equality and equal opportunity. The Pay Transparency Act imposes requirements on Ontario employers:

• Salary rates or ranges must be stated in all publicly advertised job postings.
• Employment candidates may not be asked about their past compensation.
• Reprisals cannot be taken against employees who discuss or disclose compensation.
• Employers with 100 or more employees as well as certain prescribed employers must track and report compensation gaps based on gender and other prescribed characteristics. Such employers must post their pay transparency reports online, or at least in one conspicuous place in every workplace of the employers.
• The province will also publish such pay transparency reports, which may be done online.

Employers with 250 or more employees must submit a yearly pay transparency report.

The coming into force of the Act was delayed pending the Government of Ontario’s consideration of the public’s response to the Ministry of Labour’s Pay Transparency Consultation Paper issued on February 19, 2019.

4. Upcoming changes to JHSC training

The Ontario government is intending changes to training programs that certify those who promote health and safety at workplaces. The goal is to end sending workers for a five-day classroom course by making online courses fully available to Ontario businesses, reducing the time needed to take the first part of the course. The changes include:

• promoting flexibility by allowing training to take place solely online for the first part of the learning, in addition to classroom, blended and distance learning;
• simplifying the requirements by removing complicated rules and red tape; and
• extending the time to complete the second part of training to within a year of completing the first part, providing more time for employers to schedule training.

Generally, workplaces with 20 or more workers are required to have a Joint Health Safety Committee (JHSC) with one certified worker member and one certified employer member.

This change is expected sometime in 2020.

5. Reviews and updates to employment and labour laws reflecting the changing economy and workplaces

The Ministry of Labour, Training and Skills Development’s key strategies that support the Ontario government’s key priorities announced in the 2019-2020 annual report and plan indicate that the government is planning further reviews and updates to employment and labour laws to reflect the changing economy and workplaces.

Therefore, employers should expect further changes to the Employment Standards Act and Regulations and the Labour Relations Act. No further details were provided.

6. Occupational Exposure Limit (OEL) updates

Effective July 1, 2020, Regulation 833 is amended by O. Reg. 449/19 to reflect the adoption of new or revised occupational exposure limits (OELs) or listings for 36 chemical substances based on recommendations by the American Conference of Governmental Industrial Hygienists.

Changes include:

• the addition of listings for 7 substances in the regulation: boron trichloride, calcium silicate (naturally occurring as wollastonite), hard metals (containing cobalt and tungsten carbide), simazine, acetamide, cadusafos and folpet;
• revisions to exposure limits or listings for 19 substances currently regulated: boron tribromide, boron trifluoride, n-butyl acetate, sec-butyl acetate, tert-butyl acetate, isobutyl acetate, cyanogen, propoxur, triorthocresyl phosphate, warfarin, captafol, β-chloroprene, ethylene glycol, furfural, furfuryl alcohol, hexylene glycol, phthalic anhydride, stearates and tungsten;
• the removal of the listing and OEL for 1 substance: calcium silicate (synthetic nonfibrous); and
• the addition or removal of notations for 9 substances: acetylene, butane (all isomers), 2,4-D, ethane, hydrogen, liquefied petroleum gas, methyl acetylene, methyl acetylene-propadiene mixture and propane.

In addition to the changes noted above, effective January 1, 2020, the Ministry has updated the frequency of medical surveillance for asbestos-exposed workers subject to O. Reg. 278/05 in order to harmonize these requirements with provisions that apply to asbestos-exposed workers subject to O. Reg. 490/09. For more information, read the amending regulation, O. Reg. 450/19.

7. Award incentive payments during the termination notice period

The courts have continued to struggle with the issue of whether, and to what extent, incentive payments (e.g., bonuses) are due to employees during their termination notice period (Dawe v The Equitable Life Insurance Company of Canada, 2019 ONCA 512; O’Reilly v IMAX Corp., 2019 ONCA 991).

In Ocean Nutrition Canada Ltd. v Matthews, 2018 NSCA 44, the Nova Scotia Court of Appeal decided that, where incentive plan language is sufficiently clear, it is inappropriate to award a long-term incentive payment that would have accrued during the termination notice period. The Supreme Court of Canada granted leave to appeal in Ocean v Matthews and is expected to release a key decision on this in 2020. This important decision will impact how an employer awards incentive payments such as bonuses when an employee is terminated.

8. Ontario introduces legislation limiting compensation increases in the public sector

Under the Protecting a Sustainable Public Sector for Future Generations Act, 2019 (introduced as Bill 124), the Ontario government limited increases in compensation to public sector employees over a three-year “moderation period.” During the moderation period, salary rate increases for employees in the public sector are capped at 1 percent per 12-month period. Furthermore, incremental increases to the aggregate “total compensation” (e.g., salary, bonus, benefits) provided to employees in each defined group are capped at 1 percent. This new law is currently being challenged by several unions.

9. Pension changes

Ontario will finalize the rules for its target benefit regime and shared-risk plans in 2020. Jana Steele, a partner in the pension and benefits group at Osler Hoskin and Harcourt LLP states that there should be some action on variable benefits because the consultation on this issue took place last spring.

In addition, Ontario has set up an advisory committee to examine the pension benefits guarantee fund. The committee is looking at what to do about underfunded plans on insolvency.

The Financial Services Regulatory Authority of Ontario (FSRA) aims to ensure that the regulatory framework facilitates asset transfers, consolidation, plan flexibility and other sector evolution to support the pension sector. Over the coming year, FSRA intends to adjust its organizational structure and relationship model to gear more towards large and jointly-sponsored pension plans. It also intends to review and consult on inherited guidance and develop a plan to update, retire or merge inherited guidance.

FSRA plans to consult on a plan to enhance its oversight of pension matters and begin implementation over the next year. This will include consideration of plan governance, a financial and risk assessment of the Pension Benefit Guarantee Fund (PBGF), and improved pension risk analysis. FSRA also intends to enhance its expertise in key areas such as credit analysis and pension risk analysis.

FSRA also intends to focus on certain types of pension plans. It intends to focus on standards and best practices in the use of leverage and illiquid assets in jointly-sponsored pension plans, as well as develop best practices in terms of funding, governance and investments for multi-employer pension plans (MEPPs). FSRA also intends to begin development and documentation of a risk-based supervisory approach for defined contribution (DC) pension plans in areas such as member behaviour and engagement, decumulation options, investments and fees. FSRA promises consultation and collaboration with pension plans in these areas, including through technical advisory committees.

Last words

Employers need to remain aware of their rights and responsibilities and ensure compliance.