This Chapter considers the extent to which the Employment Standards Act and related legislation responds to the circumstances of precarious work. To address any gaps, it suggests possible reforms. It covers policy considerations, establishing a broader basic floor of minimum rights and expanding knowledge of employee rights and employer obligations. Enforcement is a central ingredient to effective employment standards and both proactive and reactive enforcement systems must respond adequately. Finally, this Chapter discusses mechanisms that support ESA compliance and enforcement both generally and in respect of specific classes of vulnerable workers.
A. Broad Policy Considerations
Employment standards in Ontario are regulated through the Employment Standards Act, 2000 (ESA) which sets out the minimum rights of workers and the obligations of employers.250 The ESA regulates a wide variety of work-related issues, including minimum wages, employment records, hours, vacation, leaves of absence, termination and severance and includes relevant enforcement provisions as well as special protections for workers at temporary help agencies. Although the legislative framework provides for basic minimum protections for many workers, extensive exemptions and special rules for workers in specific occupations have been enacted, primarily through regulations. The ESA applies to all workers; however, it is most significant for nonunionized employees, since unionized workers often have higher standards and mechanisms to enforce contracts.
The ESA came into force in Ontario in 1969, combining several work-related statutes.251 Since its enactment, it has frequently been amended. Legislative changes in the 1970’s to early 1990’s mostly expanded legislative protections for workers with the introduction of termination notice requirements, severance pay provisions, pregnancy leave and bankruptcy protection.252 Not all changes made during this period expanded rights, however, as lower minimum wage rates were introduced for servers in the hospitality industry.
Reforms introduced in the mid-1990s shortened limitation periods for claims and limited the amount that could be claimed for lost wages. The Ontario government imposed a multi-year minimum wage freeze over this same period.253 As well, certain leave provisions were expanded and clarified. Government statements at the time of these legislative changes emphasized administrative efficiency and flexibility, but also highlighted the need to protect the most vulnerable workers.254
The Employment Standards Act, 2000 introduced major changes with increased parental leave provisions, anti-reprisal protections and personal emergency leave.255 Some restrictions were removed for eligibility for public holidays and certain enforcement provisions were introduced. At the same time, the maximum number of hours worked per week could be increased by agreement between employee and employer, breaks and vacation periods could be divided into smaller time periods, and overtime could be averaged over a four-week period.
In response to the growth in temporary help agencies, new protections for temporary help agency workers were introduced through the Employment Standards Amendment Act (Temporary Help Agencies), 2009.256 These provisions require agencies to provide workers with information about the agency, the assignment and working conditions and they prohibit workers from being charged fees. As well, restrictions have been removed from client employers entering into employment contracts with workers. Other regulatory changes made at the same time ensured that temporary help agency workers are covered under the ESA provisions relating to public holiday pay, termination and severance. 257
The ESA saw further amendments in 2010 under the Open for Business Act, 2010.258 The Act created a number of obligations for employees seeking to make a claim under the ESA with the result being that claimants are now usually required to approach their employers before an ESA claim will be investigated, although in certain cases, such as vulnerable employees, the obligation may be waived. Employment Standards Officers (ESOs) were also given the ability to facilitate settlements at an early stage in the proceedings upon consent of the parties. According to Vosko et al, up to 80 percent of cases are resolved at the early stage through compliance with an ESO determination of wages owing, settlement, withdrawal or denial of complaint.259 Workers’ advocates are concerned that claimants feel pressured to settle for less than is owed. Further, they regard negatively any pre-order activities that do not result in a formal finding against the employer. From their perspective, it is important that formal records be kept of noncompliant employers for future enforcement proceedings.260
Much has been written and said about the workplace relationship regulatory scheme. While the following comments heard by the Fairness at Work panel relate to the Canada Labour Code system, they are reflective of the two divergent views that have emerged about the ESA.261
In hearings, briefs and research reports, two broad views of the workplace relationship emerged. On the one hand, many employers tended to emphasize its contractual, consensual, bilateral character. “Let us work these matters out with our employees,” they might say, or, “Our employees are happy with their working conditions,” or even, “Terms and conditions should be a matter of contract between employer and employee.” On the other hand, many unions, workers and advocacy groups tended to emphasize the inherent imbalance of power between workers and employers that, in their view, prevents fair dealing in the labour market in general, and in most employment relationships in particular. They argue that regulation is needed to undo the results of this imbalance, from which no fair consensual or contractual understandings could possibly emerge. The first position may be somewhat closer to the way the law has historically regarded employer-employee relations; the second may often be closer to the realities of the contemporary world of work. However, neither perspective can be ignored. In life, as in law, workplace relations are shaped both by contract and by regulation.262
In a similar vein, the LCO’s research and consultations revealed a great deal of concern among workers’ advocates and academics that the ESA claims process, as currently configured, places too onerous a burden on employees to self-advance their own claims. Workers’ advocates argued for a system that places less responsibility on employees to pursue individual claims, tipping the scale in favor of increased government initiated inspections, investigations and prosecutions. From this perspective an ideal enforcement model is envisioned as both expeditious and consistent with an emphasis on mandatory, deterrent responses. Workers’ advocates and academics also favored expanding legislative protections. Employers, on the other hand, expressed concern about the impacts that increased regulation and the resultant increased expenses would have on their businesses, many of which must compete in a global economy. Employers favored compliance support for businesses under the existing enforcement provisions. Workers themselves were primarily concerned about accessing the protections in the current legislation and fear of reprisal.
Since the enactment of the original ESA, government has been cognizant of the need to respond to both workers’ and employers’ interests. In 1968, at the introduction of the legislation, the Minister of Labour made the following comments: “when it comes down to considering improvements in standards of employment, we must improve but also maintain a balance that will help us to keep industry and to attract new industries to the province.”263
This has been the driving force behind the multiple amendments to the ESA over the years. The result is an Act that sets out broad employment protections but limits them through special rules and exemptions. Some sections of the Act do not apply to smaller businesses. Sector specific rules or exemptions have been enacted for certain occupations within industries such as agriculture, construction, residential care workers and restaurants and accommodation. In other cases, casual, temporary or part-time workers may not qualify for certain protections due to insufficient hours or the discontinuous nature of their employment. The result is a legislative framework that, some argue, no longer meets its objective in providing a basic floor of minimum rights for all workers.
In the meantime, the struggle to find the right balance continues. As noted in Fairness at Work:
What, then, to make of the argument that state regulation also has its limits, that if regulation places excessive burdens on business and cripples the economy, we will all be worse off – vulnerable workers, their employers and all the rest of us? This is not merely a legitimate concern; it is a crucial question. Nonetheless, most people agree that at some undefined point this concern must be set aside, and moral or normative concerns must be allowed to trump economic or business concerns. In this day and age, in a country with Canada’s affluence and moral aspirations, we are not likely to tolerate certain kinds of working conditions.264
For the LCO, the question is whether in today’s economy and moving forward into the future, Ontario is striking the right balance and, if not, what new direction should be taken.
B. Basic Floor of Minimum Rights
1. Reducing and Updating Exemptions
As we have noted, the ESA purports to legislate minimum employment standards but contains a multitude of special rules and exemptions. In some cases, exceptions are occupation specific, where the ESA sets out differential treatment for certain categories of workers.265 For example, there are four categories of agricultural workers: farm workers, harvesters, near farmers and landscape gardeners. All but farm workers are entitled to minimum wage. Harvesters are entitled to public holidays but farm workers, near farmers and landscape gardeners are not. There are special rules set out for most construction workers and many other occupations and/or industries. Hours of work, eating periods and overtime pay are other areas where there are specific exemptions for certain occupations. Farm workers and harvesters are exempt from all of these.
In other cases, non-standard workers do not qualify for certain protections of the Act because of discontinuous employment or insufficient time worked. While precarious employment is not “synonymous with non-standard employment”, labour insecurity is often associated with engagement in non-standard and/or discontinuous forms of work.266 As it stands, most provisions of the ESA do not explicitly exclude non-standard employees. In fact, there are a number of provisions that explicitly take into account discontinuous periods of employment. There are, however, instances where ESA coverage is dependent upon a qualifying period. For example, persons holding multiple part-time positions may work 60 hours a week but never qualify for overtime pay as they do not work more than 44 hours a week for any individual employer. In responding to the Interim Report, government officials noted that “[t]he role of employment standards is to ensure that an employer does not exploit an employee in that relationship. But an employer cannot be responsible for the totality of an employee’s circumstances.”267 While this may be true, at the same time, with the shift in employment toward greater discontinuity and insecurity, legislation aimed to protect workers must be responsive to new ways that work is being organized in order to ensure effectiveness. As another example, some workers in successive temporary positions may never qualify for two weeks vacation as they may never work 12 months at any given position. Vacation pay is not subject to these qualifying periods. However, termination notice requires at least three months employment. Severance pay requires five years of employment and the employer must have a payroll of $2.5 million or the discontinuance must be part of a mass termination. In this case, not only does length of service determine eligibility but size of the business enterprise is a determinative factor in qualifying for protection. As pointed out by the Ontario government in responding to the Interim Report, justification for these differences is based on the view that these are considered reasonable qualifying periods for these entitlements. While this may be so, when a significant portion of available work is shorter term and insecure, employment protections that cover only standard forms of employment are not responsive to the needs of increasing numbers of workers in non-standard working relationships. In our view, it is time to consider developing additional types of protections for non-standard workers.
An example of such recognition of new work realities are the legislative changes that came into force on November 6, 2009. Under the Employment Standards Amendment Act (Temporary Help Agencies), 2009, temporary agency workers were confirmed to be employees of the agency. By operation of regulation on the same date, termination and severance provisions under the Employment Standards Act became applicable to employees of temporary employment agencies.268 These apply as long as the employment relationship between the agency and employee continues, whether or not the employee is working on an assignment with a client of the agency.
The web of special rules under the ESA are so complex that the Ministry of Labour has developed a special rule tool on its website that helps employees and employers identify which occupations have exemptions or special rules. It is likely that each occupational specific exemption was put in place in response to a perceived industry need relevant at the time of enactment to introduce a degree of flexibility into the legislation which would serve the needs of employers operating in a competitive market. From workers advocates’ point of view, however, it is viewed negatively: “most of the exemptions relate to the regulation of overtime pay, hours of work and minimum wage, enabling a regulatory regime that allows employers to minimize the costs and scheduling of labour.”269
In our view, legitimate concerns have been raised about the current relevance of the exemptions. Time has passed and the Act has been amended on a piecemeal basis over an extended period of time. The result is an Act that is difficult to comprehend and navigate. The effect has eroded Ontario’s intended legislative message of commitment to broadly available minimum workplace protections. In the LCO’s view, it is time to update, review and streamline the ESA’s exemptions. It is important to determine whether each is based on legitimate, current public policy and industry considerations. Occupational exemptions that are no longer relevant or justified should be repealed. For part-time, casual and temporary workers, given the proliferation of this type of nonstandard work, serious efforts should be made to identify and close gaps in protections. Public policy considerations should take into account a modern understanding of the new economy and of the negative implications of precarious work and particularly its disproportionate impact on racialized persons, women, the disabled, Aboriginal persons, youth, recent immigrants and those working in certain sectors. Each exemption should be reviewed with these considerations in mind with the overall objective of reducing vulnerability and providing a more uniform and broadly available set of minimum rights for Ontario’s workers.
The Law Commission of Ontario recommends that:
1. The Ontario government:
a) in consultation with labour and owner/management stakeholders, update, review and streamline the exemptions within the ESA and related regulations including a review of existing occupational specific exemptions, with the objective of ensuring any exemptions are justified on current public policy and industry considerations; and
b) ensure that the review develop and use principles that aim to promote a broadly available minimum floor of basic workers’ rights, including that justifications for exemptions be balanced against the need to reduce precarious work and provide basic minimum standards to a broader sector of the working population.
Any legislative amendments made should be monitored to identify impacts on vulnerable workers.270 An Innovative Solutions for Precarious Work Advisory Council as recommended at Recommendation 26 could provide the Ministry of Labour with advice on the relevance, justification and impact of sector specific exemptions and special rules.
The ESA would benefit from a broad policy statement in a preamble to the Act to underscore the government’s commitment to ensure basic minimum employee protections, support compliance and foster public, employer and employee awareness and education. A similar amendment was made to the Occupational Health and Safety Act in response to the Dean Report, and a new section was added outlining the Minister of Labour’s powers in regard to the promotion of occupational health and safety and prevention of diseases, promotion of public awareness, fostering a commitment to health and safety among employer and workers and education.271
The Law Commission of Ontario recommends that:
2. The Ontario government codify within the ESA a broad policy statement highlighting its commitment to protecting basic minimum employment rights, supporting compliance and fostering public, employer and employee awareness and education.
2. Minimum Wage
According to Statistics Canada, in 2009, 8.1 percent of Ontario workers earned minimum wage. The Canadian average was 5.8 percent.272 Poverty advocates support minimum wage as a poverty reduction policy initiative. While the policy has not been without controversy with economists arguing both for and against minimum wage as an effective poverty reduction tool, every Canadian jurisdiction has adopted a minimum wage.273
As of March 31, 2010, the rate in Ontario for minimum wage was raised to $10.25 an hour for most jobs. The Ontario government has raised the minimum wage approximately 50 percent from $6.85 in early 2004 in part to offset earlier freezes and to ensure minimum wages were outpacing inflation.274
For some years leading up to the increases, advocates had called for bringing the minimum wage up to $10.00. After seven increases, in February 2011, the government announced that it would not raise the minimum wage further but instead would “appoint a committee representing both business and workers to provide advice on the minimum wage in advance of the 2012 budget.”275 This was welcomed by the Ontario Chamber of Commerce that had recommended the government:
Initiate an independent minimum wage review board or commission, comprising of business (representing various sectors and size), labour representatives and social groups
Conduct regular minimum wage reviews that include an economic impact assessment on the provincial economy
Combine any increase to minimum wage with social measures targeted to low income Ontarians, so as not to rely heavily on operational business costs (minimum wage) to address poverty issues in the province.276
However, as of the writing of this report, there is no information indicating that this Committee has been convened.
At the same time, some workers’ advocates and academics are continuing to call for additional increases to minimum wage, tying the minimum wage to the low income cut- off (LICO) index regulating the rate through a body independent of government or having the minimum wage adjusted for inflation.277 The business community has cautioned about the negative impacts of steep increases.278 In its 2011 report, the Canadian Federation of Independent Business took the position that substantial increases in minimum wages tend to hurt rather than help low income employees in small and medium businesses where employers must absorb the additional costs through reduced hours, reduced training or job cuts.279 Many minimum wage earners are employed in such enterprises and they would bear the costs of such increases.
In our view, the work of the proposed Committee would have been instructive had it been implemented. Such a committee would provide a forum for employer and employee representatives to advise government in identifying the best long term approach to minimum wage balancing the needs of business and employees. The LCO supports the implementation of this minimum wage advisory Committee.
The Law Commission of Ontario recommends that:
3. The Ontario government convene the minimum wage Committee, or similar body, to review minimum wage issues balancing the needs of business and employees.
3. Part-time employees paid proportionately at the same rate as full-time employees
The LCO’s consultations and research revealed the need for a response to the situation of part-time workers receiving lower pay than full-time workers. While there are often legitimate business reasons to hire part-time employees, some employers appear to use part-time employment to hire workers at a lower rate.280 Unless there is a justification for the difference based on skill levels, experience or job description, Arthurs argues that such discrepancies are unfair to part-timers and, ultimately, will reduce the standards of full-time workers as well.281 The negative impacts of this situation are exacerbated by the fact that part-time work is highly gendered and that, among part-time workers, women are more likely to be low-paid.282 As noted earlier, while choice is a factor for many women engaging in part-time work, the choice is frequently illusory where women are bound by home and care-giving responsibilities.
Findings also suggest that single parents, often women, racialized workers and recent immigrants are more likely to find themselves in part-time, temporary work.283 The result is that paying part-time workers at a lower rate than full-time workers disproportionately creates vulnerability in these traditionally disadvantaged groups. Within the Project Advisory Group, some members commented upon the need for equal (proportionate) pay provisions to be extended to all workers including casual, temporary and part-time. This would appear to be justifiable in the absence of some clear basis for distinguishing the work done on the basis of experience, skill or job description.
The effort to reduce unequal treatment of part-time workers could serve several purposes. It would proportionately increase equivalency of rate of pay for those who are employed on a part-time basis, thereby partially reversing some of the negative impacts encountered disproportionately by women and other traditionally disadvantaged groups in part-time work by increasing income and perhaps reducing reliance on social assistance. This, in turn, may serve to promote fair and flexible work arrangements in a way that may make part-time work more attractive to workers, benefitting both businesses as well as employees.
Care would be required in crafting legislation to ensure that the concept of equal work is defined in a way that is relatively easy to identify. Lessons can be learned from the UK experience where legislation has been enacted to protect part-time workers from less favourable treatment.284 The legislation also aims to promote flexible work arrangements. According to at least one report, while the legislative protections have improved the situation for some part-time workers and contributed to reducing discrimination, the fact that individuals must assert “less favourable treatment” on a case-by-case basis through litigation presents as a barrier to broad access to the right. Furthermore, the definition of “less favourable treatment” as articulated in the legislation has been challenging to identify, particularly in the absence of a full-time employee as comparator and, as a result, the Act is considered to have had a limited impact on transforming the nature of part-time work.285 In the final analysis, we support equal, proportionate pay for part-time workers, while we recognize there will be certain complexities involved in developing an effective, legislative response.
The Law Commission of Ontario recommends that:
4. The Ontario government, taking into account the complexities of the issue, consider what amendments could be made to the ESA to ensure part-time workers are paid at proportionately the same rate as full-time workers in equivalent positions where there is no justification for the difference based on skill, experience or job description.
Arthurs suggested that the government investigate a range of possibilities for developing new vehicles such as a benefits bank or other mechanisms for delivering benefits coverage to non-standard workers through an employee and/or employer purchased group insurance plan or plan delivered by a public agency.
Whatever is the right model, some way must be found to provide benefits coverage for vulnerable workers who do not now have access to it. Moreover, it would be better if the solution were found sooner rather than later. As unionization rates decline, as more workers move from large firms to small firms, as more workers move from regular employment to non-standard contracts or selfemployment, the case for a new approach to benefits insurance comes to rest on a new basis: not only do vulnerable workers need protection, but so too does a growing proportion of the entire workforce.286
One submission to the LCO suggested “a benefit agency modeled along the lines of the multi-employer premium based WSIB experience could be explored…Creating multiemployer agencies, councils or trust vehicles…would be cost effective and a creative way to ensure that employees obtain necessary coverage.” 287
The Commission for the Review of Social Assistance in Ontario recommended that “the Province should examine ways to make prescription drug, dental, and other health benefits available outside social assistance to all low-income Ontarians.”288 The Review identifies one possible model as a pooled public insurance plan administered by government or private sector with graduated subsidies for low-income earners.
Another proposal that has been suggested to address temporary workers’ need for benefits is to require employers to pay a premium for short term contracts. This opinion was reiterated by Poverty and Employment Precarity in Southern Ontario (PEPSO) in its response to the LCO’s Interim Report suggesting consideration of the casual loading concept in place in Australia in which casual employees must be paid at a rate 15-25 percent higher than minimum wage to compensate for the lack of certain entitlements such as paid leave. In some cases, part-time workers are entitled to a part-time increase in rate as well. In France, temporary agency workers and fixed term contract workers receive an additional percentage of their pay (10 percent and 6 percent respectively) at the completion of the work assignment. Whether such a concept could be adapted for some or all short term workers to compensate for the lack of benefits, may be a future consideration for the government after consultation with employee and employer stakeholders. We recognize that such an innovation would have cost implications for employers but it may also serve to reduce some of the vulnerability created by casual and temporary forms of work making this type of work less precarious. The Australian Industry Group, representing employers, has suggested that the flexibility of casual work benefits both employers and employees and that the casual loading supplement is attractive to many casual employees.289 Consideration of such an initiative would necessarily require an extensive analysis of the costs and benefits to all parties in order to determine the best course of action. A review of the initiative’s experience in Australia and France would also be warranted. The Innovative Solutions for Precarious Work Advisory Council (Recommendation 26) could consider these issues.
The Law Commission of Ontario recommends that:
5. The Ontario government, utilize the Innovative Solutions for Precarious Work Advisory Council (Recommendation 26) in consultation with labour, management and insurance representatives, to explore options for the provision of benefits for non-standard and other workers without benefits coverage, with consideration given to the concepts of a benefits bank and mandatory short term contract premium for temporary workers, among other options.
5. Emergency/Medical Leaves
PERSONAL EMERGENCY LEAVE FOR NON-STANDARD EMPLOYEES
The personal emergency leave provisions of the ESA provide for an annual 10 days of unpaid leave for illness, injury, medical emergency, bereavement or urgent situations related to close relatives. These provisions are only applicable to employees whose employer regularly employs 50 or more employees. While not explicit in the Act, the Ministry of Labour indicates that part-time employees are eligible for the full 10 days annually even where the employment has commenced part-way through the year.290
While the ESA Policy and Interpretation Manual is silent about the eligibility of temporary employees for personal emergency leave, the Ministry of Labour advised that, in fact, temporary workers are eligible for personal emergency leave.291 By contrast, the manual is explicit that family medical leave, for example, is available to contract employees.292
Family medical leave is an eight week leave to provide care or support to prescribed family members for serious medical conditions with a significant risk of death. Unlike personal emergency leave, it is not restricted to larger businesses. Family caregiver leave was another eight week leave introduced in the Legislature in December 2011 that provided up to eight weeks of unpaid job protected leave for employees to provide care and support to a sick or injured family member with “a serious medical condition” where death need not have been imminent and there was no restriction for those working in small businesses. As the legislature prorogued while this Bill was in committee, it remains to be seen whether it will be re-introduced in the future. Family caregiver leaves represent a relatively recent legislated recognition of workers’ family responsibilities. Yet these leaves are not dependent upon the size of the employer’s enterprise as is the case with personal emergency leave. These differences in eligibility raise the question of whether the personal emergency provisions should be reviewed to ensure that each provision has a solid rationalization based on current public policy grounds.
In the LCO’s consultations, respondents noted that the lack of access to personal emergency leave is particularly difficult for vulnerable workers who often work in smaller businesses.293 The example of pregnant women attending medical appointments was raised as a particularly critical gap. However, not everyone we consulted agreed that the leave provisions should be extended further. Some employer organizations noted that the leave provisions did not necessarily benefit lower wage workers and indicated that the provisions were primarily accessed, and in some cases inappropriately used, by workers in higher skilled positions. Some members of the Project Advisory Group supported extending personal emergency leave to all employees and enacting provisions for paid sick leave.
The LCO believes that personal emergency leave should be available to all workers notwithstanding the size of the enterprise. We are aware, however, that smaller enterprises may be operating with much less flexibility than larger ones. Employers have also raised concerns about their ability to maintain competitiveness in the face of lower regulations in neighbouring jurisdictions.294 One compromise position that was suggested is the possibility of legislating extended personal emergency leave while, at the same time, categorizing available leaves into more defined categories as is the case in Prince Edward Island. Prince Edward Island’s employment standards legislation provides three days per year for illness and injury; in addition, after five years of employment, one day of paid sick leave is available. Three unpaid days of leave are available for bereavement, one day of which is paid in the case of the death of an immediate family member.295 There would be a downside for workers in that more defined limits would be placed on the amount of leave that could be taken for any given category; however, this would be one way to extend the protection to all while minimizing the impact on businesses. We do not necessarily endorse this suggestion. It is simply an example of an alternative approach that was raised during the course of our consultations. It would be necessary to weigh the costs and benefits to consider whether such an approach would be worth considering. We note that, at the time of this report, Prince Edward Island is the only Canadian province to have introduced provisions for paid sick leave in employment standards legislation and the provisions are very limited.
The Law Commission of Ontario recommends that:
6. The Ontario government review personal emergency leave provisions in the ESA to ensure each provision is justified on current public policy grounds and to determine ways to extend the benefit to workers in workplaces with fewer than 50 employees (including part-time, casual and temporary employees of these small enterprises).
EXTENDED MEDICAL LEAVE
Some members of the Project Advisory Group believe that the Employment Standards Act should protect workers in cases of long term illness. Anecdotal evidence was cited about promising European models for mandatory employer paid insurance plans. Also raised was the possibility of a legislated requirement for employers to extend benefits to non-standard workers when full-time employees were covered. Saskatchewan’s legislation requiring benefits for some part-time employees was raised, although the significant limits to that legislation are notable. In declining to recommend that employers provide benefits to non-standard workers, Arthurs’ comments are useful.
No doubt some employers decide to deny coverage to non-standard workers purely and simply in order to lower their payroll costs. However, it is also likely that providing coverage for nonstandard workers and those employed by SMEs [small and medium-sized enterprises] is more complicated and expensive than for regular full-time workers in larger enterprises. The actuarial problem of spreading risks from across a small group, the administrative diseconomies of smallscale plans and the problem of pro-rating certain benefits for part-time workers all represent potential disincentives to employers considering whether to provide benefits coverage to nonstandard workers. These problems are severely exacerbated by the difficulties of collecting premiums from and providing benefits to a transient population, such as temporary and agency workers. It is not completely clear whether the barriers to benefits coverage that I have identified are real or merely hypothetical. However, I am not prepared to recommend that employers be required to provide benefits to non-standard workers unless and until I am convinced it is practicable for them to do so.296
While we are not making a recommendation for the provision of benefits for nonstandard workers to be enshrined in legislation, we do suggest in recommendation 5 that the Ontario government explore options for the provision of benefits for nonstandard workers utilizing the Precarious Work Advisory Council Advisory Council (Recommendation 26).
C. Knowledge of Rights and Obligations
1. Public Awareness, Education and Outreach
In Fairness at Work, Arthurs observed
the best prospects for securing compliance with labour standards involve programs to educate workers and employers concerning their rights and responsibilities…Where possible, these programs ought to be undertaken in cooperation with employer, worker or advocacy organizations.297
Lack of workers’ and employers’ knowledge about their rights and responsibilities was a frequent theme raised in the LCO’s consultations by government, employers, workers, community service providers, workers’ advocates and academics alike.298
The Ministry of Labour has made very extensive efforts to respond to concerns about lack of knowledge through the development of its ESA website, providing multilingual information, special tools and contact information about the Ministry’s telephone line. Despite these efforts, the consultations demonstrated that limited access to computers, limited literacy and language skills, as well as fear of reprisals, created barriers for workers’ access to the system. In our consultations with temporary foreign workers, the LCO heard that some had received no information about their rights prior to arrival in Canada and did not know who to turn to for assistance.
Further efforts to increase public education would be an effective method for getting the message out. As an example, Working on the Edge proposed the promotion of employees’ rights and employers’ responsibilities through a Ministry of Labour public education campaign.299 A campaign featuring ads, posters and information sessions would raise the profile of the legislation for both workers and businesses highlighting government support for protecting vulnerable workers and for supporting employers with ESA compliance. Based on the information we received during our consultations and submissions, the LCO notes the importance of active rather than passive public education. Emphasis by the Ministry of Labour on actively bringing the information to workers and employers rather than reliance primarily on the Ministry’s website would have a greater impact. Both employer and worker stakeholders noted concerns about over-reliance on the internet for disseminating public information. Not everyone has access to the internet and rural Ontario does not always have access to high speed internet.300 Public education materials and sessions should be situated where the workers and employers are, in public places such as subways, buses, television and in workplaces. As noted in their feedback to the Interim Report, the Metro Toronto Chinese and Southeast Asian Legal Clinic made the point that it would be important to ensure that materials and sessions were accessible to ethno-racial communities.301 Existing government-employer-employee committees can be another way to disseminate information. Such a campaign could be initiated as part of a larger provincial strategy that we recommend in Recommendation 47.
The Ministry of Labour currently conducts some outreach information sessions with worker and employer groups. Programs like these, particularly those that feature personto- person contact between the Ministry and the employment community, should be supported and expanded. As noted by the Chinese Interagency Network of Greater Toronto, providing workers with greater personal access to Ministry of Labour staff for questions, complaints and information would be very useful.302 Increasing ESA access through direct personal contact as well as partnerships between the Ministry and community has been proposed by various commentators.303 The Ministry of Labour is well-positioned to continue to expand its current outreach programs and to develop community partnerships through the implementation of initiatives aimed at workers in industries and groups that are disproportionately affected by precarious employment including temporary foreign workers, recent immigrants, youth, the disabled, racialized persons, Aboriginal persons and women.
A number of commentators have advocated a model based on the New York Wage Watch Program, initiated as a pilot in 2009 by the New York State Department of Labor.304 This Program is a formal partnership program between government and community agencies to hold workers’ rights sessions, provide employers with compliance information, distribute literature and refer cases of encountered violations to the Department of Labor. It is an innovative project that trains community members who work closely with workers and employers on the ground and with government agencies tasked with administering labour laws. The program has attracted some controversy in that it is framed as an information and education program, yet opponents have expressed concerns that it is, in reality, a form of community enforcement that is being used as a mechanism for union organization.305 Further, opponents contend that the program was implemented without consulting the employer community. In our view, a program that builds community-government partnerships to increase knowledge of rights and responsibilities would be beneficial. Consistent with the Drummond Report’s recent recommendation for more stakeholder and community group involvement in policy development, implementation of any such program would require consultation with employer and workers’ organizations and careful study of the effectiveness and impacts of New York’s program.306 A government-community partnership between the Ministry of Labour and the Ontario Council of Agencies Serving Immigrants (OCASI) has resulted in more than 40 on-site education sessions for immigrant and settlement groups during which “employment standards officers provided a basic introduction to the ESA, a demonstration of tools and copies of print resources.”307
As recommended in Recommendations 13 and 23, expansion of the workers’ rights services of the Legal Aid Ontario clinic system and/or community agencies serving vulnerable workers would be another option for enhancing capacity for educational sessions and the development of government-community partnerships. The objective would be to heighten ESA awareness. It would have the potential for decreasing fear among workers in pursuing legitimate ESA claims resulting in increased access to justice.
The Law Commission of Ontario recommends that:
7. The Ministry of Labour:
a) launch a public awareness campaign on Employment Standards Act rights and responsibilities;
b) to support workers’ and employers’ needs for additional information about the ESA, continue to offer and to expand capacity for providing outreach through ESA informational/educational sessions including but not limited to those in high risk sectors and groups; and
c) develop partnerships with employer, employee and community organizations to enhance worker and employer knowledge of ESA rights and responsibilities.
2. ESA Handout at Outset of Working Relationship
A simple, virtually no cost strategy for increasing ESA knowledge and supporting compliance in the workplace could be achieved through a handout provided to employees at the outset of the working relationship. Currently, subsection 2(3) of the Employment Standards Act requires employers to display an informational poster in the workplace that outlines ESA rights and responsibilities and provides the Ministry of Labour contact information. It must be displayed in English and the majority language of the workplace if the Ministry provides the poster in the majority language. This poster is available in printable form as a one-page document on the Ministry of Labour website. Employers can obtain it on the website free of charge and in multiple languages. We suggest an amendment to the ESA that requires employers at the outset of the working relationship to not only display the poster, but also provide a copy of it in document format to all new employees both in English and the language of the worker, if available. In our view, this would increase the likelihood that basic ESA information would be made more accessible to workers. It would increase the chance that workers would take the document home to read it and possibly other family members would read it as well. Such an action has the potential for fostering conversation and inquiry. It may lead more workers to review the Ministry website. By providing such a handout at the outset of the working relationship, employers would set the stage for establishing a sense of commitment to ESA compliance in the workplace.
The Law Commission of Ontario recommends that:
8. The Ontario government amend the ESA to require employers to provide the ESA poster in handout format to all new employees in English and, to the extent possible, in the language of the employee.
3. Setting Out the Terms of the Employment Relationship
Arthurs emphasized the importance of employers and workers having a clear understanding of the terms of employment; he recommended a legislated requirement that employers provide non-unionized employees with written notice of rates of pay, hours of work, general holidays, annual vacations and conditions of work at the outset of the employment relationship. An obligation to set out in writing the status and terms of the working relationship would increase the likelihood of compliance by
reminding employers of their obligation to obey the law, and by alerting employees to the possibility of taking remedial action if the law is violated…Clear understandings will facilitate legal recourse for the injured party and perhaps make the job of the defendant easier….308
Temporary agency workers must receive information describing work assignment, hours of work and rate of pay under section 74.6 of the ESA.309 Now, pursuant to the new federal requirements, temporary foreign workers (NOC C and D and live-in caregivers) must receive this type of information in standard form employment contracts. This suggests government awareness of the protective effect of this type of written record for vulnerable workers. In our view, the requirement should be extended to all employees. A clear description of the terms of the employment received at the outset of the relationship has the potential for increased compliance and, if necessary, assistance in asserting ESA rights. In the section on self-employment, there is further discussion of this concept in the context of independent contractors.
The Law Commission of Ontario recommends that:
9. a) The Ontario government amend the ESA to require employers to provide all employees with written notice of their employment status and terms of their employment contract; and
b) the Ministry of Labour develop standard forms to support employers in this task.
D. Employment Standards Act Enforcement
1. The Existing Model: A Critique
In this section, we describe Ontario’s general approach to employment standards enforcement and the challenges associated with it. Later, we discuss collateral issues arising from current ESA enforcement.
Ontario’s ESA regulation model has been described as “a mix of ‘hard’ and ‘soft’ law approaches” with “soft” referring to the “government’s reliance on voluntary employer compliance or self-regulatory behaviour from firms” and the “hard” law approach including “orders to pay, compliance orders, and fines or prosecution”.310 Arthurs observed that worker activists and academics tend to view the employment relationship as essentially an unequal power imbalance rather than one of equal parties to a contract, and because of this, they support a system which primarily focuses on investigation and prosecution of employment standards violations as public responsibilities similar to the criminal justice system. Such advocates reject the idea of a self-enforcement model that places, in their view, too much responsibility on individual claimants. However, the reality is more complex. A purely public enforcement system such as the criminal justice system focuses on the public interest objective of achieving justice for society as a whole. Individual compensation to the harmed party plays a lesser role. In our view, a purely public law model is not workable for employment standards because a key objective must be compensating individuals for their loss. Therefore, the system must, necessarily, retain elements of the civil justice process. As Arthurs points out, the system is a hybrid of regulation and contract, of public and private law.311
Arthurs perceives the success of the existing model as highly dependent upon its ability to ensure compliance.
Labour standards ultimately succeed or fail on the issue of compliance. Widespread noncompliance destroys the rights of workers, destabilizes the labour market, creates disincentives for law-abiding employers who are undercut by law-breaking competitors, and weakens public respect for the law.312
Ontario’s Ministry of Labour works to promote the “soft law” approach of voluntary compliance through its Education, Outreach and Partnership strategy. The Ministry’s website outlines the goals of the strategy:
To create an environment where employers and employees understand their rights and obligations under the Employment Standards Act, 2000 (‘ESA’).
To increase employer awareness of responsibilities under the ESA by providing employers with the resources and tools to help them comply.
To encourage compliance with the ESA.
The Ministry’s approach demonstrates its understanding of the link between education and compliance.
The Education, Outreach & Partnership (EOP) initiative began formally in 2009. Yet engagement with employers and employees covered by the Employment Standards Act, 2000 (ESA) has been part of the Employment Standards Program from its early history. It has long been recognized that education and compliance go hand in hand.313
Information is provided through a multi-lingual phone service that received more than 300,000 calls in 2011.314 The Ministry responded to 9,000 email inquiries in 2010 and the Ministry’s website has very extensive tools, videos and explanatory materials with many resources available in 23 languages.315 The Ministry also engages in direct informational sessions with groups of employers and employees. As the government response to the Interim Report explained, “[e]xtensive website materials, including interactive tools, are available to assist employers to educate themselves and ensure they are in compliance with the ESA. Interactive tools include Hours of Work and Overtime Tool, Public Holiday Calculator and Severance and Termination Tools.”316 When contraventions of the ESA are found through inspections or claims investigations, employment standards officers are empowered to impose escalating administrative penalties, issue tickets under Part I and initiate prosecutions under Part III of the Provincial Offences Act.
However, as Doorey points out, this approach has its limitations.
…many employers weigh the costs of compliance against the relatively low probability of being found in non-compliance and the weak penalties associated with a breach, and make an economic decision not to comply…The MOL already provides considerable resources on its various websites, and offers telephone assistance to provide advice to workers. However, few vulnerable employees know how to find these websites or even to look for them, even assuming that they have access to the Internet, or know about the telephone service. While the MOL has done a good job of translating some of the information into multiple languages, the general MOL website is in English and difficult for non-English speaking workers to navigate. More fundamentally, a model intended to aid vulnerable workers that places the burden on employees to conduct internet research and then claim their legal entitlements will always be ineffective.317
This point was echoed by the Chinese Interagency Network of Greater Toronto in feedback to the Interim Report.318 Our consultations revealed frequent reports of a lack of employment standards enforcement.319 We heard about wages below minimum wage for temporary help agency and temporary foreign workers. Temporary foreign workers reported unpaid wages. Temporary help agencies were reported as continuing to charge fees despite the new provisions prohibiting this practice.320 These types of practices and other contract violations were further highlighted by workers and advocates in our consultation with the Migrant Workers Alliance for Change.321 Nonstatus workers were subject to multiple violations.322 The LCO was made aware of “agents” who place temporary foreign agricultural workers with employers, creating a triangular employment relationship similar to the temporary help agency relationship. Employers do not pay more than minimum wage of $10.25 per hour to the agent, and the worker receives less from the agent (as low as $7.50 per hour).323 According to the Chinese Interagency Network of Greater Toronto, some employers manipulate wage records to hide the fact that workers had worked excessive hours and were paid less than minimum wage. The Network advised us that in one such case an employee had worked a 60 hour week and was paid $7.00 per hour, some of it in cash to hide the rate and working hours in the record.324 Issues related to unpaid wages, vacation pay, termination pay, overtime and public holidays were the main complaints reported to the Ministry of Labour.325 Some suggest that ESA violations are widespread.326
What is strikingly clear from workers’ experiences is the “everydayness” of substandard working conditions. Workers do not come forward with just one experience of employer violations. When reviewing previous job experiences, it becomes clear that people in low-wage and precarious work experience violations of labour standards in job after job…workers go from one bad job to the next with no protection against employers’ violations. 327
Despite these reports, the LCO’s research and consultations revealed that most employers are compliant with the legislation.
These findings do not indicate that all or most employers violate ES [employment standards]. Many employers do comply with the ESA. However, the prevalence of violations undermines employers who do comply with minimum labour standards and contributes to a downward pressure on wages and working conditions.328
Advocates have pointed out, accurately, in our view, that the current process overemphasizes investigating individual complaints of employer violations.329 Detection of violations is largely through workers’ self-enforcement and individual claims. This approach has been described as “expensive and risks overloading available capacity.”330 There is general consensus that proactive enforcement is a much more effective mechanism for ensuring the protections of the ESA than the reactive system of responding to individual complaints. The Auditor General suggested that the need for increased proactive inspections is demonstrated by the fact that violations were found in 40 percent to 90 percent of such inspections. 2011-12 data from the Ministry of Labour indicate that 83 percent of inspections revealed violations.331 Vosko et al pointed to the success of proactive inspections and to the fact that 92 percent to 99 percent of confirmed unpaid wages were recovered through proactive processes whereas only about half were recovered through the individual claims process.332 Current Ministry of Labour data support these findings, showing that approximately 60 percent of monies owing is recovered through investigations while 98 percent is recovered through proactive inspections. The Ministry attributes this, in part, to the fact that proactive inspections are conducted on active businesses while investigations sometimes relate to insolvent businesses.
In Fairness at Work, Arthurs said
I received many submissions to the effect that the [federal] Labour Program’s enforcement strategy ought to be more proactive. Instead of concentrating on processing workers’ complaints, inspectors ought to take the initiative randomly auditing sectors or enterprises that exhibit a profile of non-compliance, or making a concerted effort to enforce particular provisions of Part III [of the Canada Labour Code] that seem to be violated with unusual frequency. These submissions make good sense, and I accept them.333
The occupational health and safety regime has been identified as a system that places stronger emphasis on proactive enforcement activities than the ESA system.334 In arguing for more proactive enforcement under the ESA regime, Vosko et al make the point that although it may seem reasonable to prioritize stronger protection for health and safety over employment protections which can be remedied through financial compensation, the differences should not be overstated, given the negative impacts on quality of life associated with prolonged precarious work.335
There appears to be widespread agreement that Ontario should shift its focus to concentrate more on proactive enforcement activities. We agree. However, the need will continue for a model that also responds to individual complaints.
Compliance is likely to be secured through a range of strategies. Strategies should include information, education, persuasion and proactive monitoring – all designed to encourage compliance without coercion. But they should also include effective remedies and sanctions – administrative, civil and criminal – with gradations of severity. Sanctions should be used when noncoercive strategies fail to produce the desired results, especially in the case of egregious violations. Compliance strategies should operate proactively for the most part, rather than being invoked when violations have already occurred. And they should address root causes and patterns of persistent non-compliance as well as isolated violations.336
….Still, it is very difficult to turn away a complainant with a seemingly meritorious case.337
In the long-run, better front-end enforcement may work to decrease individual claims by increasing compliance. In the meantime, we acknowledge that a recommendation focussed on increased proactive enforcement will have significant resource implications for the Ontario government.
The Law Commission of Ontario recommends that:
10. The Ministry of Labour place a greater emphasis on ESA proactive enforcement processes while continuing to use a range of strategies including voluntary compliance, proactive inspections and responses to individual complaints.
2. Specific Issues Arising from Current Enforcement
APPROACHING EMPLOYER PRIOR TO CLAIM
As we have noted, the primary method of enforcement under the ESA’s current structure, the individual claims process, has been the subject of considerable negative commentary. The views of most academics and advocates are in line with Professor Eric Tucker’s comment: “most workers are unlikely to be assertive protagonists”.338 In other words, vulnerable workers, in insecure employment, are not well-placed to make complaints. It has been suggested that the individual claims system is made more problematic by the fact that historically the Ministry of Labour has encouraged employees to attempt recovery of wages on their own.339 Not surprisingly, workers’ advocates have taken a very dim view of the enactment of changes under the Open for Business Act that had the effect of imposing further obligations on many claimants before an investigation is commenced.340
Pursuant to the amendments that took effect in January 2011, the Director of Employment Standards can require the complainant to take certain steps such as communicating with the employer about the violation, and providing information about the employer’s response. While not explicit in the legislation or the ESA Policy and Interpretation Manual, it is apparent from statements on their website that the Ministry of Labour has made a general policy decision to require all claimants to contact their employers about the violation unless a decision is made to waive the requirement.341
The Ministry of Labour materials make clear that exceptions can be made for vulnerable workers such as live-in caregivers, youth, persons with disabilities, workers with language barriers, those who fear their employers, those with reasons relating to the Human Rights Code or those with other appropriate reasons.342 Exceptions can also be made for such situations as when the claim is close to the six month limitation period or the employer cannot be located. These exceptions can be granted, upon request, presumably as an exercise of the Director’s (or delegate’s) discretion. It is unknown how frequently these exceptions are requested and/or granted.
While the LCO did not hear of any instances in which the Ministry had declined to exercise its discretion in appropriate cases, it is apparent from the materials we reviewed that workers’ advocates believe that the process is a strong disincentive to workers making a claim. As a case in point, the Colour of Poverty Campaign and Metro Chinese and Southeast Asian Legal Clinic supported the removal of all mandatory requirements for workers to attempt self-enforcement of ESA violations with employers prior to filing an ESA claim.343 We are not clear whether advocates are basing their objections on actual situations where the Ministry failed to waive the requirement for vulnerable workers or whether they believe workers are simply discouraged at the outset from bringing claims by even the possibility of having to approach the employer. It is also possible that the Ministry’s willingness to waive the requirement for vulnerable workers is not well known among employee and worker-side stakeholders. The Ministry of Labour’s website does set out the exceptions that will generally relieve employees from having to contact their employer prior to filing a claim, as does the claim form and guide book available in multiple languages. However, elsewhere on the website it is emphasized that most employees must approach employers. Online commentary and information about the ESA among stakeholders revealed that the exceptions are often not mentioned.344 In any event, it may be that, as a matter of principle, advocates object to a requirement that workers request special protection as an exception rather than having it granted as of right. In its response to the Interim report, the Ontario government indicated that the rationale behind the requirement to approach employers is for improved efficiency, saying “[i]f the complaint is resolved to the satisfaction of the employee, it helps the employee to obtain a remedy more quickly and also saves government resources in the enforcement process.”345
Whatever the specific basis for their objections, workers’ advocates have little confidence in the current system. The LCO was unable to determine whether there had been any impact on claims since the implementation of the Open for Business Act (OBA). Data are not available from the Ministry of Labour for the relevant period. In our view, this issue is significant enough to warrant a review. Consistent with the findings of the Drummond Report recommending ministries improve data collection and engage in evidence-based policy development, we are of the view that an evaluation should be undertaken to assess the impact of the OBA changes with the goal of determining whether claims had declined during the post-OBA period and, if so, whether the policy change was the precipitating factor.346 If so, this would justify reconsideration of the policy decision requiring, as a general rule, that employees approach their employers before embarking on an ESA claim.
The Law Commission of Ontario recommends that:
11. The Ministry of Labour:
a) engage in data collection and evaluation to determine the impact of the policy requiring employees to approach employers prior to initiating an ESA claim; and
b) consider reversal of policy if evaluation reveals negative impacts such as declines in claims attributable to the policy changes.
12. The Ministry of Labour improve communication about the vulnerable worker exemptions to approaching employers at the outset of an ESA claim.
EXPEDITING AND FACILITATING ESA CLAIMS
Lengthy time periods for resolution of ESA claims were identified as problematic in the consultations.347 In an effort to improve, the Ministry of Labour launched a task force in August 2010 to deal with a backlog of 14,000 employment standards complaints. The backlog was eliminated by October 2011.348 This process was criticized by some for encouraging workers to accept settlements for less than they are owed, a method that is viewed negatively by workers’ advocates.349
Person-to-person assistance for workers preparing their claims has been promoted as a means of increasing ESA accessibility and potentially expediting the claims-making process, thereby counteracting the effects of lack of internet access and/or language barriers. Appropriate claims information may ultimately assist adjudicators in the decision-making process.350 A related proposition by Professor David Doorey envisions the concept of one-stop shopping for employees seeking advice and assistance with ESA matters and a corresponding office for employers, or alternatively, a dedicated office offering service to both.351 Direct personal assistance could be provided through legal aid clinics or government funded offices serving workers and employers functioning in a similar role to that played by the Office of the Worker Adviser (OWA) and the Office of the Employer Adviser in workplace safety and insurance matters. The Office of the Worker Adviser supports this concept but proper resources would be required. The OWA points to the challenges of its current caseload due to its double mandate (nonunionized injured workers and OHSA reprisals), the increasing complexity of WSIB cases and demands to participate in policy issues.352 However the service is structured, it would be important to provide workers with assistance in asserting their claims and to employers in responding, ensuring that the requisite information, in the proper format, is submitted to the Ministry. Properly documented claims and responses would work to expedite and improve the quality of the claims process. As Professor Doorey highlights, support for employers is also important. In our view, small enterprises could particularly benefit from this service.
The Law Commission of Ontario recommends that:
13. The Ontario government facilitate and expedite the ESA claims-making process, by providing a mechanism for workers and employers to obtain person-to-person assistance in the claims process through additional support services such as Legal Aid Ontario clinics, Office of the Employment Standards Advisor and/or other types of worker and employer support services.
LIMITATION PERIOD AND MONETARY CAP
Section 111 of the ESA sets out a six month limitation period for bringing claims related to wages. The limitation period for recovery of wages is twelve months for cases where there is more than one violation with respect to wages of the same employee as long as one of the violations occurred within the six month period. Vacation pay also has a twelve month recovery period. For contraventions where reinstatement/compensation is sought as a remedy, the general limitation period is two years under section 96(3). The mandatory time limits may be extended in exceptional cases of fraudulent concealment, where the employee has been misled.353
The shorter limitation period for recovery of wages was enacted in 1996. It was justified by the government at the time of its introduction as a means of improving administrative efficiency, improving the likelihood of successful investigation and enforcement, better use of tax dollars, introducing flexibility and, as a result, an improvement for workers and employers.354 However, these changes were controversial at the time and today advocates continue to press for a return to the two year limitation period that was in place prior to 1996. They argue that claimants who delay have no recourse under the ESA and are left to seek relief in the civil courts which will be difficult for them to navigate. A number of observers have made the point that most claims are made after workers leave the job and some workers leave jobs being owed significant amounts of unpaid wages. “Job dislocation and difficulties learning how to pursue ES rights” make the six month limitation period a significant obstacle to accessing ESA protections.355 Despite this, most provinces currently have limitation periods in the six to twelve month range. The ESA also imposes a monetary cap of $10,000 on recovering money owing. According to critics, “the $10,000 cap on monies recoverable under the ESA leaves these workers without remedy through the ES [employment standards] claim process.”356
Recent increases in minimum wages along with the point that most ESA claimants have left the job suggest consideration for expanding the ESA’s limitation period for recovery of wages and increasing the monetary cap to $25,000.357 Providing for a higher monetary penalty would bring the ESA cap in line with the Small Claims Court cap. In our view, there does not appear to be a sufficiently strong justification for capping the ESA at a lower rate than the Small Claims Court cap. The limitation period, on the other hand, has been established and maintained since 1996 in a range consistent with that of other provinces. Returning to the two year limitation seems out of step with current trends. On any analysis, efficiency and the ability to successfully investigate are important objectives that serve all parties and utilize government resources effectively. However, we also understand that most claimants wait until they leave a job before making a claim and this can result in forfeiture of the ability to collect on long overdue wages. We would like to see a discretion provided to extend the limitation period where there were extenuating circumstances that had resulted in the claim not having been made within the six month limitation period. To accomplish this would require a legislative amendment to provide the Director with the discretion to extend the time frame for special circumstances. Policy could be developed to identify the reasons for failure to make claims in a timely fashion that could trigger this exercise of discretion, with an umbrella clause allowing for other possibilities to be considered at the Director’s discretion with the overall objective focussing on providing increased access to justice for the most vulnerable workers.
The Law Commission of Ontario recommends that:
14. The Ontario government:
a) amend the ESA to provide for a discretionary time extension for claims for wages in special circumstances; and
b) raise the ESA monetary cap to $25,000.
THIRD PARTY AND ANONYMOUS COMPLAINTS
Hardly any nonunion employees file ESA complaints. The ESA enforcement mechanisms are used almost exclusively by unionized employees who can file grievances under a collective agreement and by former employees, who have been dismissed by their employer or who have quit.358
The Auditor General made a similar point.359 This is evidence of a system that does not meet the needs of protecting workers while they are still employed. As a partial remedy, it has been proposed that the Ministry of Labour accept third-party and anonymous complaints
to initiate inspections in order to minimize threats to workers whose rights are being violated. Implementing this recommendation would mean that the most precariously employed workers, facing heightened threats of reprisal, are not obliged to take on their employers….360
We have been advised that the Ministry of Labour will accept anonymous/third party information and that an inspection may be commenced on that basis. Information can be provided through the Employment Standards Portal on the Ministry’s website or by calling the Employment Standards Information Centre (call centre).361 We note, however, that this is not advertised and does not appear to be well known. We believe it desirable that the Ministry of Labour arrange for an easily accessible, well-advertised mechanism to accept third party information. Such information could be used as a basis to determine where proactive inspections should be targeted. As pointed out by the government in its comments on the Interim Report, there are limits to the Ministry’s ability to respond to information provided anonymously; however in our view, it could be an important mechanism for responding to the many serious concerns we have heard regarding reprisals.362 It may be necessary to consider whether the reprisal protection sections of the ESA will sufficiently protect employees when they are also third party complainants if their identify becomes known or whether there is protection for employees on whose behalf a third party complainant (outside the workplace) makes a complaint.
In their submissions to the LCO, employer representatives noted the importance of developing built-in checks and balances to ensure that unfounded or vexatious complaints did not trigger costly and unwarranted inspections.363 This is a valid point. It would be important to develop policy criteria for determining whether information supplied by third parties either on its own or together with other information available to the inspectors was a sufficient foundation to warrant launching an inspection.
The Law Commission of Ontario recommends that:
15. The Ministry of Labour:
a) Develop an accessible and well communicated mechanism – such as a hotline – for ESOs to receive third-party and/or anonymous complaints which could trigger proactive inspections; and
b) develop corresponding policy criteria to ensure that unfounded complaints do not trigger unwarranted inspections.
Reporting on ESA enforcement practices in 2004, the Auditor General expressed concern that the Ministry of Labour was focusing its efforts almost entirely on investigating individual complaints against former employers even though previous proactive inspections had uncovered violations in 40-90 percent of cases. As mentioned earlier, this concern has been echoed by others.364 The Auditor General found there had been no significant improvements since a 1991 audit had revealed deficiencies in investigations, proactive inspections and prosecutions. The 2004 Report recommended increased proactive inspections, improved guidance to ESOs on enforcement and that the Ministry assess the impact of making employers pay for investigations when violations are found. In its follow-up 2006 Report, the Auditor General found progress in some areas but found no implementation of the recommendation that non-compliant employers pay for inspections. However, the Ministry committed to consider this change in future legislative reviews. Employer representatives raised concerns that inspection cost recovery for minimal infractions might impose penalties that are out of proportion with the violation and erode employer support for ESA compliance.365 In our view, these concerns have merit and, as a result, we do not necessarily suggest a “one-size-fits-all” approach. Clearly such an amendment would require policy development to identify appropriate situations and to what extent in each this tool would be employed.
The Auditor General noted that the Ministry of Labour had increased proactive inspections from 151 in 2003-2004 to 2,355 in 2004-2005 and 2,560 in 2005-2006. The Auditor General considered these to be the new benchmarks “upon which to establish future targets”.366 These inspections dropped to fewer than half that number in 2010-2011 when there were only 1,093. However, that number rose to 2,248 in 2011/12.367 The Ministry of Labour currently indicates that the Employment Standards program will consult with stakeholders as it moves “into a more proactive compliance model”. The Dedicated Enforcement Team “will focus on repeat violators and high risk sectors for vulnerable workers”.368
The prioritization of high-risk industries with vulnerable workers has been recommended in workplaces where intervention will have a high impact and deterrence will take effect.369 Enforcement sweeps and educational campaigns are supported, targeting “fissured” industries where decisions are downloaded from major employers to a complex network of smaller employers such as are found in the hospitality, janitorial and construction industries.370
As mentioned, it would be effective for the Ministry of Labour to ensure that the disproportionate representation of vulnerable workers in certain industries and groups is considered in identifying areas for targeting increased proactive inspections. For example, our consultations revealed reports of temporary foreign workers being regularly required to work late and on weekends without receiving either overtime or vacation pay. In some instances, migrant workers who worked alongside Canadian workers reported that the Canadian workers were rarely asked to work overtime and, we were advised, they were generally treated better. We heard of instances where migrant workers’ attempts to raise such concerns with employers resulted in employers’ retaliation by insisting they work additional hours with the threat of termination if they refused. We heard accounts of sexual abuse of women employees in the workplace.371 In feedback received, the Chinese Interagency Network of Greater Toronto proposed more expanded investigations as one way to reduce reliance on ESA self-enforcement through individual claims.372 The 1991 audit specifically identified the lack of expanded investigations as a major issue. It noted that when violations were detected, an investigation should be extended to determine whether other employees had experienced similar violations. This was not occurring. In its 2004 report, the Auditor General found no significant increase in the number of expanded investigations for confirmed violations.
To be effective in fulfilling its mandate, the Ministry has an obligation to protect the employment rights of currently employed workers who may be reluctant to file claims.
Greater ministry emphasis on extending investigations of a substantiated claim to cover other employees of the same employer to determine whether additional violations had taken place would be an effective means of enforcing the employment standards legislation.373
However, as of 2006, the Auditor General’s report indicated there had been no significant improvements in the number of expanded investigations conducted by the Ministry.374 This appears to be on ongoing issue. When the lack of expanded investigations was flagged in 1991, 1,795 such investigations had taken place (out of 18,582 complaints). That number had decreased to 802 by 2003-2004. While we are advised that the Ministry re-inspects 10 percent of the employers in any given year, the most recent data indicate that there were 5 expanded investigations in 2010-2011 and 53 in 2011-2012.375 The Ministry of Labour noted that this may be an underestimate of expanded investigation activity due to the way information is recorded in the database.376
The Law Commission of Ontario recommends that:
16. The Ministry of Labour:
a) substantially increase proactive inspections, particularly in higher risk industries based on established benchmarks;
b) develop strategic, proactive enforcement initiatives that target high-risk for violation workplaces, including those comprised of concentrations of temporary foreign workers, temporary agency workers, recent immigrants, racialized workers, youth, the disabled and Aboriginal people, as well as areas known for high-rates of substandard practices;
c) conduct expanded investigations when violations are detected; and
d) ensure enforcement activities include follow-up on previous violations.
17. The Ontario government amend the ESA to permit orders requiring employers found in violation of the ESA to cover the costs of investigations and inspections, in appropriate cases.
There are a variety of sanctions that may be engaged to respond to ESA violations. Employment Standards Officers have the discretion to use or not use these options. They include orders to pay wages (maximum of $10,000 per employee plus administrative costs), orders for compensation and/or reinstatement, compliance orders, tickets, ($295 plus victim fine surcharge and costs), notices of contravention ($250 for first contravention up to $1000 for subsequent contraventions, in many cases multiplied by the number of affected employees) and prosecution (maximum fine $50,000 for individuals or 12 months in jail, or both; for corporations $100,000 and higher for subsequent convictions, to a maximum of $500,000). In addition, the employer may also be required by the court to pay outstanding wages, compensate and/or reinstate the employee.
The Auditor General noted that in the five years leading up to 2004, there had been only 63 convictions under the ESA. Prosecutions were not commenced even when the amounts owing were high. In its 2004 Report, the Auditor General recommended that the Ministry of Labour provide direction to employment standards officers regarding the appropriate use of enforcement measures, including notices of contravention and prosecutions, and increase monitoring of the use of these measures for consistency of application. After the Auditor General’s Report, prosecutions reached a high of 594 in 2006-2007 and 505 in 2008-2009 but dropped to 196 in 2010-2011, only 4 of which were prosecutions under Part III of the Provincial Offences Act resulting in more serious fines.377 The prosecutions are overwhelmingly of the Part I type, resulting in total fine amounts of $360 or less.378 Workers’ advocates are of the view that “tickets are not an effective cost for violations in the first place, nor will they act as a deterrent to ongoing or future violations.”379
Commentators agree that the system must have and utilize effective penalties and sanctions.380 Some observers promote stronger policy or legislative standards with less discretion placed in the hands of ESOs.381 Other suggestions include set legislated fines for confirmed violations even in the settlement process and increased prosecutions. In general, the consultations revealed dissatisfaction with the existing use of penalties that were considered to be ineffective at deterring non-compliant employers. Advocates do not support the current widespread use of tickets under Part I of the POA which are perceived as providing inadequate incentives to compliance. Instead, they advocate for fines that double or triple the amount owed and for the payment of interest on all unpaid wages, a power which ESOs currently do not have. Advocates consider the 10 percent administrative fee levied on orders to pay wages to be an insufficient motivation for non-compliant employers to repay wages.382
ESOs should be provided with specific policy direction and education to emphasize deterrence in selection of penalties and sanctions (i.e., notices of contravention and prosecution), in cases of repeat violations and wilful non-compliance. In our view, this should include those who have been the subject of previous orders such as orders to pay wages under the ESA.
The Law Commission of Ontario recommends that:
18. The Ministry of Labour strengthen ESO policy direction supported by education to direct ESOs to select deterrent sanctions for appropriate cases, most particularly repeat violators and those who wilfully fail to comply with payment orders.
E. Mechanisms to Support Compliance and Enforcement
1. Employee Voice and Participation
Professor Anil Verma argues that “employee voice can be a powerful tool in ensuring better labour standards.”384 Other commentators agree. Building upon this concept, the LCO has considered ways to increase ESA awareness and compliance by way of improved “employee voice” through joint employee-employer work councils. This framework exists in Ontario under the Occupational Health and Safety Act in the form of the joint health and safety committee scheme.385 We explored the concept of importing such a system into the ESA as a means of enhancing compliance particularly in nonunionized workplaces populated by low wage workers.
Roy Adams proposed adopting the German model of employee work councils.386 Under the German model, work councils are a mandatory, elected body in German workplaces with five or more employees. The council has legislated rights regarding consultation, information and participation. Participation rights, referred to as codetermination, allow for joint decision-making jurisdiction over a wide variety of issues, including hours, occupational health and safety, training, job classification, and individual and mass dismissals. Work councils co-exist with unions.387 Unless approved by the collective agreement, work councils do not engage in bargaining over wages.388 Adams suggested this model is considered successful by both management and unions; he offers its resilience following economic downturns in the 1980s and 1990s as a marker of this success.389
In 2006, Professor Verma noted that while the European Union had used this model to design various measures to increase worker participation, the German government had been evaluating the work council system in the face of increased international competition and made legislative changes to adapt it to changing circumstances.390 In many cases, the changes strengthened the system. The election procedure was simplified; work councils could now be set up for more types of business relationships such as joint work councils operating across related businesses, or divisional councils could be created for specific products or business types. The scope of council activities has been increased and equity and discrimination policies have been introduced. Professor Verma concluded that “work councils were not perfect vehicles for dealing with the pressures of globalization” nor could there be a wholesale transfer of the German model to the Canadian workplace. However, he noted the value of the principles upon which work councils are founded for joint workplace decision-making.391
Building upon this concept, we have considered the possibility of creating a model for work councils in the Ontario workplace aimed at increasing employee participation and knowledge, for initiating discussions between employers and employees on ESA matters and potentially for resolving disputes. If effectively implemented, the existence of the council would work to reduce worker isolation by creating a system of support and representation in the workplace. ESOs could rely on the work council as a source of information during investigations and/or inspections. The introduction of work councils would necessitate the training of employee and employer representatives. This alone could benefit the workplace through increased knowledge. In our consultations, it was suggested that ESA work councils could be facilitated by “piggy backing” onto the existing structure of OHSA joint committees.
Project Advisory Group members had a mixed reaction to the general idea of introducing work councils and, specifically, to utilizing the existing OHSA scheme for their implementation. Some members representing labour interests indicated that OHSA committees are not operative or effective in many workplaces, and raised concerns about intimidation and reprisal in non-unionized workplaces. Employer members noted that health and safety committees work well in non-unionized environments and that most employees do not operate in a state of fear of the employer, but they raised concerns about the costs of such councils. Government representatives raised the possibility that the format for joint work councils might not easily translate from the OHSA to the ESA context.392 Feedback to the Interim Report from the Workers Action Centre/Parkdale Community Legal Services, reiterated these concerns. We were advised that employees in non-unionized workplaces are in a poor position to enforce the ESA due to the power imbalances in non-unionized workplaces. There would be a need for “externally provided ESA training [and]…an employee complaints procedure with the Ministry of Labour where reprisals or violations of the Council mandate takes place”.393 The CAW noted the lack of a role for unions and the concern that such councils would promote alternatives to unionization that would interfere with efforts to organize in such enterprises.394 However, we note that the OHSA joint worker-employer model exists in both unionized and non-unionized enterprises. Moreover, many of the workplaces referred to in this Project are non-unionized.395
While we understand the concerns that have been raised, given the challenges facing vulnerable workers, we are of the view that it is important to consider new ways of approaching the issues of maintaining minimum standards. We cannot continue to rely entirely on existing practices and processes. Developing a mechanism for injecting some of the principles of work councils into the non-unionized workplace could assist in adapting to the changing realities of the modern workplace. In our Interim Report, we were considering the value of a pilot project in select non-unionized workplaces with concentrations of vulnerable workers and, while we continue to support the idea, based upon the feedback we received, a more conservative approach is warranted. At this point, we are recommending simply that the concept of developing and utilizing some of the principles of work councils in non-unionized workplaces with concentrations of vulnerable workers be explored through government-stakeholder consultations. Depending upon the outcome of these consultations, a pilot project should be explored.
The Law Commission of Ontario recommends that:
19. The Ministry of Labour explore, through stakeholder consultations, the concept of utilizing the principles of work councils in non-unionized workplaces with high concentrations of vulnerable workers.
2. Focusing on the Top Echelon of Industry
David Weil’s 2010 report on Strategic Enforcement to the U.S Department of Labor’s Wage and Hour Division recognized that, because of the extreme effects of competition, companies were shifting away from direct employment to subcontracting, use of temporary workers and temporary agency workers, resulting in a weakening of the impact of traditional approaches to enforcement. This “fissuring” of employment by using external workers, in Weil’s view, requires a response directed at “higher levels of industry structures in order to change behaviour at lower levels, where violations are most likely to occur.”396 The report supports a coordinated approach to strategic enforcement, identifying and prioritizing workplaces with high concentrations of vulnerable workers, who are unlikely to complain, and in sectors where employer behaviours are likely to be changed. One strategy discussed is government reaching out to the top echelons of the industry or company through non-confrontational communications highlighting the government’s commitment to employment standards and the important role played by the top level of industry.
Weil’s report proposes targeting branded companies to encourage leadership within their fields for employment standards compliance. Such companies rely on their “brand” to create a unique product with a loyal client base willing to pay a premium for the brand. Good image is important to branded companies and governments can leverage this interest in maintaining a good image to encourage companies to act as leaders within their branded field by prioritizing employment standards compliance for external workers affiliated with their company. Leading employers could be featured in public campaigns and provided with additional incentives through forms of special recognition. Furthermore, among such companies, publicising the results of compliance or noncompliance would provide a significant incentive to comply among competing companies and brands within the sector.
Weil’s report proposes the coordination of enforcement activities among branches or franchises of a branded company. In situations where violations are detected, Weil recommends that part of the resolution could involve a comprehensive agreement covering all outlets/branches of a particular company. Communications about enforcement targets and resolutions such as the above could be made highly visible within industries that employ vulnerable workers. In this way, pressure to comply could be brought to bear on supply chains. To be effective, deterrent penalties would be required when violations are detected.397 Given that small enterprises are legally required to comply with the ESA, we were asked what the point would be to engage larger businesses in supply chain compliance? In our view, given that subcontracting and outsourcing is a reality in the new economy, and the fact that there are limits to Ministry of Labour enforcement resources, we see this as an opportunity to engage larger businesses in taking responsibility for the effects of subcontracting to ensure compliance throughout the supply chain. It was suggested that it would be useful to use these methods to encourage larger companies to incentivize affiliated enterprises to provide higher than minimum standards.398 We agree that this could be built into an escalating scale of recognition and incentives for larger companies taking responsibility for the actions of the enterprises they engage. Other ways to engage supply chains are discussed in the Chapter on Health and Safety.
Another mechanism that utilizes the idea of placing responsibility on the main employer to ensure compliance and fair wages for subcontractors is a Fair Wage Policy in place in a number of Ontario municipalities, many of them based upon the City of Toronto’s model. Fair Wage Policies protect workers by requiring contractors with the City to pay subcontractors at prevailing rates set out in the fair wage schedule. The Policy requires compliance with acceptable working conditions and hours. The Policy originally applied only to the construction sector but expanded to include other industrial sectors such as clerical and cleaning. It attempts to create a level playing field between union and nonunion competition and protects workers. Notably, such policies do not apply to small enterprises and can be waived in some circumstances. The Ontario government has had a Fair Wage Policy in place since 1995 for construction, building cleaning and security contracts; however, the minimum wage levels were not updated since the Policy’s establishment and over time market wages increased to levels higher than the Policy’s prescribed minimums. A 2008 review of the Policy prepared for the Ontario government highlighted the controversial nature of Fair Wage Policies by outlining the arguments and evidence for and against them; however it provided few concrete conclusions.399 While such policies might have limited scope in the situation of many vulnerable workers, particularly in small enterprises, we note that they have been a means of protecting workers through a form of supply chain compliance and, as such, some of their principles might be adaptable in developing supply chain policies for subcontractors in larger companies.400
The Law Commission of Ontario recommends that:
20. The Ministry of Labour:
a) develop processes of reaching out to and focusing on the top echelon of industry to address ESA non-compliance where workers are affiliated with the company, particularly those subcontracted to small enterprises and temporary agency workers; and
b) identify and provide recognition and incentives for companies that are leaders in extending employment standards compliance and higher than minimum standards to external workers particularly those subcontracted to small enterprises and temporary agency workers.
3. Responding to Temporary Foreign Workers: Fear of Repatriation
Low skilled workers in temporary foreign worker programs have specific concerns due to the fact that their Canadian work permit is specifically tied to an individual employer. If an employee is terminated, some temporary foreign worker programs allow for the employee to find other employment within a specified period, although there are significant limitations on their ability to transfer. The Seasonal Agricultural Workers Program (SAWP) contract provides for repatriation of the employee to his or her home country when the employer, in consultation with the government agent, terminates the employment based on non-compliance, refusal to work or any other sufficient reason. While there are processes in place to avoid early termination (described below in more detail), when and if these fail, SAWP workers must return immediately to their home countries. Tied work permits were specifically highlighted in Made in Canada as one of the major causes of worker vulnerability.401 According to advocates for migrant workers, the solution would be to create sector-specific, province-specific or open work permits and ultimately, to provide mechanisms for workers to obtain permanent residency.402 Work permits are a federal immigration function and therefore beyond the purview of this Report. However, research has also identified concerns about termination, repatriation or non-contract renewal as an effective disincentive for workers to access provincially regulated legal remedies intended to protect such workers.403 Repatriation need not be expressly threatened by the employer, it can be implicit. Or, the fear arises simply from the migrant workers’ temporary status; workers know they can be sent home or not asked back. This, we were told, effectively mutes any worker’s complaints about breaches of employment standards, health and safety legislation or housing standards.404
If repatriation is achieved without an opportunity for an appeal or independent review, it effectively denies the worker avenues of legal redress available under Ontario law, such as seeking protection from the anti-reprisal provisions found in the ESA.405 When workers are no longer in Ontario, it is difficult to exercise these legal rights. Concerns about repatriation were also raised in the Dean Report in its review of Occupational Health and Safety.406 In response, the Report recommended expediting the hearing of reprisal complaints at the Ontario Labour Relations Board and relevant changes have now been implemented. In our view, a similar mechanism should be made available in the context of the Employment Standards Act. This would assist all workers facing reprisal but most particularly temporary foreign workers whose vulnerability is more acute.
While “naming” in SAWP can have benefits for workers and employers, it also can serve to create concern among employees that they will not be “named” by the employer to return to Canada the next year or that they will be refused by their home country’s Ministry of Labour. Workers indicated that with the availability of agricultural labourers through the NOC C and D Pilot Project, there is another pool of workers who can replace an existing SAWP worker.
Despite concerns about repatriation, rates of actual termination of SAWP workers are not high. Of the approximately 15,000 SAWP workers in each of 2009 and 2010, F.A.R.M.S. advised that only 73 and 120 respectively were repatriated for breach of contract and for all reasons only about .5 percent are repatriated.407 Therefore, F.A.R.M.S. and liaison officers did not perceive termination as a tool used by SAWP employers to exercise undue control over workers. The Labour Issues Coordinating Committee observed, “[m]ost farm workplaces are cooperative in nature with employer and employee working shoulder to shoulder.”408 Furthermore, they considered termination as an avenue of last resort. Before termination is exercised, we were advised that employers will often try to resolve issues directly with workers. Where that is unsuccessful, employers will often contact F.A.R.M.S., who will work with the employer and liaison officer to seek to resolve the issue or to negotiate a transfer of the worker to another employer (with the approval of Human Resources and Skills Development Canada [HRSDC]). However, we were advised that transfers did not occur frequently.409 F.A.R.M.S. noted that termination has negative consequences for employers in terms of administrative costs, travel and other costs to hire a SAWP worker and they emphasized the role of liaison officers in resolving workers’ issues.410 Liaison Services supported these views advising that termination and repatriation, at will by the employer, does not occur. Under the employment contract, the Liaison Officer must be consulted before termination occurs and, where an employer is acting unreasonably, F.A.R.M.S. will intercede and discuss the matter with the employer. It is also possible that workers will no longer be made available to that employer, although this has occurred only rarely. As was noted by the Labour Issues Coordinating Committee, “workers are wanted and needed for viable business…injured or unhappy workers greatly reduce the efficiencies needed for business.”411
Despite the mechanisms in place under SAWP to minimize terminations, our consultations and research nevertheless revealed significant concerns about job loss and repatriation among these workers.412 It is the fear itself that has been identified in the research as the primary barrier to workers asserting their rights, making them vulnerable to exploitation by non-compliant employers.413 NOC C and D workers may have slightly more mobility in that they are eligible to initiate job transfers if they can find another eligible employer who is willing and able to obtain a labour market opinion (LMO) and successfully navigate the procedures for hiring a temporary foreign worker. On the other hand, SAWP workers have liaison agents and F.A.R.M.S. to assist with transfers.414
In our view, the most effective response to workers’ fear of repatriation would be to develop an independent decision-making procedure prior to repatriation. Given that actual instances of termination occur infrequently under SAWP, this should not create a significant challenge for SAWP employers; however it would be important to ensure that the process was designed to minimize impacts on farm employers. Since repatriation statistics do not appear to be readily available for the NOC C and D program, it is not known to what extent it occurs under this program, but, clearly, this type of mechanism could be beneficial for these employees who lack the practices and oversight of the SAWP program and are therefore more likely to be in need of protections. Moreover, the implementation of an added level of oversight may be a way to improve confidence and reduce fear among temporary foreign workers. In our view, an independent decision-making body made up of Ministry of Labour and/or HRSDC representatives and/or worker and employer representatives would help to ensure that repatriation is not being utilized as a reprisal for workers attempting to access their rights or is otherwise unjustified. Such a mechanism would be particularly important for NOC C and D workers. The process should be very simple and efficient. It should be available to convene and make a decision within very short time frames. It would be important that the decision-making system not become overburdened with process and delay. While we support interim reinstatement provisions for appropriate circumstances, we recognize there would be challenges in any process that put employers and employees back into a relationship that is no longer workable for one or both.415
In feedback to the Interim Report, the Labour Issues Coordinating Committee cautioned against overburdening farm employers with regulation to respond to a small minority of noncompliant employers. The importance of enacting legislation that employers understand and believe in was stressed as key to achieving compliance. We were cautioned against “sledge hammer legislation” where penalties are out of proportion to the seriousness of the infraction. In their view, it was important to “[in]form educate, advise followed by progressively stronger penalties to amend behaviour”. In our view, in principle, a progressive approach makes good sense, recognizing that it is important to ensure that employers who are repeatedly non-compliant are subject to appropriate penalties.
Government feedback to the Interim Report suggested that an alternative approach to an independent decision-making process would be to provide more information to SAWP participants on the low likelihood of repatriation, the safeguards in place and the process that occurs before repatriation. Education was also suggested for employees on how to approach employers and liaison agents with concerns and education for employers on how to respond appropriately.416 This is a good idea. Ideally this would be put in place in addition to the decision-making mechanism.
In feedback we received to the Interim Report, the Civil Liberties and Human Rights Section of the Ontario Bar Association (OBA) supported a similar point to the one made by Faraday that an administrative body be created to hear all issues concerning the terms of migrant workers contracts prior to repatriation.417 The OBA section also raised the important point that migrant workers were sometimes not available when their matters came up for hearings. The OBA section suggested that legislative amendments are required to “allow claims hearings for repatriated employees to be conducted using alternative forms of evidence, such as affidavit or video-taped evidence, and alternative arrangements for cross-examination.”418 This issue may benefit from a fuller review.
The Law Commission of Ontario recommends that:
21. The Ontario government:
a) amend the ESA to include a process for ensuring reprisal complaints are expedited and, in the case of migrant workers, that such complaints are heard before repatriation.
b) work together with F.A.R.M.S. and other organizations serving workers in low skilled temporary migrant worker programs to provide:
i) information to temporary migrant workers about the process and likelihood of premature repatriation,
22. In coordination with the federal government, the Ontario government:
a) institute a process for independent decision-making to review decisions to repatriate temporary foreign workers prior to the repatriation to ensure dismissal is not a reprisal for accessing workers’ rights under federal or provincial legislation or contract;
b) for reprisals, the independent-decision making body have the authority to order interim reinstatement for appropriate circumstances pending decisions and appeals; and
c) where there is a finding of reprisal, provision be made for transfer to another employer or, where appropriate, reinstatement.
Agencies that provide legal service to temporary migrant workers should be fostered. An independent decision-making process prior to repatriation, as described above, would be an area where legal representation could play a valuable role. In general, availability of legal and other support for workers could increase knowledge of and access to workers’ rights for temporary foreign workers and other vulnerable workers. We heard from or met with organizations such as the Caregivers Action Centre that assist live-in caregivers and the Office of the Worker Adviser, that provides assistance to workers making claims of reprisals. In its response to the Interim Report, the Office of the Worker Adviser raised the issue that it would be important that migrant workers have legal supports for reprisals.419 We heard about the crucial role played by legal clinics in providing worker support. In our consultations, we met with several organizations and became aware of others that provide support, assistance, advocacy and outreach to migrant workers.420 For example, the Agricultural Workers Alliance (AWA) Support Centres operate four centres in Bradford, Leamington, Simcoe and Virgil and are ventures of the United Food and Commercial Workers Union and the Agricultural Workers Alliance. These centres provide direct or referred assistance to migrant farm workers dealing with repatriation concerns and claims for workers’ compensation, parental leave benefits, Canada Pension Plan, Employment Insurance and health insurance.421 In the Niagara Region, Community Legal Services of Niagara South has partnered with the Niagara Migrant Workers Interest Group, a group of community organizations and volunteers, to provide legal and other supports to migrant workers. This type of innovative work undertaken by unions and community groups is a positive step in creating new pathways of providing support to migrant workers in asserting their legal rights. As referred to previously, through a Ministry of Labour partnership with the Ontario Council of Agencies Serving Immigrants (OCASI), the Ministry has provided more than 40 education sessions providing introductory employment standards information and resources.422
The Law Commission of Ontario recommends that:
23. The Ontario government support the establishment of greater legal and other supports for temporary migrant workers asserting rights and making claims through expanded legal services or other such mechanisms.
24. Unions and community groups continue to develop and expand innovative services to support migrant workers to assert their legal rights.
4. Enforcing Vulnerable Workers Rights through Association
Many commentators are of the view that one of the most effective means of reducing worker vulnerability and enforcing workers’ rights is through unionization. Unionization’s benefits have been described as important social values, related to workers’ well-being and providing a forum for airing grievances.423 The Supreme Court of Canada has noted that:
It is widely accepted that labour relations laws function not only to provide a forum for airing specific grievances, but for fostering dialogue in an otherwise adversarial workplace. As P. Weiler has written, unionization introduces a form of political democracy into the workplace, subjecting employer and employee alike to the “rule of law”.424
Despite unionization’s benefits for workers, unions have never been a panacea. Even at the height of unionization in Canada, only about 35 percent of Ontario workers were unionized.425 While many workers’ advocates are pressing for increased unionization as the remedy to precarious work, the prospect of increased unionization may be out of step with global trends. Unions themselves are assessing their appropriate role in today’s and the future’s economic and social conditions.426 Ontario, in common with much of the industrialized world, is experiencing a gradual decline in unionization rates.427 While Canadian unions remain strong relative to the United States and, in fact, in absolute numbers, union membership is increasing in Canada, union density (the percentage of the Canadian workforce that is unionized) decreased between 1997 and 2010 from 33.7-31.5 percent.428 As 2011 data indicate, unionization rates are much higher in the public sector (74.7 percent) as compared to the private sector (17.5 percent). Private sector rates in Canada have declined over the past decade from approximately 19.9 percent in 2001.429 And among Canadian jurisdictions, Ontario had the second lowest unionization rate, at 27.9 percent, in 2010.430 Interestingly, while national rates for men have declined over the past decade, women’s unionization rates have increased to 32.7 percent beyond the national average. This tracks a trend starting in 2006 when unionization rates for women first surpassed that of men.431
The declines that have occurred have been attributed to the radical economic, technological and social changes that have taken place over the past 30 years.432 Competitive pressures brought about by globalization, free trade and economic downturns diminish the bargaining power of unions and in an environment of financial insecurity, workers are less willing to organize. The decline of the manufacturing industry has also been an important contributing factor in Ontario. It is significant that the role of most unions in Canada has traditionally been a narrow one, focused on bargaining for wages, job security and working conditions in the immediate workplace rather than on broader issues of training, hiring and career development.433 With the rise of precarious and non-standard forms of work, this model is in decline. The Wagnerian collective bargaining model adopted in the Ontario Labour Relations Act (LRA) was developed in the context of a traditional workplace with one employer and many employees carrying out standardized skills in a single workplace, a scenario which is becoming ever less common in the modern economy.434
Commentators have suggested that unions must adopt a broader focus that is responsive to the unique needs of workers in non-standard employment relationships.435 The issue of unionization is always a highly politicized one, but it is particularly delicate in this period of economic uncertainty. On the other hand, others argue that “union membership is central to limiting precarious employment.”436
One area where the debate about vulnerable workers has been centered is the express exclusion of agricultural workers from Ontario’s traditional labour relations regime. A 1992 Task Force considering the issue of extending collective bargaining rights to agricultural workers looked to other jurisdictions and observed that providing agricultural workers with the right to bargain collectively had not resulted in organizing to any significant degree nor did it have an undue negative impact on farms in those jurisdictions.437 The Task Force proposed a collective bargaining regime that included provision for an exclusive bargaining unit and a collective bargaining process that emphasized negotiation and prohibited strikes, but provided for binding arbitration in the event of an impasse. This model was adopted in the Agricultural Labour Relations Act, 1994 (ALRA). It should be noted that the ALRA excluded from its scope the most vulnerable agricultural workers in Ontario – temporary foreign workers and other seasonal workers.438 The ALRA was short-lived, being repealed by the newly elected government in 1995. In response to the repeal, the United Food and Commercial Workers (UFCW) and individual agricultural workers in Dunmore et al. v. Ontario (Attorney General) challenged the exclusion of agricultural workers from the labour relations scheme as a violation of their freedom of association and equality rights as guaranteed in the Canadian Charter of Rights and Freedoms.439
In Dunmore, the Supreme Court of Canada recognized the particular vulnerability of agricultural workers.
Distinguishing features of agricultural workers are their political impotence, their lack of resources to associate without state protection and their vulnerability to reprisal by their employers; as noted by Sharpe J. [at trial], agricultural workers are “poorly paid, face difficult working conditions, have low levels of skill and education, low status and limited employment mobility”.440
On the other hand, the Court also acknowledged the threat that unionization posed to the family farm in Ontario:
…[t]he Attorney General has demonstrated that unionization involving the right to collective bargaining and to strike can, in certain circumstances, function to antagonize the family farm dynamic. The reality of unionization is that it leads to formalized labour-management relationships and gives rise to a relatively formal process of negotiation and dispute resolution; indeed, this may be its principal advantage over a system of informal industrial relations. In this context, it is reasonable to speculate that unionization will threaten the flexibility and cooperation that are characteristic of the family farm and distance parties who are otherwise … ‘interwoven into the fabric of private life’ on the farm.441
…I am satisfied both that many farms in Ontario are family-owned and operated, and that the protection of the family farm is a pressing enough objective to warrant infringement of s. 2(d) of the Charter. The fact that Ontario is moving increasingly towards corporate farming and agribusinesses does not, in my view, diminish the importance of protecting the unique characteristics of the family farm; on the contrary, it may even augment it. Perhaps, more importantly, the appellants do not deny that the protection of the family farm is, at least in theory, an admirable objective.442
But where the employment relationship between farmer and workers was already formalized, the Court noted that “preserving ‘flexibility and co-operation’ in the name of the family farm is not only irrational, it is highly coercive.”443
On the issue of the economic fragility of Ontario’s farming industry, the Court noted:
I disagree with the appellants that the ‘Government has provided no evidence that the Ontario agricultural sector is in a fragile competitive position or that it is likely to be substantially affected by small changes in the cost and operating structure of Ontario farming.’444
The Court apparently accepted the Ministry of the Attorney General’s submission that
agriculture occupies a volatile and highly competitive part of the private sector economy, that it experiences disproportionately thin profit margins and that its seasonal character makes it particularly vulnerable to strikes and lockouts…these characteristics were readily accepted by the Task Force leading to the adoption of the ALRA.445
However, the Court in Dunmore noted that this same rationale could be extended to many industrial sectors that experience thin profit margins and unstable production cycles (due to consumer demand or international competition, for example).446
In Dunmore, the Court held that “the total exclusion of agricultural workers from the LRA violates section 2(d) of the Charter and cannot be justified under section 1.”447 It should be noted that only the right to associate and not the right to collective bargain was at issue in Dunmore.448 The Court went on to hold
at minimum the statutory freedom to organize in s. 5 of the LRA ought to be extended to agricultural workers, along with protections judged essential to its meaningful exercise, such as freedom to assemble, to participate in the lawful activities of the association and to make representations, and the right to be free from interference, coercion and discrimination in the exercise of these freedoms.449
In response to the Dunmore decision, Ontario introduced the Agricultural Employees Protection Act, 2002 (“AEPA”), an alternative legislative scheme. The AEPA was enacted to
…protect the rights of agricultural employees while having regard to the unique characteristics of agriculture, including but instead not limited to, its seasonal nature, its sensitivity to time and climate, the perishability of agricultural products and the need to protect animal and plant life.450
Under the AEPA, agricultural workers have the right to join an employees’ association and to make representations to their employers through the association, respecting the terms and conditions of their employment. They also have the right to protection against interference, coercion and discrimination in the exercise of their rights.451 The AEPA utilizes the Agriculture, Food and Rural Affairs Appeal Tribunal to rule on disputes over the application of the Act.452
The AEPA does not provide for majority representation, a limit on the number of associations that may represent a particular segment of the workforce, the right to strike or arbitration. In short, it provides for the formation of employee associations but does not provide the full Wagner model labour relations process available under the LRA. As a result, the UFCW and three agricultural workers challenged the constitutionality of the AEPA in Fraser v. Attorney General of Ontario.453
In Fraser, the Supreme Court reviewed in general terms the meaning of its previous holding in Health Services and Support – Facilities Subsector Bargaining Assn. v. British Columbia.454 It affirmed that s.2(d) protects “good faith bargaining on important workplace issues …not limited to a mere right to make representations to one’s employer, but requires the employer to engage in a process of consideration and discussion to have them considered by the employer.”455
Fraser went on to say that Health Services represented the view that the good faith negotiations required by s.2(d) constituted a requirement for “the parties to meet and engage in meaningful dialogue”, avoid unnecessary delays and make reasonable efforts “to arrive at an acceptable contract”. It did not “require the parties to conclude an agreement or accept any particular terms”, nor did it “guarantee a legislated dispute resolution mechanism in the case of an impasse”. Section 2(d) protected the right to a general process of collective bargaining but not to a particular model.456
Fraser held that the AEPA was constitutional by finding that “properly interpreted”, the Act imposed “a duty on agricultural employers to consider employee representations in good faith.”457 The Court found that the AEPA was not intended to deny agricultural workers collective bargaining rights within the meaning of s.2(d), but only that the AEPA did not extend Wagner model collective bargaining to farm workers.
These considerations lead us to conclude that s.5 of the AEPA, correctly interpreted, protects not only the right of employees to make submissions to employers on workplace matters, but also the right to have those submissions considered in good faith by the employer.458
The majority concluded: “The bottom line may be simply stated: Farm workers in Ontario are entitled to meaningful processes by which they can pursue workplace goals.”459
This decision has been highly criticized by those in the labour movement who contend that it did not take into account the social reality and unique vulnerabilities of agricultural workers. In particular, the Court’s statement that section 2(d) must provide a process that allows for “the right of an employees’ association to make representations to the employer and have its views considered in good faith” is viewed as a retreat from the emphasis in Health Services on a duty of good faith bargaining to “a much paler right to ‘good faith consideration’”.460 This is viewed by workers’ advocates as wholly inadequate, unworkable and unrealistic. From their perspective, agricultural workers are so vulnerable that nothing short of statutory protection for the full labour relations scheme as provided in the LRA will be effective.
Post-Fraser, the debate continues unabated as to what is required to meet the needs of farm workers weighed against Ontario’s agricultural industry. Given the reaction to Fraser, it seems unlikely that a consensus position among the various stakeholders will emerge in the near future. Through the course of the decisions, however, certain matters have become accepted facts by the Court. The vulnerability of agricultural workers and their need for labour relations protection in some form has been recognized. The Court in Dunmore also recognized the economic tenuousness of the agricultural industry, the legitimacy of the interest in protecting the family farm and the mix of family businesses and large agri-businesses that comprise Ontario farms. This type of evidence was also before the Court in Fraser. Other than adopting its position in Dunmore on the vulnerability of agricultural workers, the Supreme Court in Fraser appeared to prefer to leave the balancing of these various interests to the legislature.
Beyond Fraser, should there be government appetite to revisit the issue and to implement feasible law reform in this area, in view of the challenges and balancing of interests required to make major policy changes, it might be helpful if an expert panel were assigned to undertake an analysis of the case law, relevant literature and evidence presented to the courts and broad consultation with relevant labour and management stakeholders as well as affected ministries. Such an undertaking is beyond the capacity and scope of this Project.
In the immediate term, the AEPA should be reconsidered in light of Fraser. As noted, the Court in Fraser in affirming Health Services used language such as “good faith negotiations” to describe section 2(d) protections and later in the decision when applying the facts specifically to the AEPA, referred to “good faith consideration of employee representations.” While some observers view this as a partial retraction of the section 2(d) protections articulated in Health Services, such an interpretation is not explicit in Fraser. Rather, the Court in Fraser affirms the Health Services ratio that section 2(d) protects “good faith negotiations”. The Court makes explicit that this includes the “right to make representations to one’s employer” and a duty on agricultural employers to consider employee representations in good faith, including the requirement that the employer “engage in a process of consideration and discussion” in relation to those representations.461 Parties must “meet and engage in meaningful dialogue”. They must “avoid unnecessary delays and make a reasonable effort to arrive at an acceptable contract”.462 In our view, these elements have been expressly identified as protected by section 2(d) in both Fraser and Health Services.
The majority in Fraser noted the union’s lack of utilization of the AEPA. As Justice Farley noted at the trial level:
There has been no use of the mechanics of the AEPA as to bringing a case before the Tribunal; the Applicants stated that it would be fruitless to bring a useless application before a useless Tribunal. I am of the view that this condemnation is premature. A successful application would do one of several things: be effective positively as to action; or morally give the wrongdoing employer a “bloody nose”; or if truly an empty process it would demonstrate the need for strengthening by legislative amendment.463
While the AEPA does not provide for union certification or majoritarianism, nothing in the legislation prevents unions from assisting workers to form employee associations. In our view, agricultural workers could benefit from union support for the AEPA employee associations. While this may not be satisfactory to unions and workers’ advocates because they might believe this would impede the development of a fully realized collective bargaining regime, there does not appear to be a significant likelihood of achieving this objective in the near future. The role unions could play in assisting workers to access the rights articulated in the AEPA as interpreted by Fraser would be highly beneficial for these workers. Unions could also play an important role in assisting workers to utilize the Tribunal in appropriate cases particularly in view of the elements of good faith bargaining now read into the AEPA. The Supreme Court in Fraser supported Justice Farley’s cautious hope that the AEPA Tribunal would be effective in resolving disputes.464
Section 11 of the AEPA specifically empowers the Tribunal to make a determination that there has been a contravention of the Act, and to grant an order to remedy with respect to that contravention. The Tribunal may be expected to interpret its powers, in accordance with its mandate, purposively, in an effective and meaningful way. Labour tribunals enjoy substantial latitude when applying their constituent statutes to the facts of a given case.465
Codification of Fraser in the manner we recommend coupled with serious efforts to form employee associations, engage in good faith bargaining and utilize the Tribunal may contribute to improving the lives of vulnerable agricultural workers and if not, these efforts will provide a concrete evidentiary basis for future government or judicial consideration of the effectiveness of the legislation.
The Law Commission of Ontario recommends that:
25. The Ontario government amend the AEPA by explicitly including the elements of bargaining in good faith protected by section 2(d) of the Charter as identified by the Supreme Court of Canada in Health Services and affirmed in Fraser.
Even where unionization is available, migrant and other vulnerable workers are frequently unwilling to join unions for fear of displeasing their employer, endangering their job and, for some, risking limited immigration status. While other provinces, except Alberta, have brought agricultural workers into their labour relations schemes, unionization rates of farm workers in other provinces are not high, although in Tucker’s view there has been a positive impact.466 The inherent limitations of Ontario’s traditional collective bargaining process as applied to agricultural workers, as well as other vulnerable workers highly dependent on their employer, suggests that new models of labour support should be developed to respond to changing realities.
There are several different forms of unionization that have emerged globally, as well as other forms of non-union association. Community unionism expands the focus of the union beyond the conditions of employment. It involves “the formation of coalitions between unions and non-labour groups in order to achieve common goals.”467 This model developed, in part, in response to rising unemployment rates as a means of supporting unemployed workers who did not have a workplace within which to organize.468 Unlike the traditional model of industrial unionism, it reaches workers who tend to move frequently among different workplaces such as temporary agency workers or dependent self-employed workers.
Sector-based unionism in Canada has taken two dominant forms: craft unionism and labour market unionism. Craft unions, prominent in Canada prior to the rise of industrial unionism, “seek to provide their members with employment security by controlling the supply of labour and establishing a monopoly over skills.”469 For instance, a union may collectively bargain for all workers in an industry with all potential labour users and become the sole provider of a certain form of skilled labour through the use of hiring halls, a form of union-run employment referral centre. Although difficult to organize, craft unionism has been used successfully in skilled sectors in Canada, with the construction industry serving as its most notable example.470 Labour market unionism facilitates collective organizing and bargaining for workers located on multiple worksites who may be working with multiple employers.471 Sectoral bargaining overcomes the problem of small shops and high turnover that typify many low-wage industries.
International trade unionism facilitates international cooperation between unions as a response to the multinational nature of work in the globalized marketplace. With the establishment of the International Trade Union Confederation in the 2000s, member unions agree to take international policy into account when making domestic decisions and to provide the Confederation with both financial support and regular updates on the trade union’s activity.472 In exchange, they receive “solidarity and assistance” from the Confederation.473
Outside the Confederation framework, other international unions act across borders. For example, in the Canadian construction industry, labour relations are dominated by the 14 international building trades unions, headquartered in the United States with offices throughout Canada.474 Another example is the UFCW which has entered into agreements with Mexican governments and advocacy groups to provide support to Mexican agricultural workers working in Canada under temporary foreign worker programs. It also supports these workers following repatriation.475 Cross-border action by a national union is a unique alternative function for unions, consistent with community unionism as outlined above.
Unionization is not the only model available for supporting vulnerable workers. Other models of employee associations have sprung up, including non-profit hiring halls, cooperatives and mandatory employment councils. Still other models may emerge that better adapt to the changing nature of work in the 21st century. Worker organizations need to continue to adapt themselves to new situations. It may be useful for academics or a public policy think tank to consider a project to assist in the development of ideas for new forms of worker representation. Such a review would consider possible alternative models to traditional unionization and the Wagner model of collective bargaining to support and assist vulnerable workers in the workplace. This could include consideration of emerging models for representing worker interests in various forms of precarious work in Ontario, including agricultural work, domestic work, temporary agency work and others.
5. Innovative Solutions for Precarious Work Advisory Council
Some of our recommendations such as those involving the implementation of partnerships, those related to targeting high-risk industries and the modernization of ESA exemptions will require extensive consultation by government with workers and employer organizations, community agencies, government and experts. In the context of responding to the unique needs of vulnerable workers in the Occupational Health and Safety setting, the Dean Report recommended the use of an advisory committee appointed under section 21 of the OHSA which provides that “the Minister may appoint committees ..or persons to assist or advise…on any matter that the Minister considers advisable.”476 In December 2012, this commitee was established by the Ontario government.477
The Dean Report explained the reason for the recommendation as follows:an advisory committee appointed under section 21 of the OHSA would improve the OHS system’s ability to respond to the needs of vulnerable workers. It would be a standing forum for consulting parties who are knowledgeable about vulnerable workers and have a role in protecting them. Such a committee could include representatives of labour and employer groups from sectors with precarious employment; immigrant and refugee support agencies; community and social service agencies; legal clinics; other ministries; and federal and municipal programs. Specific matters about which the committee could provide advice include implementing the Panel’s recommendations, improving enforcement strategies and developing and distributing awareness materials. 478
While the Employment Standards Act does not have a section comparable to section 21, this is not a bar to the implementation of such an expert advisory group on employment issues. The Employment Standards Act provides for the power to make regulations for the establishment of Ministerial Advisory committees, or the committee could be implemented more informally.479 A standing expert advisory group of participants willing to work together would be a valuable tool that the Ministry could draw upon to assist it in developing innovative solutions that respond to these and other emerging workplace issues. The issues that arise in this area can be contentious and views are often polarized along the worker-employer divide. It is very difficult to find areas of consensus. Project Advisory Group members questioned whether a single committee could adequately represent all the industry specific concerns and interests. This could be addressed by subcommittees of industry specific business, labour, academic and community representatives where areas of consideration require this type of specific expertise.
For such an advisory council to operate successfully participants must be willing to put aside differences and find ways to move forward on the issues; the right people must be chosen. This will require identification of individuals interested in reducing precarious work within current economic realities in government, academia, the business, labour and non-profit communities who have demonstrated fair, objective and creative thinking and an ability to engage in productive dialogue with participants representing opposing sides of the argument.
The Law Commission of Ontario recommends that:
26. The Ministry of Labour convene an Innovative Solutions for Precarious Work Advisory Council of representatives of relevant ministries, experts, and labour and employer organizations to obtain advice and to develop initiatives for improved and expedited ESA compliance and enforcement with a view to recommending best practices for responding to the existing and emerging needs of vulnerable employees/precarious work in the changing workplace.
F. Employment Legislation Protecting Temporary Foreign Workers
In recent years, concerns have increasingly been raised about the fair treatment of temporary foreign workers, particularly those in lower skilled employment. Governments have responded through a variety of legislative and policy measures. Federally, changes to the Immigration and Refugee Protection Regulations have been enacted that came into effect April 1, 2011.
…the Government of Canada has become increasingly aware of instances where employers, or third-party agents working on their behalf, are failing to abide by commitments made to workers. Prior to these amendments, no provisions existed in the Regulations to hold employers accountable for their actions regarding TFWs [temporary foreign workers]. Breaches that could occur include employers paying TFWs less than promised; providing TFWs with poor working conditions or giving them different occupations from those agreed upon in the offer of employment; inadequate accommodations for some TFWs; and third-party agents charging fees to workers, rather than employers, in contravention of any existing provincial/territorial legislation.480
Employers seeking to hire temporary foreign workers must now demonstrate compliance with past offers of employment to such workers, including wages, working conditions, housing, health insurance, transportation and federal-provincial laws regulating employment. Failure to comply can result in denial of the Labour Market Opinion and a two year ban on hiring. In addition, the employer’s name may be posted on Citizenship and Immigration Canada’s website. It should be noted, however, as of the date of this Report, no employers’ names are posted.481 As previously mentioned, there are now standard form employment contracts for NOC C and D workers and livein caregivers that employers must use covering wages, accommodation, benefits, hours of work, duties, vacation and sick leave entitlements. They require that health care insurance be provided at the employer’s expense until the worker is eligible for provincial health care coverage and a one week termination notice must be given to workers who have worked for longer than three months. Recruitment fees may not be recovered from the employee and transportation costs must be covered by employers. Unlike SAWP, which allows some cost recovery, transportation costs may not be recovered from the worker.
The contract makes clear that terms are subject to provincial employment and health and safety standards. To respond to the need to provide greater protection for temporary foreign workers in the lower skilled NOC C and D Program there are more detailed and specific contract terms required for NOC C and D agricultural workers. Live-in caregivers, also in need of greater protection, have specific contract terms. Agricultural employers are required to provide appropriate housing (in accordance with guidelines and which may be at a cost to the employee), a Record of Employment and, at the employer’s expense, chemical and pesticide safety equipment.482 Other federal changes limit the time that workers may remain in Canada to four years after which they must wait an additional four years before applying under the program again.483 The intention is to reinforce the temporary nature of the work permits. SAWP workers are exempt from these limits.
The live-in caregiver program provides for the option to obtain permanent residence at the completion of the service period. While this is a major advantage, it has caused some to refer to the live-in caregiver program as a “carrot and stick” approach to permanent residency requiring participants to remain working and living in their employers’ homes for the qualifying period during which workers are highly unlikely to risk termination of employment to complain about infringements of their rights.484 Instances of exploitation and abuse have been well-documented: live-in caregivers have been required to work excessive hours, denied time-off, paid inadequate wages, physically and psychologically abused and had their passports confiscated.485 With the location of the workplace inside private residences, monitoring and enforcement of employment standards is very difficult.486
Women coming to Canada under the Live-in Caregiver Program (LCP) face unique difficulties because they are confined to live and work in their employers’ homes for at least two (2) years. During this time, they are dependent upon their employers for wages, food, shelter, health care, and a good work reference to help them gain permanent resident status. Their dependent and temporary worker status puts live-in workers and caregivers at risk of unfair treatment and abuse by their employers. It also makes them less likely to complain, leave, or report the abuse for fear of losing the opportunity to gain permanent resident status.487
In recognition of live-in caregivers’ need for special protection, in 2009 Ontario enacted the Employment Protections for Foreign Nationals Act (EPFNA).488 This Act
prohibits recruiters from charging any fees to foreign live-in caregivers, either directly or indirectly.
prevents employers from recovering placement costs from the live-in caregiver.
prohibits employers and recruiters from taking a live-in caregiver’s property, including documents such as a passport or work permit.
prohibits a recruiter, an employer, or a person acting on their behalf from intimidating or penalizing a live-in caregiver for asking about or asserting their rights under the Act.
requires recruiters and, in some situations, employers to distribute information sheets to live-in caregivers setting out their rights under the EPFNA and those provisions of the Employment Standards Act, 2000 (ESA) considered to be of particular relevance.489
When the new legislation first became effective, the Ministry of Labour set up a hotline for live-in caregivers to call for information; however, the hotline has since been discontinued. The Ministry has developed fact sheets in English, French, Hindi, Filipino and Spanish, available on its website, for employers and recruiters to provide to workers explaining the new legislation.
In addition to federal protections outlined above that have been implemented for temporary foreign workers, genuineness assessments for offers of employment to live-in caregivers now have additional criteria beyond those for other migrant workers.490 Employers must demonstrate the “need for the live-in caregiver, the provision of adequate accommodation, and the ability to pay the wages offered”.491 Effective December 11, 2011, live-in caregivers who have completed the requirements for permanent residency receive open work permits while awaiting finalization of their status. This permits them to move out of the employer’s home sooner and seek work in other fields.492
In our consultations, we were advised that the main areas of concern for live-in caregivers are non-payment of wages, unresolved claims with the Ministry of Labour, performing non-caregiver tasks (e.g., nursing, housework and similar tasks) and little control over working hours. Some workers’ advocate groups have suggested that EPFNA protections have been ineffective. They suggest that the Ministry’s enforcement efforts have been directed solely at recruiters and otherwise have been inadequate. In their view, workers need more knowledge of rights, more support for asserting their rights, less fear of reprisal, the ability to make anonymous complaints to the Ministry of Labour and proactive enforcement. Others have indicated that for migrant workers not covered by EPFNA, recruitment and other abuses represent significant problems.493 The Migrant Workers’ Alliance for Change brought to our attention the story of a live-in caregiver who, because of fear, endured abuse and living in an unsafe basement in terrible conditions for 24 months until she completed her contract, after which, with the support of police and information from the Caregivers Action Centre, she was able to file a report with the Ministry of Labour.494
In our consultations during 2011, we met with workers in the NOC C and D program who reported paying between $5,000 to $12,000 to a recruiter to facilitate their coming to work in Canada. To pay these amounts, each had to take significant loans for at least half of the recruiter’s fee, with the balance paid from the worker’s savings. The work that was made available paid minimum wage ($10.25/hr).495 The payment of the recruiter’s fee and the debt incurred played a significant role in the decision of these workers to stay in very unfavourable working conditions. While the new federal standard form contract aims to negate employers passing on recruiter fees to workers through contractual terms, it remains to be seen whether it will be effective. In our view, there would be a greater chance of success if the province supported the federal initiative with a clear message of denouncement against unscrupulous recruitment fees by extending the Employment Protection for Foreign Nationals Act (EPFNA) to all temporary migrant workers.496
Manitoba’s response to exploitive recruitment fees, workers arriving to find no job available and the developing underground economy was the Worker Recruitment and Protection Act (WRAPA) which came into effect April 1, 2009.497 The Act requires employers seeking to hire temporary migrant workers to register with the Manitoba government before seeking an LMO with HRSDC. With cooperation from the federal government, an employer must show proof of registration in Manitoba before an LMO application can proceed. Registration under the WRAPA requires employers to
provide information on their company, the types of positions they want to fill and, if applicable, the third parties that will be involved in the recruitment process. Third parties must be licensed as foreign worker recruiters by the Manitoba Employment Standards Branch or exempt from the legislation.498
A key advantage to the legislation is that the government of Manitoba knows where the migrant workers are, allowing for compliance monitoring. Similar to the federal government’s new genuineness assessment, Manitoba considers the employer’s past conduct in assessing the merits of the application.
The Manitoba Ministry of Labour maintains a database of employers to assess compliance history. The legislation has resulted in approximately 2,000 business registrations each year and, at the date of this report, 19 recruiters of foreign workers registered.499 While initial start-up resources were higher, currently the program utilizes five full time equivalent positions for its operation including enforcement. Manitoba received approximately 3,200 entries of foreign workers in 2010, while Ontario received 66,000. Monitoring 66,000 workers in Ontario we could expect resource requirements to be very high compared to Manitoba. On a cost-benefit analysis, it is questionable whether it would be feasible to recommend such an initiative for Ontario. While the Manitoba model may work well in smaller jurisdictions and is recommended in Made in Canada, the LCO received mixed reaction from those we consulted about the feasibility of this type of scheme for Ontario.500 In general, respondents were of the view that, while helpful, it would not be a complete response to concerns about migrant labour. Without effective enforcement which would be very resource intensive for Ontario, some were concerned that such legislation would become a registration only on paper.
In our view, rather than enacting another statute, it would be preferable for Ontario to build upon what is already in place. EPFNA currently applies only to live-in caregivers. But it has a structure in place to permit its extension to other classes of migrant workers by way of regulation. During consultations prior to its enactment, live-in caregivers were confirmed as among the most vulnerable. The Ontario government has indicated that the federal government has moved to provide protection for temporary foreign workers and it continues to monitor the situation of other temporary foreign workers “and will assess, when needed, if any additional action is required to further protect temporary foreign workers coming to Ontario.”501
In our view there is ample evidence to suggest that time has come. Prescribing all temporary migrant workers under EPFNA would extend protections against unscrupulous recruitment. This would complement the federal protections described above regarding genuineness assessments. These measures could provide a substantial level of protection to migrant workers. Extending EPFNA to all migrant workers would also raise the workers’ knowledge of their employment rights in Ontario. This is in line with one of the recommendations in Made in Canada that recommends that migrant workers be provided with information both pre and post-arrival regarding their employment, social and human rights.502
The Law Commission of Ontario recommends that:
27. The Ontario government extend the Employment Protection for Foreign Nationals Act to all temporary migrant workers in Ontario.
For Ontario, one of the gaps to be closed is to ensure that information about the identity and whereabouts of temporary foreign workers and their employers is received in order to enforce existing legislation. As a means of enforcing the new protective regulations and supporting provincial initiatives to protect migrant workers, the federal government is seeking to improve federal-provincial information-sharing. HRSDC advises that it may share decisions made on labour market opinions (LMOs)
with federal-provincial/ territorial governments for the purpose of the administration and enforcement of relevant legislation and regulations (e.g. employment standards, occupational health and safety, immigration, and third party recruitment).503
To support federal decision-making on LMOs and genuineness assessments, Ontario needs to have a clear process for communicating to the federal government on noncompliant employers. The need for greater federal-provincial information sharing was identified by Ontario’s Expert Roundtable on Immigration.504 The flow of such information requires a Canada-Ontario information-sharing agreement. The federal government has indicated its desire to negotiate such agreements and other provinces, including Manitoba, have had them in place for a number of years.505 Informationsharing agreements by their very nature raise complex issues about privacy and the use of personal information, and therefore they are also time-consuming and challenging for governments to negotiate. While the Temporary Foreign Worker Agreement commits Ontario to negotiating such an agreement and such negotiations are ongoing, no such agreement has been completed between Ontario and the federal government.506 However, in the absence of such an agreement, information about the names and whereabouts of employers and foreign workers obtained by the federal government will not be available to Ontario for enforcement mechanisms. Moreover, federal efforts to protect migrant workers through the genuineness assessment will be much less effective. As noted by Ontario’s Expert Roundtable on Immigration, “[b]oth governments [federal and provincial] share a commitment and a responsibility for protecting temporary foreign workers”.507
The Law Commission of Ontario recommends that:
28. a) The Ontario government negotiate an information-sharing agreement with Human Resources and Skills Development Canada and Citizenship and Immigration Canada to permit information to flow between Ontario and the federal government for the purpose of increasing protections for temporary foreign workers by:
i) strengthening federal-provincial oversight over temporary foreign worker contracts;
b) The Ontario government initiate consultations with the federal government to bring about greater co-ordination of policies affecting worker protection for low skilled temporary foreign workers.
In the LCO’s consultations, workers’ advocates, most notably, the Migrant Workers Alliance for Change expressed the view that workers who enter Canada to respond to labour needs should be provided with permanent resident status. In their view, temporary foreign workers create too great a power imbalance between employer and worker due to the dependency of the workers’ immigration status on the employment relationship. This lays the foundation for the risk of exploitation, creating a situation in which workers will never feel sufficiently secure to assert their rights. These observers believe that the federal government should refocus its efforts away from temporary labour and invest in making long term immigration decisions to secure a sufficient workforce for Canada’s needs. In other words, Canada’s immigration policies should include provision for accepting lower skilled workers on a more permanent basis. This viewed is echoed in Made in Canada.508
The arguments in support of Temporary Foreign Worker Programs focus on the fact that Canada and Ontario obtain labour for the period it is needed but do not have to support the worker over periods of unemployment. Workers who need employment can obtain it, supporting themselves and their families in their home country. Workers’ countries of origin receive benefits in the form of the self-sufficiency of their citizens. Our immigration system emphasizes a preference for skilled and educated workers as permanent residents rather than workers for low skilled employment. Given that there are very few new jobs created in Canada for the workers in lower skilled jobs, there may be some support for this. The Final Report by the Ontario Expert Roundtable on Immigration, which focuses on high skilled workers, suggests that temporary foreign worker programs should only be used to bring in lower skilled workers after all other avenues to find suitable workers have been exhausted. Similarly, the Fraser Institute, suggests that the lower skilled work currently performed by temporary foreign workers should be performed by permanent residents or citizens.509 This would appear to overlook the reality that employers have been unable to find suitable local employees for these positions although recent federal initiatives to make changes to the Employment Insurance program requiring unemployed Canadians to accept a broader range of work may perhaps be targeted at this issue.510 At this point, Ontario’s agricultural industry continues to be highly dependent upon the temporary foreign worker labour force. We import it every year. It may be that the time has come for an acceptance and a greater appreciation of the contribution made by lower skilled migrant workers. In recognition of the vulnerabilities faced by lower skilled temporary foreign workers, the Ontario Expert Roundtable on Immigration indicated the need for better protections, both federal and provincial, for these workers.511
1. The Extent of Self-Employment
Until the 1970s, self-employment rates in Canada had been on a downturn due to decreased agricultural employment.512 From that point, however, self-employment rose steadily for almost two decades reaching a peak of approximately 17 percent in 1998 before falling back to about 15 percent in 2002.513 Levels remained relatively stable in the 2000s.514 In 2009, self-employment constituted 16 percent of employment in Canada.515 Ontario’s experience is reflective of Canada’s as a whole; self-employment has remained relatively stable over the past decade, with data suggesting that approximately 15 percent of the Ontario workforce was self-employed from 1999-2011.516
2. Own-Account Self-Employment
The main area of vulnerability among the self-employed occurs among the own-account self-employed. Own-account self-employed people are those who “do not employ workers and who do not control the risks of the production process or accumulate capital.”517 Unlike traditional self-employment, it more closely resembles employment than entrepreneurship.518 In some cases, these workers may be self-employed but have only one client and be in a state of significant dependency upon that client, making them vulnerable to exploitation. Some workers are incorrectly classified as self-employed when, in fact, they are employees under the ESA. Not all own-account self-employed workers are vulnerable, but own-account self-employment can be an indicator of precarity, particularly when coupled with low wages because it does not include the protections associated with employment (e.g., protection under the Employment Standards Act, 2000).
Canadian rates of own account self-employment grew dramatically between 1976 and 2000, from 4 percent to nearly 9 percent of total female employment and from 7 percent to 12 percent of total male employment.519 In the 1990s, nearly 45 percent of new employment emerged in the form of own-account self-employment.520 According to one research team, the “increase in own-account self-employment accounted for the entire increase in self-employment during the 1987–98 periods”.521 This is consistent with findings across industrialized nations where growth in self-employment in the 1980s and 1990s was concentrated in own-account self-employment.522 Own-account selfemployment also played a significant part in the more recent recessionary growth of self-employment.523
Own-account self-employed workers generally earn less than employees or employers.524 This is exacerbated by the fact that self-employed workers are less likely to have benefits coverage.525 Women and members of visible minorities are more likely to be found in own-account self-employment as compared to other forms of self-employment.526 While the category of self-employed employers has a higher concentration of men and highly educated individuals, the own-account self-employed are more often women and workers with lower levels of education.527 Part-time employment rates for the own-account selfemployed are high, particularly among female workers.528 Female own-account self-employed workers are often engaged in service jobs. In 2000, one third of female own-account self-employed workers were in the service industry.529 Nineteen percent of immigrants, compared to 15 percent of Canadian-born workers, were engaged in selfemployed work and more immigrants were likely to report that they had entered self-employment because of a lack of suitable paid jobs (33 percent of immigrants, compared to 20 percent of Canadian-born workers).530
Noack and Vosko found that approximately 15 percent of Ontario’s workforce are selfemployed (5 percent of the Ontario workforce are self-employed employers and about 10 percent are own-account self-employed). The Ontario experience is similar to the Canadian experience as a whole in that Ontario women were less likely to be selfemployed as compared to men; however, when they were self-employed, it was in own account self-employment, much of this work being in a low income category.531
3. The Legal Framework
Self-employed workers are not covered under the ESA which requires the existence of an employment relationship where the worker and employer fall within the Act definition of “employee” and “employer”. For workers in precarious forms of work, classification as an employee is a condition of enjoying ESA protections and basic minimum standards. According to Parry and Ryan, the definitions of employee and employer have attracted more attention and controversy than any others under the ESA.532
(a) a person, including an officer of a corporation, who performs work for an employer for wages,
(b) a person who supplies services to an employer for wages,
(c) a person who receives training from a person who is an employer, as set out in subsection (2), or
(d) a person who is a homeworker, and includes a person who was an employee
(a) an owner, proprietor, manager, superintendent, overseer, receiver or trustee of an activity, business, work, trade, occupation, profession, project or undertaking who has control or direction of, or is directly or indirectly responsible for, the employment of a person in it, and
(b) any persons treated as one employer under section 4, and includes a person who was an employer.533
As Ryan and Parry point out, the Ontario Labour Relations Board has indicated that distinguishing employee from independent contractor can be very difficult.534 Because the definitions are broadly drafted, employment standards officers (ESOs) trying to distinguish between legitimate independent contractors and those who should be classified as employees must go beyond the text of the statute and apply common law tests.535 However, a clear test for determining whether a worker is an employee or an independent contractor remains elusive. As Fudge, Tucker and Vosko report, “[s]ince the 1950s, prominent employment and labour scholars have concluded that the English common law did not have a unified conception of employment or a coherent method for distinguishing between employees and independent contractors.”536
The ESA Policy and Interpretation Manual states that “it is the existence of the relationship between the employer and the employee that defines an employee for the purposes of the Act”.537 The definition of the employment relationship in other statutes has not been found to be of great relevance to the determination under the ESA.538 However, a number of approaches to making the determination have emerged within the common law.
In a 2003 decision, 671122 Ontario Ltd. v. Sagaz Industries Canada Inc., the Supreme Court of Canada explicitly rejected a single test approach.539 It did, however, review the prevailing tests and present a non-exhaustive list of relevant criteria for making a determination as to whether a worker “engaged to perform…services is performing them as a person in business on his own account.”540 These factors include:
Whether the worker has control over his or her own activities,
Whether the worker owns his or her own tools,
Whether the worker hires other workers to help, and,
Whether the worker has i) an opportunity for profit or ii) takes on either financial risk or “responsibility for investment and management held by the worker”.541
Sagaz reviewed the fourfold test set out in Montreal (City) v. Montreal Locomotive Works Ltd.; control, ownership of tools, chance of loss or profit and integration. Following the direction in Sagaz that there is no single definitive test, employment standards officers, adjudicators and courts must draw upon the factors in Sagaz, the fourfold test in Montreal and other tests that have emerged: the “organization test” that focuses on whether the worker was part and parcel of or integral to the organization, the “enterprise test” that examines the degree of control and risk taken by the employer and the “business practices test” that looks at the intention of the business arrangement between the parties.542 Each test offers an approach to the central question: “is the person who has been engaged to perform services performing them as a person in business on his or her own account?”543
One issue that has arisen in the legislation is whether a “dependent contractor” is or could be included in the definition of employee under the ESA. “Dependent contractors” are not defined under the ESA but they are under the Labour Relations Act. The definition of employee under the Labour Relations Act includes dependent contractor.
“Dependent contractor” means a person, whether or not employed under a contract of employment, and whether or not furnishing tools, vehicles, equipment, machinery, material, or any other thing owned by the dependent contractor, who performs work or services for another person for compensation or reward on such terms and conditions that the dependent contractor is in a position of economic dependence upon, and under an obligation to perform duties for, that person more closely resembling the relationship of an employee than that of an independent contractor.544
In general, dependent contractors are workers with only one client, opening them up to extreme vulnerability. Whether this type of vulnerability can be remedied through legislation is an open question discussed later.
4. The Key Issue: Misclassification
The primary concern arising out the LCO’s research and consultations, regarding selfemployment, was that of misclassification. Some individuals are misclassified as own-account self-employed contractors when they would more properly be considered employees under the ESA. If a worker is misclassified (i.e., defined as self-employed when they should be defined as an employee) either deliberately or erroneously, the worker may not be aware that he or she is in an employment relationship and can access the protections of the ESA. This can have particularly harsh impacts on low income workers with disproportionately negative impacts on women and immigrants. As pointed out by the CAW in their response to the Interim Report,
[t]he misclassification of employees as something else, such as independent contractors, presents a serious problem because these employees are often denied access to critical benefits and protections – such as family and medical leave, overtime compensation, minimum wage pay and Unemployment Insurance – to which they are entitled. In addition, misclassification can create economic pressure for law-abiding business owners, who often find it difficult to compete with those who are skirting the law. Employee misclassification also generates substantial losses for state Unemployment Insurance and workers’ compensation funds.545
Advocates have indicated that workers sometimes agree to be classified as self-employed by signing contracts or setting up paper corporations at the request of the employer simply in order to secure some form of income. In other cases, workers erroneously believe that they are self-employed simply because of an assertion made by the employer.546 However, these are not the governing factors in determining whether an employment relationship exists. Some advocates are concerned with what is referred to as “creative classification” by employers. Practices of misclassification have been identified in industries such as cleaning and trucking. In our consultations, we heard about examples of some pizza delivery persons and workers in the catering industry being misclassified as independent contractors and their employers not acknowledging their employment standards obligations.547 In responding to the Interim Report, the Chinese Interagency Network of Greater Toronto indicated that they had encountered workers, mostprevalently among sewing machine operators in factories and general help in grocery stores, “forced to be self-employed by the employers in order to be hired”.548 Sewing machine operators earned their wages through piece-work creating an “atmosphere of competition among workers as well as to minimize workers’ cohesiveness in addressing any kinds of work issues.” 549
Employers may also legitimately contract work out and indicate that this is a necessity to compete in the global market in areas such as manufacturing. Workers’ advocates, however, do not accept globalization as the primary cause.
Employers argue that these strategies are necessary because of global economic integration. While it may be that some local manufacturers struggle to drive down their costs in order to compete against firms located elsewhere, globalization does not explain new employer practices in Ontario. Many employers and industries engaged in outsourcing, indirect hiring, and misclassifying workers that have been documented by the WAC [Workers Action Centre] are in sectors that have a distinctly local market – restaurants, janitorial services, business services, construction, trucking, and home health care, warehousing, packaging and manufacturing of locally consumed goods.550
When considering options for reform, it is important to understand the distinction between misclassification and business choices that companies are making to increase their competitiveness, such as outsourcing and using temporary agency workers. Misclassification, whether it is deliberate or inadvertent, is covered by existing legislation and therefore efforts to address it must be enforcement driven. Legitimate business choices that result in labour insecurity require other types of responses such as incentives or regulation for large employers to take responsibility for ESA compliance among their subcontractors (i.e., supply chain regulation) and perhaps strengthened legislative protection as discussed previously and in the next Chapter dealing with the OHSA.
5. Possibilities for Reform
Some writers have proposed harmonization of the definition of “employee” or “worker” across relevant legal regimes, to provide conformity of the Employment Standards Act definition with those established in other contexts, such as under federal income tax law. Alternatively, it has been suggested that employment statutes “could be revised to include provisions allowing for determinations on the definition of employee in one context to be made applicable in other contexts.”551
Another line of thinking suggests that definitional reform is insufficient. Fudge, Tucker and Vosko suggest abolishing the distinction between employees and independent contractors and extending protection to all workers, not only in the employment standards context, but also with respect to collective bargaining and income tax law, maintaining at least that “[t]he starting-point should be that all workers dependent on the sale of their capacity to work be covered, unless there are compelling public policy reasons for a narrower definition.”552 Rather than relying on an expanded or broadened definition of employee as the basis for protection, Fudge, Tucker and Vosko suggest protection as a default, regardless of how one labels the sale of labour. On a similar note, the Wellesley Institute argues for extended ESA coverage without regard to classification. Arguing on the basis of equality and human rights legislation, it suggests
[t]here should be no difference in pay or working conditions for workers doing the same work but which is classified differently, such as part-time, contract, temporary, or self-employed.
The ESA has a role in establishing a framework for equality among workers doing comparable work. The government should not enable employers to impose inferior conditions on workers (who end up being primarily women, racialized workers, immigrant workers and young workers) simply because of the form of employment or employment status. This measure would help bring the ESA in line with the Human Rights Code.553
While the LCO supports the general view that workers, such as those in part-time positions, should be paid proportionately the same as their counterparts in full-time positions for equivalent work, self-employed persons are in a different category. Suggestions that any distinction between the self-employed and the employed be collapsed in all regulation would have far-reaching consequences and would potentially have negative impacts for self-employed persons. In any event, it would require broad policy considerations at both the provincial and federal level that are beyond the scope of this Project.
It is difficult to understand the justification for regulating the work of those who are legitimately self-employed. Furthermore, we are of the view that implementation of such a policy would have feasibility challenges. For example, should self-employed individuals be required to limit themselves to a certain number of hours per week or be required to pay themselves a certain wage? Such regulation would not only be unenforceable but also undesirable. Furthermore, how would the responsibility for a two-week vacation be divided among an independent contractor’s multiple clients?
In our view, the real issue is how to identify and remedy the situation of workers erroneously misclassified as self-employed when an employment relationship actually exists. A secondary issue is whether additional protections should be put in place to protect self-employed workers in dependent working relationships (i.e., low-wage workers with only one client), while allowing for other self-employed persons to benefit from flexibility and choice in self-determination of working conditions.
In the LCO’s view, the most straightforward approach would be to target the actual issue, the practice of misclassifying employees, through improved enforcement procedures, policy development, ESO training and public awareness. This would protect the most vulnerable without negatively impacting those who benefit from self-employment. The advantages of compliance and enforcement practices such as proactive inspections and expanded investigations outlined earlier are equally applicable to the situation of identifying cases of misclassification. The most effective enforcement activities would be those directed at industries known to be at high-risk for practices of misclassification such as trucking, cleaning and catering, as well as identification and proactive monitoring of industries populated by workers known to be disproportionately affected.
Our consultations revealed a sense that those who work with vulnerable workers were not confident that Ministry of Labour determinations on classification of employee versus selfemployed were consistently made appropriately. In the ESA Policy and Interpretation Manual, ESOs are provided with information about the various legal tests. However, no substantive policy direction is provided.554 Policy direction on an approach to the determination based on the common law tests may be a way to provide more transparency and confidence among stakeholders in the decision-making process. We have discussed the merits of public awareness campaigns earlier in this Report. In our view, highlighting the practice of misclassification and educating on the appropriate definition of employee and self-employment through public awareness posters, ads and information sessions targeted at the general public and at high-risk industries would increase the likelihood of compliance and build a foundation for improved enforcement.
Consideration should be given to the possibility that there is systemic misclassification. In other words, it may be that entire classes of workers are being incorrectly identified as independent contractors. Once these classes or types of workers are identified, rather than requiring each worker to bring his or her case to the Ministry of Labour as an individual complaint, proactive blitz-type enforcement activities would have the added potential of uncovering this type of systemic misclassification. Such processes could pave the way for specific policy development and employer education.
A clear test for defining employment codified within the ESA is another way that the Province could make an emphatic statement about the issue and, at the same time, provide guidance for employers, employees and decision-makers. It may be challenging, however, to create a definition specific enough to provide a test that is useful yet flexible enough to keep pace with the metamorphic nature of employment. We caution against implementing improved consistency at the expense of some degree of flexibility. Rigid consistency does not always produce the desired results. In our view, policy and law must operate by balancing flexibility and consistency. The government and courts must have a clear policy and legal framework, but they must also be given adequate discretion to respond to the wide-range of individual circumstances presented to them.
Beyond considerations of consistency, extending protection to workers in relationships of dependency (i.e., low-wage contractors with one client) presents unique challenges. For example, a state of dependency may be fluid in that some such workers may be dependent upon one client at one point in time and have several clients at another time.555 Consideration of a definition of “employee” that extends itself to include such workers would need to take into account the needs of independent and/or self-employed persons who benefit from flexibility and control over their working arrangements. It would also have to respond to concerns expressed by employee representatives that have, in the past, suggested that such measures could cause employers “who already mislabel workers to do so with respect to newly-protected dependent contractors, i.e. labeling them as ‘independent’ contractors.”556 In other words, it could make things worse instead of better. These would have to be considered in carefully drafting any new standard and it should also leave room for the recognition of new and emerging forms of employment with a range of individual situations. Recognizing that such changes cannot anticipate all impacts, any such policy and legislation should be evaluated after a reasonable period of time to determine effectiveness and whether adjustments are required.
The Law Commission of Ontario recommends that:
29. The Ministry of Labour act to reduce misclassification of employees as selfemployed by:
a) engaging in proactive compliance and enforcement processes directed at industries with known high incidences of misclassification;
b) increasing transparency in decision-making through policy guidance and training for employment standards officers on the definition of employee and the common law tests; and
c) launching a public education campaign to raise awareness of the issue of misclassification of employees under the Employment Standards Act.
30. The Ontario government consider extending some ESA protections to selfemployed persons in dependent working relationships with one client, focussing on low wage earners, and/or identifying other options for responding to their need for employment standards protection.
At Recommendation 9, we recommend that the Ministry of Labour enact a requirement that employers provide all workers with written notice of their employment status and terms of their employment contract at the outset of the working relationship. We believe this step would have particular benefits for workers misclassified as selfemployed. It would create a situation requiring all parties to turn their minds to the issue of the employment relationship. In its response to the Interim Report, Ontario government officials raised concerns about the possibility that requiring a written contract could increase the risk of deliberate or erroneous misclassification of employees as self-employed.557 As we have noted, sometimes simply a written assertion that a worker is self-employed is accepted as sufficient when, in law, it is not the case. However, if forms developed by the Ministry of Labour for this purpose set out the appropriate definition of employee versus self-employed, the forms themselves could provide guidance and education on proper definitions. Inclusion of Ministry contact information would encourage individuals to seek clarification from the Ministry on grey areas. The forms themselves and the requirement to complete them would have the effect of improving knowledge and voluntary compliance. It would also benefit decision-makers later should a dispute arise. Coupled with an effective public education campaign, this simple low-cost step would be a valuable strategy for confronting the issue of misclassification. The Ontario government’s feedback raised concerns about the fact that standard forms could not anticipate all employment contract issues and would therefore not be an ideal response.558 We would reiterate that the federal government has fashioned standard form contracts for several categories of vulnerable workers to attempt to extend additional protections to these workers. This is a clear message of the perceived protective effect of articulating the terms of the employment relationship.
While we recognize that not all terms could be covered by standard forms, the most general terms could be included.
The Law Commission of Ontario recommends that:
31. a) The Ontario government amend the ESA to require employers and contractors to provide all workers, including independent contractors, with written notice of their work or employment status and the general terms of their employment or work contract (including remuneration, hours, and other terms); and
b) the Ministry of Labour develop standard forms to support employers and contractors in this task.
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