Before the long weekend, many details of the upcoming Changing Workplaces Review were revealed, which we commented on at the time. Now that Review has been formally released, and we can see what it means to businesses in Niagara.

The GNCC’s position is that policy needs to be evidence-based and backed by research, aimed at increasing prosperity and well-being, not at winning elections. We are non-partisan — our favoured party is whichever party (or parties) puts forward rational policies to build prosperity. Our opposition to reports of a politically-motivated minimum wage hike, for example, were based on the facts that it was not evidence-based and was clearly motivated by the upcoming election, not by a desire to do what had been calculated as economically optimal for Ontario.

In fact, the Changing Workplaces Review does not include a recommendation on minimum wage after all. This was never within the scope of the Review to begin with. However, with the Ontario NDP proposing a $15-an-hour minimum, along with their counterparts in other provinces and the federal NDP, the Liberals will need a policy response in the 2018 election, so expect the minimum wage hike to be revisited.

The Review acknowledged but ultimately rejected the arguments of the Ontario Chamber of Commerce and the Keep Ontario Working Coalition that the issue of precarious work was overstated. A significant part of the Review deals with vulnerable employees. “Precarious work” is taken to mean unpredictable and varied hours of work, scheduling practices in which the work-life balance of the employee is not considered, low income, and lack of benefits.

The Review as published contains the following important recommendations:

LEGISLATION AND ENFORCEMENT

Much of the Review concerns legislation and enforcement, and recommends overhauls to both. These would not change the laws of employment themselves, and so would not directly affect employers, but would aim to make the enforcement of employment law more effective. For instance, the review recommends consolidating the Employment Standards Act, 2000, the Labour Relations Act, 1995, and the Occupational Health and Safety Act, 1990 into a single Workplace Rights Act.

The Review also proposes education for both employees and employers about the Act, and that Ministry of Labour inspectors and officials should be authorized and required to report violations.

Also recommended are more resources for workplace rights enforcement. These include pro-active initiatives such as spot checks, audits, and inspections, increased targeted inspections in sectors where large numbers of vulnerable employees work, and more data collection and analysis. The Review sees the Ministry of Labour moving to become more like a traditional law enforcement agency.

TEMPORARY FOREIGN WORKERS

The Review recommends that no termination of employment of a temporary foreign worker should be effective unless and until an order is made by a neutral adjudicator. This is aimed at dealing with alleged reprisals against workers who complain about violations of workplace law.

INCREASED PENALTIES

To discourage violations, increasing Employment Standards Act (ESA) violation tickets from $295 to $1000 is recommended, and the penalties for a Notice of Contravention would be doubled. The Ontario Labour Relations Board (OLRB) would be empowered to issue administrative monetary penalties up to $100,000 per contravention. Employers could also be ordered to pay the costs of an investigation, and employees could be paid interest on unpaid monetary settlements.

EXEMPTIONS AND STANDARDS

The Review notes that, with 85 current exemptions and special rules, only a minority of Ontario workers are completely covered by the ESA.  Therefore, a full review of all exemptions is recommended. The Review goes further, though, and recommends changes to exemptions and standards such as:

• Ending student minimum wage
• Ending student exemption to the “three-hour rule” (i.e. that workers who regularly work more than three hours a day and present themselves for work but are offered fewer than three hours of work should be paid for three hours regardless)
• Phasing out liquor server minimum wage
• Ending differential pay between part-time and full-time workers doing the same work (this was recommended by three other Canadian commissions, the earliest in 1983, but was never acted upon)
• Mandating that temporary workers work a maximum of six months before a requirement for equal pay kicks in, with a three-month cooling-off period to prevent employers from firing and immediately re-hiring a temporary worker immediately before the deadline
• No longer requiring the Ministry of Labour to approve shifts totalling 48-60 hours per week, while maintaining the approval requirement for weekly hours above 60, which would grant some flexibility back to employers
• Averaging overtime to be permitted only to allow for flexibilities such as a compressed work week or continental shift, or other flexibilities desired by employers
• Employers with fewer than 50 employees would now be obliged to provide personal emergency leave and bereavement leave
• Interns and trainees would no longer be exempted from the ESA
• Employees to be given the right to request changes in hours of work, schedule, or location after 1 year of service. However, employers will be free to refuse such requests, although reasons would be given in writing upon request, no appeal would be granted, and an employee would only be able to make one request per year.

While removing bureaucratic oversight in long shifts is useful, we are concerned about the removal of exemptions for small businesses, who frequently do not have either the staff numbers to be truly flexible, or the HR or legal resources to navigate Ontario labour law. These exemptions were put into place for good reason and should not be tossed aside. The government needs to review the evidence and assess the likely impact on small business that these policies would have first.

Many businesses will also be discouraged from hiring students due to an end to their separate minimum wage, resulting in higher student and youth unemployment, the rates for both of which are much higher than the general unemployment rate already. This policy would end up hurting a lot of the workers it is aimed at helping, and the Province should only consider this recommendation after careful study of the likely impact on unemployment.

LEAVE, TIME OFF, AND VACATION

Bereavement leave is recommended to be set at three unpaid days for family members covered by current Personal Emergency Leave (PEL) provisions. PEL is recommended to be set at seven days. If employers desire doctors notes, it is recommended that employers be required to pay for them. The Review found that extending PEL to all employees was more important than mandating paid sick leave at this time.

The Review recommends increasing vacation entitlement to three weeks per year only after five years of employment by the same employer. It notes that Ontario is currently not up to par with other Canadian jurisdictions in this regard.

LABOUR RELATIONS

The Review recommends that the right to collectively bargain (i.e. to form labour unions) be extended to the following, currently-exempt groups of employees:

• Domestics
• Hunters and trappers
• Members of the architectural, dental, land surveying, legal, and medical professions
• Agricultural and horticultural employees

Exemptions for agricultural workers on a “family farm” are being considered, as are restrictions on strikes and lockouts for agricultural workers. This might end up being similar to regulations for e.g. firefighters, police officers, or nurses, whose labour disputes automatically go to interest arbitration when they cannot be resolved at the bargaining table.

Rumours in the labour movement are that they actually prefer this, as arbitrators often give them better deals than they could probably get through a strike. “Pattern bargaining,” i.e. using precedents in other negotiations to decide arbitration, has often led to significant pay increases for police and firefighters which have strained municipal budgets.

The Review recommends that the secret ballot process for certification continue, and that the province not return to card-based certification, provided that:

• Remedial certification and first-contract arbitration follow in cases where employer misconduct interferes with a union drive i.e. if a union drive fails because an employer illegally interfered with the process, the union would be certified anyway and the negotiation of the first contract would be arbitrated
• A “mediation-intensive” model such as that which British Columbia introduced in 1993 be followed to improve labour relations success in first-contract negotiations
• Decertification or displacement applications not be prioritized until mediated certification and first-contract arbitration is complete
• Unions be given contact information for employees in the proposed bargaining unit once they have demonstrated that at least 20% of the employees are in favour of the union. Decertification applications would also be required to demonstrate at least 20% sentiment against the union.

Consolidation or modification of bargaining units (e.g. merging two unions representing two different locations for the same company) would be done solely by the Ontario Labour Relations Board (OLRB) under the recommendations.

Different franchise locations could be viewed the same as different locations of the same employer and could be expected to be treated as a single unit. Implementation of this would be on a case-by-case basis as interpreted by the OLRB, and franchises would not be compelled to bargain as one unit.

Two of our greatest concerns were reports that the Review supported a return to card-based certification and full union access to employee records, which would tilt labour relations power greatly in favour of unions. This approach is more balanced than was expected.

Maximum penalties for LRA contraventions are recommended to be increased to $5,000 for individuals and $100,000 for employers and unions alike.

It is recommended that a striking employee may make an unconditional application to return to work, which an employer would be generally required to honour. Currently, an employee may do this within six months; the Review proposes making the time period indefinite.

Successor rights, where a union is preserved for a workplace when the business is sold, are recommended to be extended to service sectors such as security, food service, or cleaning.

SUMMARY

Overall, the Review is more balanced than initial reports that surfaced last week led us to believe. Whether this is because those reports were inaccurate, or because the Ontario government moderated its position after intensive lobbying from the Ontario Chamber of Commerce (OCC), the Keep Ontario Working Coalition, and the GNCC and other regional Chambers and Boards of Trade, is not known. The OCC’s position can be read here.

The removal of a $15/hour minimum wage and card-based union certification are welcome, as these were major concerns for local businesses and would have created a decidedly business-unfriendly milieu in Ontario, discouraging investment and job creation.

The government has not yet commented on the Review, and as we have advocated before, we hope that the endorsement (or rejection) of its recommendations will only come after, and as a result of, extensive study of their likely economic impact. A comprehensive economic impact analysis is the only responsible way to proceed with these recommendations.