Canada: Ontario Changing Workplaces Review: Final Report Recommends Sweeping Reforms To Employment And Labour Statutes

In 2015, the Ontario government initiated the Changing Workplaces Review (Review) with a view to identifying potential reforms to the Employment Standards Act, 2000 (ESA) and the Labour Relations Act, 1995 (LRA) to ensure that the province's employment standards and labour relations laws continue to reflect modern realities. The government appointed C. Michael Mitchell and the Honourable John C. Murray as special advisors to lead the Review, with a mandate to consider the broader issues affecting the workplace and assess how the province's current employment and labour law framework addresses those issues. In particular, the special advisors were asked to determine what changes, if any, should be made to the ESA and LRA, particularly in light of relevant trends and factors including globalization, trade liberalization, technological change, the growth of the service sector, and changes in the prevalence and characteristics of standard employment relationships. This is the first independent review in Canada to consider specific legislative changes to both employment standards and labour relations in a single process.

The special advisors issued their much anticipated Final Report on May 23, 2017. Their sweeping recommendations for changing the ESA and the LRA, if adopted, would usher in a new array of workplace rights in the province.

The 420-page Final Report includes over 170 recommendations on a wide range of issues, including consolidating the ESA, LRA and the Occupational Health and Safety Act under a single Workplace Rights Act, to be subject to a process of independent review every five to seven years. The Workplace Rights Act would be comprised of three parts, entitled Rights to Basic Terms and Conditions of Employment, Rights to Collective Bargaining, and Rights to a Safe and Healthy Workplace.

The special advisors were mandated to consider the need for reform through the lens of changes in the workplace and the economy that have been occurring over a lengthy period of time, while being supportive of business in a changing economy. In the Final Report, they state that, during hearings held across Ontario as part of the Review, they found many legitimate social and economic concerns affecting vulnerable employees in precarious employment, characterized by job instability, low wages and lack of benefits. Accordingly, they have aimed their specific recommendations at creating better workplaces in Ontario with decent working conditions and widespread compliance with the law.

View the Final Report

The following summarizes a number of key issues identified by the special advisors, along with their related recommendations.

Employment standards

Definition of employee

The special advisors identify the misclassification of employees – whether intentional or unintentional – as independent contractors not covered by the ESA as a significant issue. Accordingly, a key recommendation in the Final Report is for the Ministry to make misclassification a priority enforcement issue. Other recommendations include expanding the statutory definition of employee in the ESA to include dependent contractors, as currently defined in the LRA as:

"a person, whether or not employed under a contract of employment and whether or not furnishing tools, vehicles, equipment, machinery, material, or any other thing owned by the dependent contractor, who performs work or services for another person for compensation or reward on such terms and conditions that the dependent contractor is in a position of economic dependence upon, and under an obligation to perform duties for, that person more closely resembling the relationship of an employee than that of an independent contractor."

ESA exclusions and exemptions

In addition to stating that the government should make a review of the existing ESA exemptions a priority, the special advisors recommend eliminating, over a three-year time frame, the special minimum wage rates for liquor servers and students under 18.

Perhaps more significantly, recommendations include changing the current test for managers to a "salaries plus duties" test, where in order to be exempt from hours of work and overtime protection, a manager would have to perform defined duties, which would generally follow tests which are, in broad strokes, compatible with the Ontario Labour Relations Board (OLRB) criteria. The special advisors also recommend that the salary figure be 150% 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 – i.e. the threshold triggering overtime pay.    

Equal pay with comparable full-time employees

The special advisors recommend amending the ESA to provide that no employee shall be paid a rate lower than a comparable full-time employee of the same employer. This rule would not apply, however, where there is a difference in treatment between employees on the basis of: (a) a seniority system; (b) a merit system; (c) a system that measures earnings by quantity or quality of production; or (d) another factor justifying the difference on objective grounds.

Pension and benefits plan coverage

For practical reasons, and out of a concern that there could be significant unintended impacts on full-time employees, the special advisors do not go so far as to recommend equal treatment in the provision of benefits and pensions for part-time, temporary, contract, casual and seasonal employees. Instead, they recommend that the government initiate an urgent study on how to provide at least a minimum standard of insured health benefits across workplaces, especially to those full-time and part-time employees currently without coverage, and to the self-employed, including small employers.

Scheduling and the right to request

There are currently no provisions in the ESA that regulate scheduling of work by employers or require employers to provide advance notice of shift schedules or of last minute changes to existing schedules. Noting that workers often have very little ability to make changes to their work schedules when needed to accommodate family and other responsibilities, and that scheduling – a complex and difficult subject – cannot be the same for all employees employed in all businesses, the special advisors recommend revising the ESA to give the Ministry the authority to regulate scheduling. Recognizing the need for predictable schedules for employees in certain sectors and the variability of scheduling requirements, they also recommend that the government adopt a sector-specific approach to the regulation of scheduling, making regulation in some sectors, such as fast food and retail, a priority.

A further recommendation would give employees with one year of service a right to request, in writing, that the employer decrease or increase his or her work hours, provide a more flexible schedule, or alter his or her work location. The employer's obligation to respond to an employee's request would be limited to one request per calendar year, per employee.

Temporary help agencies

The Final Report notes that "the triangular nature of the relationship between the employee, the agency and the client, and the temporary nature of the employment, results in some temporary help agency employees being among the most vulnerable and precariously employed of all workers."[i] The special advisors accept the general proposition that these workers should be paid the same as others performing the same work in the same establishment. Among the other recommendations related to temporary help agency employees is that prior to terminating the employment relationship with an assignment worker, the client should consider, in good faith, whether the assignment worker is suitable for an available position with the client.

Hours of work and overtime

Recommendations with respect to hours of work include an option for obtaining group consent to work overtime or to other hours of work rules, by way of a secret ballot vote on a sectoral basis.

The special advisors recommend overtime averaging only be permitted where it would allow for 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. Overtime averaging should not be permitted for other purposes, unless a specific case can be made by an industry or sector for averaging on a sectoral basis.

Of note, the special advisors also recommend leaving the overtime threshold at 44 hours in a week and repealing the requirement to obtain Ministry consent to work 48 to 60 hours a week.

Personal emergency leave

Submissions by employee advocates with respect to the ESA's personal emergency leave (PEL) provisions were keen to entitle all employees to PEL and so recommended that the 50+ employee threshold for entitlement be removed. Conversely, employer submissions were more focused on the cumbersome and conflated nature of the provisions, stating that it was difficult to navigate the various PEL categories and to establish that their generous paid sick leave and bereavement policies provided greater rights than the ESA.

The special advisors' recommendations pay credence to both employee and employer concerns. First, they recommend removing the 50 employee minimum, requiring employers of all sizes to provide PEL entitlements. Second, they recommend that PEL be broken down into separate leave categories, so that employees are entitled to seven days' unpaid leave for personal illness, injury and family emergencies and to three days' unpaid leave for bereavement. Notably, the total number of days of leave that an employee is entitled to – 10 days in total – does not change under these recommendations.

The Final Report also recommends adding a new classification of emergency leave to cover an employee if the employee is, or the employee's minor children are, a victim of domestic violence. The special advisors suggest that all information related to an employee's request for leave under this category be kept confidential.

Absent from the recommendations is any requirement to provide paid sick days. However, the Final Report does recommend that employers be required to pay for any medical notes they require from employees to substantiate a leave.

Termination, severance and just cause

The special advisors' Interim Report, released in July 2016, suggested that sweeping changes to the ESA termination and severance provisions might be anticipated. Indeed, the options considered by the special advisors at that time included the removal of the eight-week cap on notice of termination, eliminating the three-month eligibility requirement for notice of termination, increasing the 26-week cap on severance pay, and precluding employers from dismissing employees for anything but just cause.

Interestingly, the Final Report provides no commentary – much less any recommendations – with respect to the ESA provisions on termination, severance or just cause.

Vacation

Compared to other Canadian provinces, Ontario has the least generous provisions with respect to paid vacation. Accordingly, the special advisors recommend increasing vacation entitlement to three weeks after five years of employment, with a corresponding increase in vacation pay to at least 6%.

Remedies and Penalties

As part of an effective compliance strategy, the special advisors favour enforcement mechanisms that encourage compliance, deter non-compliance and provide appropriate restitution to employees whose ESA rights have been violated. Their recommendations include increasing the amount of tickets from $295 to $1,000, and doubling the penalties for Notices of Contraventions.

They further recommend adding a new provision that would allow the OLRB to issue administrative monetary penalties of up to $100,000 per contravention, give the OLRB the authority to order employers to pay the costs of an investigation and to pay employees interest on their unpaid monetary entitlements, and permit employers and the Ministry to enter into undertakings on a voluntary basis, enforceable by the OLRB.

Director liability for employee remuneration

The special advisors recommend amending the existing provisions of the ESA and the Ontario Business Corporations Act to make directors of a corporation liable for up to six months' wages and up to 12 months' accrued vacation pay if the employee has not been paid these sums by the corporation.

Labour relations

Scope and coverage of the LRA

The special advisors' review of the current exclusions from collective bargaining is informed by Supreme Court of Canada jurisprudence finding that the right to meaningful collective bargaining is an essential component of the right to freedom of association under section 2(d) of the Charter of Rights and Freedoms. Accordingly, they recommend amending the LRA so that the following groups, currently excluded from the Act, are covered:

  • Domestic workers employed in a private home. The special advisors note that there is no valid policy reason to deny this group of workers their constitutional right to freedom of association, even though "the promise to engage in collective bargaining will be in most cases, illusory"[ii] since many domestic workers are the only person employed in a private home by a homeowner.
  • Persons employed in hunting or trapping. The special advisors note that no other Canadian jurisdiction excludes this group from coverage under the applicable provincial labour legislation.
  • Agricultural employees. The special advisors add that the government should consider whether protection for the family farm is a pressing and substantial objective warranting the exclusion of some or all persons employed on a family farm from the LRA. Of note, although the special advisors acknowledge that agricultural workers are currently covered under the Ontario Agricultural Employees Protection Act (AEPA), they state that "viewed through a policy lens (which must be informed by and take into account Charter principles), and as a practical matter, in our view, the AEPA is defective ... as it contains barriers to the realization by agricultural employees of their ability to advance their interests and to protect themselves."[iii] They go on to enumerate, over several pages what, in their view, are defects in the AEPA – a discussion that is arguably well outside their mandate.

Horticultural employees. The special advisors note that no other Canadian jurisdiction excludes this group from coverage under the applicable provincial labour legislation, and they find no valid policy reason to exclude horticultural employees from coverage. They acknowledge, however, that strikes by horticultural workers could have a significant impact on planting, growing, harvesting and caring for plants and trees.

Certification procedure

Although the special advisors state they do not believe that there is a single "correct" certification procedure, they nonetheless recommend that the secret ballot process for certification be preserved, provided additional recommendations are also accepted, the key points of which are summarized below.

Where the true wishes of 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.

An intensive mediation process should be integrated into the first contract arbitration process. A union certified by remedial certification would be entitled to first contract arbitration only after undergoing the intensive mediation process.

Decertification or displacement applications should be prohibited while the intensive mediation and first contract process is ongoing.

Provided the OLRB is satisfied that the union has the support of approximately 20% of the employees in a proposed bargaining unit, the union should be permitted to obtain employee lists and contact information. The special advisors emphasize that a "fair and democratic voting process requires a list of eligible voters and contact information to be made available so that employees can be informed participants in the election process."[iv]

Consolidation and amending of bargaining units

Ontario is one of very few Canadian jurisdictions that does not give its labour board the general authority to consolidate and amend bargaining units. The special advisors recommend giving the OLRB the power to modify bargaining unit structures if it satisfied that the bargaining unit or units are no longer appropriate for collective bargaining. They further recommend that, in sectors or industries where employees have been historically underrepresented by unions, the OLRB be given the power to consolidate existing and/or newly certified bargaining units involving the same employer and the same union in order to contribute to the development of effective collective bargaining relationships.

Broader-based bargaining for franchisees

The Final Report identifies and discusses a number of existing or proposed models of broader-based bargaining, illustrating the alternatives that could be considered. However, the special advisors recommend proceeding with only one model of broader-based bargaining to be applied to franchisees, whereby the OLRB could require certified or voluntarily recognized bargaining units of different franchisees of the same franchisor to bargain together centrally if they are represented by the same union in the same geographic area. They justify the reasonableness of a franchisee central bargaining model, given that franchisees operate their businesses in a way that is materially the same, under the same contracts and policies of the same franchisor. Further, staffing, labour costs and methods of operation are either the same or so similar that any differences are manageable.

Related and joint employers

The special advisors describe LRA issues regarding the identification of the "true" employer and the complex relationship among related or joint employers as being among the most difficult areas addressed in the Review. They have generally not recommended changes to the existing law or otherwise attempted to regulate genuine subcontracting relationships.

However the special advisors have included one specific recommendation in relation to temporary help agencies, whereby temporary help agency workers assigned to perform work for clients of the agency, or persons assigned by other suppliers of labour to perform work for a person, would be deemed to be employees of the client or of the person, as the case may be, for the purposes of the LRA.

Successor rights

The current successor rights provision protects union and bargaining unit employee rights when there is a sale of a business, providing that bargaining rights and collective obligations of the "seller" flow through to the "purchaser". However, this protection does not currently apply to contracting out and re-tendering contracts in the building services industries. In order to protect vulnerable workers in this situation, the special advisors recommend extending the successor rights provision to the building services industries (specifically, security, food services and cleaning services), and further revising the LRA to include a regulation-making authority allowing for the possible expansion of successor rights to other services or sectors in the future.

Prosecutions and penalties

Currently, on conviction for an offence for a violation of the LRA, individuals can be fined up to $5,000 and corporations, employers' organizations, unions and trade union councils can be fined up to $25,000. Each day that a contravention continues may constitute a separate offence. The special advisors note that these maximum amounts have not changed since 1990. Accordingly, they recommend increasing the maximum amounts to make individuals liable to a fine of up to $5,000, and corporations, employers' organizations, unions and trade union councils liable to a fine of up to $100,000.

What's next? Stay tuned for the government's formal response

In a relatively short statement announcing the release of the Final Report, Minister of Labour Kevin Flynn stated that the government has reviewed the recommendations and will be announcing its formal response within the next week.

The authors wish to thank Kaley Dodds for her help in preparing this legal update.

Footnotes

[i] Final Report at page 198.

[ii] Final Report at page 286.

[iii]  Final Report at page 298.

[iv] Final Report at page 339.


About Norton Rose Fulbright Canada LLP

Norton Rose Fulbright is a global law firm. We provide the world's preeminent corporations and financial institutions with a full business law service. We have 3800 lawyers and other legal staff based in more than 50 cities across Europe, the United States, Canada, Latin America, Asia, Australia, Africa, the Middle East and Central Asia.

Recognized for our industry focus, we are strong across all the key industry sectors: financial institutions; energy; infrastructure, mining and commodities; transport; technology and innovation; and life sciences and healthcare.

Wherever we are, we operate in accordance with our global business principles of quality, unity and integrity. We aim to provide the highest possible standard of legal service in each of our offices and to maintain that level of quality at every point of contact.

For more information about Norton Rose Fulbright, see nortonrosefulbright.com/legal-notices.

Law around the world
nortonrosefulbright.com

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.