Ontario Government Announces Sweeping Employment and Labour Law Changes

On May 30, 2017, the Ontario government announced a plan to introduce legislation entitled “The Fair Workplaces, Better Jobs Act, 2017,” that, if enacted, could mean significant changes to several employment standards and labour relations rules. The text of the announcement is available on the Ontario government’s website.

Highlights of the proposed changes include a significant increase in Ontario’s minimum wage, an extra week of vacation for employees with five or more years of service, paid emergency leave days, strengthened protections against misclassification of an employee as an independent contractor, and numerous rules designed to help unions organize workers.

This plan was widely anticipated as a response to the recently-released Changing Workplaces Review, a 419-page report prepared by special advisers C. Michael Mitchell and John C. Murray after extensive consultation with various stakeholders across the labour relations spectrum. This report, commissioned with great fanfare by the Liberal government two years ago, made 173 recommendations with respect to Ontario’s workplace legislation.

With the Fair Workplaces, Better Jobs Act, 2017, the Ontario government has now proposed significant changes to both the Employment Standards Act, 2000 (ESA) and the Ontario Labour Relations Act, 1995 (OLRA), seeking to increase protections and basic standards for Ontario workers, especially those who have been identified as being at greater risk, and ease the path for a unionization process. Most of these changes would take place between January 1, 2018, and January 1, 2019.

Although details in many areas will only be known when the proposed legislation and/or any associated regulations are introduced, the following is a summary of the announced changes.

Employment Standards Proposals

Minimum Wage Increases

The highest profile proposal in this plan involves a material increase to the general minimum wage from its current amount of $11.40 per hour to $14.00 per hour by January 1, 2018, and to $15.00 per hour by January 1, 2019. This represents the largest increase in the minimum wage rate over such a short period in Ontario history. Employers may want to seriously consider the impact of this proposal.

The plan would maintain lower rates for designated groups, such as students and liquor servers, but the rates for these groups would increase by roughly the same percentage as the general minimum wage rate.

Equal Pay Provisions

As was recommended in the Changing Workplaces Review final report, employers would be required to pay all full-time, part-time, casual, temporary, and seasonal employees the same wage rates (with certain exceptions where the wage difference has an objective basis such as seniority or productivity systems).

Similarly, employers utilizing workers from temporary help agencies would be prohibited from paying such workers less than they pay their own employees for doing the same work.

Employees in any of these scenarios who believed they were subject to a wage distinction would have the legislated right to request a wage review of the employer, although it is unclear at this time how such a review would be applied or enforced. These proposals would take effect on April 1, 2018.

Scheduling

The proposed legislation would include significant rights for employees with respect to scheduling of hours of work. The proposed changes include:

• Guaranteed 3 hours’ pay at regular rates when a shift was cut shorter than scheduled as long as employees regularly work more than 3 hours per day, or when a shift is cancelled less than 48 hours prior to the scheduled shift
• Guaranteed three hours’ pay at their regular rates for on-call employees who are not called into work
• Ability to refuse additional shifts without consequences when given less than four days’ notice by the employer
• Right to request schedule or location changes without employer reprisal after having been employed for three months

This proposal would come into force on January 1, 2019.

Misclassification

One of the key recommendations of the Changing Workplaces Review was to address allegations of employer misclassification of employees as independent contractors.

The proposed legislation would strengthen protections against employers that seek to misclassify employees as independent contractors (and thereby deny them the protections of the ESA). Although the exact nature of the proposed change is not clear, the government’s proposal indicates that the employer would be required to prove that the individual was not an employee, reversing the usual onus of proof.

This proposal would come into force quickly if passed, taking effect on the date of royal assent.

Additional ESA Entitlements—Vacations, Overtime, and Holidays

The proposed legislation would make certain changes to additional existing ESA entitlements:

• It would provide employees with five years of service with the same employer a minimum of three weeks of (paid) vacation, as opposed to the current two weeks.
• Where an employee works for the same employer in multiple positions, overtime pay will be paid at the rate of the position he or she was working during the overtime period.
• It would implement changes to public holiday pay calculations and other unspecified changes to public holiday provisions which purport to simplify related issues.

These proposals would come into force on January 1, 2018.

ESA Protected Leaves

The proposed legislation would make certain changes to additional existing ESA leaves:

• It would provide 10 personal emergency leave days per year available to all employees, not just those working for employers with more than 50 employees.
• A minimum of two of those personal emergency leave days would be paid.
• Reasons for taking personal emergency leave would expand to include domestic or sexual violence or threat of domestic or sexual violence.
• Employers would be prohibited from requiring a medical note for use of personal emergency leave.
• It would create unpaid leave for the death of a child from any cause for a period of up to 104 weeks.
• It would create unpaid leave for crime-related child disappearances for a period of up to 104 weeks.
• Family medical leave would be increased from up to 8 weeks in a 26-week period to up to 27 weeks in a 52-week period.

These proposals would come into force on January 1, 2018.

Employment Standards Enforcement

The proposed legislation would make a number of changes to the processes relating to ESA claims, as well as the potential results of such claims.

A significant change that was recommended by the Changing Workplaces Review would be a greater investment in the employment standards claim process. This investment would include authorization for the province to hire up to 175 more employment standards officers and launch a program to educate both employees and small- and medium-sized businesses about their rights and obligations under the ESA. This investment seeks to improve the turnaround time for ESA claims and resolutions as well as provide greater assistance to smaller employers that may struggle to understand the process.

Other proposed changes include that an employee would no longer need to contact his or her employer before filing a claim, and the Director of Employment Standards would no longer be permitted to refuse to investigate any such claim based on insufficient information from the claimant.

Consequences for employers found to be in violation of the ESA by such investigations would also be increased. Maximum administrative monetary penalties for noncompliant employers would increase from $250, $500, and $1000 to $350, $700, and $1500, respectively. ESA officers would have greater power to order direct payment to employees and more options for methods of payment. These officers would also be authorized to award interest on employees’ unpaid wages or on fees that were found to be unlawfully charged to employees.

Additionally, the Director of Employment Standards would be authorized to publish the names of individuals who have been issued a penalty, a description of the contravention, the date of the contravention, and the amount of the penalty.

Finally, the powers of the government to collect unpaid wages would be increased. A collector authorized by the Director of Employment Standards would be empowered to issue warrants, place liens on real and personal property, and hold security while a payment plan was underway. Such agents would also be able to collect and share personal information in the course of collection.

These proposals would come into force on January 1, 2018.

ESA Exclusions

The government plan would eliminate or drastically reduce the scope of various exemptions from ESA minimum standards for groups such as:

• Crown employees (this proposal would go into force on January 1, 2018);
• individuals receiving training for work through their employer (this proposal would go into force on January 1, 2018);
• students who are employed and regularly work more than three hours (such employees would be paid for at least three hours even if they worked less than three hours, and this proposal would go into force on January 1, 2019); and
• employees working in a simulated job or working environment for their rehabilitation (this proposal would go into force on January 1, 2019).

The proposed legislation would also require the Ministry of Labour to conduct a review of existing ESA exemptions and special industry rules, including consultation with affected stakeholders. Most notably, the government has highlighted that the exemptions in place for managers and supervisors would be part of this review. This presents a serious possibility that employers may lose the ability to rely on one of the key exemptions from ESA standards, such as overtime.

Miscellaneous Employment Amendments

Additional proposed changes to the ESA include the following:

• Removal of the provision that requires proof of “intent or effect” to defeat the purpose of the ESA when determining whether related businesses can be treated as one employer and held jointly and severally liable for payment owed under the ESA.
• A requirement that temporary help agencies provide an assignment employee with at least one week’s notice (or alternate equivalent work or pay in lieu) when an assignment scheduled to last longer than three months is to terminate early.
• Electronic agreements between employers and employees, such as an agreement to work excess hours, would serve as agreements in writing.

Labour Relations Proposals

Union Certification

As discussed above, the biggest mandate for the Ontario government in the context of labour relations, strongly supported by the recommendations of the Changing Workplaces Review, is simplifying and facilitating the ability of employees to form unions. Private sector unionization rates have been shrinking province-wide for decades, and these reforms are intended to remove as many barriers to increasing unionization as possible.

The government has proposed the following changes to certification rules and procedures:

• Card-based certification would be permitted for the temporary help agency industry, the building services sector, and the home care and community services industry.
• The Labour Relations Board would be permitted to conduct certification votes outside the workplace, including electronically and by telephone.
• Unions would be permitted to access employee lists and certain contact information, provided that they could demonstrate that they have the support of 20 percent of employees involved.
• Certain conditions for remedial certification would be eliminated, allowing unions to more easily get certified when an employer engages in misconduct that contravenes the OLRA.
• The Labour Relations Board would be granted additional powers to regulate the voting process (ostensibly, in order to help assure the neutrality of the voting process).

The proposed legislation would also require the Labour Relations Board to address first contract mediation-arbitration applications before dealing with displacement and decertification applications, make access to first contract arbitration easier, and add an intensive mediation component to the process.

The Labour Relations Board’s ability to apply successor rights for previously unionized workplaces would be enhanced; building services contracts that were re-tendered would be subject to successor rights, as would other publicly funded contracted services when re-tendered.

Finally, the Labour Relations Board would be granted additional discretionary powers to structure bargaining units. The proposed legislation would allow the board to change the structure of bargaining units within a single employer if the existing bargaining units were found to be no longer appropriate for bargaining, or to consolidate newly certified bargaining units with other existing bargaining units under a single employer if those units were represented by the same bargaining agent.

These proposals would come into force six months after the coming-into-force date of The Fair Workplaces, Better Jobs Act, 2017.

Employee Protections

The proposed legislation would also focus upon providing additional protections to unionized employees engaged in the process of enforcing their collective bargaining rights.

Specifically, the legislation would protect employees from being disciplined or discharged without just cause by their employer in the period between certification and conclusion of a first contract, as well as during the period between the date the employees were in a legal strike or lockout position and the new collective agreement.

Additionally, employers would be required to reinstate an employee at the conclusion of a legal strike or lockout (subject to certain unspecified conditions), and to provide access to grievance arbitration for the enforcement of that obligation. The OLRA at present gives employees the right, under certain conditions, to return to work within six months of the commencement of a lawful strike, but the government plan would remove this time limitation.

Similar to the discussion regarding the ESA, this plan proposes to engage a consultation between the Ministry of Labour and all stakeholders to consider existing exemptions to the OLRA and determine whether such exemptions should be eliminated.

Finally, the proposed plan would enhance penalties on employers found to be in violation of OLRA protections. This legislation would increase maximum fines under the OLRA to $5,000 for individuals and $100,000 for organizations (from the current $2,000 for individuals and $25,000 for organizations).