Canada: Ontario Proposes Major Changes To Workplace Laws

On December 4, 2013, the Ontario government introduced Bill 146, An Act to amend various statutes with respect to employment and labour, also known as the Stronger Workplaces for a Stronger Economy Act, 2013.  

According to the Minister of Labour, the goal of the bill is to both level the playing field for employers and increase protection for vulnerable workers in Ontario. The proposed changes are similar to some of the recommendations made by the Law Reform Commission of Ontario that submitted a report on vulnerable workers.

Although the bill has just been introduced, if it passes through the legislature and then receives royal assent, it will have a significant impact on workplace regulation in Ontario by making major changes to a number of employment-related statutes, including the Employment Standards Act, 2000 (ESA), the Workplace Safety and Insurance Act, 1997, the Occupational Health and Safety Act (OHSA), the Labour Relations Act, 1995 and the Employment Protection for Foreign Nationals Act (Live-in Caregivers and Others), 2009 (EPFNA). The material changes proposed by the bill are described below.

Changes to the ESA

Removal of the $10,000 Cap for ESA Wage Claims

One highly notable change is the proposed removal of the $10,000 cap that is currently in place for unpaid wages claims under the ESA. Wages may include regular salary, commissions, certain bonuses, termination pay, severance pay or vacation pay.

Claim Period Extended From Six Months to Two Years

In addition to removing the cap on orders to pay wages, the proposed changes would extend the time limits for filing claims under the ESA. Currently, employees can claim six months' worth of unpaid wages and twelve months' worth of unpaid vacation pay. If the proposed changes come into force, these time limits will be replaced by a single two-year period.

Employer Self-Audit

In addition to the investigative and inspection powers that employment standards officers currently possess, the proposed changes to the ESA would also empower these officers to order employers to conduct a detailed self-audit with respect to their ESA compliance, at the employer's expense.

An employer would then be required to report those results to an employment standards officer within a designated period of time. Employers subjected to such audits would be required to report any unpaid wages or instances of non-compliance that may have been revealed. Once reported, the employer could face wage orders or other compliance orders by employment standards officers.

Major Changes for Businesses That Utilize Temporary Help Agencies

Other significant changes to the ESA would affect companies that utilize the services of temporary help agencies. For example:

  • Shared Liability for Wages – The bill would require the sharing of liability between a temporary help agency and an organization that contracts for assigned workers from the agency if the agency fails to pay for the workers. Therefore, even if an employer has already paid a temporary help agency for its services, that same employer may still find itself on the hook for unpaid wages if the temporary agency has failed to pay them. 
  • Clients of Agencies Responsible for WSIB – Employers that utilize the services of temporary help agencies would become responsible for the WSIB premiums and related accident costs of an agency's temporary workers. Currently, the WSIB premiums and accident costs arising from the employment of a temporary worker are attributed to the temporary help agency. However, the bill would attribute costs to the company using a temporary help agency if a temporary worker is injured during an assignment at the company's location. The company using the temporary worker would also be required to notify the WSIB within three days of an injury to a temporary worker that requires health care.

Ministry of Labour Information Poster

Employers are currently required to display an employment standards information poster produced by the Ministry of Labour (MOL). In addition to requiring the posting of this material, the proposed changes would require an employer to provide each employee with a copy of that poster in the language of their choice (provided that the MOL has a copy in the language requested). The bill would require all employees to receive a copy of the poster within 30 days of the bill's coming into force. Once the bill is in force, all new employees would have to receive a copy within 30 days of their start date.

Protection Under OHSA Extended to Unpaid Interns

With all the recent media coverage about unpaid interns, it is no surprise that this new legislation will affect unpaid interns.

The proposed amendments would expand the definition of "worker" under OHSA and extend the protection beyond workers receiving monetary compensation. Protection would be extended to the following:

  • unpaid co-op students who are working as part of a secondary school program;
  • unpaid co-op students who are working as part of a program authorized by a post-secondary institution; and
  • true interns who meet the conditions under section 1(2) of the ESA.

As mentioned in a previous post, the ESA requirements for unpaid interns are fairly strict and many interns currently designated as such may not meet these qualifications.

Limiting the "Open Period" for Union Raids

The bill also provides for changes to the Labour Relations Act, by reducing the "open period" for displacement applications (commonly known as union raids) in the construction industry from three months to two months. This change would help to benefit employers as it would reduce disruptions to the workplace as well as the time and resources spent at the Ontario Labour Relations Board. However, this limited window would also reduce the opportunity for employees who wish to change unions.

Increased Protection for Foreign Workers

Finally, the bill would extend protection under the EPFNA to all foreign workers in Ontario. Currently, the legislation applies only to live-in caregivers. In addition, the proposed changes would require employers and/or recruiters to provide information guides prepared by the MOL to all foreign workers and would limit the ability of employers and recruiters to charge fees or recover costs from foreign workers who come to Canada.

Implications for Employers

As illustrated above, Bill 146 contains a number of significant changes of interest to employers that will have a material impact on the workplace and its regulation. Even though the bill is a long way from enactment, we would recommend that employers take note of the following:

  • The elimination of the $10,000 cap for unpaid wages claims and the ability to claim wages going back two years would likely result in an increase of claims (and for higher amounts) going before the MOL rather than before the courts. As a result, not only would employers lose the procedural protections provided by the courts (e.g., full disclosure), but they would also lose the ability to reclaim costs.
  • The ability of the MOL to order employer self-audits has the potential to increase the costs associated with employment standards compliance. Moreover, as the self-audit will generate evidence capable of being used by the MOL against the employer, employers will need to be extremely diligent in preparing any report and should consult legal advice to avoid incriminating statements.
  • With the proposed shared liability for wages between temporary help agencies and their clients, organizations that use agencies would have to scrutinize the business practices (and potentially the solvency) of the agency in addition to negotiating stronger indemnities in their contracts with the agencies.
  • As WSIB costs would be attributed to the client of the agency to which the worker is assigned, employers that use temporary labour would need to be mindful of their safety practices and apply such pratices to all staff to manage their WSIB premiums and experience rating.
  • Similarly, as interns would be covered by OHSA, employers would have to ensure that their health and safety policies and procedures (e.g., training, work refusals) are applied to interns.

Although Bill 146 is still in its very early stages, it is notable for implementing some of the recommendations of the Law Reform Commission, as well as catering to all the recent media attention surrounding unpaid interns, temporary employees and foreign workers. While we are unsure whether this bill will ever come into force given the potential of a provincial election, the proposed changes in the bill are likely to ensure that such proposals continue to be discussed. We will keep you updated as Bill 146 progresses through the legislature.

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