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Quebec Court of Appeal rules on its constitutionality
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Global | Publication | July 2016
Last year the Ontario government initiated the Changing Workplaces Review (Review), which it intends as the first step towards identifying potential reforms of the Employment Standards Act, 2000 (the ESA) and the Labour Relations Act, 1995 (the LRA) to better protect workers, while supporting businesses in our changing economy. Two government-appointed special advisors – C. Michael Mitchell, formerly union-side labour lawyer at Sack Goldblatt Mitchell LLP, and the Honourable John C. Murray, former justice of the Ontario Superior Court and before that management-side labour lawyer – are responsible for carrying out public consultations and preparing an interim report and a final report, with recommendations to the Minister of Labour in relation to both the LRA and the ESA.
On July 27, 2016, the Minister of Labour released the much-anticipated Interim Report, which is based on 12 days of initial public consultation, over 300 written submissions from a variety of stakeholders including employer, labour, employee-advocacy and other groups and individuals, and research papers commissioned by the Review itself.
In the Interim Report, the special advisors consider the changing nature of the workforce, the workplace and the economy itself, particularly in light of relevant trends and pressures including the increase in temporary jobs, part-time work and self-employment; the rising prominence of the service sector; the effects of globalization and trade liberalization; and accelerating technological change. They conclude that these various trends and pressures on the workplace “highlight the need for reform of employment standards and labour relations legislation, and especially to provide protection to vulnerable workers and those in precarious work situations.”
View the Interim Report
The Interim Report identifies approximately 50 issues affecting Ontario’s workplaces and over 225 options of differing size and scope for addressing these issues in the LRA and ESA. Although maintaining the status quo is listed as an option for each issue, some of the other options, if enacted, would usher in significant change, including, for example, providing “just cause” protection for all employees covered by the ESA and creating a model for certification that applies specifically to franchisors and franchisees.
The following summarizes a number of the key issues and options.
Definition of Employee
The special advisors note that two issues were raised consistently by unions and employee advocates: the misclassification of employees as independent contractors and the current definition of employee in the ESA.
Employee advocates suggested that misclassification occurs because of ignorance of the law by both employers and employees, the perceived benefit of being able to deduct business expenses from income as an independent contractor, and intentional avoidance by employers of their legal obligations. With respect to the second issue, employee advocates submitted that the ESA should be amended to apply to dependent contractors. Employers commenting on these issues stressed the need to use independent contractors whose unique expertise, cost, efficiency and availability cannot be duplicated by their own employees.
Options identified by the special advisors include:
“Joint” Employer Issues
Employee advocates argued that lead companies or employers who contract out should have some liability and responsibility for employment standards of employees in the business from which they benefit. Likewise, they argued that it would be appropriate for franchisors to have responsibility for compliance with employment standards legislation, together with their franchisees. Accordingly, employee advocates suggested that additional provisions are required to create obligations on businesses higher up the chain of contracting or the supply chain, to address non-compliance by subcontractors or employers lower down the chain.
By contrast, employers argued that wide-ranging legislative provisions making all businesses liable for the employment standards violations of their contractors would be too great an interference in the market, where contracting is a legitimate business tool for organizing the production of goods and services. Representatives from the franchising industry strongly argued that making franchisors liable for franchisee ESA obligations is unnecessary, would be costly and burdensome, and could threaten the entire franchise model.
Options identified by the special advisors include:
Hours of Work and Scheduling
The special advisors note that during consultations they heard most about scheduling hours of work and that the limitations on hours of work “were not at the forefront of the debate”. Options identified by the special advisors with respect to hours of work and scheduling include:
Personal Emergency Leave
Employee advocates expressed concern about the 50+ employee threshold for entitlement to personal emergency leave (PEL), and made recommendations to extend PEL to employees working for smaller employers, so that all employees could have access to this benefit. Employers asserted that PEL should be assessed in the context of the other leaves that are provided for under the ESA. Many employer stakeholders pointed to the difficulty of navigating the various ESA leave provisions. Some employers said that the nature and scope of the current PEL make it difficult to establish that their generous paid sick leave and bereavement leave policies provide a greater right or benefit than PEL.
Options identified by the special advisors with respect to PEL include:
Termination, Severance and Just Cause
The special advisors heard a number of submissions about eligibility requirements and quantum of termination notice and severance pay. Employee advocates submitted that the ESA should be amended to provide protection against unjust dismissal, whereby employees could not be dismissed without just cause and could be reinstated by a government-appointed adjudicator if dismissed without cause.
Options identified by the special advisors with respect to termination of employment, severance and just cause include:
ESA Exemptions and Exclusion
In February 2016, the special advisors provided the Ministry of Labour with an Interim Update, indicating that a comprehensive review of the 80+ exclusions and exemptions was, in practical terms, beyond the scope of the Review. In the Interim Report they note there has been sustained criticism from many sources about the number and scope of exemptions in the ESA, suggesting that the exemptions are out-dated, inconsistent, complex and often lacking in rationale.
Accordingly, the special advisors have stated they are likely to recommend that Ontario establish a new process of review to assess the merits of many of the exemptions, to determine whether the exemptions are warranted or whether they should be modified or eliminated.
Related and Joint Employers
Unions submitted that the LRA needs to be amended to ensure that bargaining structures reflect who funds and controls the work, and to ensure that bargaining takes place with the parties that have primary economic interest and ultimate control over the business, particularly in the context of franchise operations and temporary help agencies. By contrast, proposals from employers and employer associations advocated maintaining the status quo for bargaining under the LRA and establishing clear statutory criteria for a related employer declaration, particularly in a franchise context.
Options identified by the special advisors include:
Card-based Certification
The special advisors note that the appropriate model for certification is a “polarizing issue.” In the consultation process unions strongly favoured card-based certification, arguing that in this era of declining unionization in the private sector, it is necessary to make it easier for employees to have access to collective bargaining and to remove measures that would ensure an ongoing decline in unionization rates. Employer stakeholders strongly opposed card-based certification and asserted that the secret ballot vote is the most democratic.
Options identified by the special advisors include:
Access to Employee Lists during Organizing Drives
Labour groups have proposed that if the union meets a threshold of, for example, 20% of employees having signed union cards, the union could apply to the OLRB for an order requiring the employer to provide a list of employees in the proposed bargaining unit, including names, job information and contact information. Employers have raised concerns about such proposals, including with respect to privacy implications for employees, the potential for unions to “game the system” in order to obtain information that would help them organize, and the possibility of extensive litigation related to these issues.
Options identified by the special advisors include, subject to certain thresholds or triggers, providing unions with access to employee lists with or without contact information (the use of the lists could be made subject to rules, conditions and limitations).
Applications for bargaining unit reviews and consolidation
While provisions permitting bargaining unit reviews and consolidation are included in the Canada Labour Code and in labour statutes in some other provinces, they are notably absent from the LRA. The special advisors note that from a union perspective, the goal of having a consolidation provision is to ensure that smaller units, once certified, can be combined into more rational, long-term bargaining structures. At the same time, however, unions expressed concern that giving the OLRB the power to merge and reconfigure bargaining units, especially where different unions are involved, could force change against the wishes of a significant number of employees. While employers generally opposed a consolidation provision, describing it as simply boosting union bargaining power in situations where the union’s presence is weak, they also recognized that giving the OLRB the authority to restructure and rationalize bargaining units is an effective way to modernize, particularly where the existing bargaining structure may be fragmented or antiquated.
Options identified by the special advisors include:
Interim Orders and Expedited Hearings
Submissions from union stakeholders supported expanding the OLRB’s power to issue substantive interim orders on “such terms as the Board considers appropriate” where unfair labour practices are alleged, and provided that the applicant adduces evidence establishing a factual foundation sufficient to meet the test for interim relief. Employers tended to oppose broader substantive interim order powers on the basis that interim orders grant a remedy before a finding of a violation of the LRA.
Options identified by the special advisors include:
Given the breadth of the Changing Workplaces Review and the number and variety of submissions during the initial consultation process, the Ontario government has launched a second phase of public consultations seeking feedback on the special advisors’ Interim Report. Following these consultations, the special advisors will provide the government with a final report and recommendations to help inform changes to modernize Ontario’s labour and employment laws.
Feedback on the Interim Report may be provided via e-mail or mail-in submissions. Submissions specifically related to the subject of personal emergency leave must be completed by August 31, 2016. The deadline for submissions on all other issues is October 14, 2016.
A Guide to the Interim Report lists issues canvassed by the special advisors, including issues that have not yet been the subject of significant public debate or discussion, and gives additional information about how you can provide input on the Interim Report.
View the Guide to the Interim Report
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The Act respecting the laicity of the State (the Act) has received a lot of attention since its adoption in June 2019.
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