Canada: Guide To Bill 148 | Temporary Help Agencies

Last Updated: November 20 2017
Article by David K. Law

Most Read Contributor in Canada, October 2018

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In many respects, Temporary Help Agencies are the principal target of the Bill 148 amendments to Ontario's Employment Standards Act.  The amendments appear informed by the view that agencies treat their own employees with substandard regard, while hiring parties provide temporary help substandard working conditions and terms.

The Bill 148 provisions, ostensibly meant to afford greater rights and protections to temporary personnel ("assignment employees") will make it more costly and complex for companies to engage people through agencies. This can only be interpreted as an effort to dissuade companies from using agencies, in turn encouraging them to hire people directly.

Card-Based Certification of Trade Unions

Amendments to the Labour Relations Act hold that employees of temporary help agencies may become unionized through "card-based certification" – a paper process without a vote, where a trade union can demonstrate to the Labour Relations Board that it has the support of at least 55 percent of the people employed in the proposed bargaining unit.

Notice for Early End of an Assignment

Assignment employees on jobs expected to last 3 months or more, if released before the end of the "estimated term" are entitled to one (1) week's wages in lieu of notice – or the offer of a reasonably comparable job for no less than one week – as "notice." 

Exceptions are where assignments end early for uncontrollable circumstances ("frustration") or at the end of strikes or lockouts. Assignment employees guilty of "willful misconduct" or dereliction of duty are not entitled.

New section 74.10.1 adds several new burdens to THAs: they must estimate the duration of an assignment, budgeting somehow to pay notice in longer-term estimated jobs. THAs will presumably try limiting assignments to less than three months (to avoid the potential liability) but that may mean assignment employees will be less well-trained, less well-versed in workplace hazards and arguably less valuable to the client site. THAs cannot remove an assignment employee early, without notice even for just cause, but rather only in cases of misconduct (possibly a different and higher standard).

Equal Pay for Equal Work in the Temporary Help Sector

"Assignment employees" sent by a temporary help agency (THA) to a client site, must receive the same wage as the client's employees, performing substantially the same work, requiring the same abilities, in the same establishment. A person's status as an "assignment employee" is not grounds for different wages.

The client site may not lower its own employees' wages to help a THA comply with that rule.

No trade union may do anything to attempt or cause a THA to contravene the rule. However, collective agreements effective on April 1, 2018 which contravene the rule, continue to apply until no later than January 1, 2020.

An employee may request wage information, about client site employees, to confirm whether they have been equally paid.

This new section 42.2 in Part XII of the ESA will effectively make every assignment employee more expensive to employ in a particular job, than the client site's own employees (because THAs charge some form of fee, often a percentage commission, on the people they place at a client). This has to be a profound disincentive for client sites to hire people through THAs, except in more urgent circumstances.

For companies historically dependent on THAs for staffing, incentives shift towards hiring directly. That adds layers of risk and potential cost which hiring parties have been able to avoid through the use of THAs. The "value proposition" of a THA changes in these conditions – presumably to a greater focus on insulating the client employer from employee-related liabilities such as WSIB claims and of course, risks of termination cost.

These provisions also add a significant layer of analysis and record-keeping to all employers, which must now establish criteria and collect evidence for judging the "kinds" of work being done, the "skill, effort and responsibility" required to perform it and the "working conditions."

No Fees charged to Assignment Employees

THAs may not charge a fee to assignment employees or prospective assignment employees, for job opportunities. Amended section 74.14 authorizes the Ministry of Labour to order repayment to the person charged the fee; section 74.16 applies administrative penalties.

This reinforces the point that THAs cannot profit based on wage differentials between their assignment employees and the regular employees at client sites.

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.

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