The Ontario government’s bill is moving closer to being passed and the province’s employers are bracing for a wave of change
As the proposed changes to Ontario’s employment standards and labour laws chug along towards being passed, human resources lawyer Laura Williams gives her take on what the changes mean for Ontario employers.
As two weeks of Ontario government consultations with business leaders, union representatives and employee advocacy groups came to a close recently, a clear consensus emerged amongst employers from across the province: The Fair Workplaces, Better Jobs Act, 2017 (Bill 148) goes too far, too fast, in its attempt to modernize Ontario’s Employment Standards Act, 2000 (ESA) and the Labour Relations Act, 1995 (LRA).
“There is no question that the proposed changes laid out in Bill 148 will put the success and competitiveness of Ontario’s business community in jeopardy, particularly our small business community,” Ashley Challinor, director of policy for the Ontario Chamber of Commerce, told media after one of the consultation sessions, echoing the views of industry and business organizations that expressed similar concerns over the bill’s rapid schedule for change.
There is no doubt that Bill 148 will present a host of new challenges to Ontario employers. The legislation, if passed in its current form — which is all but guaranteed given the Liberals’ strong majority at Queen’s Park — seeks to boost employee wages and strengthen workers’ rights at a time of increasingly precarious employment. The Ontario government is particularly concerned about the rise in part-time and casual employment, just as full-time employment opportunities become more elusive in the face of major sectoral shifts and both automation- and globalization-driven economic change across the province.
Bill 148 takes drastic, expedited steps toward levelling that playing field — and in so doing will place a more onerous financial burden on employers.
Grim predictions of financial hardship and even job losses stemming from the legislation are not far-fetched — many employers may be hard-pressed to manage these changes, particularly small and medium-sized organizations that employ fewer than 20 people.
With that in mind, here are some of Bill 148’s key proposals and why they could give so many organizations grief in the months and years ahead.
Wages
Bill 148 proposes to increase the minimum wage to $14 per hour on Jan. 1, 2018, then to $15 per hour by Jan. 1, 2019 (up from the current rate of $11.40 per hour). The minimum wage would then continue to increase in step with inflation. The legislation would give a pay raise to 25 per cent of Ontarians.
Bill 148 also includes equal pay for equal work provisions. These would require that casual, part-time, temporary and seasonal employees receive the same pay for performing the same job as full-time colleagues, subject to certain exceptions. Temporary help agency employees would receive the same wages as permanent employees of the organization to which they are contracted, when performing the same duties. These changes would come into effect on April 1, 2018.
How it will impact employers: Where organizations rely on minimum wage labour, the change will have an obvious and immediate impact on labour cost structures, while also forcing changes to everything from wage grids to training budgets — an administrative task that could prove both arduous and costly. Some smaller employers may even be forced to lay off workers or terminate employment relationships to mitigate the damage of the swift increase in wages.
Scheduling
Rules around shift scheduling would be changed to protect employees employed in the same position for three months from reprisals if they request work schedule or location changes. The ESA currently does not extend reprisal protection in these circumstances. Employees would also be allowed to refuse to accept shifts with less than four days’ notice. These changes would take effect on Jan. 1, 2019.
In addition, employees would receive pay for three hours of work if their shift was cancelled within 48 hours of its scheduled start time. Under the current law, employers may cancel scheduled shifts at any time before an employee arrives for work, without providing compensation. On-call employees would now receive a minimum of three hours’ pay for each 24-hour period they are on call, regardless of whether they work.
How it will impact employers: Beyond the impact to their bottom-line, proposed scheduling rule changes under Bill 148 would hamper organizations’ labour flexibility. This could be particularly detrimental in sectors such as hospitality or security, which rely largely on lower-waged employees and often require a greater degree of scheduling latitude to effectively manage employee hours.
Employee misclassification
Some of the most significant changes under Bill 148 are the proposed provisions that would restrict employee misclassification. Employers will now face much stricter penalties — including prosecution, public disclosure and fines — if they classify employees who are by definition part- or full-time employees with protections under the ESA, as contractors. Employers are currently not subject to penalties for misclassification.
How it will impact employers: This change ups the ante when it comes to penalizing employers for misclassifying employees — a practice that has long been prohibited under the ESA. What remains to be seen are the extent of the sanctions. What we do know is that organizations will face far greater risk and will need to be far more diligent to ensure that any new contract hire does, indeed, meet the province’s definition of a contract employee.
Paid vacation and personal emergency leave
Under Bill 148, minimum vacation entitlement will grow to three weeks and six per cent vacation pay after five years of service with the same employer — up from the current two weeks and four per cent — effective Jan. 1, 2018. In addition, all employees would be entitled to 10 days of personal emergency leave (PEL), two of which would be paid. This will apply to organizations of all sizes, a change from current ESA requirements that provide the entitlement to staff of companies with more than 50 employees. PEL scope would be expanded to include employees experiencing domestic or sexual violence, or the threat of domestic or sexual violence. The current grounds for taking PEL are limited to: illness, injury or a medical emergency experienced by the employee; the death, illness, injury or medical emergency of certain family members; and urgent matters related to certain family members.
The government is also changing rules to do with employee sick notes. Under Bill 148, organizations will still be able to request evidence of PEL entitlement; however they will be prohibited from requesting a sick note for any employee taking PEL for up to 10 days.
How it will impact employers: Under-staffed organizations may be placed under even greater pressure to meet client obligations, but in the long term, changes to paid vacation entitlements will likely have a positive impact on most organizations which have kept entitlement to two weeks and four per cent. I’ve long argued that organizations that promote work-life balance tend to have more productive, innovative and engaged employees. This policy change should help further that goal.
The effective banning of sick notes and the expansion of PEL entitlements is another matter. With the former, organizations will now be hamstrung when it comes to determining whether employees are genuinely ill when they take time off and, arguably, whether the employee can be accommodated to return to work where an earlier return may be possible. Smaller organizations will also be required to pay employees for two days of PEL, which may have an adverse bottom-line impact.
Labour relations
Proposed changes on the labour relations front are no less significant. Bill 148 would simplify the union certification process by removing certain conditions for remedial union certification in cases of employer misconduct, allowing the Ontario Labour Relations Board (OLRB) to conduct votes outside the workplace and allowing unions easier access to employee lists and contact details when they achieve 20 per cent support for a union drive. In addition, employees currently limited to vote-based certification — such as temporary help agency, home care, building services and community services industry workers — would be allowed to unionize using card-based certification.
Lastly, the OLRB would be able to change bargaining unit structures in cases where existing bargaining units are deemed inappropriate for the purpose of collective bargaining. This represents a departure from current rules that require a voluntary agreement between a bargaining unit and the employer before changes can be made.
How it will impact employers: Unionizing would become far easier in Ontario, adding incentives for employees to launch union drives, even if certification is unlikely. The caveat here is that unionization tends only to happen across organizations where engagement levels are demonstrably weak. Employees working for progressive employers tend to shun unionization altogether. In that sense, organizations should focus on employee engagement activities to build stronger workplace cultures — a positive outcome that would benefit both employers and employees across the province.
