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4.2 Scope and Coverage of the Labour Relations Act

See also: The Changing Workplaces Review

4.2.1 Coverage and Exclusions

Background

The Labour Relations Act (LRA) does not apply to:

  • a domestic worker employed in a private home;
  • a person employed in hunting or trapping;
  • an agricultural employee (covered by the Agricultural Employees Protection Act, 2002);
  • a person employed in horticulture (subject to certain conditions and exceptions);
  • a provincial judge; or
  • a person employed as a labour mediator or labour conciliator.

In addition, the LRA provides that no person shall be deemed to be an employee:

  • who is a member of the architectural, dental, land surveying, legal or medical profession entitled to practice in Ontario and employed in a professional capacity; or
  • who, in the opinion of the OLRB, exercises managerial functions or is employed in a confidential capacity in matters relating to labour relations.

Finally, the LRA either does not apply at all to, or its application is modified for, certain groups of employees in the public sector who are covered by specialized legislation. In particular:

  • police (covered by the Police Services Act and the Ontario Provincial Police Collective Bargaining Act, 2006);
  • professional firefighters (covered by the Fire Protection and Prevention Act, 1997);
  • employees of colleges of applied arts and technology (covered by the Colleges Collective Bargaining Act, 2008);
  • employees in teacher bargaining units (covered by the School Boards Collective Bargaining Act, 2014); and
  • crown employees (covered by the Crown Employees Collective Bargaining Act, 1993).

These public sector employees have separate labour relations legislation falling outside the scope of this Review.

The issues related to agricultural and horticultural employees are addressed separately, below.

In the late 1960s, the Task Force on Labour Relations (better known as the Woods Task Force) reviewed the exclusions that then existed under the federal legislation (broadly similar to what exists in the LRA today) and could find no justification for any of them when measured against the principle of freedom of association.[43] The Woods Task Force recommended that the statutory right to bargain collectively should be extended to:

  • supervisory and junior managerial employees;
  • employees working in a confidential capacity in matters relating to labour relations;
  • licensed professionals;
  • dependent contractors[44];
  • agricultural workers; and
  • domestic workers.

When the Canada Labour Code was subsequently enacted in 1973, it generally reflected this advice, providing an expansive definition of “employee”.

In 1993, the Ontario Labour Relations Act was amended and the list of exclusions under the legislation was revised. The new law allowed architects, dentists, land surveyors, legal professionals and some doctors[45] to apply for certification. A bargaining unit consisting solely of employees who were members of the same profession was deemed to be appropriate for collective bargaining, but the OLRB could include professionals in a bargaining unit with other employees if it was satisfied that a majority wished to be included in a broader unit. The 1993 amendments also repealed the exclusion of domestic workers from the Act. The amendments did not change the requirement that in order to be certified, a union must represent a bargaining unit of more than one person working for a single employer.

In addition, changes to the law in 1993 and 1994 addressed labour relations for agricultural workers, as discussed in more detail, below.

In 1995, the law was changed again, and the previously existing exclusions, including those for professionals and domestic workers, were reintroduced.

In reviewing the exclusions within the LRA, the circumstances with respect to each group need to be carefully considered. For example, the situation of domestic workers is unique. That workforce is overwhelmingly female, comprising many women who have come to Canada from low-income regions, and who face inherent vulnerability in the labour market. The historical exclusion of this group was apparently based on the belief that domestic workers formed an intimate social bond with the private households they worked for, and that the possibility of unionization would be an inappropriate barrier to this necessary bond.[46]

The situation of professionals such as doctors and lawyers is quite different. Professionals were seen as having adequate protection through their self-regulated professional bodies. As well, their exclusion seemed appropriate given the conflict between a professional’s continuing duty and obligation to his or her patients or clients and the right to strike.

Certainly, many question whether the historical rationales for excluding these groups from the LRA continue to be relevant. There are, for example, 19 non-health professions and 27 regulated health professions in Ontario; however, only architectural, dental, land surveying, legal and medical professions are excluded under the LRA.

In the case of managerial employees, different issues and considerations arise. The traditional and prevailing reason for excluding this group of employees from collective bargaining has been to ensure that the employer can effectively direct the functions of the enterprise. Managers, who have responsibility to direct and control employees, would have a conflict of interest if included in bargaining units. For bargaining unit employees, the exclusion of managers ensures that the union remains independent of employer influence.

In 1993, no changes were made to the managerial exclusion notwithstanding that a Ministry of Labour Discussion Paper released in 1991 had proposed an amendment to permit supervisory employees to bargain collectively in bargaining units separate from those of other employees.

The exclusion of “persons employed in a confidential capacity in matters relating to labour relations” has attracted little commentary.

Other Jurisdictions

All Canadian jurisdictions exempt those performing management functions or those employed in a confidential capacity in matters relating to labour relations from the definition of “employee” under their respective labour legislation (although there is some variation in the scope of the managerial exclusion).

The exclusion of hunters and trappers is unique to Ontario; the reason for this is unclear. The exclusion of land surveyors is also unique to Ontario. In other Canadian provinces, only Alberta, Nova Scotia and Prince Edward Island exclude regulated professions in a manner similar to Ontario,[47] and only Alberta and New Brunswick exclude domestic workers.

Submissions

Any review of current exclusions must be informed by the recent jurisprudence from the Supreme Court of Canada regarding freedom of association under the Charter (described in more detail in the Chapter on Guiding Principles, Values and Objectives). Suffice it to say that in Mounted Police Association of Ontario v. Canada (Attorney General),[48] the Court made it clear that freedom of association protects:

  • the right to join with others and form associations;
  • the right to join with others in the pursuit of other constitutional rights; and
  • the right to join with others to meet the power and strength of other groups or entities on more equal terms.

In the context of labour relations, the Court made it clear that these principles apply to all individuals and operate to guarantee the right of employees to associate meaningfully in pursuit of collective workplace goals, including collective bargaining.

With the exception of agricultural and horticultural workers (see below), the LRA exclusions have not been a dominant issue in our consultations.

The submissions received regarding the LRA exclusions can be summarized as follows:

  • some lawyers working for Legal Aid Ontario would like to have the ability to bargain collectively with their employer;
  • several labour organizations were of the opinion that the exclusions in the LRA, not already subject to a separate collective bargaining regime, should be abolished;
  • a number of stakeholders suggested removing the exclusion of domestic workers from the LRA; and
  • labour organizations would generally support expanding the coverage of the LRA but agree that managers and persons employed in a confidential capacity in matters related to labour relations ought to remain excluded.

Options:

  1. Maintain the status quo.
  2. Eliminate some or most of the current exclusions in order to provide the broadest possible spectrum of employees access to collective bargaining by, for example:
    1. permitting access to collective bargaining by employees who are members of the architectural, dental, land surveying, legal or medical profession entitled to practise in Ontario and employed in a professional capacity; and
    2. permitting access to collective bargaining by domestic workers employed in a private home.[49]

4.2.1.1 Agricultural and Horticultural Employees

Background

The LRA does not apply to:

  • agricultural employees within the meaning of the Agricultural Employees Protection Act, 2002; or
  • a person who is employed in horticulture by an employer whose primary business is agriculture or horticulture.[50] (“Horticulture” is not defined in the LRA, but has been interpreted by the OLRB to include activities such as gardening, landscaping, nurseries, growing trees, etc.)

The Agricultural Labour Relations Act, 1994

Until 1994, agricultural and horticultural workers were excluded from Ontario’s labour relations regime. In 1994, the Agricultural Labour Relations Act, 1994 (ALRA), was enacted by the government following the recommendations in the reports of the Task Force on Agricultural Labour Relations, namely, the Report to the Minister of Labour (June 1992) and the Second Report to the Minister of Labour (November 1992).

The government adopted most of the Task Force’s recommendations in developing the ALRA. Provisions of the ALRA included:

  • a preamble indicating that it was in the public interest to extend collective bargaining rights to the sector and that agriculture and horticulture sectors have certain “unique characteristics” (e.g., seasonal production, climate and time sensitivity, perishable nature of agricultural and horticultural products, the need to maintain continuous processes to ensure the care and survival of animal and plant life);
  • a prohibition against work stoppages (bargaining disputes that could not be resolved in bargaining or mediation were referred to final offer selection or, with the agreement of the parties, to voluntary interest arbitration);
  • incorporation by reference of many key provisions of the LRA (subject to certain modifications), including provisions relating to:
    • certification and decertification of bargaining agents;
    • duty to bargain in good faith;
    • successor rights;
    • unfair labour practices; and
    • enforcement by a special agriculture industry division of the OLRB;
  • restrictions on the certification of bargaining units containing seasonal workers (such bargaining units could be certified only if a regulation allowed it and the unit contained only seasonal employees); and
  • protections to ensure that family members could perform work for the employer, despite any provisions in a collective agreement, a union constitution, the ALRA, or the LRA, as it then was.

The ALRA was in effect from June 1994 to November 1995. During that period, the United Food and Commercial Workers Union was certified as the bargaining agent for a single bargaining unit in Leamington, Ontario, and filed two other certification applications.

In 1995, the ALRA was repealed in its entirety and the Labour Relations and Employment Statute Law Amendment Act (Bill 7) was enacted. In addition to terminating any agreements reached under the ALRA, Bill 7 terminated any certification rights of unions. Bill 7 was enacted pursuant to an initiative of the government and repealed the only statute ever to extend union and collective bargaining rights to Ontario’s agricultural workers. The net effect of Bill 7 was that agricultural and horticultural workers were again excluded.

Constitutionality of Agricultural Exclusion − Dunmore v. Ontario (Attorney General)

In Dunmore v. Ontario (Attorney General),[51] the Supreme Court of Canada considered the constitutionality of the exclusion of agricultural workers from the LRA. In Dunmore, farm workers challenged the exclusion as a violation of their freedom of association under the Canadian Charter of Rights and Freedoms. They argued that Bill 7, combined with section 3(b) of the LRA, prevented them from establishing, joining and participating in the lawful activities of a union, denying them a statutory protection enjoyed by most occupational groups in Ontario.

The Court quoted from the lower court decision in which Justice Sharpe stated that the government of Ontario has:

…“a very different perspective from that of its predecessor on appropriate economic and labour policy” and, indeed, rejects any attempt to include agricultural workers in its labour relations regime. Moreover, the affidavit evidence in this case “presents in stark contrast two conflicting views of an appropriate labour relations regime for agricultural workers in Ontario,” one denying the existence of any “industrial relations rationale” for the current exclusion, and the other maintaining that the collective bargaining model of the ALRA or the LRA would unduly threaten the province’s farm economy (pages 201-2). This latter view is evidently shared by the Legislature of Alberta, which is the only other Canadian province to exclude agricultural workers from its labour relations regime.

In Dunmore, in discussing the scope of state responsibility with respect to freedom of association, the Court asked whether:

…in order to make the freedom to organize meaningful, section 2(d) of the Charter imposes a positive obligation on the state to extend protective legislation to unprotected groups. More broadly, it may be asked whether the distinction between positive and negative state obligations ought to be nuanced in the context of labour relations, in the sense that excluding agricultural workers from a protective regime substantially contributes to the violation of protected freedoms. (See paragraphs 19-20).

The answer to the question of whether excluding agricultural workers from the LRA contributed to the violation of protected freedoms was unequivocal. At paragraph 48, the Court stated:

…it is reasonable to conclude that the exclusion of agricultural workers from the LRA substantially interferes with their fundamental freedom to organize. The inherent difficulties of organizing farm workers, combined with the threats of economic reprisal from employers, form only part of the reason why association is all but impossible in the agricultural sector in Ontario. Equally important is the message sent by section 3(b) of the LRA, which delegitimizes associational activity and thereby ensures its ultimate failure. Given these known and foreseeable effects of section 3(b), I conclude that the provision infringes the freedom to organize and thus violates section 2(d) of the Charter.

The Court declared the exclusion of agricultural workers from the LRA to be invalid and gave the government eighteen months to implement amending legislation if the government saw fit to do so. In providing this remedy, the Court neither required nor forbade the inclusion of agricultural workers in a full collective bargaining regime, whether in the LRA or a special regime applicable only to agricultural workers such as the ALRA. In deferring to the Legislature, the Court stated that the “question of whether agricultural workers have the right to strike is one better left to the legislature, especially given that this right was withheld in the ALRA.” (See paragraph 68).

In 2002, in response to Dunmore, the Ontario Legislature enacted the Agricultural Employees Protection Act, 2002 that came into force on June 17, 2003.

The Agricultural Employees Protection Act, 2002

Employees employed in agriculture are covered by the Agricultural Employees Protection Act, 2002 (AEPA). Horticultural workers remain excluded from the LRA but have no separate labour relations regime.

Agriculture is defined in the AEPA as including:

…farming in all its branches, including dairying, beekeeping, aquaculture, the raising of livestock including non-traditional livestock, furbearing animals and poultry, the production, cultivation, growing and harvesting of agricultural commodities, including eggs, maple products, mushrooms and tobacco, and any practices performed as an integral part of an agricultural operation, but does not include anything that was not or would not have been determined to be agriculture under section 2 of the predecessor to the LRA as it read on June 22, 1994.

An employer under the AEPA is defined as “(a) the employer of an employee, and (b) any other person who, acting on behalf of the employer, has control or direction of, or is directly or indirectly responsible for, the employment of the employee.”

The AEPA creates a separate labour relations regime for agricultural workers. The AEPA grants agricultural workers the right to form and join an employees’ association, to participate in its activities, to assemble, to make representations to their employers through their association on their terms and conditions of employment and the right to be protected against interference, coercion and discrimination in the exercise of their rights. The employer must give an association the opportunity to make representations respecting terms and conditions of employment and the employer must listen to those representations or read them. Complaints under the AEPA can be filed with the Agriculture, Food and Rural Affairs Appeals Tribunal. The Act falls under the purview of the Ministry of Agriculture, Food and Rural Affairs.

The AEPA does not contain a statutory requirement for the employer to bargain in good faith with an employees’ association. However, it should be noted that in Ontario (Attorney General) v. Fraser, a majority of the Supreme Court of Canada held that section 5 of the AEPA, correctly interpreted, protects not only the right of employees to make submissions to employers on workplace matters, but also the right to have those submissions considered in good faith by the employer.[52] The AEPA does not provide for strikes, lock-outs or for any other dispute resolution mechanism.

Constitutionality of the AEPA − Ontario (Attorney General) v. Fraser

The constitutionality of the AEPA was upheld by the Supreme Court of Canada in Fraser. In doing so, the Court noted that no effort had been made to resort to the Agriculture, Food and Rural Affairs Appeals Tribunal and that the Tribunal “should be given a fair opportunity to demonstrate its ability to appropriately handle the function given to it by the AEPA.” At paragraph 112, the Court stated:

Section 11 of the AEPA specifically empowers the Tribunal to make a determination that there has been a contravention of the Act, and to grant an order or remedy with respect to that contravention. The Tribunal may be expected to interpret its powers, in accordance with its mandate, purposively, in an effective and meaningful way.

In Fraser, the Court reaffirmed that section 2(d) of the Charter confers the right to a meaningful process of collective bargaining, understood as meaningful association in pursuit of workplace goals, and explained that such a process includes the employees’ rights to join together, to make collective representations to the employer, and to have those representations considered in good faith.

The Court also reaffirmed that a meaningful process of collective bargaining guarantees a process rather than an outcome or access to a particular model of labour relations. In other words, the Wagner Act is a particular model of collective bargaining but not a necessary model, to ensure the right of employees to meaningfully associate in pursuit of collective workplace goals.

Right to Strike − Saskatchewan Federation of Labour v. Saskatchewan

In Saskatchewan Federation of Labour v. Saskatchewan,[53] the Supreme Court of Canada further elaborated on what is meant by the Charter guarantee in section 2(d) to a meaningful process of collective bargaining.

The Court was required to deal with the question of whether designated employees could be prohibited by legislation from striking. In deciding this issue, the Court relied on numerous international obligations including Canada’s international human rights obligations, about which the court stated, at paragraph 62:

Canada’s international human rights obligations also mandate protecting the right to strike as part of a meaningful process of collective bargaining. These obligations led Dickson C.J. to observe that:
…there is a clear consensus amongst the [International Labour Organization] adjudicative bodies that [Convention (No. 87) concerning freedom of association and protection of the right to organize (68 U.N.T.S. 17 (1948)] goes beyond merely protecting the formation of labour unions and provides protection of their essential activities − that is of collective bargaining and the freedom to strike. [Alberta Reference, at page 359].

The Court held that the right to strike is an essential part of meaningful collective bargaining and concluded that while public sector employees who provide essential services may perform functions which, arguably, should be afforded a less disruptive mechanism for the resolution of collective-bargaining disputes, because the Legislature abrogated the right to strike and provided no alternate dispute resolution mechanism, the prohibition was unconstitutional. At paragraphs 25 and 81, the Court stated:

Where strike action is limited in a way that substantially interferes with a meaningful process of collective bargaining, it must be replaced by one of the meaningful dispute resolution mechanisms commonly used in labour relations. Where essential services legislation provides such an alternative mechanism, it would more likely be justified under s. 1 of the Charter. In my view, the failure of any such mechanism in the PSESA is what ultimately renders its limitations constitutionally impermissible.
The trial judge concluded that the provisions of the PSESA “go beyond what is reasonably required to ensure the uninterrupted delivery of essential services during a strike”. I agree. The unilateral authority of public employers to determine whether and how essential services are to be maintained during a work stoppage with no adequate review mechanism, and the absence of a meaningful dispute resolution mechanism to resolve bargaining impasses, justify the trial judge’s conclusion that the PSESA impairs the section 2(d) rights more than is necessary [Emphasis in original].

Right to Strike − Post Saskatchewan Federation of Labour v. Saskatchewan

The AEPA neither prohibits nor provides a right for agricultural workers to strike and does not provide for any alternate dispute resolution if their “discussions” reach an impasse.

It is obvious that strikes by agricultural workers could have significant adverse impact on planting, growing and harvesting, on animal health and safety, on bio-security and on a host of other important interests. In Dunmore, it will be recalled that the Supreme Court of Canada stated: “the question of whether agricultural workers have the right to strike is one better left to the legislature…” (See paragraph 68).

Other Jurisdictions

For the most part, other Canadian jurisdictions include agricultural and horticultural workers under their general labour relations statutes.

Alberta has recently passed legislation that will extend labour relations coverage to agricultural workers (these changes are not yet in effect). Our understanding is that the Alberta government intends to consult with stakeholders in the sector with a view to developing sector-specific regulations.

Before 2014, Quebec’s Labour Code provided, in section 21, that: “Persons employed in the operation of a farm shall not be deemed to be employees for the purposes of this division unless at least three of such persons are ordinarily and continuously so employed.” The alleged purpose of this provision was to exempt small farms from the provisions of the Code. However, the effect of section 21 of the Code was that, on a farm that employed two full-time workers and many seasonal employees, the seasonal workers were not covered by the provisions of the Code and, therefore, were effectively denied the benefits of organizing and of collective bargaining. Section 21 of the Code was challenged in the Quebec Superior Court and was found to be unconstitutional.

In response to the Superior Court decision, in 2014, the current government amended the Code implementing “Special Provisions Applicable to Farming Businesses”. The Special Provisions are modeled after the Ontario AEPA. They are applicable to agriculture operations where fewer than three full-time employees are ordinarily and continuously employed. The Special Provisions require an employer to give an association of employees of the farming business a reasonable opportunity to make representations about the conditions of employment of its members. The employer must examine the representations and discuss them with the association’s representatives. If representations are made in writing, the employer must give the association of employees a written acknowledgement of having read them. Diligence and good faith must govern the parties’ conduct at all times. As with the AEPA, there are no provisions for a strike or lock-out and no other dispute resolution mechanism is provided.

In farming businesses where three or more employees are ordinarily and continuously employed, the general provisions of the Labour Code apply allowing for certification of bargaining agents and collective bargaining. As with the former section 21 of the Code, the fact that many seasonal workers may be employed in a farm business does not trigger the application of the general provisions of the Code relating to the rights of employees to join a union and engage in collective bargaining. Those rights are triggered only where three full-time employees are ordinarily and continuously employed.

Submissions

The exclusion of agricultural employees from the LRA was the focus of significant attention during the consultations.

Labour and employee advocacy groups contend that the AEPA is ineffective and that agricultural employees should be covered by the LRA. They contend that access to traditional collective bargaining is necessary to give meaning to their constitutional rights under section 2(d) of the Charter. Unions and worker advocates assert that access to collective bargaining is essential if working conditions for vulnerable agricultural employees are to improve. Some groups also recommended that the exclusion of horticultural employees from the LRA should be eliminated.

We heard from employers that the status quo should be maintained. They argue that the Supreme Court of Canada in Fraser upheld the constitutionality of the AEPA and that there is no reason to change that model for agricultural employees. They contend that the LRA model of collective bargaining, with the right to strike, should not be applied to the agricultural sector whose unique characteristics remain constant. As outlined in the ALRA, 1994, these unique characteristics include:

  • seasonal production;
  • climate and time sensitivity;
  • the perishable nature of agricultural and horticultural products; and
  • the need to maintain continuous processes to ensure the care and survival of animal and plant life.

Given the unique nature of the agricultural business, some employer stakeholders expressed that extending LRA coverage to employees in the sector would tip the balance of power in favour of employees and unions at the expense of employers who are uniquely vulnerable to strike action. Employers asserted that farmers are price-takers, not price-makers and that competition from outside Canada is already a threat to Canadian farmers and to the economic viability of farming operations in Ontario. Employers submit that extended coverage under the LRA for agricultural workers will worsen their competitiveness and unduly threaten Ontario’s important farm economy.

Options:

  1. Maintain the status quo by leaving the existing LRA exemption for agricultural and horticultural employees in place and maintaining the AEPA for agricultural workers.
  2. Eliminate the LRA exclusions for agricultural and horticultural sectors under the LRA and repeal the AEPA for agricultural workers.
  3. Enact new legislation, perhaps like the ALRA, for agricultural workers.
  4. Include horticultural workers in any legislation covering agricultural workers.

4.2.2 Related and Joint Employers

Background

In an increasing range of circumstances, it has become important to determine, for the purposes of the LRA:

  • which of two entities is the employer;
  • whether a number of entities are a related employer; or
  • whether entities are joint employers.

Increasingly, organizations do not always operate as a single employer that directly hires its workforce and controls all aspects of its business. For example, it is common for businesses to supplement, and even replace, some or all of their regular workforces by engaging workers from a temporary help agency (THA) or labour broker.

Businesses may subcontract supervision for particular parts of an operation to a contractor together with the staffing responsibility for that part of the operation. Or an enterprise may be organized in such a way that different entities have responsibility for different facets of the business. It may not be clear who the employer is. An entity with real influence and control on the terms and conditions of employment may appear not to be an employer at all.

Similarly, franchisees must comply with the franchise agreement and the requirements of a franchisor, which could affect the manner in which they manage their workforce or operate their business. Some franchisors may exert more control or less control over the business of a franchisee and over terms and conditions of employment.

Several policy questions arise in these situations, including whether a collective bargaining relationship can be effective or stable if parties who also impact the employment relationship are not at the bargaining table. Another question is how to distinguish between different situations where part of a business is contracted-out. For example, where the lead business has no involvement in highly specialized work performed by a subcontractor, then involving the lead business in bargaining with respect to the subcontractor and imposing employer obligations on the lead business would arguably be unfair and excessive. However, this may be different from situations where the lead business is closely involved or has ultimate authority on an on-going basis with the core work performed by a contractor or franchisee.

True Employer

Where there is more than one potential employer for a group of employees under the LRA, the OLRB will determine which employer is the “true employer” on a case-by-case basis, weighing various factors to determine which choice appears to be consistent with the statutory and labour relations framework.

The OLRB has wrestled with the issue of determining the true employer. The analysis has evolved over the years as the context has changed and as these triangular relationships have become common. Historically, the Board has considered numerous factors such as whether a party:

  • exercises direction and control over the employees;
  • has authority to dismiss employees;
  • is perceived by the employees to be the employer; and
  • whether there exists an intention to create an employer-employee relationship.[54]

The Board now emphasizes that it makes a purposive and contextual analysis.[55] There is no single factor that is determinative and no exhaustive list of factors to apply mechanically to a particular situation. The question to be asked is, “having regard to all of the facts of the specific case, which entity should the union be required to bargain with and represent the employees with so that collective bargaining can be as effective and stable as possible?”[56]

The OLRB has considered the non-exhaustive factors in determining the true employer identified by the Supreme Court of Canada in Pointe-Claire (City) v. Québec (Labour Court), including: the selection process, hiring, training, discipline, evaluation, supervision, assignment of duties, remuneration and integration into the business.[57]

Accordingly, unlike the ESA, the OLRB typically does not treat assignment workers as employees of the THA. Instead, the question of who is the employer is determined on a case-by-case basis. Most often, the issue of who is the employer arises in certification applications.

If the OLRB determines that the assignment workers are employees of the client, they may be included in a proposed bargaining unit and count for the purposes of a representation vote at the client workplace, but such workers have also been excluded on occasion at the request of the union because of the difficulty in organizing them. However, if assignment workers are found to be employees of the THA and not of the client, they would be unable to unionize at the client workplace.

Although labour relations legislation technically enables THA workers to organize at the level of the THA, there are numerous challenges, and unionization at the agency level is almost non-existent in Canada.[58]

In certification applications that involve THA workers, there is often prolonged litigation at the OLRB to determine the true employer and, most frequently, the client has been found to be the employer by the OLRB.[59] However, in at least two certification applications, the OLRB has exercised its discretion to make a related employer declaration pursuant to section 1(4) of the LRA, and the temporary help agency and client business were both found to be the employer.[60]

Related Employer

The OLRB has the power to treat related or associated businesses as a single employer for the purposes of the LRA, where they carry on associated or related activities under common control or direction. These activities need not be carried on simultaneously and there is no need to establish that the businesses were structured for anti-union purposes.

Pursuant to the related employer provision under the LRA, the OLRB may “pierce the corporate veil” where more than one legal entity carries out economic activity that gives rise to employment or collective bargaining relationships regulated by the LRA.[61] The OLRB has stated that the purpose of this provision is to prevent mischief, by protecting the bargaining rights of a union from being deliberately or inadvertently eroded by the commercial operations of related employers.[62]

As indicated above, section 1(4), the related employer section, has been applied in certification applications to find that a temporary help agency and client business were carrying on associated or related activities under common control and direction. In distinguishing between those subcontracting arrangements where section 1(4) would apply and those where it would not, the OLRB has distinguished between situations where the subcontracting was legitimate and those where it was not. In general, the OLRB would be less likely to find that two entities are related in situations where the subcontracted work was not for core functions, was less permanent, and was more subject to the control of the subcontractor.[63]

The OLRB has also been asked to treat franchisors and franchisees as related employers and, depending on the context, has done so on some occasions but not others.[64]

Other Jurisdictions

In a recent case in the United States that has attracted much attention and controversy and is currently being appealed in the courts, the National Labor Relations Board (NLRB) held that, in light of the prevalence of THA employees, its common-law joint employer standard had failed to keep pace with changes in the workplace and economic circumstances.[65]

A majority of the NLRB held that a client business and staffing agency were joint employers, and that two or more entities may be joint employers of a common workplace, if:

  • both entities are employers within the meaning of the common law; and
  • they share or co-determine those matters governing the essential terms and conditions of employment.

In deciding whether an employer possesses sufficient control over employees to qualify as a joint employer, the NLRB will, among other things, consider if the employer has exercised control indirectly through an intermediary, or whether it has the right to do so. It is not necessary for the control to be exercised “directly and immediately.”

Submissions

Unions have told us 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 real parties that have primary economic interest and ultimate control over the business. Their recommendations include:

  • creating a rebuttable presumption that an entity directly benefiting from a worker’s labour is the employer of that worker for the purposes of the LRA;
  • deeming that any individual engaged in performing work for the benefit of an entity is an “employee” of that entity, regardless of the form of the relationship, unless the individual earns more than $150,000 per year from that entity; and
  • allowing the OLRB to provide for certification of common bargaining structures across groups of franchise-based operations associated with a given parent firm operating in a specific geographic area.

In the case of THAs, the point was raised that extensive litigation at the OLRB in every case in which there are assignment workers in an enterprise puts strain on the resources of all parties and that clear rules are required.

In the case of franchise operations, it was argued that where the franchisor exercises influence or control over the operations, it should be considered the employer of the franchisee’s employees. Alternatively, it was argued that regardless of the amount of actual control exercised by the franchisor over the operations of the franchisee, collective bargaining cannot be effective unless the real economic players in the enterprise are required to bargain with the employees. Accordingly, it was argued that both the franchisor and franchisee must be present at the bargaining table and be joint employers for labour relations purposes.

Employers and employer associations have told us that the current LRA provisions regarding related employers, franchises and THAs should be maintained or revised to exclude certain relationships. They emphasized the importance of certainty and noted that any changes could threaten established business models. It was argued that, by and large, franchisors have little if any authority over a franchisee’s employees, and that the franchisee is the entity that exercises control over terms and conditions of employment and is the real employer in a franchise’s day-to-day operation. It was argued that the franchisor should not be dragged into the labour relations world unless it takes an actual hands-on role in the franchise’s operation. Their recommendations include:

  • maintaining the status quo for bargaining under the LRA;
  • expressly excluding franchise relationships from the LRA;
  • establishing clear statutory criteria for a related employer declaration, particularly in a franchise context; and
  • requiring the OLRB to consider whether an entity exercises control over labour and employment issues before making a related employer declaration.

Many stakeholders raised issues respecting THAs and temporary workers that will be addressed under the Employment Standards Chapter of this Interim Report, which could affect collective bargaining. For example, labour and employee organizations recommended that temporary workers engaged through a THA be provided with the same wages, benefits and working conditions as workers hired directly by the client business. At least one employer association stated that temporary workers engaged through a THA should not be provided with the same working conditions as other workers, which conditions could include lay-off procedures under a collective agreement and defeat the purpose of engaging temporary workers.

Options:

  1. Maintain the status quo.
  2. Add a separate general provision, in addition to section 1(4), providing that the OLRB may declare two or more entities to be “joint employers” and specify the criteria that should be applied (e.g., where there are associated or related activities between two businesses and where a declaration is required in order for collective bargaining to be effective, without imposing a requirement that there be common control and direction between the businesses).
  3. Amend or expand the related employer provision by:
    1. providing that the OLRB may make a related employer declaration where an entity has the power to carry on associated or related activities with another entity under common control or direction, even if that power is not actually exercised; and
    2. stating which factors should be considered when determining whether a declaration should be made.
  4. Instead of a general joint employer provision, enact specific joint employer provisions such as the following:
    1. regarding THAs and their client businesses:
      1. create a rebuttable presumption that an entity directly benefitting from a worker’s labour (the client business) is the employer of that worker for the purposes of the LRA; and
      2. declare that the client business and the THA are joint employers;
    2. regarding franchises, create a model for certification that applies specifically to franchisors and franchisees (see Option 3 in section 4.6.1, Broader-based Bargaining Structures, below), and introduce a new joint employer provision whereby:
      1. the franchisor and franchisee could be declared joint employers for all those working in the franchisee’s operations; or,
      2. the franchisor and franchisee could be declared joint employers for all those working in the franchisee’s operations only in certain industries or sectors where there are large numbers of vulnerable workers in precarious jobs.

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