Reversal of previous Ontario government’s employment standards changes brings reprieve for employers, disenchantment for employees?
The Ontario government’s recent passing of Bill 47, the Making Ontario Open for Business Act, 2018, has offered a regulatory reprieve for Ontario businesses still reeling from the earlier, transformative package of labour and employment law changes introduced with Bill 148, The Fair Workplaces, Better Jobs Act, 2017.
The latter was, of course, the previous Ontario Liberal government’s attempt to level the labour playing field by modernizing the province’s Employment Standards Act, 2000 (ESA) and Labour Relations Act, 1995 (LRA). It was roundly criticized by many in the business community who argued that the changes went too far, too fast and compromised their ability to compete. Since then, the controversial Pay Transparency Act has also been indefinitely shelved — the legislation would have required larger employers to publicize gender-based compensation gaps, required all employers to include salary ranges in public job postings, and prohibited reprisal against employees who discussed their wages, among other measures. Bill 66, the Restoring Ontario’s Competitiveness Act, 2018, which would make it easier to have employees work more than 48 hours per week and to average employees’ wages over up to four weeks in calculating overtime pay, was also tabled in December and will likely become law in early 2019. These changes, along with the passage of Bill 47, underscore the provincial Conservatives’ intent to roll back any recent employment law amendment they deem bad for business.
Indeed, Ontario Premier Doug Ford promised to do away with many of Bill 148’s worker-friendly amendments and he delivered on this promise in November when Bill 47 became law. While a more detailed overview of Bill 47’s ESA amendments can be found in my article “An employment standards U-turn in Ontario,” (Canadian Employment Law Today, Nov. 21, 2018), below I’ve highlighted some of Bill 47’s key ESA and LRA amendments:
ESA
• A repeal of the entitlement to two paid and eight unpaid personal emergency leave (PEL) days and an introduction of new unpaid leave entitlements for personal illness, bereavement and family responsibilities
• A freeze of the minimum wage at $14 per hour
• A repeal of scheduling provisions previously slated to take effect on Jan. 1, 2019
• A repeal of the reverse onus that required organizations to prove that a worker is not an employee (and is instead an independent contractor or volunteer) where there is a dispute over employment status
• A repeal of provisions requiring equal pay for equal work based on employment status
• A rollback of the rule prohibiting employers from requesting a doctor’s note when employees request time off due to illness
• Maintenance of the formula for public holiday pay that was in effect before Bill 148.
LRA
• A repeal of the requirement for employers to provide employee lists to unions in certain circumstances
• A repeal of remedial certification as an automatic remedy
• A repeal of card-based certification for industries other than construction
Many organizations lauded these changes — regarding them as a necessary restoration of the balance of interests of both labour and business — even as many overlooked their unintended consequences. After investing the time and expense to adjust their workplace policies, procedures and employee entitlements in areas such as scheduling, compensation, vacations, attendance, job-protected leaves and on-call scheduling, to name only a handful, the repeal of Bill 148 amendments requires employers to go through the process once again — and this time with greater risk both from a legal and workplace engagement perspective.
A major employer concern is rolling back entitlements while ensuring the changes do not constitute constructive dismissal — which allows an employee to claim that an employer’s significant unilateral change to a fundamental term or condition of employment with which the employee disagrees amounts to dismissal by the employer.
Even though employers are well within their rights to roll back certain entitlements in the wake of Bill 47’s passage, certain of those changes, without employees’ agreement, could be such significant unilateral changes to fundamental terms or conditions of employment that they constitute constructive dismissal. For example, for employers that substantially increased some employees’ wages in 2018 to ensure equal pay for equal work based on employment status, unilaterally rolling those wage increases back could amount to constructive dismissal, even though the increases were only implemented to comply with Bill 148 amendments. To minimize this risk, employers should secure employee sign-off on significant changes before their implementation.
Risk of employee disenchantment
An equally-pressing concern facing employers is how to navigate the process and effectively communicate these changes without compromising their credibility and good standing with employees. Whatever changes employers may choose to implement, the changes should be made strategically. Employers should pay close attention to the new law’s potential impact on workplace engagement and morale. Employers may be permitted to claw back some entitlements, but doing so could cause a backlash in the workplace, especially for organizations that rely on minimum-wage workers who were expecting their hourly pay to increase by another $1 on Jan. 1, 2019. Others may be upset that Bill 148’s revised scheduling rules and paid PEL entitlements have been repealed. To some workers, these amendments were likely as significant as the minimum wage increase. Potential employee irritants abound in the wake of this legislative about-face.
However, employers have an opportunity to turn what could be a significant HR challenge into a victory. It starts by communicating the relevant changes introduced under Bill 47, and what they mean in the context of your workplace. Employers should be cognizant of the changes that matter most to their workers — and organizations already struggling to attract and retain top talent will need to tread lightly throughout this process. Town hall meetings with transparent discussions including key management team members are one tool that can help defuse employee disenchantment.
Thinking twice before rolling back some of Bill 148’s entitlements is another option. If moving forward with a wage increase to $15 for your entire workforce isn’t affordable, for example, it may be possible to maintain the two paid leave days that Bill 148 provided. Or, perhaps providing extra vacation days would be a step toward appeasing agitated employees. Even maintaining a policy that limits when a doctor’s note will be required to justify the use of sick days could help to send a more accommodating message.
If your management and HR team decide to take this approach, be explicit when communicating your intentions. Make it clear that although your organization is not required to maintain any of Bill 148’s repealed provisions, you care about your employees, understand why they may be upset about these changes and are determined to maintain a strong relationship. It’s also crucial to display empathy and drive home the message that your organization understands how repealing Bill 148 is likely to have a significant financial impact on employees’ personal finances.
In doing so, the point is made clear: your organization values its people. Embracing that message can help maintain employee engagement, minimize turnover, preserve productivity and turn what could have been an HR disaster into a culture-building opportunity.
