Good News for Franchising While Certain Industries Singled Out and Some Difficult Roads Ahead for All Business
On May 30, 2017, in a direct response to the Ontario Changing Workplaces Review Final Report (Final Report), Ontario Premier Kathleen Wynne announced that the Ontario government is moving forward with significant changes to the province's labour and employment laws. The new legislation will be introduced as quickly as within a week of being announced and will be called The Fair Workplaces, Better Jobs Act, 2017. It will amend both the existing Employment Standards Act (ESA) and the Labour Relations Act (LRA).
Some of the more significant employment standards changes that will affect all employers equally include the following five key changes:
- The minimum wage will be increased to Can$15 an hour by January 1, 2019. This increase will be phased in over the next 18 months, rising to $14 an hour on January 1, 2018, and then to $15 the following January. The current minimum wage in Ontario is $11.40.
- Equal pay will be mandated for part-time workers doing the same job as full-time workers.
- After five years of working with an employer, an employee's minimum vacation entitlement would increase from two to three weeks per year.
- Employers will now be required to pay an employee three hours of wages if the employer cancels a shift with less than 48 hours notice.
- All employees will be given 10 personal emergency leave days a year, and a minimum of two of those days must be paid.
These are but five key changes announced in a package that will include many more.
As we previously reported, the Final Report recommended a combination of both good and bad news for franchisors and franchisees. So this latest announcement by the Ontario government will therefore be viewed as good news for the franchise business model and the majority of franchisors and franchisees. That is because, notwithstanding the substantial number of changes being introduced, the government has chosen not to single out franchising for separate treatment.
So, in keeping with the Final Report, Ontario will not be moving forward with deemed joint or common employer status for franchisors. And contrary to the recommendations in the Final Report, the Ontario government will not be going forward with the recommendation that independent unrelated franchisees of one brand in a geographical area can be required to collectively bargain with employees of those multiple franchisees towards one union contract.
However, the government did announce that they plan to make it easier for multiple businesses owned by one employer to be certified as one bargaining unit, which will likely make it easier for those businesses to become unionized. This can certainly affect multi-unit franchisees with locations that are geographically close.
The government also did not indicate that "top down" enforcement was part of their current plans. In last week's elert we reported that such a plan could put franchisors in a difficult position of having to offer more guidance and support to franchisees with no assurances that such activity would save them from a common employer finding under current law. Instead the government indicated their plans to make more money available for training programs, and to hire more employment standards enforcement officers.
This package of news also includes some items that may be problematic for certain businesses that are commonly franchised. For instance, the government plans to introduce card check union certification for these targeted industries, namely temporary agency workers, home and community care workers, and building services workers. Card check certification procedures will replace the secret ballot process currently used, but only in the named industries. Additionally, the government announced plans for enhanced enforcement of the current law on misclassification of employees as independent contractors.
The full impact of these changes is still to come with legislation to be introduced as early as this Thursday. The May 30th announcement noted that a public consultation process will commence and proceed throughout the summer. We will continue to report on upcoming developments.
The author of this elert gratefully acknowledges the contributions of Cassels Brock Summer Law Student Jesse Tepperman.
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