In order to limit their employment law obligations, cross-border
employers need to understand the laws governing their employees who
perform work in Ontario. It is particularly important for employers
headquartered in the United States to understand that there is no
“at will” employment in Ontario. Rather employees in
Ontario are governed by a contract of employment, either express or
implied. If an employee does not have a written contract of
employment, there is an implied contract of employment
incorporating the minimum statutory protections provided by
Ontario’s Employment Standards Act plus additional rights of
the employee under the common law.
With this in mind, employers headquartered outside of Ontario
should enter into written employment agreements in order to set out
the mutual obligations of the employment relationship and to limit
common law liability to their employees in Ontario. It is
particularly important in such areas as termination,
confidentiality/non-disclosure and
non-competition/non-solicitation. In Ontario it is also essential
that employer’s policies and procedures become part of the
contract of employment. Of note are employee handbooks or
policies/procedure manuals, which in many jurisdictions are
expressed not to be or form part of a contract of employment, but
should be incorporated into the contract of employment in Ontario
so that the employer may rely upon their provisions with respect to
managing or disciplining employees in Ontario.
Highlights of Proposed Changes to the Ontario Employment Standards Act (“ESA”):
Minimum Wage Increases – The general minimum wage
would increase to $14 per hour in 2018 and to $15 per hour in 2019.
The special minimum wage rates for liquor servers, students under
18, and homeworkers would increase by the same percentage as the
general minimum wage.
Paid Vacation – Employees with at least five years
of service would be entitled to three weeks paid vacation.
Paid Personal Emergency Leave – All employers would
be provided 10 days of emergency leave (“PEL”) per
year, two of which would be paid. Employers would be prohibited
from requesting a doctor’s sick note from an employee taking
PEL.
Family Medical Leave – This would be increased from
8 to 27 weeks.
Overtime Pay – Employees who hold more than one
position with an employer would be paid at the rate for the
position in which they are working during any overtime period.
Equal Pay for Equal Work – Employers would be
required to pay casual, part-time, temporary and seasonal employees
the full-time employee rate when performing the same job for the
same employer. Exceptions include where a wage difference is based
on a seniority system, a merit system or systems that determine pay
by quantity or quality of production.
Similarly, temporary help agency
(“THA”) employees
(“assignment workers”) would be paid
at the same rate as permanent employees of the THA client when
performing the same job and such assignment workers would be
entitled to request a review of their wages. THAs would be required
to provide assignment workers with at least one week’s notice
when an assignment scheduled to last longer than three months will
be terminated early.
Scheduling – Employees would be entitled to request
schedule or location changes after having been employed for three
months.
Employees who regularly work more than three hours per day, but
upon reporting to work are given less than three hours, would be
paid three hours at their regular rate of pay.
Employees could refuse to accept shifts if their employer asks them
to work with less than four days’ notice.
If an employer cancels a shift within 48 hours of its start,
employees would be paid three hours at their regular rate of
pay.
When employees are “on-call” and not called in to work,
the employer would pay them three hours at their regular rate of
pay for each 24-hour period that employees were on-call.
Employee Misclassification – Employers that
misclassify their employees would be subject to penalties including
prosecution, public disclosure of convictions and monetary
penalties. Such measures are intended to address cases where
employers improperly classify their employees as independent
contractors and thus preclude them from being entitled to the
protections under the ESA. In the event of a dispute, the employer
would have the burden of proving that the individual is not an
employee.
This new method of dealing with misclassification may require
employers headquartered outside Ontario to take a more careful
approach to the classification of their employees of Ontario than
in the past because of the new penalties contemplated by Bill
148.
Joint or Related Employer Liability – Proof of
“intent or effect” to defeat the purpose of the ESA
would be removed when determining whether related businesses can be
treated as one employer and held jointly and severally liable for
monies owing under the ESA.
This change in approach to the issue of joint or related employer liability will be of particular importance to employers headquartered outside of Ontario which conduct business in Ontario through a subsidiary which is subjected to significant control by a non-Ontario parent and also for franchisors which are found to exercise an unusual degree of control over the operations of their franchisees.
Highlights of Proposed Changes to the Ontario Labour Relations Act (“LRA”)
Proposed changes to the LRA would affect union certification
rules in order to more easily facilitate unionization and will
enable the Ontario Labour Relations Board
(“OLRB”) to change existing bargaining
units.
Union Certification – The following in respect of union
certification are proposed:
- establishing card-based union certification for the THA industry, the building services industry and home care and community services industry;
- allowing unions to access employee lists and certain contact information, provided the union can demonstrate that it has already achieved the support of 20% of employees in the proposed bargaining unit;
- empowering the OLRB to conduct votes outside the workplace, including electronically and by telephone;
- eliminating certain conditions for remedial union certification, allowing unions to more easily certify when an employer engages in misconduct that contravenes the LRA;
- making access to first contract arbitration easier, and also add an intensive mediation component to the process before dealing with displacement and decertification applications; and
- empowering the OLRB to authorize Labour Relations Officers to give directions relating to the voting process and voting arrangements with a view to facilitating the neutrality of the voting process.
Structure of Bargaining Units – The OLRB would be
allowed to change the structure of bargaining units within a single
employer, where the existing bargaining units are no longer
appropriate for collective bargaining, and to consolidate newly
certified bargaining units with other existing bargaining units
under a single employer, where those units are represented by the
same union. This proposal could impact multi-unit franchisees and
franchisors with multiple corporate stores in close geographic
proximity.
Additional proposed amendments to the LRA would impact
return-to-work rights and procedures, just cause job protection in
the period between certification and conclusion of a first
contract, and during the period between the date the employees are
in a legal strike or lock-out position and the new collective
agreement, and with respect to fines and penalties against
offending employers under the LRA.
Conclusion
If enacted, the proposed amendments to the ESA and LRA would
undoubtedly result in increased operational and compliance costs
for employers and require reconsideration of some current
strategies for dealing with both unionized and non-unionized
employees.
Currently the proposed legislation (Bill 148) is before the Ontario
Legislature’s Standing Committee on Finance and Economic
Affairs. The Ontario government’s intention has been to enact
Bill 148 in the fall of 2017 so that would begin coming into effect
on 1 January 2018.
*A portion of this Client Alert originally appeared on The
Lawyer’s Daily website published by LexisNexis Canada
Inc.
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.