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June 15, 2017

Winter is Coming: Forecast Predicts Extensive Changes for Ontario Workplaces Starting January 1, 2018

Authors Hendrik Nieuwland and Amelia Cooke

While much of Ontario basks in the province’s first heat wave of 2017, the provincial government’s recent announcement of sweeping changes to employment and labour laws, many of which could come into effect as early as January 1, 2018, has many Ontario businesses looking ahead to what this winter may have in store for them.

Perhaps the most notable change in the works is the government’s plan to increase the general minimum wage rate (which currently sits at $11.40 per hour) to $14.00 per hour in 2018 and to $15.00 per hour in 2019. These increases will undoubtedly have an impact on many workplaces; the government estimates that more than a quarter of Ontario workers would receive a pay raise through the proposed increases to minimum wage.

In addition to increasing the minimum wage rates, the government has introduced new employment and labour legislation entitled The Fair Workplaces, Better Jobs Act, 2017, which will make a broad range of changes to the Ontario Employment Standards Act, 2000 and Labour Relations Act, 1995.  This legislation was recently introduced into the Legislature; however, the changes have not yet been passed and are not yet in effect. Some of the key changes the legislation outlines include the following:

Changes to the Employment Standards Act, 2000 (“ESA”)

  • General and Special Minimum Wage Rate Increase – The legislation calls for increases to the general minimum wage rate (currently $11.40 per hour) to $14.00 per hour sometime in 2018 and to $15.00 per hour sometime before October 1, 2019.The special minimum wage rates for liquor servers, students under 18, hunting and fishing guides, and homeworkers will be increased by the same percentage as the general minimum wage.
  • Equal Pay for Equal Work – The legislation requires employers, including Temporary Help Agencies, to pay casual, part-time, temporary and seasonal employees the same amount as full-time employees who perform substantially the same kind of work in the same establishment; whose performance requires substantially the same skill, effort and responsibility; and who perform work under similar working conditions.
  • The legislation prohibits employers from reducing an employee’s pay in order to comply with the above-noted requirements.
  • The legislation provides exemptions to the requirements for equal wages where a wage difference is based on seniority, merit, or quantity/quality of production.
  • Employees will be allowed to request a review of their wages if they believe they are not receiving equal wages without fear of reprisal. The legislation requires an employer to either adjust the employee’s pay accordingly or provide a written response if the employer disagrees which includes the reasons for the disagreement.
  • In the event of a conflict between the legislation and a collective agreement that is in effect on April 1, 2018, the collective agreement will prevail; however, collective agreements made or renewed on or after April 1, 2018 will not prevail over the legislative requirements.
  • If implemented, these requirements would come into force on April 1, 2018.
    • Temporary Help Agencies (“THA”) – The legislation requires THA’s, except in certain limited circumstances, to provide assignment employees with at least one weeks’ notice or pay in lieu of notice when an assignment that is scheduled to last longer than three months will be terminated early. The notice requirement will not apply if the THA provides the employee with an alternative work assignment that is reasonable in the circumstances and has an estimated term of one week or more. This change would come into force on January 1, 2018.
    • Scheduling – The legislation grants employees who have been employed for three or more months the right to request schedule or location changes and to receive a response from their employer within a reasonable time. It does not provide employees with the right for their requests to be granted. This change would come into force on January 1, 2019.
    • Reporting Pay, Shift Changes, and On Call Employees – The legislation provides employees with a minimum of three hours of pay if they regularly work more than three hours and, upon reporting to work, are given less than three hours of work. Employees will also be entitled to three hours of pay if their employer cancels their shift with less than 48 hours’ notice. These provisions will not apply in circumstances outside of the employer’s control such as fire, power failure, storms, etc. The legislation also gives employees with the right to refuse a demand or request to work or be on call if made less than 96 hours before the start time of the shift. However, if a collective agreement addresses the above-noted circumstances and there is a conflict between the legislation and the collective agreement, then the collective agreement will prevail. These changes would come into force on January 1, 2019.
    • Overtime Pay – In circumstances where an employee holds more than one position with a company and works overtime, the legislation requires that overtime be calculated based on the hourly rate for the position in which the employee is working during the overtime period.This change would come into force on January 1, 2018.
    • Consequences for Employee Misclassification – The legislation prohibits employers from misclassifying employees as independent contractors. In the event of a dispute, the legislation outlines that the employer is responsible for proving that an individual is not an employee.Contrary to the recommendations set out in the Changing Workplaces Report, the government has not changed the definition of employee to include dependent contractors. Wary of unintended consequences, the government referred to the Law Commission of Ontario’s study of the issue which advised against a dependent contractor provision as its scope would be difficult to define without inadvertently capturing true independent contractors.This provision will come into force on Royal Assent.
    • Joint Liability – The legislation removes the provision that requires proof that the “intent or effect” is to defeat the purposes of the ESA when determining whether related businesses can be treated as one employer under the ESA. This proposal would come into force on January 1, 2018.
    • Paid Vacation – Pursuant to the legislation, employees with five years of service will be entitled to three weeks of paid vacation. This brings Ontario in line with most other provinces.This change would come into force on January 1, 2018.
    • Public Holiday Pay – The general formula for calculating public holiday day will change to use the total amount of regular wages the employee earned in the preceding pay period divided by the number of days the employee worked in that period.This change would come into force on January 1, 2018.
    • Paid Emergency Leave – The legislation expands personal emergency leave of 10 days per year (previously all unpaid) to apply to all employees, rather than just those in workplaces with 50 or more employees.Two of these days would be paid, the rest would be unpaid.The legislation requires that the paid days be used first. The legislation prohibits employers from requiring a certificate from a qualified health practitioner as evidence for taking personal emergency leave. The legislation also expands the reasons for taking personal leave emergency days to include employees who experience (or whose family members experience) domestic or sexual violence or the threat of sexual or domestic violence.These changes would come into force on January 1, 2018.
    • Child Death Leave and Crime-Related Child Disappearance Leave – the legislation introduces a new leave for the death of a child for any reason (removing the previous restriction to a death related to crime), and a separate new leave for the crime-related disappearance of a child. Both leaves are for a period of up to 104 weeks. These changes would come into force on January 1, 2018.
    • Family Medical Leave – Increases family medical leave from 8 weeks in a 26 week period to 27 weeks in a 52 week period. This change would come into force on January 1, 2018.
    • Complaints and Enforcement – Employees will no longer be required to contact their employer before filing a claim under the ESA.The legislation increases flexibility around the administrative monetary penalties for non-compliance with the ESA and expands the Director’s explicit powers with respect to enforcement of orders to pay. It allows the Director to issue warrants, place liens on real estate and personal property, and to hold a security while a payment plan is underway.It also allows the Director to publish the names of those who have been issued a penalty along with a description of the contravention, the date of the contravention and the amount of the penalty. These changes would come into force on January 1, 2018.
    • Electronic Agreements – Clarifies that electronic agreements between employers and employees, such as agreements to work excess hours, can serve as agreements in writing. This change would come into force on January 1, 2018.
    • Employment Standards Enforcement – The government intends to hire up to 175 more employment standards officers and to launch a program to educate both employees in small and medium size business about their rights and obligations under the ESA.Once the new employment standards officers are hired, which the government has indicated will by 2020-2021, the employment standards program will resolve all complaints filed within 90 days and will inspect 1 in 10 Ontario workplaces.They will also provide compliance assistance to new employers with a specific focus on small and medium sized businesses.

Changes to the Labour Relations Act, 1995 (“LRA”)

The Government has also introduced legislation to make changes to the LRA, the most notable of which are the following:

  • Establishes a card-based union certification process for the temporary help agency industry, the building services sector, and home care and community services industry, which allows the OLRB to certify a trade unit as the bargaining agent for the employees if the OLRB is satisfied that more than 55 percent of the employees in the bargaining unit are members of the trade union;
  • Requires the OLRB, in certain circumstances, to certify a trade union as the bargaining agent when an employer engages in misconduct that contravenes the LRA;
  • Adds a mediation component to the first agreement process, after a “no board” report has been issued;
  • Requires the Ontario Labour Relations Board (the “OLRB”) to address first contract mediation arbitration applications before dealing with displacement and decertification applications;
  • Provides unions with means to gain access to employee lists and certain contact information if they can demonstrate that they already have the support of 20% of the employees involved. If ordered, the list will include the employee’s names, personal phone numbers and personal email addresses, if available to the employer. The legislation includes timelines for destroying the information, and limits the number of times the information can be requested for a group of employees within a certain time frame.
  • Empowers the OLRB to conduct votes outside the workplace;
  • Empowers the OLRB to authorize labour relations officers to give directions relating to the voting process and voting arrangements in order to ensure the neutrality of the voting process;
  • Extends successor rights to the retendering of building services contracts. The legislation outlines that a sale of a business will be deemed to have occurred in circumstances where employees perform services at a premise, their employer ceases, in whole or in part, to provide services at those premises, and substantially similar services are subsequently provided at the premises under the direction of another employer;
  • Allows the OLRB to change the structure of bargaining units within a single employer where the existing units are no longer appropriate and to consolidate newly certified bargaining units with other existing bargaining units under a single employer where those units are represented by the same bargaining agent;
  • Requires employers to reinstate employees at the conclusion of a legal strike or lock-out subject to certain conditions and to provide access to grievance arbitration for the enforcement of that obligation;
  • Protects employees from being disciplined or discharged without just cause by their employer in the period between the date employees are in a legal strike or lock-out position until the date the new collective agreement is entered into; and
  • Increases maximum fines under the LRA to $5,000.00 for individuals and $100,000.00 for organizations.This is a significant increase as the current maximum fine for organizations is $25,000.00.

 

All of these proposals, if passed, would come into effect six months after the Act comes into force. The government also plans to review current exclusions under the LRA in consultation with affected ministries and stakeholders.

Next Steps

The government introduced a draft of The Fair Workplaces, Better Jobs Act, 2017 for first reading on June 1, 2017 – the last day before the Legislature’s summer recess. The legislation has been referred to the Standing Committee on Finance and Economic Affairs.

At this early stage, it is unclear whether the government intends to pass this legislation through the Legislature before the provincial election scheduled for June 2018. The government’s proposal to bring certain amendments into effect on January 1, 2018 suggests an intention to push forward with the changes as quickly as possible.  However, the government has also recommended a broad consultation process with stakeholders and, as the draft has gone to a Standing Committee, this could delay implementation of the legislation.  The Standing Committee is scheduled to meet numerous times over the summer months to discuss the legislation.

Once the fall session of the Legislature begins we will have more information on the new legislation and will provide a further update at that time.

The foregoing is for informational purposes only, and should in no way be relied upon as legal advice. For legal advice tailored to your circumstances and business, please contact any of SOM LLP’s lawyer’s by email or telephone.

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