This report maps current enforcement and compliance measures and practices in Ontario’s regulation of employment, particularly as they relate to precarious employment. It evaluates the effectiveness of Ontario’s enforcement regimes, focusing on Employment Standards (ES) and Occupational Health and Safety (OHS) legislation, and sets these regimes in the context of those operating in jurisdictions across and outside Canada. Through this process, it identifies and evaluates potential reforms to improve regulatory effectiveness, particularly for workers in precarious jobs. The central argument is that there are fundamental deficiencies in both of these enforcement regimes: each, albeit in different ways, is out of step with the realities of the contemporary labour market and each demands more proactive approaches to regulation combined with, where appropriate, innovative reactive and voluntary measures that are embedded in strong public enforcement.
While the report focuses on enforcement practices related to ES and OHS legislation, it is instructive to begin with a brief discussion of both the broader principles that underpin these pieces of legislation and the general models of enforcement that aim to implement these principles.
At a normative level, both ES and OHS legislation aim to promote ‘decent work.’ The concept of ‘decent work’ as developed through the International Labour Organization (ILO) is defined as jobs that provide income and employment security, equity, and human dignity. This aim is articulated in regulations at multiple scales and at the international level it is the rationale for ILO standards. Specifically, the norm of decent work is rooted in the ILO’s 1998 Declaration on Fundamental Principles and Rights At Work and more recent 2008 Declaration on Social Justice for Fair Globalization. The 1998 Declaration defines these fundamental rights to be: freedom of association and the effective recognition of the right to collective bargaining; the elimination of all forms of forced or compulsory labour; the effective abolition of child labour; and the elimination of discrimination in respect of employment and occupation. In 2008, the Declaration on Social Justice for a Fair Globalization built on this framework committing members to implementing the Decent Work Agenda through four interconnected objectives: (i) promoting decent work by creating a sustainable institutional and economic environment; (ii) developing and enhancing measures of social protection – social security and labour protection – which are sustainable and adopted to national circumstances; (iii) promoting social dialogue and tripartism; and (iv) respecting, promoting and realizing the fundamental principles and rights at work. The norm of decent work shapes regional labour standards agreements as well. For example, in North America this norm informs the labour standards side agreement to the North American Free Trade Agreement (NAFTA), the North American Agreement on Labour Cooperation, including its principles on ES, non-discrimination, prevention of, and compensation for, occupational injuries, and protection of migrant workers.
In Canada broadly and in Ontario in particular, the pursuit of decent work entails three normative goals: the promotion of social minima, universality, and fairness. Social minima refers to “ensuring that workers benefit from minimum acceptable conditions of employment and … actively promot[ing] the adoption of socially desirable terms and conditions of employment.” This is historically a primary rationale for ES legislation, which is meant to establish a legislative floor below which conditions of employment are not to fall. Such a floor is recognized as necessary to protect against employer exploitation due to unequal bargaining power between workers and employers (see goal of fairness below).
The second goal is universality. This objective involves “extend[ing] the minimum benefits of the legislation to the greatest possible number of employees.” While universality is a stated goal of legislated standards, special exemptions and/or conditions are often built into legislation to exclude particular employee groups from coverage of some or all standards depending on the circumstances of their employment.
Finally, the goal of fairness refers to “safeguard[ing] workers against exploitation and …protect[ing] employers against unfair competition based on lower standards.” Underlying the principle of fairness lies the imperative to address the fundamental power imbalance that exists between employers and employees, particularly those workers who are without union representation and in the most precarious forms of employment.
These normative goals contribute to, and are reinforced by, the workplace policy objectives of assuring basic labour standards, protecting against major down side risks associated with employment and mitigating against power imbalances and resulting abuses. Such workplace objectives translate into, and are shaped by, both OHS laws (protections against exposure to unacceptably hazardous working conditions and provisions for worker involvement in OHS management) and ES laws (standards governing payment of wages, hours of work and eating periods, overtime pay, minimum wage, public holidays, vacation with pay, equal pay for equal work, benefit plans, leaves of absence, and termination and severance of employment).
Such laws are then enforced through a range of regulatory strategies that differ in the way they deploy available enforcement tools. In broad terms, there are three general forms of enforcement: (i) proactive enforcement; (ii) reactive enforcement; and (iii) voluntary compliance.
Proactive enforcement relies heavily on inspections and expanded investigations when violations are detected. Orders to pay and prosecutions are used to achieve both specific and general deterrence. In this form of enforcement, inspections are carried out in order to determine whether or not violations are taking place, rather than as a response to a specific complaint. Proactive inspections may be used in forms of ‘strategic enforcement’, where employers in sectors known to have high levels of violations are targeted for inspection. The underlying assumption of this strategy is that the proactive approach will not only detect un/underreported violations, but also that the fear of possible inspection will create pressure for employers in these sectors to improve compliance. Moreover, the proactive approach is favoured by many labour organizations and advocates as workers in high violation sectors are often the most vulnerable to employer power and the least likely to complain.
Proactive enforcement can take other forms as well. For example, among others, Weil discusses the use of a strategy known as the ‘hot cargo’ boycott, which utilizes a provision of the Fair Labor and Standards Act in the US to enable state boycotts or the embargoing of goods that are manufactured in violation of the Act. This tactic caused garment manufacturers to pressure subcontractors to improve compliance with legislated standards. Additional forms of proactive enforcement may come from collaborative efforts between government agencies or even forms of tri-partite collaboration, integrating unions and civil society organizations into the enforcement process alongside government and employers.
Reactive enforcement depends on complaints to trigger regulatory intervention, and typically emphasizes negotiated settlements, reserving more coercive measures such as orders to pay and prosecution for egregious cases. The most common form of reactive enforcement is complaints from individual workers who have experienced violations of legislated standards. Typically, these complaints will initiate an investigation by the relevant government agency, which may lead to prosecution and penalties for employers and settlements for workers As workers in precarious jobs are often reluctant to raise complaints about violations due to fear of job loss, systems of anonymous complaints are considered to be more conducive to protecting workers’ rights in such situations. As a means to increase pressure on employers to comply with legislated standards, Kent Elson argues for private prosecution of employers who violate employment standards, suggesting that this would not only punish violators but could also foster new norms of compliance through both stiff penalties and social stigma.
As with proactive enforcement, forms of collaboration between public and private actors have been identified as offering possibilities for reactive enforcement. Collaborative strategies may include public regulation of private (voluntary) codes of conduct, and union-government partnerships in conducting labour standards inspections. As with collaborative proactive strategies, the aim in these approaches is to bring state agencies and private actors together in the enforcement process to improve compliance. Using the Australian case as an example, however, Hardy and Howe caution that as unions are integrated into this process, they may be drawn towards reactive strategies and lose their capacity to engage in preventative (proactive) forms of enforcement.
Finally, voluntary compliance is an enforcement strategy that depends heavily on education for both workers and employers about legislated standards, as well as employer strategies of ‘self-regulation’ through private codes of conduct. Voluntary compliance strategies may also lead to negotiated settlements when complaints arise. Prosecutions may be used, but generally as a last resort. With practices and principles of corporate social responsibility becoming commonplace in recent years, employer self-regulation often takes the form of voluntary codes of conduct that companies develop themselves to regulate working conditions, including working conditions across transnational supply chains. As they are voluntary, there is great variation across these types of codes, though they may build from principles of international labour standards developed through the ILO. While they are developed and implemented privately, they may involve forms of ‘monitored self-regulation’, for example through third-party auditing of the application of the standards contained within the codes. Advocates of self-regulation/voluntary compliance through corporate codes of conduct suggest that such codes hold potential to improve compliance with legislation as companies will be more inclined to comply with practices they develop themselves. Critics, however, warn that self-regulation without backing by ‘hard law’ does not offer an effective mechanism of monitoring or enforcement.
Governments may play a role in promoting voluntary compliance strategies as well. Specifically, government strategies to foster voluntary compliance include producing and disseminating information materials to raise awareness about legislated standards, engaging in ‘naming and shaming’ campaigns to publicize information about egregious violations, and developing public procurement policy agreements that award government contracts to companies that have strong compliance practices. The assumption underlying these practices is that the role of government should be to foster employer ‘self-reliance’ in complying with legislation, rather than taking a proactive approach to enforcement or relying on prosecutions and fines.
Each of these models of enforcement is outlined in specific detail in the report’s sections on the ESA (S.II), the OHSA (S.III), and in its discussion of ‘best practices’ (S. V).