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Labour law overhaul

Legal Report: Labour & Employment
|Written By Elizabeth Raymer
Labour law overhaul
Illustration: Pete Ryan

Ontario’s ‘Changing Workplaces Review’ could swing the pendulum toward employees.

Reforms are coming to Ontario’s labour laws, but how far-ranging they will be — or even if the Wynne government will implement them before the next provincial elections in 2018 — remains to be seen.

In February 2016, the Ontario government announced the launch of public consultations to consider reforms to the Employment Standards Act and the Labour Relations Act.

Twelve days of public hearings across the province heard from more than 200 organizations and individuals, and more than 300 written submissions were received. The interim report, released in July, outlined the myriad issues under consideration and the options for change: some 50 issues and more than 225 options relating to them.

“I would say the report has been embraced and praised for taking such a comprehensive approach to the review,” says labour and employment lawyer Danny Kastner of Kastner Law in Toronto, who also chairs the labour and employment section of the Ontario Bar Association. “At the same time, the report was challenging for those wishing to comment [because] it presents such a broad range of possibilities.”

With a key focus of the Changing Workplaces Review being precarious work and a decreased security of tenure for employees, its interim report has been — not surprisingly — more popular with labour unions and workers’ advocate groups than with the business and employer community.

“What I’m telling clients is, there is more process before us,” says Craig Rix of Hicks Morley Hamilton Stewart Storie LLP in Toronto, whose firm works on the employer side. “A thousand ideas may be distilled” to 25 or 30, he said, and then “we’ll have something to bite off and chew on.”

Legislation ripe for modernization

Changing Workplaces Review is the first independent review commissioned by the Ontario government in a generation. It looks at the modern workplace and workforce, including work precarity, standardizing types of employment and employers and unionization. Ontario is the only jurisdiction in Canada currently reviewing its employment and labour legislation.

C. Michael Mitchell, a Toronto arbitrator and mediator, and John Murray, a retired justice of the Ontario Superior Court, are its special advisors.

“The scope of our review is very broad and, while we intend to deal with a variety of matters, . . .  our key focus will be on vulnerable workers in precarious jobs and the need for legislative amendments to address some of the issue facing these workers,” wrote the special advisors in their interim report.

“At the same time, we will be mindful of the interests of employers . . .  and will carefully consider changes being sought by employers that could impact employees.”

Employment standards and labour relations were developed at a time when labour relations were more conventional, Kastner notes. “The old labour market was much different” in that there was more stability and security in the workplace; it was not unusual for employees to stay with one company for their entire working life and retire with a good pension after a quarter-century or more of service.

“Now that we have so many models of employment,” says Kastner, “the sense among workers’ advocates in particular is that workers don’t have the range [of protections] that they once had, and that legislation doesn’t keep up” with the changing labour marketplace.

Some of the reforms being contemplated would bring clarity and benefits to employers, Kastner says. “There are manifestly different laws that apply whether someone is an employee or a contractor. Many people who were classified as employees are now contractors,” and bringing clarity to the law would help employers understand their obligations, he says. “Now, employers are often left to guess.”

The report outlines myriad options for reform of existing legislation, including “maintain the status quo” as the first option for each issue examined.

Precarious work

Precarious work generally refers to non-permanent employment such as seasonal and other temporary work. This can include what Changing Workplaces Review refers to as “misclassification” of employees; for example, where someone who has been working full-time hours in an employer’s workplace for several years can nevertheless be considered a “freelancer,” or independent contractor, with no job security or benefits.

“An important focus is on vulnerable workers in precarious jobs in the context of employment standards and labour relations,” the interim report’s authors note.

The issue of precarious work is “the main focus” of the review, says Kastner. “It is becoming more and more common for people to be described as contractors, so employers may be able to circumvent labour legislation. The employer . . . has enormous powers to evade employment standard obligations.”

Enforcement

“While most employers likely comply or try to comply with the ESA,” wrote the special advisors, “we conclude that there are too many people in too many workplaces who do not receive their basic rights.”

George Vassos of Littler LLP in Toronto, who practises on the employer side, predicts the government will want to enhance enforcement of current laws and statutes. “There may be changes to legislation resulting in harsher penalties” for employers, he notes.

Balancing rights

The interim report’s authors acknowledge the balance that must be maintained between employer and employee rights.

“The fact that this Review is taking place is strong evidence of a broad societal concern over the changes that have taken place in the workplace and the fact that for many there has been a long-standing trend of deteriorating working conditions for a growing number of workers,” the special advisors write.

“At the same time, the mandate from the Minister of Labour to recommend changes that will support business (also reflected in our Terms of Reference) is recognition that change cannot take place without taking into account its impact on business and that keeping the economy strong is a priority for everyone. . . .  The regulation of labour and employment law must not be so burdensome as to impair unnecessarily the competitiveness of Ontario business.”

But labour and employment practitioners who represent employers predict that labour unions and workers’ advocates may be happier with changes to the legislation.

“My expectation is that the employer community will see the new changes imposing more limitations, restrictions, and the employer community will see changes as more negative than positive,” says Vassos.

Those changes may include placing term limits on temporary contracts, changing the test for determining who is an independent contractor and facilitating unionization of the workplace, lawyers say.

Termination provisions

(just cause)

Although almost all collective agreements in Ontario contain a “just cause” provision for termination of employment, the Employment Standards Act does not; in general, an employer can dismiss an employee for any reason. The ESA requires only that the employer provides notice of termination or pay in lieu of notice to the employee and, if the employee is eligible, severance pay.

Three Canadian jurisdictions — Nova Scotia, Quebec and the federal jurisdiction — have unjust dismissal protection that allows employees to contest their termination and provide for possible reinstatement by an independent arbitrator where no cause is found to exist. Ontario is now considering doing the same.

The special advisors note that the absence of a “just cause” requirement in the ESA means that temporary foreign workers, who come each year to work in Ontario in agriculture and who are allowed just one employer, must return to their country of origin if they are dismissed by their employer, and that TFWs are reportedly often threatened with dismissal.

In Nova Scotia, employers must show just cause to terminate an employee with more than 10 years of service, with exceptions for some sectors such as fisheries, construction and sales, and in circumstances such as corporate restructuring, where a job is eliminated. Andrew Nielsen of Pink Larkin in Halifax, a firm that works on the employee side, says that the “just cause” provision has been positive, and not only for protecting workers’ rights.

“It tends to drive settlement more quickly,” Nielsen says.

Wrongful dismissal cases “can be more expedited and efficient because it’s an administrative process” created by the just cause requirement in the legislation, he says. A complaint can be filed and heard by the vice chairs of the province’s labour board rather than in the Supreme Court of Nova Scotia.

In Quebec, the just cause provision kicks in after just two years of employment and employees are entitled to free legal representation when they file wrongful dismissal complaints, says Danilo Di Vincenzo of Le Corre LLP in Laval, Quebec, who practises on the management side.

“The politics and social mood here is different,” he adds. “We had to look at employers being more structured, and being more prepared” for complaints, including putting everything in writing rather than relying on oral agreements or understandings. It also means training clients, he says, through publications and training seminars, to help them avoid running afoul of the law.

“We know that complaints are unavoidable,” di Vincenzo adds.

Next steps

Ministry of Labour spokeswoman Janet Deline said the special advisors were “thoroughly reviewing all submissions and commissioned research,” and the ministry was looking forward to receiving their final report and recommendations this year.

The mandate of the current Liberal government under Premier Kathleen Wynne may or may not be renewed in October 2018, when Ontarians will next go to the polls.

 “Some provinces in the past have certainly been subject to greater swings in terms of political and legislative mandates than has Ontario,” says Darryl Hiscocks of Torys LLP in Toronto, who practises on the employer side. “What we’re seeing here may be one of these swings,” he adds, noting that the direction the special advisors seem to be heading in may benefit employees more than employers.

“A huge part” of what the review will address will be the legislation formed during former premier Mike Harris’s Progressive Conservative government, says Kastner, which resulted in lower costs for employers but made it harder for workers to unionize.

“If reforms come in to reverse those changes and modernize legislation, it won’t happen unless the government is sympathetic,” he says. “If there is a change of government, that doesn’t leave much time.”


SPECIAL REPORTS