A. Ontario Legislation —  The Employment Standards Act

ES are legislated standards that set minimum terms and conditions of employment in areas such as wages, working time, vacations and leaves, termination and severance. ES generally apply to most workers in a labour market but are often the only source of workplace protection for workers in non-unionized jobs. The majority of Ontario’s over 6 million workers in over 370,000 workplaces rely on ES. This section of the paper provides both a chronological overview of the development of ES legislation in Ontario, and a summary of recent reforms to Ontario’s Employment Standards Act (ESA).

 

1. 1969-1995

Ontario’s ESA was enacted in 1969. The ESA provided a minimum wage for both men and women and established maximum hours of work at 8 per day and 48 per week. An overtime rate of time and a half was set for anything over 48 hours a week and the Act established the right to refuse overtime work. It also provided for time and a half on 7 statutory holidays and guaranteed 2 weeks of paid vacation per year. The principles behind the development of the Act were consistent with normative framework outlined above. Specifically, the legislation was designed to set minimum standards for Ontario’s labour market and provide legislative protection for those most vulnerable to employer exploitation.[29]

The core standards of the ESA were altered through minor reforms in the 1970s, 1980s, and early 1990s, most of which added to the scope of legislative protections for workers in the province. Termination notice requirements were added in 1971.  In 1972, a pregnancy leave provision was added that gave employees with at least 1 year of seniority in workplaces of 25 or more up to 12 weeks (6 and 6) of pre- and post-natal leave, and entitlement to their former or a comparable position.  In 1975, the overtime pay (time-and-one-half) threshold was reduced from 48 hours to 44, and pregnancy leave provisions were expanded to cover up to 17 weeks of leave.  In 1976, the province introduced a differential (lower) minimum wage rate for servers in the hospitality industry. 

Severance pay provisions were introduced in 1981.[30] These provisions provided employees with a minimum of 5 years of service with 1 week’s pay for each year worked up to a maximum of 26 weeks in cases of mass termination. Under amendments made in 1987, employers were required to provide termination notices 1 week in advance for any employee employed longer than 3 months, with an additional week’s notice for each year of employment, up to a maximum of 8 weeks.[31] Workers with 5 years of employment at a business with an annual payroll of at least $2.5 million became eligible for severance pay.  In addition, the new severance provisions were extended to workers whose temporary lay-off extended beyond 35 weeks in a 52-week period. Further, in the case of mass layoffs, the legislation required that employers provide the Ministry of Labour (MOL) with an explanation of the economic circumstances surrounding the termination, a summary of consultations with employees and the affected community, any proposed measures to help those laid off, and a statistical profile of affected workers.

Bankruptcy protection legislation was introduced in the Spring of 1991.[32] The Employee Wage Protection Program was designed to provide employees with compensation for unpaid wages, commissions, overtime wages, vacation pay, holiday pay, and termination and severance pay, up to a maximum of $5000 per employee.  The program was administered through the Employment Standards Branch of the MOL and Employment Standards Officers (ESOs) were given the ability to order payments under the program.  The program was funded out of general provincial revenues.  Upon payment of a claim, the government would attempt to recover funds from employers and businesses. 

 

2. 1995-2001

Beginning in 1995, Ontario’s ES underwent a three-stage reform process. The reforms pursued constituted a break from the normative framework of ES outlined above. Specifically, they were designed primarily to promote ‘flexibility’ for employers, in particular through changes to working time standards introduced in 2001.

First, in 1995 the Employee Wage Protection Program was terminated and the minimum wage was frozen at $6.85, a wage freeze that would last for 9 years. Second, in 1996, the Employment Standards Improvement Act reduced the time limit for workers to register formal complaints from 2 years to 6 months, and placed a $10,000 limit on monetary awards for ESA violations, regardless of the value of lost wages. The Act also introduced a provision preventing unionized employees from filing ES complaints with the MOL, requiring employees with union representation to resolve ES complaints through the grievance arbitration process, placing the cost of administering ESA complaints in the hands of unions, rather than the Ministry.[33]

Finally, major legislative changes were implemented in the ESA, 2000. These amendments increased weekly maximum hours of work from 48 to 60 and allowed for the calculation of overtime pay to be based on an averaging of overtime hours across a 4-week period: employers could schedule overtime hours without compensation at time and a half provided the total for the 4-week period was less than 176 hours. They also revoked the system of government permits required for excess hours (more than 48 per week), introducing instead a requirement for employee ”consent” to the new excess hours and overtime averaging provisions. The ESA 2000 also introduced anti-reprisal protections and family crisis leave. In addition, the government expanded the parental leave provisions of the Act, to bring them in line with federal amendments to the Employment Insurance program, allowing for up to 52 weeks of unpaid, job protected leave for birth mothers and up to 37 weeks for new parents (generally fathers or adoptive parents).

 

3.  2004-10

Between 2004 and 2010, ES reforms displayed a partial return to decent work principles, with the introduction of ES legislation targeted at particular groups of ‘vulnerable workers’: specifically, workers employed through temporary help agencies and live-in caregivers.[34]  In developing this legislation, the government assumed that most employers will comply with minimum standards legislation and aimed to target legislative reforms at employers in sectors where violations are high.

The Employment Standards Amendment Act (Temporary Help Agencies) 2009 developed new standards for workers in temporary help agencies. It introduced requirements that temporary agencies must provide information about the agency (name and contact information) and working conditions (incl. pay, hours, nature of work) to workers. It extended ESA coverage for public holiday pay and termination and severance to these workers. Finally, it introduced some prohibitions on charging fees to clients for entering into employment agreements with assignment employees. Specifically, agencies are permitted to charge clients a fee if an employee is offered a permanent position in first six months of an assignment with that client.

In 2010, the Employment Protection for Foreign Nationals Act (Live-in Caregivers and Others), introduced a series of legislative protections for those employed as live-in caregivers. Specifically, it banned fees charged by recruiters and employers, allowed live-in-caregivers up to 3½ years to make a complaint to recover prohibited fees, prohibited reprisals against live-in caregivers for exercising their rights under the legislation, and prohibited an employer or recruiter from taking possession of a live-in caregiver’s property (incl. documents such as passports). The Act also authorized ESOs to proactively enforce the legislation.

 

4. 2010 to present

Finally, the most recent reforms to the ESA were introduced through the Open for Business Act, 2010 (OBA). This Act focused on enforcement, modifying enforcement practices with the stated aim of making these practices more ‘efficient’. Specifically, the OBA alters ES enforcement procedures fundamentally by, among other things, requiring workers facing ES violations to first approach their employers for a resolution, mandating that workers and employers provide information on their claims before they will be accepted by the MOL, and giving new powers to ESOs to facilitate settlements between workers and employers, including unprecedented discretion over monetary compensation for workers.[35]  Like the ESA reforms of 2001, the OBA was a clear departure from the norms of decent work outlined above, prioritizing the efficient resolution of claims over the aim of protecting vulnerable workers.

First, employees are required to notify their employer before the MOL will initiate an ES claim.[36] The assumption behind this requirement is that “[m]ost employers want to do the right thing and they will often remedy the situation promptly and voluntarily, if they agree there is a valid claim.”[37] Second, the amendments place responsibility on individual workers to collect the information for their complaints, reducing the requirements on the investigative procedure itself. If an ESO determines that there is insufficient evidence provided by an employee, then the officer may determine there is no violation. Finally, the amendments promote a voluntary approach to ES regulation, specifically through amendments that give ESOs a role in bringing employers and employees to a mediated settlement, with the Act stating that “[n]either party would have to participate in such a settlement unless they agree to it.”[38]

In addition to the OBA, the MOL struck an Employment Standards Task Force to address the backlog of 14,000 ES complaints that have accumulated in recent years. The Task Force has a two-year mandate to clear this backlog and will operate under the aegis of the reformed ESA. The Task Force will not engage in a process of proactive investigation into ESA violations, but will investigate these existing claims “based on an officer’s review of written materials and through telephone discussions with parties.”[39] The Task Force will also utilize the new emphasis on voluntary, mediated settlements as a means to resolve claims and to create efficiencies in the enforcement process.

 

B. Mapping Employment Standards Enforcement

Workers’ access to minimum ES depends on the government’s ability to promote and enforce such standards. The legislation provides the Director of Employment Standards and ESOs with broad powers of investigation (e.g., entering business premises and requiring production of records for inspection). Officers have extensive authority to resolve complaints of violations incl