Canada: Ontario Government Employment Proposals Affect Business Planning And Budgets

In this Update

• The Ontario government recently released legislative proposals to introduce amendments to the Employment Standards Act and the Labour Relations Act. These changes are expected to affect many employers in Ontario.
• Expected changes to the Employment Standards Act would have an impact on the following: minimum paid vacation, penalties for improperly classifying a worker as an independent contractor, paid personal emergency leave, scheduling rules, minimum wage increases, pay for temporary help agency employees and pay for casual, part-time, temporary and seasonal employees.
• Expected changes to the Labour Relations Act would affect union certification rules in order to facilitate unionization and would enable the Labour Board to change existing bargaining units.

Ontario employers will face new compliance and cost challenges if changes that the Ontario government intends to make to the Employment Standards Act (the ESA) and the Labour Relations Act (the LRA) actually become law. We expect that the government will table the amending bill incorporating these proposed changes in the near future. While the amending process does take time, and the government has indicated an intention to stagger the implementation or Target Effective Dates, businesses need to be aware of these proposed changes for planning and budgeting purposes.

Below we highlight some of the expected changes to the ESA, which will affect many, and in some cases all, employers in Ontario. We also outline several important expected changes to the LRA.

Expected changes to the ESA

1. Paid vacation

The proposed legislation will require that employers provide three weeks of paid vacation to all employees with at least five years of service. Currently, the legislation mandates two weeks' paid vacation.

Target Effective Date: January 1, 2018

2. Penalties for improperly classifying a worker as an independent contractor

The proposed legislation will impose sanctions on employers that misclassify employees as "independent contractors."

Employers that misclassify their employees could be subject to penalties, including prosecution, public disclosure of a conviction and monetary penalties.

We expect the bill will have a "reverse onus" provision: in the event of a dispute, the employer would be responsible for proving that the individual is not an employee.

Target Effective Date: If the bill passes, this proposal would come into force on Royal Assent.

3. Paid personal emergency leave

Personal emergency leave (PEL) currently applies only in workplaces with 50 or more employees. Under the proposed amendments, this threshold will be eliminated, so all employers will have to provide PEL.

The proposed legislation will also require that employers provide employees with two paid PEL days per year. Further, the proposed changes will prohibit employers from requesting a doctor's sick note from an employee taking PEL.

Target Effective Date: January 1, 2018

4. Scheduling

The proposed legislation will set out new scheduling rules:

• Employees will have the right to request schedule or location changes after having been employed for three months.
• Employees who regularly work more than three hours per day, but upon reporting to work are given less than three hours, must be paid three hours at their regular rate of pay.
• Employees can refuse to accept shifts if their employer asks them to work with less than four days' notice.
• If an employer cancels a shift within 48 hours of its start, employees must be paid three hours at their regular rate of pay.
• When employees are "on-call" and not called in to work, the employer must pay them three hours at their regular rate of pay. This would be required for each 24-hour period that employees are on-call.

Target Effective Date: January 1, 2019

5. Equal pay for equal work provisions: Casual, part-time, temporary and seasonal employees 

The proposed legislation will require that employers pay casual, part-time, temporary and seasonal employees equal to full-time employees when performing the same job for the same employer.

There would be exceptions to the requirement for equal wages where a wage difference is based on the following:

• a seniority system;
• a merit system;
• systems that determine pay by quantity or quality of production; or
• other factors (sex and employment status do not qualify as exceptions to this requirement).

Target Effective Date: April 1, 2018

6. Equal pay for equal work provisions: Temporary help agency employees

The proposed legislation will require that temporary help agency (THA) employees (assignment workers) are paid equal to permanent employees of the THA client when performing the same job.

Target Effective Date: April 1, 2018

7. Minimum wage increases

The government is proposing to increase the general minimum wage to the following:

• $14 per hour on January 1, 2018
• $15 per hour on January 1, 2019

The special minimum wage rates for liquor servers, students under 18, hunting and fishing guides, and homeworkers will be maintained, and will increase by the same percentage as the general minimum wage.

8. Other expected changes to the ESA

The proposed changes will also deal with a wide variety of other matters, including penalties for non-compliance, statutory leaves, exemptions and students. At least one change will streamline employer compliance processes because the proposed legislation will make clear that electronic agreements between employers and employees, such as an agreement to work excess hours, can serve as an agreement in writing. In connection with these legislative changes, the province has announced that it plans to hire up to 175 more employment standards officers, signaling that the Ontario Ministry of Labour will be placing a renewed emphasis on ESA compliance.

Changes to the LRA

The proposed legislation will make the following changes to union certification rules in order to facilitate unionization:

• allow unions to access employee lists and certain contact information, provided the union can demonstrate that it has already achieved the support of 20% of employees involved
• establish card-based union certification for the temporary help agency industry, the building services sector and home care and community services industry
• empower the Ontario Labour Relations Board (OLRB) to conduct votes outside the workplace, including electronically and by telephone
• eliminate certain conditions for remedial union certification without a vote, allowing unions to more easily get certified when an employer contravenes the LRA
• make access to first contract arbitration easier, and also add an intensive mediation component to the process

The proposed legislation will also allow the OLRB to change the structure of bargaining units within a single employer, where the existing bargaining units are no longer appropriate for collective bargaining, and to consolidate newly certified bargaining units with other existing bargaining units under a single employer, where those units are represented by the same union.

Target Effective Date: If the proposed legislation is passed, all labour relations proposals would be in effect six months after the act comes into force.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.