Canada: Bill 66 Passes In Ontario Legislature - It Turns Out The Sky Is Not Falling After All

Last Updated: April 17 2019
Article by Michael MacLellan

The Ontario government has passed Bill 66, known as Restoring Ontario's Competitiveness Act, 2019.  It is an omnibus bill making amendments to a number of statutes, but this article will focus on some of the more alarming (at least to the alarmists) amendments impacting labour and employment law.  For a full summary of the entire omnibus bill, you can review the government's Backgrounder here.

Some of the most profound changes from Bill 66 are coming to the Employment Standards Act, 2000 and the Labour Relations Act, 1995.  I would urge you to take a critical view of reactionary Chicken Little-type internet headlines reading: "working more and earning less"; "assault on workplace wages and protections"; and "undermining overtime rights".

1. CHANGES TO THE EMPLOYMENT STANDARDS ACT, 2000

Excess Hours Agreements

Pre-Bill 66, the ESA allowed employers and employees to agree that the employee will work more than the 48 hour weekly limit imposed by the ESA.  However, and with some exceptions, that arrangement would only be valid if it was approved by the Ministry of Labour's Director of Employment Standards.  This approval requirement has been removed.  That's it.  And frankly, you should not expect that it will make a whole lot of difference.

Getting approval from the Director under the old provisions took a long time, which was remedied by the ESA holding that the agreement to work additional hours would be valid pending the Director's approval on certain conditions.  Bill 66 simply removes the requirement to obtain the Director's approval in order for an agreement to work additional hours to be enforceable.

Overtime Averaging Agreements

Similarly, under the pre-Bill 66 language, an employer and employee could enter into an agreement to average an employee's hours over a period of weeks for purposes of calculating entitlement to overtime, but only with the approval of the Director.  For example, an employee could agree that they will not receive overtime payments unless their average weekly hours worked over a four week period exceeds 44.  This particularly makes sense on continental shift schedules where hours of work vary weekly, but are overall predictable, alternating between significantly exceeding 44 hours and significantly falling below 44 hours.  Bill 66 again simply removed the requirement of approval by the Director.

Just like with the excess hours agreements, the amendment really just removes a bureaucratic requirement for oversight of valid agreements being entered into between consenting parties.

CCPartners' Take

For any person who would complain that workers will be abused, or that a disparity in actual or perceived bargaining power will harm employees, please keep in mind that no such agreement to excess hours or averaging will be valid without written agreement of the employee.  And nothing is eliminating the protection of all workers from reprisals.  No employer can take any negative action against an employee for enforcing their rights under the ESA.  That means that no employee who declines to enter into an excess hours agreement or overtime averaging agreement, can be punished by their employer, and if an employer does engage in a reprisal, that employee will have a right to seek remedies under the authority of the Ministry of Labour.

2. CHANGES TO THE LABOUR RELATIONS ACT, 1995

Bill 66 will have a significant impact on labour relations in Ontario's construction industry.  The construction industry is treated differently than other industries under the Labour Relations Act, and more than one quarter of the provisions of the Act are specific to the construction industry. 

An employer in the construction industry can be bound to a collective agreement with a particular trade union, and if they are, then that employer can only perform work with workers who are members of that union.  If the employer wants to hire a contractor to do the work, that contractor must be bound to the same union – and typically the same collective agreement.  The reality is that a number of entities, including municipalities, school boards, hospitals, and colleges, have been considered employers in the construction industry, despite the following definition:

"non-construction employer" means an employer who does no work in the construction industry for which the employer expects compensation from an unrelated person.

Bill 66 expands that definition to include "an employer who is deemed to be a non-construction employer".  Ten different entities are now deemed to be non-construction employers under the Act, including municipalities, school boards, hospitals, and colleges.

This is a change that has been loudly championed by a number of municipalities in particular.  Shortly after the Bill passed, a news article coming from Sault Ste. Marie began with "A 30-year trade monopoly that costs Sault Ste. Marie millions of dollars annually on local infrastructure construction projects has finally been removed".

The Bill accepts arguments from the broader public sector that its entities are not appropriate for the special construction industry labour relations model, and voids existing bargaining rights collective agreements.  Notwithstanding that, the employer retains a right, within three months of the Bill taking effect, to opt-out of the application of the amendment, and keep its existing bargaining structure and collective agreement.

The Region of Waterloo has purported to have seen a 50% reduction in bids on public construction and infrastructure projects since it became bound to a construction industry collective agreement several years ago, hamstringing its ability to engage most cost-effective contractors who are still perfectly qualified and capable of performing the work.

The amendment has been hailed not only by employers in the broader public sector, but associations of contractors who have been shut out from even bidding on public sector work.  The Ontario Sewer and Watermain Contractors Association released a written statement, noting that a Hamilton-based think tank called Cardus has determined that this amendment alone could save Ontario Municipalities' more than $370 Million per year if all publicly funded construction and infrastructure projects are subject to an open bidding process.  Likewise, the Progressive Contractors' Association has noted that under the previous statute, more than 83% of qualified firms in Waterloo who precluded from submitting bids on projects paid for with public funds.

CCPartners' Take

Some people will simply endorse unionized work in any context, on a theory that organized labour is always best for society, and view the amendments to the Labour Relations Act as an erosion to workers' rights.  Respectfully, I disagree.

Entities that clearly were not construction employers were being treated as if they were construction employers.  This needed to be rectified.  The net gain to all of Ontario should be as expected – a competitive construction market where public dollars can go further in repairing and updating infrastructure.

Although collective agreements will be voided where the newly-deemed "non-construction employer" does not invoke its right to opt-out of the new amendment's application, workers will always have a right to be represented by a union.  Their employers, typically general contractors seeking out wide ranges of projects to build, will have to adapt.  In the meantime, employers who are not bound to any union, or are bound to a different union that did not have an existing contract with the public entity, will have the opportunity to seek out new work for their workers.

The net gain is simply too great to ignore.

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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Michael MacLellan
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