PC government moves to freeze minimum wage, alter personal emergency leave rules
After weeks of speculation, Ontario’s Progressive Conservative (PC) government announced recently it hopes to repeal much of the previous Liberal administration’s Bill 148, Fair Workplaces, Better Jobs Act, 2017.
Bill 47, the Making Ontario Open for Business Act, was introduced to “enable more Ontario employers to boost job creation and investment by cutting unnecessary regulations that are inefficient, inflexible and out of date, while maintaining standards to keep Ontarians safe and healthy,” said the government.
The new reforms would include maintaining the province’s minimum wage at $14 per hour until 2020, whereupon increases will once again be tied to inflation, while personal emergency leave (PEL) would be replaced with a framework that allows employees three unpaid days off for personal illness, two for bereavement and three for family responsibilities.
Current provisions for domestic and sexual violence would be maintained, while regulatory burdens around scheduling slated to come into effect as of 2019 would be repealed via the Labour Relations Act.
“We are lightening the burden on businesses and making sure that hard work is rewarded,” said Ontario Labour Minister Laurie Scott. “Businesses should have confidence in reasonable and predictable regulations. And everyone who works should have the confidence of a good job and a safe workplace.”
The legislation will re-energize small business owners — many of whom are ready to close up shop, said Tony Elenis, president and CEO of the Ontario Restaurant Hotel and Motel Association in Mississauga.
“Bill 148 was probably the most onerous regulatory framework that hit our industry for a number of reasons — and all at once,” he said. “I’m very optimistic that this sends a loud message for investment, and also for those poor guys that work day and night... just to make ends meet. There’s more and more now that are just saying, ‘I’ve had enough.’”
Minimum wage, holiday pay
It is important to remember a minimum wage increase was never part of the previous Liberal government’s Changing Workplaces review, said Elenis, noting the truncated timeline for an increased base rate forced many hospitality employers to cut part-time staff and increase menu prices.
“Business needs to operate on a plan,” he said. “It’s too much, too soon, and it’s not about going up with the minimum wage. There’s nothing wrong with going up with it, but it’s just the speed.”
“There were businesses that had more benefits before than they have now. You don’t hear that all over the news, but they had to claw back to make sure their bottom line was sustainable.”
Via Bill 47, the averaging public holiday pay formula prescribed by Bill 148 would return to the previous pro-rated formula for good.
Bill 148’s public holiday provisions were an “administrative nightmare,” according to Rachel de Grâce, director of advocacy and legislative content at the Canadian Payroll Association in Toronto.
“We tried to stop the public holiday train, but it had already left the station,” she said. “We certainly weren’t the only people to ask for either a total or partial repeal of (Bill) 148.”
“What (Bill) 47 changes are things that needed to be changed from an employer administration side,” said de Grâce. “Although it just creates an additional step right now to review policies… to turn the clock back and re-establish what might have been in place prior to (Bill) 148, in the long run, all the changes that (Bill) 47 introduce should benefit employer administration.”
New leave framework
Bill 148’s PEL reforms would be replaced by a package of annual leave days for every worker. While the right of every Ontario worker to receive three weeks of paid vacation after five years would be maintained, Bill 47 would repeal the provision prohibiting employers from requiring employees to provide medical notes when requested.
Employers were struggling with the lack of mechanisms to challenge employees on their reasoning for paid leave, said Amanda Hunter, a partner at Hicks Morley in Toronto.
“There was definitely a bit of a hue and cry saying that this is ridiculous and expensive,” she said. “One of the biggest pressure points for most employers is managing attendance.”
PEL provisions created a lot of ambiguity in terms of employee entitlements, said de Grâce.
“It is unfortunate that the original personal emergency leave wasn’t clearer. If it were clearer, I’m not sure that changes would necessarily have been made to the two days paid.”
It’s not clear how employers will respond, she said.
“For example, if an employer who’s not unionized hired someone newly this year with the two days paid under personal emergency leave, now that they no longer need to under minimum standards — will they renegotiate with their employees or their union?”
“To me, that’s the biggest ticket item here. This involves HR; this involves, potentially, legal counsel.”
The change will likely mean a reduction in the number of PEL days taken, said Dylan Augruso, employment lawyer at Dickinson Wright in Toronto.
“Employers will have the ability to hold employees accountable for all PEL days they take,” he said. “Failure to provide evidence of entitlement to a PEL day by an employee could result in discipline by their employer.”
Alterations to scheduling provisions — such as a minimum of three hours’ pay if a worker’s shift was cancelled within 48 hours of its start — would be cancelled via Bill 47. And an employee’s right to request schedule or work location changes after being employed for three months, as well as an employer’s record-keeping duties, would fall by the wayside as a result of the new legislation.
“That was really the most impactful concern I had over everything else — the scheduling,” said Elenis. “Our industry has huge, wide swings of demand. You might just lose reservations within an hour or two.”
The burden of updated scheduling provisions would have put a major strain on an industry where flexibility is a necessity, said Elenis.
“Scheduling would have been a nightmare.”
Equal pay for equal work provisions on the basis of employment status would also be reversed by Bill 47. However, the requirement for equal pay on the basis of sex would be maintained.
This will stimulate more hiring, particularly for seasonal and casual work, said Augruso.
“There will be no requirement to match temporary or seasonal employee salaries and benefits to those of full-time employees.”
Advice for employers
It’s difficult to know how employers will address the changes, said Hunter.
“I’m thinking about employers that might have given raises under the equal pay for equal work,” she said.
“I’m not sure how people are going to deal with that. You may or may not see employers trying to revert back to what they were paying (people) before they gave them increases because of that provision.”
Some employers may choose to keep PEL in place, said de Grâce. “They might have already budgeted for this, already embraced it, already presented it to their employees as something positive the employer is contributing on their behalf.”
However, contracts worded towards “number of days legislated” can be changed without fear of a potential voiding scenario, she said.
Employers and HR professionals face plenty of tough conversations going forward, said Elenis.
“You have to have good employer-employee relationships (to do business today),” he said, and employers planning to reduce provisions to match the newly proposed legislation should “plug something else in” to maintain a good relationship.
Employers should take a wait-and-see approach before making any drastic changes to policies, said Augruso.
“While the bill is expected to pass under Ontario’s PC majority government, it is very possible that we will see changes to the bill before it is formally passed,” he said. “In many cases, reverting to an employer’s pre-Bill 148 policy will be sufficient.”