This Chapter considers possible reforms for the Employment Standards Act and related legislation. 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. 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 industries have been enacted, primarily through regulations. The ESA applies to all workers; however, it is most significant for non-unionized 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. 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. 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 promoted increased “flexibility” for employers with shorter limitation periods and limits on the amount that could be claimed for lost wages. The Ontario government imposed a multi-year minimum wage freeze over this same period. Government statements at the time of these legislative changes emphasized flexibility, but also highlighted the need to protect the most vulnerable workers. As well, certain leave provisions were expanded and clarified.
When the Employment Standards Act, 2000 was introduced, major changes were put in place with the introduction of increased parental leave provisions, anti-reprisal protections and personal emergency leave. 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. 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. Temporary help agency workers are now covered under the ESA provisions relating to public holiday pay, termination and severance. As well, restrictions have been removed from client employers entering into employment contracts with workers.
The ESA saw further amendments in 2010 under the Open for Business Act, 2010. 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% of cases are resolved at the early stage through compliance with an ESO determination of wages owing, settlement, withdrawal or denial of complaint. 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 non-compliant employers for future enforcement proceedings.
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.
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.
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 balance 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 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 balance 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.”
This balancing act 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 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 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.
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 industry specific, where the ESA sets out differential treatment for certain categories of workers. 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 construction workers and many other industries. Hours of work, eating periods and overtime pay are other areas where there are specific exemptions for certain industries. 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. 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. Similarly, persons in successive temporary positions may never qualify for two weeks’ vacation as they may never work 12 months at any given position. 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. While these qualifying periods ma