Contract work, labour cost-cutting leave large class of ‘vulnerable’ workers, federal commission says
Canada’s labour laws are failing a growing number of workers and are in need of fundamental reform, according to the Law Commission of Canada, a government advisory agency on legal reform.
The commission is releasing a discussion paper to launch a series of consultations and meetings across the country. A formal report with recommendations for reform will follow next year.
The world of work has changed drastically in recent years but labour laws have not kept up, leaving many workers unprotected, unsafe and vulnerable, said Karen Jensen, senior research officer and lead author of a discussion paper that forms part of the commission’s Vulnerable Worker project.
More than one-third of the Canadian workforce is now engaged in non-standard temporary or contract work. But eligibility for most labour rights, benefits and protections are available only in standard full-time, permanent employment.
“The system is no longer corresponding to the reality of the situation,” she said. “There are fairly sizable pockets of people that are just not making it.”
The push by employers for less regulation and lower labour costs — through fewer benefit contributions, for example — has led to a growing number of workers stuck in high-stress, low-reward and even harmful work situations that can be difficult to escape.
The paper offers few specific suggestions for reform, but is sweeping in its scope. It poses questions about many of the factors which make it difficult for Canadians to work and support themselves and their families.
“Vulnerability is experienced in many ways: through inadequate pay, unhealthy or dangerous working conditions, insufficient hours, exploitative atmospheres, lack of benefits, inability to effect change, powerlessness and marginalization,” states the report.
Over the past three decades, Canadian businesses have felt pressure to reduce costs. “As a result, there has been increasing pressure to deregulate the labour market in order to provide employers with more latitude to reduce their costs,” states the paper.
“However, in reality, costs have not been reduced; they have merely been shifted onto workers. Hence, when employers seek to reduce their benefit expenses and the costs of dismissing workers, for example, they are in fact assigning those costs to the workers. Similarly, when minimum wage is not raised as the cost of living increases, the costs are shifted from employers to the individual worker.”
Labour costs for employers have been held in check, but at a cost to the workers, said Jensen. “We are reducing our capacity to be productive. There are just big chunks of workers who are not being productive because they are stretched too thin,” she said.
The commission is not suggesting a reversion to the old system where employers covered all of the costs for worker protections and support. “But we have to look at ways we can all bear the load.”
One of the suggestions proposed by the commission is some form of “social drawing rights” system. Anyone in work of any kind will accumulate “credits” that would translate into a variety of funding and support (for more, see sidebar below).
“One of the fundamental problems in Canada is how we retrain and retool workers,” she said. “There is very little there.” The social drawing rights scenario would offer support for people who need to reduce income-earning work time to attend training and skills upgrading.
Jensen also said any changes will have to take into account the situation for employers. “You struggle constantly to keep your labour costs down and if you don’t you go out of business. How is that going to help anyone?” she said.
After releasing the discussion paper, the commission will hold public meetings across the country to gather feedback. A final report with recommendations for change will eventually be sent to Parliament, perhaps by spring, she said. Ottawa only has power to amend standards in the federal and federally regulated sector, but it’s hoped the reform would inspire similar changes in provincial labour codes, she said.
Human Resources and Skills Development Canada will be closely watching the consultations by the Law Commission.
Minister of Labour and Housing Joe Fontana called last month for a full review of the Canada Labour Code. The commission paper and consultations will be part of the department’s investigation into possible changes, said Gay Stinson, director of policy development for the labour program of HRSDC.
“This is a matter of some considerable interest for us,” she said. “We are in the research phase to identify the issues and numbers of workers, and the ways people can be considered vulnerable.”
One of the major changes that should be taken into account in reshaping labour law is the shift to the knowledge economy, she added. There is a big change in how, where and when work gets done and it may be time to look at improvements to laws to do something about the culture of long hours and overwork, she said.
Labour standards need to change to reflect not only economic forces, but societal factors as well, she said. Can it be easier for older workers to transition into retirement gradually? Should there be new rules to help workers with caregiver responsibilities? Should special allowances be mandated for single parent families? Should changes be made to address the unique challenges of two-income families, she asked.
Some schools let kids out long before the standard workday is finished, causing extra worries for parents. Is it possible to make changes to help parents cope with those types of stresses? Employers need to have flexibility, but parents should also be able to leave work for parent-teacher interviews.
However, any change, while helping workers, also can’t hurt employers, she said.
“Always when making regulation there is a balance point. If we are making a lot of regulations that turn out to be onerous and difficult and introduce rigidity instead of flexibility then the impact of that legislation is probably not going to be positive,” she said.
Ron Saunders, director of the Work Network for the Canadian Policy Research Networks, a think-tank specializing in social and economic policy research and public engagement, has also been doing research on worker vulnerability. He said one area in need of review is the minimum wage.
“If people are working full time most of the year, they ought to not be in dire straits. You ought to be able to be out of poverty,” he said.
There have been so many studies on the impacts of minimum wage increases that research can be found to support almost any position. Some show increases discourage employers from hiring, while others show the disincentive effect is minimal.
“But what we are finding is that the vast majority of the research shows, yes, there are negative effects for teenagers. If you raise the minimum wage teenage work hours will fall. But it virtually has no effect once you get beyond age 24.”
The real objective right now is to start a conversation about these issues, said Jensen of the discussion paper and consultations. “If someone says, ‘No, we don’t like that suggestion,’ then we’ll say, ‘Why? What don’t you like about it?’”
If it is suggested temporary and contingent workers don’t get the same benefits as full-time permanent employees, then what, she asks. “Do we have some way for them to upgrade so they don’t spend the rest of their life in that work? I don’t think it is a satisfactory answer to say they are just left out and have to do without.”
Social drawing rights would encourage training
Social drawing rights are based on the belief that workers earn certain rights for their membership in the labour force. This occupational status does not refer to a specific employment contract, but to the diverse forms of work experienced during one’s lifetime. Social drawing rights would facilitate workers’ ability to move in and out of the paid labour force in order to accomplish certain objectives and meet certain responsibilities like occupational training, child or elder care and volunteer work.
Workers would have an opportunity to draw down rights or “credits” that they have accumulated during the course of their working lives. A worker may decide to draw accumulated credits to receive income support while working part time to care for preschool children.
Or else, a worker may draw on the right to receive financial support while attending school. Instead of having to face the costs alone, the worker has the right to use collective funding for that purpose up to a certain level.
The funding is provided by various sources: government, firms, trade unions, social security agencies, professional bodies, insurance companies and workers themselves. Social drawing rights spread the risks involved in exercising the freedom to move in and out of the paid labour force. In this way, workers are not being told to take responsibility for their own economic security without being given the support to do so.
Importantly, there is a collective responsibility to fill the pool of social drawing rights, so that the risks involved in the flexible labour market are more equitably born by all, including the worker. Thus, the system, which puts the responsibility on workers to make responsible decisions about when and for what purpose to draw on their rights, is consistent with both the notion of individual, as well as collective responsibility.
The commission is releasing a discussion paper to launch a series of consultations and meetings across the country. A formal report with recommendations for reform will follow next year.
The world of work has changed drastically in recent years but labour laws have not kept up, leaving many workers unprotected, unsafe and vulnerable, said Karen Jensen, senior research officer and lead author of a discussion paper that forms part of the commission’s Vulnerable Worker project.
More than one-third of the Canadian workforce is now engaged in non-standard temporary or contract work. But eligibility for most labour rights, benefits and protections are available only in standard full-time, permanent employment.
“The system is no longer corresponding to the reality of the situation,” she said. “There are fairly sizable pockets of people that are just not making it.”
The push by employers for less regulation and lower labour costs — through fewer benefit contributions, for example — has led to a growing number of workers stuck in high-stress, low-reward and even harmful work situations that can be difficult to escape.
The paper offers few specific suggestions for reform, but is sweeping in its scope. It poses questions about many of the factors which make it difficult for Canadians to work and support themselves and their families.
“Vulnerability is experienced in many ways: through inadequate pay, unhealthy or dangerous working conditions, insufficient hours, exploitative atmospheres, lack of benefits, inability to effect change, powerlessness and marginalization,” states the report.
Over the past three decades, Canadian businesses have felt pressure to reduce costs. “As a result, there has been increasing pressure to deregulate the labour market in order to provide employers with more latitude to reduce their costs,” states the paper.
“However, in reality, costs have not been reduced; they have merely been shifted onto workers. Hence, when employers seek to reduce their benefit expenses and the costs of dismissing workers, for example, they are in fact assigning those costs to the workers. Similarly, when minimum wage is not raised as the cost of living increases, the costs are shifted from employers to the individual worker.”
Labour costs for employers have been held in check, but at a cost to the workers, said Jensen. “We are reducing our capacity to be productive. There are just big chunks of workers who are not being productive because they are stretched too thin,” she said.
The commission is not suggesting a reversion to the old system where employers covered all of the costs for worker protections and support. “But we have to look at ways we can all bear the load.”
One of the suggestions proposed by the commission is some form of “social drawing rights” system. Anyone in work of any kind will accumulate “credits” that would translate into a variety of funding and support (for more, see sidebar below).
“One of the fundamental problems in Canada is how we retrain and retool workers,” she said. “There is very little there.” The social drawing rights scenario would offer support for people who need to reduce income-earning work time to attend training and skills upgrading.
Jensen also said any changes will have to take into account the situation for employers. “You struggle constantly to keep your labour costs down and if you don’t you go out of business. How is that going to help anyone?” she said.
After releasing the discussion paper, the commission will hold public meetings across the country to gather feedback. A final report with recommendations for change will eventually be sent to Parliament, perhaps by spring, she said. Ottawa only has power to amend standards in the federal and federally regulated sector, but it’s hoped the reform would inspire similar changes in provincial labour codes, she said.
Human Resources and Skills Development Canada will be closely watching the consultations by the Law Commission.
Minister of Labour and Housing Joe Fontana called last month for a full review of the Canada Labour Code. The commission paper and consultations will be part of the department’s investigation into possible changes, said Gay Stinson, director of policy development for the labour program of HRSDC.
“This is a matter of some considerable interest for us,” she said. “We are in the research phase to identify the issues and numbers of workers, and the ways people can be considered vulnerable.”
One of the major changes that should be taken into account in reshaping labour law is the shift to the knowledge economy, she added. There is a big change in how, where and when work gets done and it may be time to look at improvements to laws to do something about the culture of long hours and overwork, she said.
Labour standards need to change to reflect not only economic forces, but societal factors as well, she said. Can it be easier for older workers to transition into retirement gradually? Should there be new rules to help workers with caregiver responsibilities? Should special allowances be mandated for single parent families? Should changes be made to address the unique challenges of two-income families, she asked.
Some schools let kids out long before the standard workday is finished, causing extra worries for parents. Is it possible to make changes to help parents cope with those types of stresses? Employers need to have flexibility, but parents should also be able to leave work for parent-teacher interviews.
However, any change, while helping workers, also can’t hurt employers, she said.
“Always when making regulation there is a balance point. If we are making a lot of regulations that turn out to be onerous and difficult and introduce rigidity instead of flexibility then the impact of that legislation is probably not going to be positive,” she said.
Ron Saunders, director of the Work Network for the Canadian Policy Research Networks, a think-tank specializing in social and economic policy research and public engagement, has also been doing research on worker vulnerability. He said one area in need of review is the minimum wage.
“If people are working full time most of the year, they ought to not be in dire straits. You ought to be able to be out of poverty,” he said.
There have been so many studies on the impacts of minimum wage increases that research can be found to support almost any position. Some show increases discourage employers from hiring, while others show the disincentive effect is minimal.
“But what we are finding is that the vast majority of the research shows, yes, there are negative effects for teenagers. If you raise the minimum wage teenage work hours will fall. But it virtually has no effect once you get beyond age 24.”
The real objective right now is to start a conversation about these issues, said Jensen of the discussion paper and consultations. “If someone says, ‘No, we don’t like that suggestion,’ then we’ll say, ‘Why? What don’t you like about it?’”
If it is suggested temporary and contingent workers don’t get the same benefits as full-time permanent employees, then what, she asks. “Do we have some way for them to upgrade so they don’t spend the rest of their life in that work? I don’t think it is a satisfactory answer to say they are just left out and have to do without.”
Social drawing rights would encourage training
Social drawing rights are based on the belief that workers earn certain rights for their membership in the labour force. This occupational status does not refer to a specific employment contract, but to the diverse forms of work experienced during one’s lifetime. Social drawing rights would facilitate workers’ ability to move in and out of the paid labour force in order to accomplish certain objectives and meet certain responsibilities like occupational training, child or elder care and volunteer work.
Workers would have an opportunity to draw down rights or “credits” that they have accumulated during the course of their working lives. A worker may decide to draw accumulated credits to receive income support while working part time to care for preschool children.
Or else, a worker may draw on the right to receive financial support while attending school. Instead of having to face the costs alone, the worker has the right to use collective funding for that purpose up to a certain level.
The funding is provided by various sources: government, firms, trade unions, social security agencies, professional bodies, insurance companies and workers themselves. Social drawing rights spread the risks involved in exercising the freedom to move in and out of the paid labour force. In this way, workers are not being told to take responsibility for their own economic security without being given the support to do so.
Importantly, there is a collective responsibility to fill the pool of social drawing rights, so that the risks involved in the flexible labour market are more equitably born by all, including the worker. Thus, the system, which puts the responsibility on workers to make responsible decisions about when and for what purpose to draw on their rights, is consistent with both the notion of individual, as well as collective responsibility.
