See also: The Changing Workplaces Review
Under our Terms of Reference, the objective of this Review “is to improve security and opportunity for those made vulnerable by the structural economic pressures and changes being experienced by Ontarians in 2015.” This requires that we reflect on the pressures and changes that have been and are occurring, and identify those employees who have been made vulnerable by these changes and are working in precarious jobs. Most of the pressures we describe are the subject of much literature and analysis by experts. We can do no more here than describe them in the briefest of terms.
Our understanding of the economic pressures, how the workplace has changed in ways relevant to this Review and who are vulnerable workers in need of greater protection, is based on our own reading and on a number of academic papers prepared for us, and especially two background reports prepared for the Review – Morley Gunderson, Changing Pressures Affecting the Workplace, 2015, and Implications for Employment Standards and Labour Relations Legislation, 2015, from which we have borrowed significantly. However, the views expressed here are our own.
We have a broad mandate to recommend changes to the Employment Standards Act, 2000 (ESA) and the Labour Relations Act, 1995 (LRA), and we are not limited in that mandate by any particular concerns. Indeed, we are to consider in the broadest terms – what changes, if any, should be made to the legislation in light of the changing nature of:
We have considered relevant trends and factors affecting our society, including:
Our Terms of Reference provide a lens through which we are to recommend changes “to improve the security and opportunity” for those who have been “made vulnerable” by the changes: “far too many workers are experiencing greater precariousness” today in Ontario. To fulfill our mandate, we must understand what is meant by “vulnerable workers” and identify those employees who are experiencing greater precariousness.
Before we describe pressures and begin our analysis, we must first acknowledge that there are important differences in how concepts such as “precarious employment” and “vulnerable workers” are used by scholars and commentators, and differences in the way that categories of standard and non-standard employment relate to these concepts.
These important differences may affect policy goals (i.e., who certain measures are designed to assist and the objective of the policy change). For example, we need to ask whether particular proposals are to be aimed only at those who are engaged in non-standard employment or whether we are concerned with a broader group of workers, including some who work in jobs that are considered standard employment. It is also vital to understand how concepts are being used in order to know whether we are talking in one case about jobs (precariousness) and on the other about people (vulnerability).
It is important to understand the differing usages of the terminology as they may affect our understanding of the magnitude of a particular problem. It is confusing when commentators use the same terminology but mean different things.
For some, precarious employment entails some form of contingency that is not present in standard employment, and the term is often used interchangeably to mean atypical employment, or employment which is non-standard. In looking at the issues, some might confine themselves to looking at the various categories of non-standard employment (such as part-time, temporary, casual, contract, on-call, etc.), asking what, if anything, should be done about the conditions of those working such jobs, but not looking at issues facing those performing standard work (i.e., full-time and some part-time employees who may be vulnerable for other reasons, such as low income and lack of benefits).
Precarious employment is defined by some in broader terms; they describe the character of precarious jobs “as work for remuneration characterized by uncertainty, low income, and limited social benefits and statutory entitlements”. Although this definition encompasses an element of uncertainty over continuing work, precarious employment in this understanding is not treated synonymously with “contingent” or “non-standard” work. Rather, precarious employment can transcend the standard/non-standard work distinction such that forms of employment that are technically full-time or part-time, permanent or temporary, may be characterized by precariousness. In other words, this definition recognizes that some “non-standard work” is highly paid, secure and not precarious, while some “standard” or full-time permanent work is poorly paid and is precarious. Without equating the concept of non-standard jobs to precarious jobs, our Terms of Reference recognize a correlation – that is, that the growth of non-standard work has put many workers in more precarious circumstances.
“Vulnerable workers” describes people, not work or jobs. It is used in many contexts to denote social groups who are defined by their “social location,” that is, by their ethnicity, race, sex, ability, age and/or immigration status. In other contexts, however, the term “vulnerable workers” denote groups of workers who have greater exposure to certain risks than other groups, regardless of their social location. In the latter context, the term “vulnerable” describes all those (regardless of the social group(s) to which they belong) whose conditions of employment make it difficult to earn a decent income and thereby puts them at risk in materials ways including all the undesirable aspects of life that go hand-in-hand with insecurity, poverty and lower incomes. We believe that our Terms of Reference in describing the objective of this Review as improving the security and opportunity of vulnerable workers, is intended to have us consider the position of all vulnerable workers in this latter sense.
We understand that our mandate requires us to consider all workers in Ontario whose employment:
This mandate thus includes many workers whose employment is uncertain (or temporary) but also workers, such as those in full-time permanent low-paid employment, many without benefits, who would not be counted in the non-standard employment category, and thus might not be considered by some to be employed in precarious jobs. Indeed, we do not think it would make public policy sense to limit our inquiry to only non-standard employment, and not to ask whether, and how, the changing workplace has affected vulnerable employees working in jobs that are considered to be standard employment.
This Chapter discusses the inter-related factors that have contributed to the changing workplace, and identifies the vulnerable workers in precarious jobs who are the subject matter of this Review.
The starting point is to recognize that the basic structural and conceptual framework for the two Acts we are reviewing was set decades ago. While these Acts have been significantly amended over the years, the basic conceptual frameworks and approach for each of them has remained. Accordingly, we must evaluate how well they are operating to meet the needs of vulnerable workers today, and potentially develop new approaches that may be required in light of workplaces that have changed over a long period and continue to change.
If this Review must re-evaluate the laws and regulations that were designed for an earlier time, it must be recognized that the existing framework of both Acts was designed largely for an economy dominated by large fixed-location worksites, where the work was male-dominated and blue-collar, especially in manufacturing. In that sector, large employers were often protected by tariffs and limited competition, and union coverage was far higher. Today the economic landscape is vastly different for both employers and employees; over many years the manufacturing sector in Ontario has shrunk significantly, while the service sector has grown significantly.
Markets for products and services are increasingly globalized and are often outsourced to foreign firms. Tariff reductions, free-trade agreements and reductions in transportation and communication costs have encouraged this trend. Companies in some sectors, notably manufacturing, previously protected by tariffs, are now subject to intense international competition, especially from imports from low-wage developing countries.
A related pressure is the trend to offshore outsourcing of business services, which is now made possible by the internet, computer technology, and software for global networking. Businesses can send their requests at the end of their business day to another time zone and have the responses the next day. Within business services, the trend has been to outsourcing increasingly sophisticated services.
In addition to global competitive pressures, Canada has experienced a re-orientation from east-west trade within Canada towards north-south trade between Canada and the United States as well as Mexico, largely as a result of free trade agreements. New trade agreements with Europe and/or with Asia (which include the United States and Mexico, such as the Trans-Pacific Partnership) are likely, if ratified, to further diminish the importance of internal east-west trade. The reorientation to external trade (much of it north-south) makes it likely that Canadian business will increasingly compete with United States businesses, which tend to have fewer labour regulations and restrictions.
With the increasing mobility of capital, some firms may have a credible threat to relocate their plants and investments into jurisdictions that have lower regulatory costs. One significant concern is that such competition for investment will lead to a “race to the bottom” or “harmonization to the lowest common denominator” in employment and labour relations law, and that this would discourage any efforts to improve conditions for Ontario workers.
The fear of workers, their communities, and policy makers of losing new investments or having plants relocate out of the province is real. The evidence of what actually influences business on this issue, however, tends to be inconclusive and controversial as shown in the research commissioned for this Review.
Many businesses in Ontario are not affected by these considerations because their businesses are in non-tradable services. Moreover, many employers will not follow a strategy of relocation or investing in the lowest-wage or least-regulated jurisdiction because there are a host of factors that inform these decisions and make Ontario attractive – positive factors such as its educated, skilled and reliable workforce, its tax structure, the public funding of its health care system, and many others. However, Ontario must consider the effect of its polices on business costs and competitiveness, especially in light of increased competitive global pressures, the north-south re-orientation and the increased mobility of capital. There is a need for “smart regulation” that can foster not only equity and fairness, but also conditions that support business.
Skill-based technological change and the transformation to the knowledge economy have had profound effects on the kind of workforce that is needed today and has facilitated many other trends, including global networking and trade, and offshore outsourcing (including the outsourcing of business services). These changes associated with the computer and the internet, are facilitating changes in manufacturing and distribution such as just-in-time-delivery systems, robotics, 3-D manufacturing, movie streaming, bar-code scanning systems and the new so called “sharing economy” manifested by such companies as Uber or Airbnb.
One of the major consequences of these competitive global pressures, along with the industrial restructuring that has taken place in Ontario, is the shift from manufacturing to services. From 1976 to 2015, for example, manufacturing’s share of total employment fell from 23.2% to 10.8%, a decrease of 12.4 percentage points. Over that same period, the service sector’s share increased from 64.5% to 79.8%, an increase of 15.3 percentage points. The increase in the service sector, however, was polarized, with the largest increases occurring in higher paying professional, scientific, technical and business services combined (from 4.6% to 13.2%) and lower paying accommodation and food services (from 3.9% to 6.4%). Together with other factors, this has had a profound impact on Ontario workplaces.
This shift in the labour market has resulted in a “hollowing out” or “disappearing middle” of the skill and wage distribution, often involving job losses for older workers in relatively well-paid, blue-collar jobs in manufacturing. These displaced workers generally do not have the specific skills to move up to the growing number of higher-end jobs in business, financial and professional services. Their skills are often industry-specific (e.g., steel, auto manufacturing, pulp-and-paper) and not transferable to other industries. Many are middle-age workers who are often regarded as too old to retrain or relocate, but too young to retire. They often wind up in low-wage, non-union jobs in personal services. The “disappearing middle” of the occupational distribution also means that it is more difficult for persons at the bottom of the distribution to train and move up the occupational ladder since those “middle steps” are now missing. They are often trapped at the bottom with little or no opportunity for upward occupational mobility.
These developments are an obvious source of growing wage and income inequality.
In an effort to explain how, in the last twenty-or-so years, workplaces have fundamentally (in his view) worsened, David Weil described the “fissuring” process where lead companies in many industries reduced their own large workforces in favour of a complicated network of smaller employers. New businesses are also being built on this same model. Weil describes the American economy, but the application to many countries around the world has been noted and commented upon in the academic literature. To some extent this trend has contributed to the labour market that we find today in Ontario.
In his book, Weil describes how lead companies, through contracting and outsourcing, reduce costs and place themselves in a position where they are not responsible for the indirect employment they create as they shift liability and cost to others. He describes how this shift to smaller companies that provide lead companies with products and services is a deliberate strategy to create intense competition at the level of employers below the lead company, and causes significant downward pressure on compensation while shifting responsibility for working conditions to third parties. Weil shows how this has created increasingly precarious jobs for employees who perform work for contractors and often for many levels of subcontractors.
Fissuring has occurred, in Weil’s view, as a result of operationalizing several distinct business strategies, one focused on revenue, another on costs and a third, which he describes as “the glue” which binds these strategies together. On the revenue side, a lead company will focus on building its brand and creating important new and innovative goods and services, while also coordinating the supply chains that make these possible. On the cost side, lead companies contract out or outsource activities that used to be done internally, creating intense competition among potential suppliers and contractors to provide the lead company with products or services.
The critical factor which allows the revenue and costs strategies to be integrated and which makes the overall business strategy successful is that the lead company can control the product and services provided by the contractors and subcontractors through new information and communication technology. That technology makes possible the creation of detailed complex standards to which contractors must abide, and also makes it possible for the lead companies to control and enforce all the standards on product quality, delivery, and other services that the contractors and subcontractors provide. Thus, contractors of the lead company, often in fierce competition with other similar companies, must comply with the rigorous supervision of the lead company. Under this strategy, the lead company avoids the legal responsibility that goes with directly employing the employees of the contractors and subcontractors, and any statutory or bargaining responsibility that goes with it. The smaller employers are therefore less stable themselves and often have more uncertain relationships with their own workers.
Franchising in some industries is another example of a business strategy where the lead company, as franchisor, avoids liability for the employees involved in the execution of the strategy and direct selling of the product, which is the core of its brand. The franchisor at the top of the supply chain may or may not be removed from the everyday operation of the business where issues of compliance with employment standards arise. However, most franchisors write and enforce detailed contracts, including legally binding manuals for franchisees that are constantly changing and relate to virtually every aspect of the business. Regulating the contractors and small companies that compete in various industries for the work of the lead companies can be difficult. The business model set up by the franchisor may squeeze profit margins, putting pressure on franchisees not to comply with minimum standards. Moreover, unlike larger companies, these smaller businesses generally do not have a sophisticated human resource department that will ensure compliance with the law.
Clearly, the resources of government to monitor compliance are stretched in any event, and stretched even further by the number of small employers, especially if a meaningful number of small employers do not comply with employment standards. The low risk of complaints from employees, particularly from those with little or no bargaining power, combined with the low risk of inspection and low penalties by the government, makes noncompliance for some small employers simply a part of a business strategy.
In any event, fissuring is a worldwide phenomenon, and jurisdictions everywhere are struggling to find mechanisms as to how the law can respond effectively and appropriately. Our jurisdiction is no exception.
Changing pressures have also arisen from changing demographics and the changing nature of the workforce. The workforce in Ontario has become much more diverse with more women, visible minorities, new immigrants, Aboriginal persons and people with disabilities. Many workers in these groups are likely to be vulnerable and to live in persistent poverty.
Although it has levelled off in recent years, there has been a dramatic increase in the labour force participation of women (and particularly married women, including those with children). The participation of women in the workforce is now close to that of men. The two-earner family is now the norm and not the exception. There are also many single parents with child-care responsibilities. This has led to very important issues of work-life balance, and has important implications with respect to many workplace issues, including gender inequality in compensation, compensation for part-time work as compared to full-time work, irregular work scheduling, and the right to refuse overtime.
In addition, the workforce in Canada is both ageing and living longer and the trend towards earlier retirement reversed in the later 1990s, especially for males. As larger portions of the workforce will be older, there will be higher age-related costs such as pensions and health related benefits as well as difficulties in retraining older workers for new jobs if the old jobs become obsolete. Many older workers who retire will later return to the labour force to non-standard jobs. Some will choose do so because they want the flexibility, especially if they already have a pension, but many will do so out of necessity because that is all that is available.
Immigration is especially important to Ontario where the majority of immigrants to Canada settle. Unfortunately, there is difficulty in integrating immigrants into the Canadian labour market in the sense that immigrants are unlikely to catch-up to the earnings of domestic-born workers who otherwise are similarly situated. The problem is getting more difficult for the more recent cohorts of immigrants who may never expect to fully catch up to the earnings of their comparable Canadian born workers. This has contributed to the increasing poverty rate amongst newly-arrived immigrants.
New immigrants are particularly likely to be vulnerable in the workplace because language barriers may keep them from knowing and exercising their rights. New immigrants may be less likely to complain about employment standards violations because they are economically vulnerable and fear reprisals. They are also less likely to work in unionized industries where the working conditions tend to be better and to be policed.
There continues to be a problem in Canada of students transitioning from school to work. Many students drop-out and this often has very negative implications for their employability and earnings. This has been especially true for Aboriginal youth. The problem of youth finding it difficult to successfully transition from school to work is compounded by the fact that the initial negative experience of not being able to get a job when first leaving school can lead to a longer run legacy of permanent negative “scarring” effects which can lead to lower lifetime earnings. Young people may react negatively to a society and labour market that will not accommodate them, and employers react negatively to the prospect of hiring young people who have a large gap in employment between their leaving school and their first job.
Union coverage rates have declined in Ontario from 29.9% in 1997 to 26.8% in 2015 for the public and private sectors combined. The decline in union coverage in the private sector has been particularly pronounced, falling from 19.2% in 1997 to 14.3% in 2015, whereas union coverage in the public sector has remained substantially higher and more stable (69.7% in 1997 and 70.7% in 2015). In Ontario’s private sector, the decline in union coverage has occurred primarily for men – it fell from 23.8% in 1997 to 16.0% in 2015; for women, there has been a smaller decline in union coverage, from 13.7% in 1997 to 12.3% in 2015. The decline in union coverage and density in the province is consistent with trends across all provinces. It has also occurred across all developed economies; in fact, the decline in Canada has been small relative to many other developed countries and especially the United States.
Much of the decline in the private sector is attributed to the movement of jobs away from industries and occupations with high union density (e.g., blue-collar work in manufacturing) to ones of low union density such as white-collar work (e.g., professional, technical and administrative) and service jobs. Some of the other alleged causes of the decline were the subject of many of the submissions to us. Some saw the decline as a result of greater employer resistance to unions, some as the result of specific changes to labour legislation that were detrimental to organizing, some as due to the union movement’s failure to modernize, adapt, and communicate effectively, while many others, especially in the academic community, point to the current law and the industrial relations system itself, which is based essentially on a “Wagner Act” model of bargaining and union organization by workplace. This model is criticized as largely irrelevant to the workplaces of the very large number of small employers which makes organizing, bargaining, and administering a collective agreement at the individual employer unit level not only inefficient but virtually impossible to effect.
In 2015, 87% of workplaces (defined as business establishments with employees) in Ontario had fewer than 20 employees and around 30% of all employees worked in such establishments. To the extent that it is impractical to organize, administer and bargain a collective agreement for so many small units of fewer than 20 employees (union coverage in such establishments in the private sector was only 7.2% in 2015), this means that about 87% of workplaces and almost 30% of the workforce are practically ineligible for unionization (not including construction).
The decline in the number of unionized employees and in the role of unions in the private sector makes the employment standards regime even more important for the future, as that is the regime that applies minimum standards today to 86% of workers in the private sector. This is even more the case if in the future there is a lack of practical possibility of union representation for many employees.
We must also consider whether the decline means that the structure of the industrial relations system has to be revised or rethought, including the rules governing organizing and the rules regarding the certification of unions. We must consider whether the existing system makes the expression of freedom of association through collective bargaining a meaningful possibility for very large numbers of private sector employees, or whether broader bargaining structures need to be considered.
Finally, we have to consider whether forms of employee voice other than unionization should be structured or made possible in the new workplaces of today.
Studies use the terms “precarious” and “vulnerable” in different ways. For example, the Law Commission of Ontario (LCO), which studied the need for reform of the ESA, used the term “vulnerable” to mean “those whose work can be described as ‘precarious’ and whose vulnerability is underlined by their ‘social location’ (that is, by their ethnicity, race, sex, ability and immigration status”). In other words, the LCO restricted the use of the term “vulnerable” to a subcategory of precarious workers with particular characteristics determined by their social location.
While we do not criticize the LCO for their use of the term “vulnerable,” we also do not believe that the word “vulnerable” was used in our Terms of Reference in any such narrow sense. Indeed, we think “vulnerable” is used in our Terms of Reference to include workers who are, for example, low paid, full-time, without benefits and whose vulnerable status is not at all associated with their social condition. We think the term potentially includes low wage, full-time, non-ethnic, non-racialized, male, Canadian-born workers, who have no disability.
We understand that technically, for some, “precarious” employment means all work that has an element of contingency, and therefore it includes employees who are well paid, sometimes precisely because of the uncertainty inherent in their work. However, the LCO did not use the term in that way, and excluded from the category of “precarious” workers those who performed temporary work and were high earners, and did not exclude those who were full-time or voluntary part-time if they were in precarious employment by virtue of other factors such as low pay without benefits.
We agree with the LCO that, for our purposes, the term “precarious” should be restricted to include only those whose work is low paid. We agree with the LCO that low wages are a necessary condition for those who are considered precarious for the purposes of needing protection and we agree that we must include some employees in standard employment categories.
We believe that the lack of security inherent in a poorly paid full-time non-union minimum wage job without benefits often creates uncertainty and insecurity for the worker that justifies calling it precarious employment. Accordingly, we find that vulnerable workers for the purposes of this Review include those who are:
We have not yet attempted to quantify the number of workers in these categories, nor have we defined “low wages,” although we will attempt to do both before we issue our Final Report. However, we have no difficulty in concluding that there is a substantial number of vulnerable workers in precarious jobs in Ontario in need of protection.
A study for the LCO based on 2008 data identified social groups more likely to be found in precarious jobs in Ontario. It identified the relative proportions of precarious workers in different populations. Although that study used different definitions to determine who was precarious, we find that its results were in keeping with the literature, and more important, the general picture it paints is useful for us for policy purposes in broadly identifying the populations that most concern us.
The populations that are overrepresented in precarious jobs, in descending order, relative to the overall average of 33.1% according to Noack and Vosko’s definition of precarious jobs are:
Non-standard employment as a category does not take into account aspects of precariousness or labour market insecurity such as low income, control over the labour process, and limited access to regulatory protection. However, there is an obvious correlation between the two, and non-standard employment as a category of employment is what is often written about and measured when precarious jobs are discussed and analysed. It is useful, therefore, to consider the nature and size in Ontario of non-standard employment and its component forms.
Components of non-standard work used in the literature, often in different combinations, include: temporary work (including term/contract, seasonal, and casual/other), solo self-employment (i.e., without paid help), part-time work, and/or multiple jobholding. Sometimes measures of non-standard employment involve a low-wage cut-off (e.g., encompass only those earning less than the median wage). At other times, they include persons at all pay levels. Some commentators include in the definition both those who work in part-time jobs voluntarily and those who involuntarily occupy such jobs because they want more hours or full-time work. Other commentators exclude voluntary part-timers, often acknowledging that the voluntary/involuntary distinction is murky as when people are constrained by pressures such as family responsibilities for childcare or eldercare.
Some non-standard work is well paid, sometimes to compensate for the uncertainty of the work. Some workers prefer higher cash wages to fringe benefits since they already receive fringe benefits as the children or spouses of other workers. Some non-standard jobs are temporary stepping stones into more permanent jobs.
These differences and different analytical approaches to the definition of non-standard employment make it difficult to determine the exact extent of the phenomenon and the extent to which it has changed over time.
In the literature the negative aspects of non-standard employment are well-documented. Such employment is generally characterized by low pay and low fringe benefits, little or no job security, limited training, few opportunities for career development and advancement, little control over one’s work environment, uncertainty over work scheduling, and little or no protection through unions. It can include large numbers of people who are recently unemployed, women, and members of visible minority groups, immigrants and youth. Also, some secure non-standard forms of employment also have a negative aspect such as, for example, poorly paid permanent part-time work.
Non-standard employment in Ontario constitutes more than a quarter of Ontario’s workforce: 26.6% in 2015. This type of employment comprises temporary employees (including term/contract, seasonal, and casual/other), solo self-employment (i.e., without paid help), involuntary part-time employees (i.e., part-time workers who say that they want full-time work, and/or multiple job-holding (where the main job pays less than the median wage).
Non-standard employment has grown over time, rising from 23.1% in 1997 to 26.6% in 2015.
From 1997 to 2015, non-standard employment grew at an average annual rate of 2.3% per year, nearly twice as fast as standard employment (1.2%).
Temporary employment grew at an annual rate of 3.5% from 1997 to 2015 – faster than the other component of non-standard employment.
Compared to workers in standard employment, those with non-standard jobs tend to have lower wages, lower job tenure, higher poverty rates, less education and fewer workplace benefits.
Poverty rates of workers in non-standard employment are two to three times higher than the poverty rates of workers in standard employment.
Real median hourly wages were about $24 for workers in standard employment relationships and $15 for workers in non-standard forms of employment in 2015.
In 2011 most workers in standard employment had medical insurance (74.3%), dental coverage (75.7%), and life or disability insurance (68.1%), or a pension plan (53.8%). In comparison, less than one-quarter of workers in non-standard employment relationships had job benefits such as medical insurance (23.0%) or dental coverage (22.8%), while only 17.5% were covered by life and/or disability insurance or had an employer pension plan (16.6%).
In 2015, the median job tenure in non-standard employment was 32 months, less than half the tenure of standard jobs (79 months). The median length of time in temporary jobs was 13 months in 2014.
The industries with the highest incidence or concentration of workers in non-standard employment, in descending order of the percentage of employment in the industry in non-standard employment (relative to the average incidence of 26.6%) are:
The distribution or share of non-standard employment by industry in descending order for 2015 is:
We now turn to consider in detail some specific aspects of non-standard employment and their characteristics in Ontario.
It has long been the case that the standard five-day work week and permanent 35 to 40 hour job is not as common as it once was. For many years, businesses have been expected to be open longer and sometimes around the clock as they have to meet the demand for goods and services. Employers need part-time workers to staff business that have peaks and valleys of demand for goods and services. Part-time work is often sought by those who need to balance work with family responsibilities, or students going to school or older workers who want to remain active labour force participants or may not have enough money to live comfortably in retirement.
Between 1976 and 2015 part-time’s share of total employment increased from 13.5% to nearly 20% (19%) with almost all of that increase occurring in the earlier period between 1976 and 1993. A little under a third of these (30% of part-time employees and 5.6% of all employees), referred to as involuntary part-time employees, had to compromise and to accept part-time jobs because they could not find the full-time positions they wanted. Part-time work is highly concentrated in the retail trades and accommodation and food services industries.
There are now many more women in the workplace and work-life balance issues are of great importance especially to those with child and family responsibilities. While this affects many men as well, women comprise two-thirds of the part-time workforce and are therefore disproportionately affected by any negative impacts that arise from part-time work and scheduling issues. In 2015, median hourly rates for part-timers were $12.50, which is only slightly more than half of the $24.04 for full-timers, although these are not comparisons between workers in the same job and same establishment (we lack the relevant data).
This wage difference does not take into account that health and other benefits (which are mostly non-taxable compensation), that are often not available to part-time employees where they are available to full-time employees in the same establishment.
The dramatic inequality in rates of pay between full-time and part-time employees, especially when they do similar work in the same establishment, together with the lack of benefits available to part-timers have also created policy issues we must consider carefully.
Today, employers’ need for part-time workers to deal with fluctuating demand dovetails with the preference of many in the workforce for that type of work. However, the employers’ need to schedule work according to fluctuations in demand often conflicts with the need of employees for predictability in their work lives. There is tension between the employer need for flexibility and the employee need for predictability, including those having to work on-call or who are subject to last minute changes in work schedules. There is also a need to consider the employer need for flexibility and part-time employees with the employee need for flexibility in being able to move more easily from one status to another. All these issues need to be examined in our Review.
The share of temporary employment in Ontario in 2015 was 10.8%, more than doubling from just under 5% in 1989. Temporary employment, including limited-term contracts, has been the fastest growing component of non-standard employment, expanding at an annual rate of 3.5% between 1997 and 2015.
Issues have been raised around the insecurity of limited-term contracts. Sometimes there is no issue regarding renewal because the contracts are genuinely for short duration, as in the case of a single project. Often they are renewed (sometimes automatically or consistently) over many years so that they appear to be almost permanent. Nevertheless, in many situations there is uncertainty and anxiety about whether there will be renewal, and in some professions and disciplines, permanent employment with the salaries, benefits, and security that come with it seems remote and impossible to attain.
Over the last twenty or more years in Ontario, temporary help agencies which provide staffing services and “assignment workers” to clients have become ubiquitous, giving rise to a host of concerns, among them the phenomenon of “permatemps,” and sometimes even situations where the entire workforce of a particular business is composed of “temporary” assignment workers. There have been concerns identified over the economic incentives for clients to use temporary workers for more dangerous work, and the lack of meaningful requirements to reintegrate those injured workers into the workplace. Indeed, this category of workers are part of an inherently insecure triangular relationship between agencies, clients and the assignment workers where they generally receive lower pay than others performing the same work, face immediate removal from the workplace, and constant uncertainty. Although Ontario made legislative changes in 2009 to regulate temporary help agencies, many important issues and problems remain.
There has always been a segment of the work force that has provided their services on a casual basis, and issues of pay and scheduling are raised for this group as they are for part-timers. Also, there has always been a part of the workforce that works on a seasonal basis in certain industries such as construction and agriculture where precarious work and vulnerable workers are often found.
Finally, there are also workers holding multiple jobs, often because their main job does not pay sufficient wages. The number of multiple job holders accounts for about 5.3% of the workforce in 2014, up from 2.2% in 1976. Three out of every five multiple job holders (62%) report earnings below the median hourly wage. Women are more likely than men to be in multiple jobs (59.3%) and in jobs with multiple non-standard characteristics (58.4%).
There are two categories of self-employment, one category of workers who have their own paid help and the other category where the person has no paid help. The entire category grew from 10.5% in 1976 to 16.1% in 1997 remaining roughly constant to 15.7% by 2015. Most of the growth was in self-employment without paid help, and that group was 6% of the workforce in 1976, 10.6% in 1997, and 10.9% in 2015. Self-employment with paid help has been fairly constant over the full period, increasing slightly from 4.4% in 1976 to 5.5% in 1997, then declining slightly to 4.8% in 2015.
Solo self-employment is classified as non-standard employment; self-employment with paid help is categorized as standard employment. Some of this growth is genuinely a result of entrepreneurial efforts by persons who start small business and employ others, while many are genuine entrepreneurial efforts by solo consultants and “freelancers.” Many workers now work from home or remotely, and/or are deemed by those to whom they provide services to be independent contractors; therefore they do not have access to benefit plans, or statutory benefits like maternity and paternity leave.
Some of the growth in self-employment is tied to the growth in project work, or to a growth in technological expertise by individuals who can provide their specialized services to many businesses. Some of the growth is the result of the fact that many employers do not want to make permanent commitments to employees. Some of the growth is the result of cyclical tough economic times and represents for many of the self-employed a poor second choice reflecting the absence of good employment opportunities. Some of the growth also represents a natural change in practices in some industries where people can now work online at home, and “freelance.”
In contrast, some of the growth in self-employment is the result of deliberate misclassification by businesses that do not wish to incur liability for employees and wish to shed liability for mandatory deductions and contributions to public pensions, employment insurance, and workers compensation schemes, together with shedding responsibility for employment standards such as maternity and parental leaves. Also, some of the growth is from a genuine desire by the providers of the service to get tax advantages that might not be available if they operated as employees, despite the fact that the dependency inherent in the relationship makes the providers of the service much closer to being employees than to being really in business for themselves. Some of this growth is highly controversial with changes in industry practice (such as the change from employed taxi drivers to allegedly independent providers who provide services to Uber).
Expected long tenure with one employer may be high for incumbent older workers, but many new entrants to the workforce cannot expect to have “lifetime” long-tenured jobs and a semblance of job stability with the same, often unionized, employer as did earlier generations. Younger workers can expect to start off in limited-term contracts or in internships (sometimes unpaid), or self-employment, and can expect to change careers often working for different employers.
Clearly there is a wide array of pressures and trends that are affecting the workplace. These were articulated to us in the various hearings and submissions provided across the province and in the research commissioned for this Review.
In many cases these pressures conflict, as when employer needs for flexibility in work scheduling conflicts with employee needs for some certainty in scheduling to facilitate work-life balance. In other cases, the pressures had the potential to benefit both employers and employees, as when some elements of non-standard employment met the needs of employers for flexibility and the needs of some workers to balance work and other personal or family commitments.
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. But they also highlight the complex trade-offs that are involved and the difficulties in navigating them.