See also: The Changing Workplaces Review

5.3.1 Hours of Work and Overtime Pay

Background

Limits on working hours in Ontario were originally designed to protect the health and safety of women, children and youths. Under the Ontario Factories Act of 1884, maximum hours of work were set at 10 hours in a day and 60 hours in a week. Subsequent legislation covered hours of work in shops and mines.

In 1944, the Hours of Work and Vacations with Pay Act established maximum hours of work of 8 hours in a day and 48 hours in a week for most employees. A primary policy objective was to create jobs by limiting hours of work and to spread work among armed forces personnel returning to the civilian labour force. These maximums still form the basis of hours of work limits today.

Under the Employment Standards Act, 2000 (ESA), hours of work regulate the number of hours an employee can be required to work in a day/week, and excess hours refer to daily hours over eight hours in a day or an established work day and weekly hours over 48. Overtime rules refer to pay. Overtime pay was introduced in 1969 and set as time-and-one-half premium for hours beyond 48 hours in a week. In 1975, the trigger point was reduced to 44 hours where it remains today.

In 1986, growing concern over what appeared to be excessive hours being worked by some while many others were without any work led the Minister of Labour to appoint the Ontario (Donner) Task Force to examine hours of work and overtime rules. The report found that there was limited job creation potential in reducing hours of work and overtime. The report also found that a reduction in the standard work week after which overtime would be paid would increase the use of overtime. Among the report’s recommendations were: the standard work week should be reduced from 44 hours to 40; overtime after 40 hours per week should be voluntary and paid at time-and-a-half. These recommendations were not implemented.

Key changes to the hours of work and overtime pay rules were made in 2001. The ESA eliminated a long-standing permit system that had regulated hours of work after 48 hours in a week. The requirement for employee written agreement to work excess hours was introduced. Employees and employers could agree in writing to a work week of up to 60 hours without Ministry of Labour approval. Ministry approval was needed for agreements to work beyond 60 hours in a week. In addition, the current provisions for daily and weekly/biweekly rest periods and in between shifts were introduced (see below for an explanation of these).

The new Act also made changes with respect to overtime pay. Agreements to average overtime over a period of up to 4 weeks no longer required the approval of the Director of Employment Standards. The Director’s approval was still required to average overtime for a period longer than 4 weeks.

Changes were subsequently made in 2005 to require the Director of Employment Standards to approve all agreements between employers and employees to work excess weekly hours – i.e., more than 48 hours in a week – not just those above 60 hours a week. Similarly, the changes required the Director of Employment Standards to approve all agreements between employers and employees to average hours of work for the purposes of determining the employee’s entitlement to overtime – not just those that average hours beyond a 4-week period.

In general, the hours of work and overtime provisions of the ESA include limits on daily hours and weekly hours as well as rules regarding rest and eating periods and payment of overtime. In addition, there are rules permitting work beyond some limits provided there are written agreements between employers and employees and provided the employer has obtained approval from the Ministry of Labour Director of Employment Standards.

Exemptions to the hours of work and overtime provisions are commonplace, but their terms vary significantly with some containing different standards than in the ESA and others containing no standard. Some were not arrived at in a transparent process or in consultation with employees. Exemptions are dealt with as a separate subject in section 5.2.3.

Approximately 78% of employees are estimated to be fully covered by the hours of work provisions, while an exemption or different rule applies to approximately 22% of employees in the province.[149] About 15% of employees are exempt from the overtime provision.[150]

Daily Hours

The maximum number of hours employees can be required to work in a day is 8 hours or the number of hours in an established regular workday so long as the 11-hour daily rest period is complied with. The daily maximum of 8 hours or an established workday can be exceeded only when there is written agreement between the employee and employer. However, taking into account the 11-hour daily rest requirement, the absolute maximum regular workday that an employer can establish is 12 hours per day (which cannot be exceeded). For example, if the regular established work day is 9 hours per day, written agreement would be required for the employee to work beyond 9 hours per day, up to 12.

Weekly Hours

The maximum number of hours an employee can be required to work in a week is 48. A written agreement with the employee is required to exceed this maximum as is an approval by the Director of Employment Standards. We understand that employer applications to schedule up to 60 hours per week are routinely approved by the Director of Employment Standards. Applications for hours beyond 60 are scrutinized.

Rest Periods – Daily Rest and Weekly/Biweekly Rest

Rest periods are periods when an employee must be free from work.

Daily Rest

An employee must receive at least 11 consecutive hours off work each day. An employee and an employer cannot agree to less than 11 consecutive hours off work each day. Therefore the maximum number of hours of work that can be scheduled in 1 day is 12 hours of work because 1 hour for meal breaks is required if an employee is scheduled for 13 hours of work. An employee and an employer cannot agree to less, and there is no other way to modify it.

Weekly/Biweekly Rest

Employees must receive at least 24 consecutive hours off work in each workweek or 48 consecutive hours off work in every period of two consecutive workweeks. This means the effective maximum work week is 6 days. For example, a 6-day work week of 8 hours per day complies with the Act.

Rest Between Shifts

There is a requirement for 8 hours off work between shifts if the total time worked on successive shifts is more than 13 hours. An employer and employee can agree in writing that the employee will receive less than 8 hours off work between shifts.

Eating Periods

Employees are entitled to a meal break of 30 minutes scheduled by the employer at intervals that will result in the employee working no more than 5 consecutive hours without a meal break. A 30-minute eating period can be split into two periods within each 5-hour period, provided the employer and employee agree. This agreement can be oral or in writing.

Overtime Pay

There are two main components to the overtime pay provisions: overtime pay and overtime averaging for the purpose of calculating overtime pay.

Overtime pay is 1.5 times the employee’s regular rate of pay and is paid on weekly hours worked in excess of 44.

An employee and an employer can agree in writing that the employee will receive paid time off work instead of overtime pay. If an employee agrees to bank overtime hours, he/she must be given 1.5 hours of paid time off work for each hour of overtime worked.

Overtime averaging allows hours of work to be averaged over a specified period of 2 or more weeks for the purpose of calculating overtime pay. Overtime averaging is permitted if the employer and the employee agree in writing and if the employer obtains an approval from the Director of Employment Standards.

We understand that employer applications to permit overtime averaging over a period of 4 weeks or less are routinely approved by the Director of Employment Standards. Applications to permit overtime averaging over a period of more than 4 weeks are scrutinized.

There is no limit on the period over which overtime can be averaged.

Employee Written Agreements Required for Excess Hours

Section 17 of the ESA provides that an employer cannot require or permit an employee to work more than the daily or weekly limits unless there is employee agreement.

An employee can agree in writing to work more than eight hours a day – or more than the regular workday if it is more than eight hours – or to work more than 48 hours in a week. Employee agreement is not valid unless the employer has first provided the employee with a copy of a Ministry document outlining the rights of employees under the hours-of-work rules.

The Ministry’s Employment Standards (ES) Program policy allows for agreements between employers and employees to be made electronically. However there does not seem to be widespread knowledge that this is acceptable. Agreements made electronically are discussed in section 5.4.2.

In most cases, an employee can revoke the agreement by giving the employer two weeks’ written notice. An employer can also cancel the agreement by giving the employee reasonable notice.

In some cases, employee agreement is obtained at the time of hiring when the prospective employee may have little bargaining power if he/she wants the job. There is no evidence of how many employees refuse to grant consent at the time of hiring. Written consents are also obtained after hiring and there is no evidence as to how many employees decline to agree. Anecdotally we were told that in a plant where the culture lends itself to being able to refuse with confidence about 20% refuse to work excess hours. There is no evidence about the frequency of employee agreement being revoked by an employee once given although anecdotally it seems to be a rare occurrence.

In a unionized workplace, the Ministry recognizes that the trade union is the exclusive agent of employees in the bargaining unit and that the union can enter into an agreement with an employer on behalf of all bargaining unit employees wherever an agreement with an employee is required under the Act. There is one reported case[151] in which an arbitrator concluded that although the terms of the collective agreement allowed the employer to require an employee to work on a public holiday, the collective agreement could not override the employee’s individual statutory right to elect not to work. The Ministry has taken the position that “this decision is inconsistent with the Program’s interpretation of s. 7 of the Act and should not be followed.”[152]

The Ministry also takes the position that, where an agreement is made between a union and an employer, unilateral revocation by an employee is not possible during the operation of a collective agreement.

With respect to agreements to average overtime, the Ministry also accepts that for employees represented by a trade union, the written agreement may be embodied in a collective agreement or a memorandum of agreement or other written documentation signed by union representatives and that all bargaining unit employees are bound by the agreement.

We are advised that union consent to work excess hours and to overtime averaging is commonplace.

Relationship Between Hours of Work and the Human Rights Code

Section 5 of the Human Rights Code requires employers to provide their employees with equal treatment without discrimination because of family status and disability. Work requirements – including hours of work – that have an adverse impact on employees because of their family status and/or disability could be discriminatory unless the requirement is found to be reasonable and bona fide and the employer has accommodated to the point of undue hardship.

Other Jurisdictions

Most provinces’ standard daily workday is 8 hours and the standard workweek ranges from 40 to 48 hours. All provinces mandate a minimum number of consecutive hours off weekly (most require 24 consecutive hours off per week). However, Ontario is the only province to require 11 consecutive hours off each day. Ontario is the only Canadian jurisdictions to have daily rest rules mandating that the longest an employee can be required to work in a day is 12 hours and where no variations or extensions can be made. This is a hard cap on daily hours.

All provinces include provisions for overtime pay which is generally at time-and-a-half of regular hourly rate for all overtime hours worked. However, there are some variations in the trigger point at which overtime is paid. Nova Scotia, Saskatchewan, and British Columbia allow hours to be averaged.

Hours of Work

Hours of Work standards in various Canadian jurisdictions
Jurisdiction Daily Hours Weekly Hours Daily Rest Requirement

Ontario

8 hours or the hours in an established regular workday

48 (written agreement and approval from ministry required to exceed)

11 hours (hard cap; no variations possible)

8 hours between shifts (unless total time worked on successive shifts does not exceed 13 hours or unless the employer/employee agree otherwise)

Nova Scotia

N/A

48

N/A

Quebec

N/A

40

N/A

Newfoundland and Labrador

N/A

40

8 hours in a 24-hour period

Prince Edward Island

N/A

48

N/A

New Brunswick

N/A

N/A

N/A

Saskatchewan

8 hours or 10 hours (in a 4-day week)

40

8 hours in a 24-hour period(exception for emergency circumstances)

Alberta

12 hours (hours of work must be confined within a period of 12 consecutive hours in any 1 work day, however, the Director can issue a permit authorizing extended hours of work)

44

8 hours between shifts

British Columbia

8 hours

40

8 hours between shifts

Manitoba

8 hours

40

N/A

Federal

8 hours

40

N/A

Overtime Pay

Overtime Pay standards in various Canadian jurisdictions
Jurisdiction Overtime Pay Trigger

Ontario

After 44 hours

Nova Scotia

After 48 hours

Quebec

After 40 hours

Newfoundland and Labrador

After 40 hours

Prince Edward Island

After 48 hours

New Brunswick

After 44 hours

Saskatchewan

After 40 hours

Alberta

After 44 hours

British Columbia

After 40 hours in a week (at the rate of time-and-a-half).

After 8 hours in a day (at the rate of time-and-a-half) for the next 4 hours worked.

Double time for all hours worked in excess of 12 hours in a day.

Manitoba

After 40 hours

Federal

After 40 hours

Right to Refuse Excess Hours

It appears that only Ontario and four other provinces require employee agreement to work excess hours but the precise rules differ significantly and the rules in Ontario appear to be among the most stringent. The requirement for employee written agreement to work excess hours beyond eight hours a day or beyond the regular hours of work is only found in Ontario and in Manitoba.

If one were to ask where in Canada can the employer insist that employees work 1 to 4 excess hours on a given day – assuming the normal daily hours are 8 and the normal maximum weekly hours are 44 – the answer appears to be that the employer can insist[153] on this everywhere except in Ontario and Manitoba.

Quebec and Alberta prohibit more than 4 excess hours in a day or 12 hours work on a day. Saskatchewan permits the scheduling of up to 4 excess hours on a day – assuming a regular 40-hour week – because although it has no daily maximum, it has a weekly maximum of 44 hours.

Ontario does permit flexibility to employers to have regular daily hours of work that are in excess of 8 hours as long as the total hours do not exceed 48 in a week.[154] This means, for example, that an employer could schedule regular hours of work of 9 hours a day or four 9-hour days and one 8-hour day.[155] However, in these circumstances, the employer could still not insist on the employee working 1 to 3 excess hours a week[156]. There are nine provinces and the federal jurisdiction[157] that appear to permit an employer to require a 9-hour a day, 5-day-a-week schedule,[158] but of those, only Ontario and Saskatchewan permit an employee to refuse to work additional hours before they have worked 48 hours per week. Quebec allows employees to refuse after working 50 hours in a week and the other jurisdictions do not give employees the right to refuse to work hours above any weekly maximum.

Right to Refuse Excess Hours of Work standards in various Canadian jurisdictions
Jurisdiction Right to decline excess hours – daily Right to decline excess hours – weekly

Ontario

Above 8, or above regular hours of work

Above 48

Manitoba

Above 8

Above 40

Saskatchewan

N/A

Above 44

Alberta

Above 12

N/A

Quebec

Above 12

Above 50

British Columbia

No

No

Federal

No

No

Prince Edward Island

No

No

Nova Scotia

No

No

New Brunswick

No

No

Newfoundland and Labrador

No

No

In the US, many states have their own laws pertaining to hours of work and overtime pay. The standard work week is 40 hours under the Fair Labor Standards Act (FLSA). Also, the FLSA does not limit the number of hours in a day or days in a week an employee may be required or scheduled to work, including overtime hours. It does not allow for averaging agreements over 2 or more weeks. Unless specifically exempted, employees covered by the Act must receive overtime pay for hours worked in excess of 40 hours in a workweek at a rate not less than time and one-half their regular rates of pay.

Submissions

During consultations, we heard most about scheduling of hours of work; however, the limitations on hours of work were not at the forefront of the debate. Scheduling is dealt with in section 5.3.2.

A very general concern raised by labour and employee advocacy groups is that the power imbalance between employers and employees potentially prevents employees from freely exercising their hours of work rights, particularly the right to refuse excess hours. Other criticisms from these groups were that excess hours approvals are not adequately reviewed or enforced and that some excess hours approvals are granted almost automatically without rigorous pre-approval scrutiny by the Ministry.

Employers, on the other hand, complained that the requirement for written consent from every employee was burdensome and that the consistent refusal to work excess hours by a significant minority within the workforce sometimes threatened the ability of business, especially manufacturers, to respond to urgent production issues.

We did hear from some businesses that generally all the different requirements and rules for hours of work create a very complex and unwieldy system that is difficult to track and follow. We also heard from employers that the hours of work rules need to be more flexible particularly regarding the daily rest period rules which require at least 11 hours free from work and cannot be overridden by consent. Employer groups point out that some workplaces, such as those in the manufacturing sector, require greater flexibility owing to just-in-time processes.

We did hear that the requirement for employee consent to work excess hours, (e.g., above 8 hours in a day and above the regular 48-hour week (which prevails in some parts of the automotive industry)) caused hardship to some employers where employees in key jobs refuse to work excess hours, thus jeopardizing just-in-time production and delivery of goods.

Labour and employee advocacy groups called for a reduction in the weekly maximum hours of work to 40 hours and for the overtime pay trigger to also be reduced to 40 hours. They also argued for the elimination of overtime averaging on the basis that it reduces employees’ pay in some circumstances and that it gives employers an incentive to schedule excess hours. Limited scope to averaging would help to ensure that employees are not deprived of overtime pay rights. We found no data as to how much the averaging provision costs employees or saves employers.

During consultations, employer comments related to overtime focused on scheduling flexibility. Employers asked that both the 44-hour overtime pay trigger and the averaging provisions be maintained. Employers explained that many schedules run with many hours in a week and few hours in the next week, which is preferred by many employees. For example, averaging hours for purposes of calculating overtime pay allows flexible work arrangements such as compressed work weeks, “continental” shifts, and other arrangements that are becoming increasingly common. Employers contend that eliminating or tightening the rules on overtime averaging would probably reduce the number of these types of schedules and thus adversely affect the flexibility required to meet operational requirements.

Summary of Current Law for Hours of Work and Overtime Pay

  • maximum daily hours: 8 hours, or the number of hours in an established regular workday;
  • maximum weekly hours: 48 hours;
  • need written employee consent to work more daily or weekly hours;
  • also need ministry director approval to work more than 48 weekly hours;
  • compulsory daily rest period of at least 11 hours, meaning an effective limit on workdays of 12 hours (no exceptions possible except by formal exemption);
  • 8 hour rest required between two shifts of more than 13 hours combined duration;
  • weekly/bi-weekly rest periods: 24 consecutive hours off per week or 48 consecutive hours off per 2 weeks;
  • mandatory 30-minute eating period for every 5 hours worked;
  • overtime pay after 44 hours at 1.5 times the regular rate; and
  • overtime averaging permitted with employee written consent and ministry director approval.

Options:

  1. Maintain status quo.
  2. Eliminate the requirement for employee written consent to work longer than the daily or weekly maximums but spell out in the legislation the specific circumstances in which excess daily hours can be refused.

    For example, in Fairness at Work, Professor Arthurs effectively recommended that employers should be able to require employees to work, without consent, up to 12 hours a day or 48 in a week (with exceptions where they could be required to work even longer) but that there should be an absolute right to refuse where: the employee has unavoidable and significant family-related commitments; scheduled educational commitments or a scheduling conflict with other employment (part-time workers only). This change would mean employers could require employees to work excess daily hours without consent as set out above.

  3. Maintain the status quo employee consent requirement, but:
    1. in industries or businesses where excess hours are required to meet production needs as, for example, in the case of “just-in-time” operations, the need for individual consent would be replaced by collective secret ballot consent of a majority of all those required to work excess hours; and
    2. employees required to work excess hours as a result of (a), would still have a right to refuse if the employee has unavoidable and significant family-related commitments; scheduled educational commitments or a scheduling conflict with other employment (part-time workers only); or protected grounds under the Human Rights Code such as disability. This “right to refuse” would also apply to unionized employees.
  4. The same as option 3, except that instead of a blanket legislative provision as in (3a), where a sector finds it difficult to comply with the daily hours provisions, exemptions could be contemplated in a new exemption process, the possibility of which is canvassed in section 5.2.3.
  5. Eliminate daily maximum hours, but maintain the daily rest period requirement of 11 hours, and the weekly maximum hours of work of 48.
  6. Eliminate or decrease the daily rest period below 11 hours which would effectively increase the potential length of the working day above 12 hours.
  7. Enact a legislative provision similar to one in British Columbia that no one, including those who have a formal exemption from the hours of work provisions, can be required to work so many hours that their health is endangered.[159]
  8. Codify that employee written agreements can be electronic for excess hours of work approvals and overtime averaging.
  9. Eliminate requirement for Ministry approval for excess hours (i.e., only above 48 hours in a week). Maintain requirement for employee written agreement.
  10. Eliminate requirement for Ministry approval for excess weekly hours between 48 and 60 hours. Maintain requirement for Ministry approval for excess hours beyond 60 hours only. Maintain requirement for employee written agreement.
  11. Reduce weekly overtime pay trigger from 44 to 40 hours.
  12. Limit overtime averaging agreements – impose a cap on overtime averaging (e.g., allow averaging for up to a 2- or 4-week or some other multi-week period). Maintain requirement for employee written agreement. Ministry approval could (or could not) be required.

5.3.2 Scheduling

Background

The ESA does not include provisions regulating scheduling of work by employers. There is currently no provision in the ESA requiring an employer to provide advance notice of shift schedules or of last minute changes to existing schedules.

There is a “three-hour rule” providing that, when an employee who regularly works more than 3 hours a day is required to report to work but works less than 3 hours, he/she must be paid the higher of:

  • 3 hours at the minimum wage, or
  • the employee’s regular wage for the time worked.[160]

Despite the numerous and varied responsibilities of many in today’s workforce, there are workers who often have very little ability to make changes to their work schedules when those changes are needed to accommodate family and other responsibilities.

Many low-wage workers not only have very little or no control over the timing of the hours they are scheduled to work but also receive their schedules with very little advance notice and work hours that vary significantly. Uncertainty can also include: last-minute call-in where no schedule is maintained and, where there is a schedule, last-minute notice to employees of changes in work hours, and “on-call” shifts where employees are expected to be available for work on short notice (i.e., less than 24 hours’ notice). Such practices make it difficult for employees to plan for child-care, undertake further training and education, maintain or search for a second job, make commuting arrangements, and plan other important activities. Consequently, uncertainty in scheduling practices may contribute to making work precarious.

Other Jurisdictions

Canada

Like Ontario, most Canadian and American jurisdictions have some reporting pay requirement that requires employers to compensate employees for a minimum number of hours when they report for work, but are sent home before the end of the scheduled shift. The amount of reporting pay required in such circumstances differs among jurisdictions, but generally ranges from 2 to 4 hours.[161]

There are examples in Canada of schedule posting requirements. In Alberta, every employer must notify the employee of the time at which work starts and ends by posting notices where that can be seen by the employee, or by any other reasonable method. An employer must not require an employee to change from one shift to another without at least 24 hours’ written notice and 8 hours of rest between shifts. In Saskatchewan, employers must give employees notice of the work schedule at least 1 week in advance and must provide employees written notice of a schedule change 1 week in advance.

The federal government has also made a commitment that certain employees will be given the right to request flexible hours (in addition to an increased parental leave). For example, employees will have the legal right to ask their employers for flexibility in their start and finish times, as well as the ability to work from home.[162]

United States (US)

Scheduling has been the subject of much discussion across the US, in response to the issues raised here. Recent developments have included: predictable scheduling laws (i.e., advance notice provisions); enhanced employee flexibility laws (i.e., right to request provisions); and non-legislative approaches (e.g., retailers re-evaluating and updating existing practices in response to external pressures).

In 2014 San Francisco became the first US jurisdiction to pass legislation[163] penalizing the use on-call shifts. The San Francisco Retail Workers Bill of Rights is intended to give hourly retail staffers more predictable schedules and priority access to extra hours of available work. It applies to retail chains with 20 or more locations nationally or worldwide and that have at least 20 employees in San Francisco under one management system. It is estimated that this law affects about 5% of the city’s workforce.

The ordinances require businesses to post workers’ schedules at least 2 weeks in advance. Workers receive compensation for last-minute schedule changes, “on-call” hours, and instances in which they are sent home before completing their assigned shifts. Specifically, workers receive 1 hour of pay at their regular rate of pay for schedule changes made with less than a week’s notice and 2 to 4 hours of pay for schedule changes made with less than 24 hours’ notice. Finally, it requires employers to provide equal treatment to part-time employees, as compared to full-time employees at their same level, with respect to:

  • starting hourly wage;
  • access to employer-provided paid time off and unpaid time off; and
  • eligibility for promotions.

Hourly wage differentials are permissible if they are based on reasons other than part-time status, such as seniority or merit systems. Further, employees’ time-off allotments may be prorated according to hours worked. Issues around equal pay for part-time and temporary employees are addressed in section 5.3.7.

The Retail Workers Bill of Rights in San Francisco has generated a larger discussion in the US about the need for predictable and stable schedules for part-time employees. A number of state legislatures have introduced or enacted similar measures including Michigan in 2014, and Connecticut, California, Illinois, Maryland, Massachusetts, Michigan, Minnesota, New York, Oregon, and Indiana in 2015.[164]

Some governments have passed (i.e., Vermont[165] and San Francisco[166]) right to request provisions. Such a right to request is intended to protect those who choose to limit their work hours in order to address family duties, to promote continuance of working at one’s current job, and to accommodate the choice of parenthood even if labour force withdrawal is affordable. Moreover, such provisions protect against reprisals for requesting schedule changes for any number of reasons.

Two federal bills have been introduced which demonstrate the extent to which scheduling issues have begun to have greater prominence in the debate in the US over workplace rules.[167]

Retailers are addressing scheduling issues on their own, with many publically speaking about existing or proposed changes. For example, Abercrombie & Fitch, Victoria’s Secret, and Gap Inc. pledged to make specific changes to their scheduling practices following inquiries by the New York Attorney General requesting information about their on-call scheduling practices questioning whether such practices were legal. Other large retailers in the US have voluntarily implemented predictable and stable scheduling regimes for part-time employees. In a unionized environment, Macy’s sets schedules for its employees as far as six months in advance for some of the shifts at its unionized stores in and around New York City.[168] Some companies have instructed their local store managers to consider requests for making schedules more stable or consistent week-to-week, such as Starbucks and Ikea, which provide up to 3 weeks’ advance notice of upcoming schedules.[169]

Outside North America, other jurisdictions have also implemented right to request legislation.

European Union (EU)

An EU directive on part-time work includes provisions facilitating movement from full-time to part-time status and vice versa, where employers are required to give consideration to requests from workers to transfer from one status to another.[170] Some European countries allow requests for transfers for all employees, but in many cases these are limited to those with caregiving responsibilities. A wide entitlement to request a change in status is often accompanied by the right to refuse for any reason although there may be a requirement that the employer meet employees to discuss the matter and provide a rationale in writing within a fixed period of time if the request is rejected. Reprisals cannot be taken against workers for making the request. While employers have a broad right to refuse requests, there is evidence that employers are more likely to permit adjustments between full and part-time works when a statutory right to request the change is in place.

The Netherlands passed the Part-Time Employment Act, which gives workers the right to periodically request a change in their weekly work hours (either requesting more or fewer hours). In July 2014, the UK extended the legal right to request flexible work arrangements for those with caregiving responsibilities to all employees to request flexible work arrangements.[171]

Australia

In Australia, caregivers have the right to request flexible work arrangements. It is available to any employee (with at least 12 months on a full-time or part-time experience with their employer) who has a child up to age 18 (or any caregiving responsibility for a member of his or her immediate family or household), has a disability, is experiencing domestic violence, or is age 55 or older.[172]

Australia also deals with scheduling as there are 122 industry and occupation awards (including retail and hospitality sectors) that cover most workers. Among other standards, the system addresses scheduling practices (i.e., rostering) as they would be relevant to particular sectors (e.g., notice of schedule changes must be provided by advance written notice for part-time retail workers).[173]

Submissions

Employee-representative bodies and advocacy groups expressed that vulnerable workers need predictable schedules, minimum shift requirements and that those workers should be compensated for being on-call (i.e., requirement to be available for a period of time during which the employer may require an employee to work but which is not compensated unless actually called into work) and for last minute changes. They are critical of the limited scheduling regulations in the ESA. For example, the current reporting pay requirement is relatively easy to circumvent through the scheduling of split shifts by employers.

They suggested that scheduling uncertainty is most prevalent in the food, hospitality, retail, health care, and child-care sectors wherein hours of work and incomes tend to be unpredictable. These sectors predominantly comprise women, visible minorities, and recent immigrants.

The majority of submissions from these groups recommend: advance notice (i.e., posting) of employees schedules (e.g., 2 weeks); minimum shift requirements (e.g., 3 hours per day to 16-24 hours per week); compensation for last minute changes to schedules (e.g., 1 hour’s pay if schedule is changed less than a week’s notice, four hours’ pay if changed with less than 24 hours’ notice); the right to request provisions without reprisals; offering of shifts to part-timers prior to hiring new staff; and job-sharing provisions – to name a few. The rationale behind such recommendations is to address issues of the need for predictability in working hours, underemployment, financial uncertainty, and general precariousness in the labour market that scheduling uncertainty contributes to and exacerbates. Moreover, anecdotally – such provisions are said to reduce absenteeism, workforce turnover, and to increase employee morale and engagement.

Employer representative groups generally strongly oppose any mandatory scheduling provisions in the ESA that apply to all employers (i.e., provisions that are applicable irrespective of the size, location, and industry). As such, they have explicitly stated a one-size-fits-all approach for scheduling does not work and that no changes be made to current models of scheduling in the ESA.

Some unions have also supported this point of view. Employers and trade unions have both expressed that scheduling can sometimes be a very difficult and complex matter requiring research, negotiations, and (sometimes) pilot projects in an attempt to achieve workable scheduling practices that balance the interests of employers for flexibility and productivity with the employees’ interests in predictability.

Professor Harry Arthurs recommended that after 1 year of service, employees should have a right to request, in writing, that their employer decrease or increase their hours of work, give them a more flexible schedule or alter the location of their work. The employer would be required to give the employee an opportunity to discuss the issue and provide reasons in writing if the request is refused in whole or in part. There would be no appeal of an employer’s decision on the merits. The employer’s obligation to respond to an employee’s request would be limited to one request per calendar year, per employee.[174]

Options:

  1. Maintain the status quo.
  2. Expand or amend existing reporting pay rights in ESA:
    1. increase minimum hours of reporting pay from current 3 hours at minimum wage to 3 hours at regular pay;
    2. increase minimum hours of reporting pay from 3 hours at minimum wage to 4 hours at regular pay; or
    3. increase minimum hours of reporting pay from 3 hours at minimum wage to lesser of 3 or 4 hours at regular rate or length of cancelled shift.
  3. Provide employees job-protected right to request changes to schedule at certain intervals, for example, twice per year. The employer would be required to consider such requests.
  4. Require all employers to provide advance notice in setting and changing work schedules to make them more predictable (e.g., San Francisco Retail Workers Bill of Rights). This may include (but is not limited) to:
    • require employers to post employee schedules in advance (e.g., at least 2 weeks);
    • require employers to pay employees more for last-minute changes to employees’ schedules (e.g., employees receive the equivalent of 1 hour’s pay if the schedule is changed with less than 2 days’ notice and 4 hours’ pay for schedule changes made with less than 24 hours’ notice);
    • require employers to offer additional hours of work to existing part-time employees before hiring new employees;
    • require employers to provide part-timers and full-timers equal access to scheduling and time-off requests;
    • require employers to get consent from workers in order to add hours or shifts after the initial schedule is posted.
  5. Sectoral regulation of scheduling – encourage sectors to come up with own arrangements:

    Recognizing the need for predictable and stable schedules for employees in certain sectors, and the variability of scheduling requirements, the government would adopt a sectoral approach to scheduling as follows:

    • the government would be given the legislative authority to deal with scheduling issues, including by sector;
    • the policy of the government would be to strongly encourage sectors which required regulation to come up with their own scheduling regimes but within overall policy guidelines of best practices set by the Ministry;
    • to develop the overall policy guidelines for scheduling, the government would appoint an advisory committee, comprising representatives from different sectors:
      • representatives of employers;
      • representatives of employees;
      • individuals with expertise in scheduling; and
      • others who may facilitate an educated discussion of the issues (e.g., representatives of community service agencies and academics with relevant expertise).

      The advisory committee would be chaired and discussions facilitated by a neutral person from outside the Ministry of Labour. Once the guidelines were in place, sectoral committee structured as described in the exemptions section of this report (see section 5.2.3) could be established as required to advise the Minister on the scheduling issues in that sector.

5.3.3 Public Holidays and Paid Vacation

5.3.3.1 Public Holidays

Background

Ontario has nine public holidays that most employees are entitled to take off work with public holiday pay. This is in line with the number of public holidays in other Canadian provinces and the federal jurisdiction, which ranges from six to ten days.

Public holiday pay is equal to the total amount of regular wages earned and vacation pay payable to the employee in the 4 work weeks before the work week in which the public holiday occurred, divided by 20. The proper calculation of public holiday pay is a common problem for employers. It is often pointed to as an example of unnecessary complexity in the Act.

Before 2001, if an employee’s work hours did not vary, the employee was paid a regular day’s pay for the public holiday. There was a requirement to calculate public holiday pay only for employees whose daily hours of work varied. Since 2001, employers are required to perform public holiday pay calculations for every employee, even those whose work hours do not vary.

In addition, those who work on a public holiday are entitled to be paid:

  • public holiday pay plus premium pay of 1.5 times the employee’s regular rate of pay; or
  • their regular rate for hours worked plus a substitute day off with public holiday pay.

There are special rules for public holidays that apply to construction employees. Such employees are not entitled to public holidays or public holiday pay if they receive 7.7% or more of their hourly wages for vacation or holiday pay.

Submissions

Current rules around public holidays (other than applicable exemptions) were not widely raised during our consultations. Some organizations suggested paid religious holidays that would mirror the two Christian-based public holidays (Good Friday and Christmas Day).

We heard from some organizations that they want public holiday pay to be simplified and more straightforward. For instance, the calculation could be more aligned with the applicable pay period. There could be greater clarity about whether bonuses and other similar payments form part of the calculation.

We also heard from small business that premium pay can impose a burden for retailers who need to be open on public holiday days.

Options:

  1. Maintain status quo – maintain the current public holiday pay calculations – i.e., total amount of regular wages earned and vacation pay payable to the employee in the 4 work weeks before the work week in which the public holiday occurred, divided by 20.
  2. Revert to the former ESA’s public holiday pay calculation –
    • Employees whose work hours do not vary: regular wages for the day;
    • Employees whose work hours differ from day to day/week-to-week (i.e., there is no set schedule of hours for each day of the week):
      • the average of the employee’s daily earnings (excluding overtime pay) over a period of 13 work weeks preceding the public holiday; or
      • the method set out under a collective agreement.
  3. Combined calculation – revert to the former ESA’s public holiday pay calculations for full-time employees and commission employees and maintain the current ESA’s formula for part-time and casual employees –
    • Full-time and commission employees: regular wages for the day;
    • Part-time and casual employees: total amount of regular wages earned and vacation pay payable to the employee in the 4 work weeks before the work week in which the public holiday occurred, divided by 20.
  4. Set a specified percentage for public holiday pay – e.g., employees receive 3.7% of wages earned each pay period. This would be the equivalent of wages for 9 regular working days to reflect the 9 public holidays in a year.[175] Under this option public holiday pay would essentially be “pre-paid” throughout the year – employees would not receive public holiday pay on each individual holiday and existing qualifying criteria would no longer apply.[176]

    Employees who worked on a public holiday would still be entitled to premium pay (or a substitute day off).

5.3.3.2 Paid Vacation

Background

Employees are entitled to 2 weeks of vacation time after each 12-month vacation entitlement year. The ESA does not provide for any increases to the 2-week vacation time entitlement based on length of employment although a contract of employment or collective agreement might do so. There are rules around when vacation must be taken.

Vacation pay must be at least 4% of wages earned in the 12-month vacation entitlement year (or alternative period).

Compared to other Canadian provinces and the federal jurisdiction, Ontario has the least generous provisions with respect to vacation time and pay. Most other provinces and the federal jurisdiction start with 2 weeks of paid vacation, and increase it to 3 weeks after a certain period of employment, which ranges from 5 to 15 years. One province, Saskatchewan, starts with 3 weeks of paid vacation, and increases it to 4 weeks after 10 years of employment.

Submissions

Employee advocates and labour groups have said that vacation entitlements should be increased. Many suggested starting at 3 weeks of paid vacation, and increasing to 4 weeks after 5 years of employment. Some organizations suggested that employees get 3 weeks’ vacation after 5 years of employment; some suggested 3 weeks for everyone.

Some employer organizations said that the current entitlements around paid vacation should be maintained. Some want greater flexibility regarding when vacation pay is paid.

Options:

  1. Maintain the status quo of 2 weeks.
  2. Increase entitlement to 3 weeks after a certain period of employment with the same employer – either 5 or 8 years.
  3. Increase entitlement to 3 weeks for all employees.

5.3.4 Personal Emergency Leave

(Note: Issues concerning paid sick days and doctors’ notes are addressed in section 5.3.5).

Background

Under the current legislation, employees whose employer regularly employs 50 or more employees are entitled to 10 days of unpaid PEL.

Section 50 of the ESA provides that an employee may use these days for a personal illness, injury or medical emergency or for the death, illness, injury or medical emergency or urgent matter concerning:

  • the employee’s spouse;
  • a parent, step-parent or foster parent of the employee or the employee’s spouse;
  • a child, step-child or foster child of the employee or the employee’s spouse;
  • a grandparent, step-grandparent, grandchild or step-grandchild of the employee or of the employee’s spouse;
  • the spouse of a child of the employee;
  • the employee’s brother or sister;
  • a relative of the employee who is dependent on the employee for care or assistance.

Employees must inform their employers about their plans to take the leave either before or as soon as possible after they have begun the leave.

Overall, about three-quarters (74%) of Ontario employees are estimated to be fully covered by the PEL provisions of the ESA. About 8% of employees have special rules for emergency leave, largely professional employees who are not permitted to take PEL if doing so would constitute professional misconduct or dereliction of duty. An additional 971,000 employees – or 19% – are exempt from the PEL provisions, because they work in small firms.[177]

There were 442,659 businesses with employees in Ontario in 2014. Only 5% of businesses employed more than 50 employees while 95% of businesses employed 49 or less employees. More than half of these businesses (58%) employed less than five employees.[178]

Other Jurisdictions

PEL is not easily compared to leave provisions in other jurisdictions because it combines a number of different leaves (sick, bereavement, and family responsibility leaves into one with an employer size threshold (50+)).

Whereas Ontario has 10 days that can be used for the purposes outlined above, every other Canadian jurisdiction except for Alberta (which does not have any leaves for sickness, bereavement, and/or family responsibility) has a specific number of days for each categorized leave. For example, New Brunswick has sick leave of up to 5 days, family responsibility leave of up to 3 days, and bereavement leave of up to 5 days for a total of up to 13 days, whereas British Columbia has bereavement leave of up to 3 days and family responsibility leave of up to 5 days for a total of 8 days.

Ontario is also the only Canadian jurisdiction to have an employer-size (50+) eligibility threshold.

Payment for any of these leaves is not common, but does exist. The federal jurisdiction provides 3 paid days of bereavement leave for immediate family members. Quebec offers 1 paid bereavement day for immediate family members, and Newfoundland and Labrador provide 1 paid bereavement day for a relative.

Only Prince Edward Island provides for paid sick leave. After six months continuous service with an employer, an employee is entitled to unpaid leaves of absence of up to three days for sick leave during a twelve-month period. If the employee takes three consecutive days, the employer may ask for a medical certificate. Employees who have more than five years of continuous service with the same employer are entitled to one day of paid sick leave and up to three days of unpaid sick leave each calendar year.

In the US, it is common to have no statutory leave entitlement for PEL. Only California and Massachusetts have PEL-related leaves. Both states have provisions for paid sick leave, which are described in section 5.3.5.

Submissions

During consultations we heard concerns from employee advocates about the 50+ employee threshold. They have made recommendations to remove this threshold and extend PEL to employees working for smaller employers so that all employees could have access to this benefit.

Employers asserted that PELs should be assessed in the context of the other leaves that are provided in the ESA including: pregnancy leave, parental leave, family medical leave, organ donor leave, family caregiver leave, critically ill child care leave, crime related child death of disappearance leave, leave for declared emergencies and reservist leave (see section 5.3.6). The problems many employer stakeholders point to is the complexity in navigating the various ESA leaves, and concerns about the way leaves are implemented.

Some employers with generous paid sick leave and bereavement and other leave policies advised that some of their employees view PEL days as being an entitlement that exists in addition to leaves already provided by the employer. The ESA currently provides that:

If one or more provisions in an employment contract…that directly relate to the same subject matter as an employment standard provide a greater benefit to an employee than the employment standard, the provision or provisions in the contract…apply and the employment standard does not apply.

Some employers have said that the nature and scope of the current PEL makes it difficult for employers to establish that their leave policies provide a greater right or benefit than PEL. For example, some say that even though they provide for paid sick leave, some employees are asking for additional unpaid sick leave days pursuant to the statutory provision.

During consultations, we heard from a number of employers about absenteeism and employees abusing the PEL provisions. Some employers pointed to high levels of absenteeism on Mondays and Fridays and on days abutting holidays as circumstantial evidence of abuse. They also asserted that although they are entitled to “require an employee who takes leave under this section to provide evidence reasonable in the circumstances that the employee is entitled to the leave” that the circumstances triggering entitlement to such leaves are difficult if not impossible to monitor.

Employers point out that the impact of such leaves when expressed as a right or entitlement can be very significant particularly because employers are not given much, if any, notice by employees of their intention to take such leaves. Indeed the very nature of such leaves, being related to emergencies precludes much notice being given in most circumstances. The leaves, although unpaid, often trigger additional costs to schedule overtime for others to fill in for the absent employee or even to staff at higher levels than necessary in order to retain the requisite staffing levels for their manufacturing operations. Sometimes, it requires the additional use of temporary and/or part time employees or of agency workers. Absenteeism and the management of absenteeism is a major concern for employers because it adds to costs and decreases productivity.

A number of employer stakeholders recommend separating/categorizing PEL into three separate leaves.

We did not hear from many smaller employers but we anticipate that they might well have vigorous opposition to any extension of the PEL provisions to employers who regularly employed less than 50 employees. Such employers do not have the resources to employ human resources professionals and lack the expertise needed to deal with absenteeism issues. Secondly, there is a concern that they do not have the flexibility and the capacity to deal with PELs as currently framed in the legislation. It can be expected that small employers have key employees who perform essential functions and who cannot be replaced on a short-term temporary basis. Therefore, they may argue that the extension of PEL provisions to smaller employers will have significant adverse impact on their ability to provide service/product to their customer/consumer base.

Options:

  1. Maintain the status quo.
  2. Remove the 50 employee threshold for PEL.
  3. Break down the 10-day entitlement into separate leave categories with separate entitlements for each category but with the aggregate still amounting to 10 days in each calendar year. For example, a specified number of days for each of personal illness/injury, bereavement, dependent illness/injury, or dependent emergency leave but the total days of leave still adding up to 10.
  4. A combination of options 2 and 3 but maintaining different entitlements for different sized employers.

5.3.5 Paid Sick Days

Background

As described in the section 5.3.4, currently, under the ESA, an employee whose employer regularly employs 50 or more employees is entitled to an unpaid leave of absence of up to 10 days per year because of any of the following:

  • a personal illness, injury or medical emergency;
  • the death, illness, injury or medical emergency of certain relatives; or
  • an urgent matter that concerns certain relatives.

In addition, employers may request “reasonable evidence” with respect to absences taken under PEL. This could include requiring an employee to provide a doctor’s note in cases where they have been away from work due to illness.

In the “Guide to Consultations” we asked whether revisions were needed to this entitlement, and whether there should be a number of job-protected sick days.

In Expected and Actual Impacts of Employment Standards, a paper prepared for the Changing Workplaces Review, Professor Morley Gunderson noted there is not a lot of research documenting the extent to which personal and other leaves are taken and their effects on health and other outcomes. He states that “workers who come to work when sick are not likely to be productive and can infect others with that associated cost,” but that creating paid sick days would be most costly for employers and would also add a cost to the public medical system for providing examinations and documentation. He further says that “workers clearly respond to the incentives of sick leave in that the more generous the leave provisions and the greater the job protection, the longer the sick leave that is taken, with their use increasing to the extent that employees increasingly regard them as a ‘right’ rather than a privilege.”

While some employers do not provide paid sick days, many others do. Where they exist, sick leave plans vary greatly in benefits provided. Some employers have plans which provide for short term and long term disability. Some employer plans and collective agreements have unpaid waiting periods before sick pay is granted, or they provide different amounts of pay depending on the number of sick days taken in a year.

Other Jurisdictions

While most provinces in Canada have some protection for employees to be away from work due to illness, requiring payment for sick days is not common. In Canada, Prince Edward Island is the only province to provide 1 paid sick day per year. This leave is only available to employees with 5 or more years of service.

In the US, California and Massachusetts have paid sick leave legislation.

In California, the leave is available to all employees and accrues at 1 hour of paid leave for every 30 hours worked. Employers are allowed to limit the amount of paid sick leave per year to 24 hours or 3 days per year.

In Massachusetts, paid sick leave is available to employees who work for employers with 11 or more employees and accrues at one hour of earned sick time for every 30 hours worked up to a cap of 40 hours per year. Employers with fewer than 11 employees are expected to offer the same leave, but unpaid.

In September 2015, US President Obama signed an executive order requiring federal contractors to offer their employees up to 7 days of paid sick leave per year. The executive order was estimated to assist approximately 300,000 people at the time of signing. In addition, President Obama has urged Congress to pass legislation that would provide paid sick day protections for workers.[179]

Globally, a 2010 report for the World Health Organization[180] suggests that as many as 145 countries have some form of leave and wage replacement with respect to employee illness. However, there are variations in how long these leaves may be and how wages are replaced (for example, wages may be replaced only partially).

Submissions

During consultations we heard from many employee advocacy groups and labour groups about the need for paid sick leave. We also heard from health care professionals and others that the lack of paid sick days causes unnecessary costs to patients, other workers who become infected by colleagues who are ill, and the health-care system generally.

Employee advocacy groups asserted that the lack of legislated entitlements to paid sick days has left many precarious workers unable to stay home when sick due to fear of lost wages and/or termination. It was commonly recommended that the ESA should be amended to repeal the exemption of 49 or fewer workers from providing PEL that all employees should accrue paid sick time [for example, a minimum of 1 hour of paid sick time for every 35 hours worked (approximately 7 paid sick days per year)], and that employers should be prohibited from requiring evidence for such absences.

Many employers were opposed to the creation of paid sick days. Some felt that a new statutory requirement would be overly costly and hurt their competitiveness. Many employers pointed to the current PEL requirement, which can be used for personal illness, to illustrate how some employees abuse the provision by viewing it as a vested entitlement. In discussing PEL, employers noted the importance of being allowed to request doctors’ notes to substantiate employee absences while acknowledging the burden that this places on the health care system. On the other hand many people have questioned the utility of medical notes which very often can only repeat what the physician is told by the patient, are costly, and which are of very little value to the employer and have little probative value in any legal proceeding.

Although we did not receive a submission from the Ontario Medical Association (OMA), in January 2014, the OMA issued a news release encouraging people who are sick to stay home. It also encouraged employers to not require sick notes as doing so only encourages the spread of germs in the doctor’s office waiting room. The then-president of the OMA said: “I can’t stress it enough going to work while sick is bad for you and potentially worse for your colleagues. Staying home to rest will help you to manage your illness and prevent others from getting infected.”

Options:

  1. Maintain the status quo.
  2. Introduce paid sick leave –
    1. Paid sick leave could:
      1. be a set number of days (for example: every employee would be entitled to a fixed number of paid sick days per year); or
      2. have to be earned by an employee at a rate of 1 hour for every 35 hours worked with a cap of a set number of days;
    2. Permit a qualifying period before an employee is entitled to sick leave, and/or permit a waiting period of a number of days away before an employee can be paid for sick days;
    3. Require employers to pay for doctor’s notes if they require them.

5.3.6 Other Leaves of Absence

Background

The ESA provides ten unpaid, job-protected leaves of absence. Before 2001 (when the ESA, 2000 came into force), there were only two job-protected leaves: pregnancy leave and parental leave. The (then) new ESA introduced a third new leave: emergency leave (the name was later changed to PEL). Seven new leaves have been created in the decade between 2004 and 2014.[181]

While PEL is discussed in a different section of this report (see section 5.3.4), all the remaining leaves are discussed below.

Pregnancy Leave and Parental Leave

Under the ESA, pregnant employees who qualify have the right to take pregnancy leave of up to 17 weeks of unpaid time off work.

New parents have the right to take parental leave – unpaid time off work when a baby or child is born or first comes into their care. Birth mothers who took pregnancy leave are entitled to up to 35 weeks’ leave. Birth mothers who do not take pregnancy leave and all other new parents are entitled to up to 37 weeks’ parental leave.

The federal Employment Insurance Act (EIA) provides eligible employees with maternity and/or parental benefits that may be payable to the employee during the period he or she is off on an ESA pregnancy or parental leave.

Family Caregiver Leave

Family caregiver leave is a leave of up to 8 weeks per calendar year per specified family member. It may be taken to provide care or support to certain family members for whom a qualified health practitioner has issued a certificate stating that he or she has a serious medical condition.

Family Medical Leave

Family medical leave is a leave of up to 8 weeks in a 26-week period. It may be taken to provide care or support to certain family members and people who consider the employee to be like a family member in respect of whom a qualified health practitioner has issued a certificate indicating that he or she has a serious medical condition with a significant risk of death occurring within a period of 26 weeks.

The federal EIA provides 26 weeks of employment insurance benefits (“compassionate care benefits”) to eligible employees taking this leave.

Critically Ill Child Care Leave

Critically ill child care leave is a leave of up to 37 weeks within a 52-week period. It may be taken to provide care or support to a critically ill child of the employee for whom a qualified health practitioner has issued a certificate stating:

  • that the child is a critically ill child who requires the care or support of one or more parents; and
  • sets out the period during which the child requires the care or support.

Parents who take leave from work to provide care or support to their critically ill child may be eligible to receive EI special benefits for Parents of Critically Ill Children (PCIC) for up to 35 weeks.

Crime-Related Child Death or Disappearance Leave

Crime-related child death or disappearance leave provides up to 104 weeks with respect to the crime-related death of a child and up to 52 weeks with respect to the crime-related disappearance of a child.

An employee who takes time away from work because of the crime-related death or disappearance of their child may be eligible for the Federal Income Support for Parents of Murdered or Missing Children grant.

Organ Donor Leave

Organ donor leave is an unpaid, job-protected leave of up to 13 weeks, for the purpose of undergoing surgery to donate all or part of certain organs to a person.

Reservist Leave

Employees who are reservists and who are deployed to an international operation or to an operation within Canada that is or will be providing assistance in dealing with an emergency or its aftermath are entitled under the ESA to unpaid leave for the time necessary to engage in that operation.

Employees on ESA leaves have the right to continue participation in certain benefit plans and continue to earn credit for length of employment, length of service, and seniority. In most cases, employees must be given their old job back at the end of their leave.

Income Support and Leaves

The leaves under the ESA are unpaid, but employees taking Pregnancy and Parental Leave, Family Medical Leave, Critically Ill Child Care Leave, and Crime-Related Child Death or Disappearance Leave may be eligible for EI benefits or grants from the federal government.

Owing to this interaction between these federal income supports and the provincial job-protected leaves, Ontario is often limited in how and when it introduces or structures new or existing leaves. Most provinces follow suit or introduce/implement leaves that are closely aligned with federal income support programs.

For example, two recent federal changes may have an impact on Ontario’s Family Medical Leave:

  1. an amendment to the EIA increased the number of EI compassionate care benefit weeks from 6 weeks in a 26 week period to 26 weeks in a 52 week period; and
  2. an amendment to the CLC that increased maximum compassionate care leave from 8 weeks to 28 weeks for providing care or support to a family member with a serious medical condition with a significant risk of death within 26 weeks. The period in which the leave may be taken has increased from 26 weeks to 52 weeks.

In addition, the new federal government has committed to providing Canadians with more generous and flexible leaves for caregivers and more flexible parental leave. The government’s election platform commitment specified that, in the future, parents may be able to receive benefits in blocks of time over a period of up to 18 months and may be able to take a longer leave of up to 18 months when combined with maternity benefits at a lower level.

These federal changes put pressure on Ontario to follow suit with leaves that mirror the federal changes so that employees who rely on the ESA can fully take advantage of the expanded EI benefits.[182]

Other Jurisdictions

Jurisdictions vary in their approach to the number of leaves they offer and in how those leaves are structured. In Canada, many of the provinces model their leave provisions on the CLC to ensure that employees are able to access federal benefits or grants when utilizing the job-protected leave. Also, some jurisdictions offer leaves to employees such as Domestic Violence/Abuse Leave (California and recently passed in Manitoba) and Elder/Child Care Leave (in Massachusetts).

Submissions

Through the consultations, we heard about different situations that might warrant the need for a job-protected leave. Specifically, we received submissions that suggested the need for a job-protected leave for employees who are victims of domestic abuse. Unfortunately, victims of domestic abuse often must find shelter for themselves and their children or to seek counselling with respect caring for themselves and their children. They may also be required to attend court proceedings related both to their right to stay in a matrimonial home and to deal with contested family issues relating to the primary residence, access to the children, or spousal and child support. These issues require immediate attention and a leave from work may be necessary. During consultations one union suggested that the ESA be amended to introduce 5 paid days of domestic violence leave and a right to extend the leave on an unpaid basis as needed.

We also received submissions that special leave provisions of 52 weeks should be available for employees who are dealing with the death of a child that is not a result of a crime.

On the other hand, during consultations we heard from a number of employers and employer organizations who cautioned us against introducing any new paid or unpaid leaves and recommended consolidation of the various existing leave provisions. For example, one association pointed out that there are four separate leaves related to the employee or their family members and that a more consolidated approach would provide administrative relief to employers. Likewise, another organization suggested that their members view the number of leaves in Ontario as confusing and burdensome; it was told by survey respondents that simplification would help both businesses and employees that are requesting the leaves.

Generally, employers believe that the existing leave provisions in the ESA provide reasonable and generous leave provisions for employees and to increase these leave provisions would further compromise productivity and competitiveness.

Options:

  1. Maintain the status quo.
  2. Monitor other jurisdictions and the federal government’s approach to leaves and make changes as appropriate (e.g., to family medical, pregnancy and parental and family caregiver leave).
  3. Introduce new leaves:
    1. Paid Domestic or Sexual Violence Leave[183] for a number of days followed by a period of unpaid leave;
    2. Unpaid Domestic or Sexual Violence Leave;
    3. Death of a Child Leave, either through:
      1. expansion of the existing Crime-related Child Death or Disappearance Leave or Critically Ill Child Care Leave; or
      2. creation of a separate leave of up to 52 weeks for the death of a child.[184]
  4. Review the ESA leave provisions in an effort to consolidate some of the leaves.

5.3.7 Part-time and Temporary Work – Wages and Benefits

(Note: Issues concerning employees’ right to request changes to their schedule are dealt with in section 5.3.2 on Scheduling. Further descriptions on part-time and temporary employment can be found in Chapter 3).

Background

This section deals with issues related to compensating part-time, temporary, casual and limited term contract employees in the same manner as full-time employees doing the same work in the same establishment hired directly by an employer. This section does not address temporary employees hired by a THA and assigned to a client. That subject is covered in section 5.3.9.

Over a long period, employment in part-time and temporary work has grown considerably and is a prominent feature of the modern labour market. Attitudes towards workers in such jobs have been changing as well. For example, at various times the OLRB considered that full-time and part-time workers should generally be in separate bargaining units because they did not share a community of interest. The attachment and commitment of part-time and temporary employees to the business was considered to be less than that of full-time and permanent employees. It was thought that their concerns and interests would be so different that they should not even bargain as a single group. This approach reflected the logical expectation that their treatment on issues like wages and benefits would be different.

This policy of separate certification for part-time and full-time units ceased in 1993 when the amendments[185] to the Labour Relations Act overruled such an approach and created a presumption in favour of combined full-time/part-time units.[186] The fundamental attitude that part-timers doing the same work in the same establishment can be treated differently through lower wages and relative access to benefits, however, has persisted in some areas of the economy and in some establishments. While many employers may treat their employees equitably (e.g., pro rata treatment or meeting a reasonable threshold of income or hours to qualify for benefits) – it is still common to find part-timers being paid less than comparable full-time employees, and without equitable access to benefits. This has raised concerns regarding the treatment of such employees in comparison to full-time employees doing the same work in the same establishment.

Concerns have also been raised over the growth of individuals working on ubiquitous fixed and limited term contracts. There are concerns over the lack of security in such arrangements – particularly in instances where it appears that employees are kept in such positions indefinitely to justify lower wages and lack of benefits.

Current Application of the ESA

The only type of wage discrimination that is prohibited under the ESA is to ensure that women and men receive equal pay for performing substantially the same job. They are entitled to receive equal pay for “equal work,” meaning work that is substantially the same, requiring the same skill, effort and responsibility and performed under similar working conditions in the same establishment.[187] The Act does not extend such protection to part-time or temporary employees in comparison to full-time employees.

Part-time and temporary employees are covered by the ESA and generally have the same rights as other employees as they are equally entitled to minimum wage, regular pay days, overtime, etc.

The ESA does not require provision of benefits plans. Where benefits plans are provided by employers, the ESA prohibits discrimination (with some stipulations[188]) between employees or their dependents, beneficiaries or survivors because of the age, sex or marital status of the employee.

Part-time Employment

Statistics Canada defines part-time workers as employed persons who usually work fewer than 30 hours per week at their main or only job[189].

In 2015, there were 1.3 million part-time workers in Ontario, which comprised approximately 19% of total employment in the province. Job growth in part-time employment outpaced full-time work between 2000 and 2015, growing at 25% and 18%, respectively.[190]

Part-time employment in Ontario tends to be:

  • predominantly female (as of 2015, women made up about 50% of total employees and 66% of total part-time workers, while men comprised 34% of total part-time workers)[191];
  • recent immigrants (as of 2008, they made up 10% of total employees and almost 16% of temporary part-time workers)[192]; and
  • minimum-wage earners (as of 2013, 21.8% of part-time workers earned minimum wage as compared to only 3.4% of full-time workers).[193]

Temporary Employment

StatsCan defines a temporary job as having a predetermined end date, or a temporary job that will end as soon as a specified project is completed. It includes seasonal jobs; temporary, term or contract jobs, including work done through a THA; casual jobs; and other temporary work.[194]

Between 2000 and 2015, cumulative growth in temporary employment has outpaced that of permanent job growth (at 45% and 15%, respectively).

As of 2015, there were 747,600 temporary employees in Ontario, comprising approximately 13% of total employees (temporary and permanent).[195]

Part-time or Temporary Work Arrangements

Employees with part-time or temporary work arrangements generally experience:

  • Lower Wages

    In 2015, median hourly rates for part-timers were $12.50, only slightly more than half of the $24.04 for full-timers in Ontario.[196] Median hourly wages for temporary employees were $15.00 in 2015, while permanent employees earned $23.00 per hour across the province.[197]

    These gaps may reflect differences in the types of jobs done by part-time/temporary and full-time/permanent workers, but they also reflect pay differences that exist when the jobs are the same or similar.

    In 2012, 30% of minimum wage earners were employed in a temporary status, a figure that well exceeded the share of temporary status workers in the workforce as a whole at that time (12.9%). Thus, minimum wage workers were two-and-a-half times more likely to be employed in a temporary job category such as seasonal, contract, casual, etc.[198]

  • Less Access to Benefits

    These differences in salary are compounded by differences in benefit coverage and especially as many benefits are non-taxable. Employers are at least twice as likely to offer extended health, dental, insurance and pension benefits to full-time permanent employees as to part-time and temporary employees.[199] Some employers and some multi-employer collective agreements offer benefits to part-timers but it is difficult to generalize about them because they vary and have different thresholds for service before employees can qualify. Some employers pay part-time employees a fixed percentage of pay in lieu of benefits.

    A 2006 study found that only 23% of temporary and contract workers had some form of benefits, as compared with 86% of full-time, permanent workers.[200]

  • Less Likely to be in Unionized Positions

    Union coverage is higher for full-time employees than part-time employees. However, coverage has been trending downwards significantly for full-time employees, but relatively flat for part-time employees (i.e., the gap has shrunk). In 2015, the union coverage in Canada was 32.2% for full-time and 23.5% for part-time employees.[201]

    As of 2015, the union coverage was 27.7% for permanent and 20.8% for temporary workers in Ontario.[202]

Other Jurisdictions

Canada

There are two jurisdictions in Canada that mandate parity in wages or benefits according to employment status.

In Quebec, employers are prohibited from paying an employee less than other employees doing the same work in the same establishment, solely on the basis that they work fewer hours each week (i.e., an employee working on a part-time basis). This does not apply to employees who earn more than twice the minimum wage.

In Saskatchewan, an employer with 10 or more full-time equivalent employees must provide benefits to eligible part-time employees (i.e., part-time employees who work between 15 and 30 hours a week receive 50% of the benefits provided to comparable full-time employees, and those working 30 or more hours in a week receive 100% of the benefits provided to comparable full-time employees).

Australia

In Australia, part-time employees are entitled to the same rights, on a “pro-rata” basis, in relation to the number of hours worked. They are also entitled to ongoing employment (or a fixed-term contract) and can expect to work regular hours each week. Australia also has special provisions for casual workers[203] through casual loading, a percentage on top of the base pay received by full-time and part-time employees. Casual employees get paid extra to make up for not getting entitlements like paid annual leave and sick leave. The exact amount of the “top-up” depends on the industry and the occupation. Most casual workers are entitled to receive 25% above the wages received by regular employees doing the same work.[204]

European Union (EU)

Part-time work has been promoted in the EU over the last two decades as a tool to mobilize labour-market groups with lower participation rates (e.g., women with children, individuals with health problems and older workers). The EU has also strongly promoted part-time work as a way to offer employers who face variations in business demand increased scheduling flexibility.

Encouraging part-time employment appears to have been one important rationale behind the agreement of all the relevant interests in society that there should be equal treatment in compensation between part-time and full-time employees. From this agreement came the Council Directive 97/81/EC in 1997.

Accordingly, in the EU, part-time workers may not be treated in a less favourable manner with respect to employment conditions than comparable full-time workers solely because they work part-time unless justified on objective grounds. A comparable full-time worker is an employee in the same establishment having the same type of employment contract or relationship, who is engaged in the same, or similar work or occupation with due regard being given to other considerations which may include seniority and qualification/skills (the Directive also deals with scheduling requests, which is dealt with in section 5.3.2).

The term “working conditions” is defined differently in the various EU countries but generally encompasses hourly wages, probationary periods, various leaves, and health and safety, training, sick pay, pension schemes, incentive programs, transfer possibilities, notice periods etc. Pro rata treatment of part-time workers with full-time workers based on the differences in hours worked is in keeping with the principle of fair treatment and there is recognition that some benefits and working conditions are difficult to apply or to provide on a pro rata basis or to provide to workers whose hours of work are insufficient to make the benefits reasonable or applicable. There are provisions, for example, that entitlement to a particular employment condition be subject to a period of service, or a number of hours worked or a level of earnings.

The term “objective reasons,” which permits differences in treatment, has been defined as precise and concrete circumstances characterising a given activity. It must be transparent as to the aim, and relate to objective reasons why the nature of the part-time or fixed-term work justifies differential treatment. In the UK, the courts have interpreted objective reasons to mean that the part-time nature of an employee’s status must be the effective and predominant cause of the less favorable treatment, though not necessarily the sole reason. A performance related pay scheme, or differences in seniority or skill and qualifications could justify different treatment.

Casual employees may be excluded from the laws requiring no discrimination against part-timers, but in practice most countries in the EU do not exclude them.

In 1999, the EU also passed Directive 1999/70/EC on Fixed-Term Work. The Directive sought to eliminate discrimination in the pay and conditions of work between fixed-term and permanent workers. It also prohibits the treatment of fixed-term workers in a less favourable manner than permanent workers solely because they have a fixed-term contract, unless the difference in treatment can be justified on objective grounds. The terms used in the Directive are identical to those used with regards to part-time employees.

To prevent abuse, countries must introduce one or more of the following measures:

  • objective reasons justifying the renewal of such contracts or relationships;
  • the maximum total duration of successive fixed-term employment contracts and relationships; and
  • the maximum number of successive renewals.

Repeated renewals of fixed-term contracts was seen as a problem insofar as they may have been used to circumvent employers’ obligations to permanent employees with respect to termination of employment, for instance. The most popular measure for preventing abuse of fixed-term contracts is a cap on the total duration of such contracts.

Submissions

Employee advocacy and labour groups have argued that part-time workers should receive the same pay (and in some cases, benefits) as their full-time counterparts.

Some have expressed concern that employers are using employment status to impose inferior pay on part-time and temporary workers. They are concerned that this is leading to a growing “precariat,” challenging concepts of decency of work, fairness and imposing challenges on vulnerable individuals to improve their situation.

Concerns were also raised with the issue of ongoing fixed-term contracts which may keep employees in a precarious state over long periods of time (i.e., unable to access permanent employment entitlements[205] even though they have been employed over a long period of time with one employer). Concerns were also raised with respect to employees who have successive short term contracts and project work with successive employers who find it difficult to obtain benefit coverage.

Many groups recommended that there be no differential treatment in pay and working conditions for workers who are doing the same work but are classified differently (i.e., part-time or temporary); and that where an employer provides benefits, these must be provided to all workers, at least pro rata or equitably, regardless of employee status.

University faculty associations have raised the issue of providing the same wages and benefits to part-time, contract faculty as full-time faculty in order to address growing concerns regarding precarious work in the sector.

One employer expressed support, stating that temporary workers should be paid a considerably higher minimum wage, and that part-time workers should have the same pay and benefits as full-time workers. The vast majority of employers have been silent on this issue.

Professor Harry Arthurs recommended that part-timers be paid the same as full-timers in the same establishment performing similar work.[206]

Options:

  1. Maintain the status quo.
  2. Require part-time, temporary and casual employees be paid the same as full-time employees in the same establishment unless differences in qualifications, skills, seniority or experience or other objective factors justify the difference.
  3. Option 2 could apply only to pay or to pay and benefits, and if to benefits, then with the ability to have thresholds for entitlements for certain benefits if pro rata treatment was not feasible.
  4. Options 2 or 3 could be limited to lower-wage employees as in Quebec where such requirements are restricted to those earning less than twice the minimum wage.
  5. Limit the number or total duration of limited term contracts.

5.3.8 Termination, Severance and Just Cause

5.3.8.1 Termination of Employment

Background

In most cases, when an employer ends the employment of an employee who has been continuously employed for 3 months, the employer must provide the employee with either written notice of termination, termination pay in lieu of notice, or a combination of the two. Notice of termination is intended to ensure that employees are given some minimum amount of advance warning of termination of employment (or pay in lieu of notice or some combination thereof) so that the employee can attempt to make new arrangements for work.

The following table specifies the amount of notice required if an employee has been continuously employed for at least 3 months. Special rules apply to the amount of notice required in cases of mass terminations.

Termination of Employment – Amount of notice required if an employee has been continuously employed for at least 3 months
Period of Employment Notice Required

Less than 1 year

1 week

1 year but less than 3 years

2 weeks

3 years but less than 4 years

3 weeks

4 years but less than 5 years

4 weeks

5 years but less than 6 years

5 weeks

6 years but less than 7 years

6 weeks

7 years but less than 8 years

7 weeks

8 years or more

8 weeks

There are certain rules that apply during the statutory notice period. For example, the employer cannot reduce the employee’s wage rate and must continue to make whatever contributions would be required to maintain the employee’s benefit plans.

The ESA also has rules concerning the temporary layoff of employees and how long such a layoff can last before the employer is considered to have terminated the employment. Generally, a temporary layoff can last no more than 13 weeks in any period of 20 consecutive weeks, but can last longer in certain circumstances (e.g., where the employer continues to make payments for the employee’s benefit under an insurance or retirement/pension plan).

Employees who are guilty of wilful misconduct, disobedience, or wilful neglect of duty that is not trivial and has not been condoned by the employer are not entitled to notice of termination or termination pay under the ESA.

Additionally, notice of termination generally does not apply to an employee who was hired for a specific length of time or until the completion of a specific task (with some exceptions). There are other exemptions.

For employees with separate periods of employment, two periods of employment will be added together if they are separated by 13 weeks or less; if two periods of employment are separated by more than 13 weeks, only the most recent period counts for purposes of notice of termination.[207]

Relationship with the Common Law of Wrongful Dismissal

Employees whose employment has been terminated and/or severed may file a complaint for termination pay and/or severance pay with the Ministry or they may sue for damages representing “reasonable notice” in a wrongful dismissal action in court. However, they cannot do both.

Because of the costs and delays surrounding suing for wrongful dismissal and the unpredictability of the result, many employees settle for their ESA entitlements even though what they are entitled to under the ESA may be less – sometimes substantially less – than the damages they would be entitled to receive at common law.

Other Jurisdictions

The federal jurisdiction and all provincial jurisdictions require employers to provide employees with advance notice of their termination, or pay instead of notice.

Threshold for entitlement: Every jurisdiction requires a minimum amount of employment before the obligation to provide notice of termination is triggered. The threshold ranges from a low of 31 days in Manitoba to a high of 6 months in New Brunswick and Prince Edward Island, with all other jurisdictions, including Ontario, setting the threshold at 3 months.

Amount of notice/pay required: All jurisdictions have a stepped system that requires employers to provide more notice/pay the longer the employee has been employed. All jurisdictions have a maximum amount of notice/pay that is required; the most common one, found in seven jurisdictions, including Ontario, is 8 weeks.

Submissions

Compared to some other issues, termination and severance of employment did not receive significant stakeholder attention during the consultations. There were, however, a number of suggested changes and concerns identified.

We heard that the 8-week cap on notice of termination (or pay in lieu of notice) should be eliminated or increased. It could, for instance, be increased to 26 weeks to mirror the cap on severance pay. We also heard that the 3-month employment threshold should be eliminated.

Some employee advocates raised concerns about the eligibility of recurring seasonal, contract, THA, and construction employees to notice/pay in lieu of notice. They also want to ensure that recurring periods of employment with the same employer are “counted” in determining eligibility.

With respect to temporary layoffs, we heard that rules concerning temporary layoffs and when they constitute a termination of employment are complex and open to employer manipulation.

In terms of an employee’s obligations when he/she is ending an employment relationship, it was also suggested that employees be required to provide 2 weeks’ notice.

Options:

  1. Maintain the status quo.
  2. Change the 8-week cap on notice of termination either down or up.
  3. Eliminate the 3-month eligibility requirement.
  4. For employees with recurring periods of employment, require employers to provide notice of termination based on the total length of an employee’s employment (i.e., add separate periods of employment as is done for severance pay). For example, if an employer dismisses a seasonal employee during the season, the employee could be entitled to notice based on his/her entire period of employment (not just the period worked that season).
  5. Require employees to provide notice of their termination of employment.

5.3.8.2 Severance Pay

Background

“Severance pay” is compensation that is paid to an eligible employee who has his or her employment “severed.” It compensates an employee for loss of employment. Severance pay is not the same as and is required in addition to termination pay, which is given in place of the required notice of termination of employment.

An employee qualifies for severance pay if his or her employment is severed and he/she:

  • has worked for the employer for five or more years; and
  • his or her employer either:
    • has a payroll in Ontario of at least $2.5 million; or
    • has severed the employment of 50 or more employees in a 6-month period because all or part of the business has permanently closed.

In determining whether the 5-year employment threshold is met, multiple periods of employment with the same employer are added together regardless of the amount of time between the periods of employment or the reason any of the periods of employment came to an end. Seasonal employees and employees on fixed-term contracts, for instance, would have their previous years’ employment with the same employer counted for the purposes of determining their eligibility for severance pay.

Almost 40% of Ontario employees are covered fully by the ESA severance pay provision.[208]

Other Jurisdictions

In Canada, only Ontario and the federal jurisdiction provide for severance pay entitlements. The threshold for entitlement is longer in Ontario than the federal jurisdiction – 5 years’ employment in Ontario compared to 12 months’ employment in the federal jurisdiction. However, the amount of severance pay to which an eligible employee is entitled is more generous in Ontario – 1 weeks’ pay per year of service (to a maximum of 26 weeks) in Ontario compared to two days’ pay per year of employment (with a minimum benefit of 5 day’s pay) in the federal jurisdiction.

Submissions

Employee advocates have suggested that the employment, payroll and 50-employee thresholds be eliminated or reduced. It was also submitted that greater clarity is needed on the question of whether payroll outside of Ontario “counts” in the calculation of the $2.5 million payroll.[209]

The large number of vulnerable employees in short-tenure precarious jobs results in their not being entitled to any severance pay.

Options:

  1. Maintain status quo.
  2. Reduce or eliminate the 50 employee threshold.
  3. Reduce or eliminate the payroll threshold.
  4. Reduce or eliminate the 5-year condition for entitlement to severance pay.
  5. Increase or eliminate the 26-week cap.
  6. Clarify whether payroll outside Ontario is included in the calculation of the $2.5 million threshold.

5.3.8.3 Just Cause

Background

The ESA does not require employers to have “just cause” for terminating an employee’s employment. Generally, an employer can dismiss an employee for any reason (subject to the anti-reprisal protections). Except for terminations for wilful misconduct, disobedience, or wilful neglect of duty (that is not trivial and has not been condoned by the employer), the ESA requires only that the employer provide notice of termination or pay in lieu of notice to the employee and, if the employee is eligible, severance pay.

Three Canadian jurisdictions, Nova Scotia, Quebec and the federal jurisdiction have unjust dismissal protection that allows employees to contest their termination and provide for possible reinstatement by an independent arbitrator where no cause is found to exist. However, as a result of a recent Federal Court of Appeal decision (now under appeal at the Supreme Court of Canada), there is a question as to whether the federal CLC does protect against termination where no cause exists.

In the three Canadian jurisdictions that have unjust dismissal protection:

  • all impose a minimum service requirement before an employee has the protection, ranging from 12 months to 10 years;
  • the statutory remedial authority has been interpreted as allowing for “make whole” remedies where an employee has been unjustly dismissed, including reinstatement and compensation addressing lost wages and benefits, mental distress, job search expenses, and other damages incurred because of the dismissal[210]; and
  • although the statutory language used to trigger a contravention is slightly different in each jurisdiction, the decision-makers all generally apply the same standards that are applied by arbitrators in the collective agreement context when they determine whether there was “cause.”

The intent of statutory unjust dismissal protection is to prevent arbitrary and unfair terminations, to enhance job security, to avoid the negative impacts on an employee who has been summarily dismissed and to provide “make whole” remedies that include the possibility of reinstatement, a remedial authority not available through the courts in a wrongful dismissal suit.

Almost all collective agreements contain a “just cause” provision and many cases of industrial discipline and discharge are contested in arbitration proceedings on a daily basis in Ontario. The proposal would extend this system to terminations to the non-unionized sector.

Many temporary foreign workers (TFWs) are employed on a seasonal basis in Ontario in agriculture and come here each year from the Caribbean, Mexico, and Vietnam and elsewhere under a program administered by the federal government. As a practical matter, most workers are permitted to be employed only by a single employer. If a TFW is dismissed by the employer, he/she is often required to return to their country of origin. Migrant workers and their representatives advised us that TFWs are often threatened with dismissal and with being sent home.

Similar concerns were expressed in relation to TFWs injured on the job who may be sent home or threatened to be sent home because of injuries sustained on the job.

Submissions

Employee advocates have said that the ESA should be amended to provide protection against unjust dismissal, meaning employees could not be dismissed without just cause and could be reinstated if they were dismissed without cause. Adjudication by a government appointed adjudicator – who has the jurisdiction to order reinstatement in an appropriate case – is seen as a more accessible, efficient and effective than the courts.

Such protection could be limited to employees who had been employed for a certain minimum period.

Some suggested that, at a minimum, an employer should be required to provide reasons for terminating an employee’s employment, which may provide greater protection against employer reprisals.

It was also suggested that an expedited process should be in place for TFWs who are particularly vulnerable to unilateral employer action and – in the absence of an expedited adjudication process – may otherwise be required to leave Canada before a complaint of unjust dismissal is heard.

Options:

  1. Maintain the status quo.
  2. Implement just cause protection for TFWs together with an expedited adjudication to hear unjust dismissal cases.
  3. Provide just cause protection (adjudication) for all employees covered by the ESA.

5.3.9 Temporary Help Agencies

Background

Temporary work, a large part of which occurs through temporary help agencies (THAs), has grown over the past 10 years.

THAs recruit and assign people to perform work on a temporary basis for clients of the agency. The duration of the assignment can vary from a day to years. Such persons are termed here “assignment workers.” Clients comprise diverse sectors and professions (e.g., manufacturing, administrative, support services, information and information technology, etc.), and as such require assignment workers with varying degrees of skill and education. However, the temporary staffing sector disproportionately comprises lower-skilled and lower-wage workers.

Businesses use THAs in a variety of ways and for a variety of purposes. Some may not always be able to predict their staffing needs and so may need temporary help to manage peaks and valleys in demand. THAs are widely used to fill this need although some employers use their own pools of temporary workers. Other clients use assignment workers as an integral part of their regular staffing program using it as a device to vet workers in lieu of a probationary period (although most keep a probationary period if the assignment worker is ever hired by the client), or because it is much easier to terminate an assignment worker than it is a regular employee of the client. Clients also wish to have a specialized agency recruit and screen potential workers at their business.

At the end of 2014, there were 1,045 temporary help services[211] in Ontario which comprised 44.1% of all temporary help service establishments in Canada. We heard that THAs were ubiquitous in many communities and constituted the major or sole entry point to employment into certain industries in some Ontario communities.

Data on industry growth are available for the employment services sector, which includes temporary staffing services as well as executive search and recruitment.[212] These data suggest the employment services sector is growing quickly; operating revenue grew by about 7% from almost $12.4 billion in 2012 to almost $13.3 billion in 2014 across Canada – with Ontario generating just over half that. Ontario experienced growth in revenue between 2012 and 2014 of about 9%, increasing from $6.4 billion to almost $7 billion.[213]

Almost 53% of the $13.3 billion in operating revenue across Canada in 2014 was generated in temporary staffing services.[214]

Since the economic recovery began in the US in 2009, staffing employment grew 3.5 times faster than the economy and seven times faster than overall employment.[215] In 2014 the industry grew 2.5 times faster than the economy and was on track to grow 3 times faster in 2015.[216] In the 20 years before 2013, the economy grew on average 2.7% annually while temporary and contract staffing grew at an average annual rate of 4.6% and sales increased 8.3% on average.[217]

Temporary and contract sales in the US grew to $115.5 billion in 2014, a year over year increase of 5.7%, and were expected to increase by 5% in 2015 and 6% in 2016. The penetration rate of the industry in the US reached a new record in 2015 of 2.05% of non-farm employment. Data from the Association of Canadian Search, Employment and Staffing Services (ACSESS) indicate that in Canada the penetration rate is 0.75%.

The industry attributes its growth to the need for flexibility and access to talent by clients. Using THAs to keep fully staffed during busy times, to fill in temporarily, to replace absent employees, to staff for short term projects, and to use agencies to find permanent employees are among the reasons that the US industry gives for why its clients use them increasingly. It is also said that economic uncertainty and volatility constrains new job creation and the use of THAs allows for “leaner staffing.”[218]

THA Business Model

While the specifics of the staffing industry business model are somewhat opaque (e.g., percentage of the mark-up charged to clients by agencies, wages of assignment workers relative to regular staff, etc.), the basic structure is that the agency recruits, refers and pays the assignment worker who performs their duties at the client’s place of business, subject to the direction of the client and for the benefit of the client’s business. The assignment worker can be removed from the client’s workplace at the direction of the client with no requirement of any notice. After the assignment is terminated, the assignment worker then is placed back on the referral list of the agency and may or may not be assigned to work for another client of the agency.

Assignment workers may comprise a large or small percentage of the client’s workforce and may work there for short or very long periods of time as circumstances vary from client to client, agency to agency, and worker to worker.

While the agency provides workers’ compensation insurance coverage for assignment workers, generally in client/agency contracts, the client agrees to provide all assignment workers with a safe worksite and information, and training and safety equipment as required. Because the client controls the facilities in which workers work, the client and agency generally agree that the client is primarily responsible for compliance with all applicable occupational, health and safety laws.

Anecdotally, we were advised that THAs charge a significant percentage premium to their clients for every hour that the assignment worker works for the client. We were advised that this premium to the client was perhaps 40% or more above the hourly rate paid by the THA to the assignment worker. Based on her research in the US, Erin Hatton claims that agencies typically charge their clients about twice the workers’ hourly wage.[219]

Assignment Worker Profile

There are limited data on assignment workers in Canada although there tends to be more on the industry in the US. In Canada, according to 2004 statistics,[220] assignment workers are:

  • most likely to work in processing, manufacturing and utilities jobs (43%) and in the management, administrative and other support industry (48%);
  • far less likely to be unionized than direct-hire, permanent employees (recent estimates of union coverage rates among agency workers are as low as 3.4%);
  • less likely than other workers to have completed high school or have a university degree; and
  • are older than other types of temporary workers[221] (e.g., seasonal, contract or casual workers), with 32% being 45 years of age or older.

Although some assignment workers seek agency work because they desire flexible employment conditions, studies have found that many engage in this work for involuntary reasons – that is, they have been unable to find more stable employment.[222]

Triangular Relationship

The triangular relationship makes the legal status of assignment workers, clients and THAs complex. While assignment workers generally have the same rights as other workers under the ESA, Occupational Health and Safety Act, 1990 (OHSA), LRA, and Workplace Safety and Insurance Act, 1997 (WSIA), the employment relationship under such laws function differently than those for workers hired by and working directly for a client employer. The laws are applied differently because of the complexity of the triangular relationship. While rights technically may be the same, the economic and structural realities of the triangular relationship often mean that practically, rights are ephemeral and cannot be accessed.

Employment Standards Act, 2000 (ESA)

Under the Employment Standards Act, 2000 (ESA), where a THA and person agree, verbally or in writing, that the agency will assign (or try to assign) the person to perform work on a temporary basis for its clients, the agency is deemed to be the employer of record by the ESA. This has been the case legislatively since 2009, and was the program policy before that. The ESA accepts the long-standing industry position that the employer is the agency, not the client.

Once there is an employment relationship between an agency and an assignment worker, the relationship continues whether or not the employee is on an assignment (working) with a client of the agency on a temporary basis. The fact that an assignment ends does not in itself mean that the employment relationship with the agency ends. Assignment workers generally have the same rights as other employees (e.g., regarding minimum wage, overtime, vacation, etc.), but the triangular employment relationship complicates the operation of the Act for such workers.

For example, rights to notice on termination operate differently for an assignment worker and a regular employee hired directly by client. If both employees do the same work at the client’s business for 4 months and both are “let go” without notice, the client would be required to pay its direct employee termination pay in lieu of notice of 1 week, but would have no payment obligations[223] to the assignment worker.

The agency also does not have such an immediate obligation to the assignment employee because the loss of work (i.e., assignment) is not technically the end of the employment relationship. If the assignment employee were placed on a temporary layoff instead of being reassigned to another client, termination pay will only be payable by the agency to the assignment worker if the temporary layoff turns into a termination of employment, e.g., the worker is not referred to another client by the agency within 13 weeks (in any period of 20 consecutive weeks).[224] (A week would not count as a week of layoff if the assignment employee were assigned to perform work for a client during that week, even for only a day).

The ESA also contains protections and responsibilities specifically for THAs, assignment workers and clients. For example, the ESA:

  • prohibits THAs from imposing certain barriers that would prevent or discourage clients of agencies from hiring the agency’s assignment workers directly (e.g., an agency not allowed to restrict client from entering into a direct employment relationship with assignment worker);
  • prohibits agencies from charging assignment workers (or prospective assignment workers) certain fees (e.g., for becoming an employee of the agency, assigning or trying to assign employee to perform work for a client, providing employee with interview preparation, or for accepting direct employment with an agency client);
  • limits to 6 months the time period in which agencies can charge clients for hiring an assignment worker permanently;
  • prohibits clients of agencies from taking reprisals against assignment workers for asserting their ESA rights[225];
  • requires that a THA provide its assignment workers with certain information about proposed assignments[226]; and
  • requires that a THA provide its assignment workers with a Ministry of Labour information sheet on their ESA rights.

As of November 20, 2015, clients are jointly and severally liable for unpaid regular wages, overtime pay, public holiday pay and premium pay. Requirements were also introduced which require both the agency and client to record the number of hours worked by assignment workers (and retain such records for up to 3 years to be available for inspection). There is no liability by the client for termination or severance pay, vacation pay, and unpaid job protected leaves.

Labour Relations Act, 1995 (LRA)

Although the Labour Relations Act, 1995 (LRA) does not speak specifically to THAs, in practice, the OLRB has not treated assignment workers as being employees of the THA. Instead, the determination of who is the employer occurs each time the issue is raised by a party, based on the particular facts. Typically the issue of identifying who is the employer arises in certification applications where the question is whether the client or the THA is the employer. If the assignment workers are employees of the client, they potentially count for the purposes of any vote and are potentially members of any bargaining unit established by the Board[227], but that is not the case if the assignment workers are found to be employees of the THA. Thus, if the assignment workers are considered employees of the THA and not the client, they are unable to unionize at the client workplace level. Although labour relations legislation would technically enable THA employees to organize at the level of the THA, there are numerous challenges to organizing at this level (e.g., assignment employees are dispersed at different client locations or the client may simply use another agency). In any event, unionization at the agency level is almost non-existent in Canada.

Often there is prolonged litigation at the OLRB as to who is the employer; most frequently the client has been found to be the employer based on ordinary employment law tests. In two cases both were found to be related employers.[228]

Workplace Safety and Insurance Act (WSIA)

The agency is deemed to be employer of record for purposes of the WSIA, including paying Workplace Safety and Insurance Board (WSIB) premiums, WSIB experience rating, and return to work obligations. The agency pays WSIB premiums for assignment workers as they move through assignments (i.e., clients do not pay anything to WSIB). These premiums can be charged back to the client directly or indirectly through fees (e.g., as part of the markup).

WSIB experience rating programs are meant to encourage employers to reduce injuries by providing refunds to safe employers and surcharges to employers with high injury rates. WSIB premium-based refunds or surcharges are based on an employer’s accident record. In the THA sector, experience rating costs and benefits are applied to the agency supplying and paying the worker, not the client to whom the worker is supplied. This is the case even though injuries occur at the client workplace, which is controlled by the client who decides what work the assignment workers perform. The experience ratings for the clients, especially those with dangerous work, are generally significantly higher than for a THA. Accordingly, the WSIB premiums paid by agencies are often significantly less than those paid by the clients for their own staff doing the same work. This provides an incentive for the client to use the assignment workers to perform more dangerous work. A client can save money by assigning work that is more likely to give rise to an accident or injury to assignment workers than to its own employees.

The issue that is raised at a general level is whether it is appropriate for there to be economic incentives for clients to use assignment workers, and at a more particular level whether it is appropriate for there to be economic incentives for clients to use assignment workers for more dangerous work.

The Stronger Workplaces for a Stronger Economy Act, 2014, provided the government with a regulation-making authority to require that the WSIB, under its experience rating programs, ascribe injuries and accident costs to the clients of the THAs where injuries to agency workers actually occur rather than to the agencies themselves. For these amendments to have any effect, they would need to be proclaimed into force, and a regulation would then need to be established under the amendments. Neither has occurred.

The premium rating system is currently the subject of possible revision, which would result in generally higher premiums for THAs. It is our understanding that the contemplated changes will still make it potentially cheaper for a client to use assignment workers in general and for risky work in its own establishment in particular. For example, if a THA carries a high premium rate because its workers have been subject to numerous accidents or injuries, then the client can reduce its cost by just switching to a new THA with lower premiums. There are few barriers to entry into the THA industry.

WSIA has a vigorous scheme to encourage and promote reintegration of injured workers into the workplace. In the case of an assignment worker, however, the client has no obligation to accommodate and put back to work or reintegrate an injured worker at the client’s business following an injury. The only responsibility for reintegration of the injured worker lies with the THA. However, the THA complies with its responsibility by putting the injured assignment worker on the THA’s referral list for up to 1 year, and assigning them, if there another assignment that allows for modified work, or is one that the worker can otherwise perform.

Occupational Health and Safety Act (OHSA)

Under Occupational Health and Safety Act (OHSA), where a worker is employed by an agency to perform assignments in the client’s workplace, the agency and the client are jointly responsible for taking every precaution reasonable in the circumstances to protect the health and safety of the assignment worker. The client normally has the day-to-day control over the work and working conditions of the workplace to which the workers are assigned. However, an agency is not relieved of its legal duties under the OHSA for the worker’s health and safety during an assignment; employer duties in the OHSA apply to both the client and agency. Under typical contracts between agencies and clients, the client agrees to be primarily responsible for compliance with the Act because it controls the facilities in which the assignment worker works, while the agency is supposed to instruct the employee on general safety matters in accordance with information which the client gives the agency.

Other Jurisdictions

Canada

Across North America, some jurisdictions have looked at how to address THA issues. Ontario is in the minority of jurisdictions that specifically addresses THA employment in its legislation. In addition to requiring a licence to operate, Manitoba’s Worker Recruitment and Protection Act has provisions regulating the operation of the THA sector (e.g., agencies are prohibited from charging assignment workers any fees[229] and from preventing a client from hiring an assignment worker) which are largely similar to regulations in Ontario.

United States (US)

In the US, the use of THAs has grown disproportionately faster than the American economy. While stronger growth in the use of temporary help is a feature of a growing economy, especially as it emerges from recession, the American Staffing Association has commented for some time that disproportionate growth of the staffing industry may be a secular trend reflecting a new approach by employers to managing growth and their workforces by using THAs. Normally the increased use by employers of temporary staffing agencies is followed by a concomitant increase by employers in direct hiring. However, as the use of temporary hiring’s increase in the US, and as permanent hiring fails to keep pace, the view has been expressed by the industry that the trend to the use of temporary help is a long-term trend and that the growth in the use of THAs will in future exceed ordinary employment growth.[230]

The ubiquity of temporary help workers has also led to significant criticism of the industry, much greater regulation by the US federal government, and new legislation in some states where THAs are very prevalent.

Critics, typified by Erin Hatton and the National Employment Law Project (NELP),[231] argue that the greater use of temporary agency work is part of the decline of the middle class.

It is almost a cliché to talk about the decline in Americans’ work lives over the last decades of the twentieth century. Time and again, newspaper headlines have lamented what the New York Times called the “downsizing of America” wage freezes and massive layoffs; closed factories and jobs moved abroad; permanent employees replaced by contingent workers. Wages stagnated and access to benefits declined. The possibility of lifetime employment was replaced with the likelihood of chronic job insecurity and episodes of unemployment. Career ladders collapsed, with more and more workers finding themselves stuck at the bottom.
The temp industry has become a classic symbol of this degradation of work. Temping is the quintessential “bad” job: On average, temps earn lower wages and receive fewer benefits; and they have less job security, fewer chances for upward mobility, and lower morale than those with full- time, year-round employment. What’s more, by increasing the flexibility of the labor supply, the temp industry contributes to downward pressure on wages, decreased employment security, and limited upward mobility for all workers, not just temps.

The NELP also argues that competition between staffing agencies causes significant downward pressure on wages. The US industry is now largely production and material moving jobs as opposed to office and administrative jobs. In the US, agencies are used directly or indirectly by the vast majority of Fortune 500 companies and racialized workers are disproportionally represented among employees of the agencies. NELP noted studies that say that health of such employees is impacted adversely disproportionately, and that the average wage difference is 22% between other private sector employees and industry workers.

Hatton has criticized the industry in the US for what she describes as its consistent effort to undermine the value of permanent workers and to expand its reach by encouraging business to look upon their employees as disposable liabilities:

First, the temp industry’s business is literally to sell degraded work: The temp industry provides American employers with convenient, reliable tools to turn “good” jobs into “bad” ones (and bad jobs into worse ones). But the temp industry has also operated on another, equally important level – in the cultural arena, where battles over “common sense” about work and workers take place.
The temp industry’s high-profile marketing campaigns have had a powerful impact on this cultural battlefield, helping establish a new morality of business that did more than sanction the use of temps; it also legitimized a variety of management practices that contributed to the overall decline in Americans’ work lives.
These cultural changes in the second half of the twentieth century were indeed remarkable. By the turn of the twenty- first century, even as some corporate executives continued to extol the value of their employees, it became widely acceptable to talk about workers—all workers, from the highly skilled to the day laborer – as costly sources of rigidity in an economy that required flexibility. As Berkeley economist Brad DeLong observed in 2009, companies “used to think that their most important asset was skilled workers…. Now, by contrast, it looks as though firms think that their workers are much more disposable – that it’s their brands or their machines or their procedures and organizations that are key assets. They still want to keep their workers happy in general, they just don’t care as much about these particular workers.” Or, as management guru Peter Drucker said more bluntly in 2002, “Employers no longer chant the old mantra ‘People are our greatest asset.’ Instead, they claim ‘People are our greatest liability.’”

As noted elsewhere in the context of joint employer liability doctrine under the FLSA[232] and in the context of the joint employer doctrine recently applied by the National Labor Relations Board (NLRB) as set out in the case of Browning-Ferris,[233] the THA industry has attracted the strong and recent attention of regulators in the US. The thrust of this attention is, in effect, to make clients and THAs joint employers. There has also been severe criticism of the treatment of these workers by clients by the US Occupational Safety and Health Administration.[234]

Illinois, Massachusetts and California have all passed laws in the last decade. Illinois requires that third-party clients that contract with day and temporary service agencies for the services of day labourers share all legal responsibility and liability for the payment of wages under state wage payment and minimum wage legislation.[235] Based on the Illinois model, new legislation in California makes clients (with some exceptions) share legal responsibility and civil liability with labour contractors for payment of wages.

California, Illinois and Massachusetts require employees to be provided with a notice of details of the assignment by the time of dispatch. Illinois and Massachusetts both require THAs to be licensed. They have also required that a poster summarizing temporary workers’ rights be displayed at agency locations, and deductions from wages be limited.

Finally, to improve working conditions and treatment of temporary workers, NELP has documented the emergence of employee community organizations across the US to challenge THA clients.[236]

European Union (EU)[237]

There was strong antipathy to THAs in the early and mid-1900s in Europe, which led to the outright banning of temporary agencies in some countries, or strict licencing in most. There was a change in attitude in the last part of the last century in the context of a growing movement within the EU since the 1990s towards promoting flexible forms of work (including part-time and temporary work) as a strategy for better meeting the needs of employers and of employees.

This new attitude to temporary work through agencies was made possible by the adoption of the concept of “flexicurity” whereby flexible forms of work are promoted but in a context of the protection of and the provision of security for temporary help workers. Flexicurity is seen by the European Commission as an integrated strategy which promotes flexibility and security in the labour market concurrently. This includes policies which promote lifelong learning and training, adjustments to period of unemployment and transition, and comprehensive social security systems.[238]

While the part-time and limited-term directives were passed in 1997, the issues surrounding THAs were much more controversial as there was much antipathy to the model in many countries. After almost 10 years of EU-level consultation, debate and discussion, a Directive on Temporary Agency Workers (2008/104/EC) was finalized which legitimized agency work, defined private employment agencies as the employer[239] and provided equal treatment for assignment workers as that of clients’ directly hired workers.[240] The Directive had three objectives:

  1. to better develop flexible forms of work to promote job creation and higher levels of employment through reducing restrictions placed on temporary agencies (the perceived positive role of temporary agency work in bringing people into work and reducing unemployment as well as supporting labour market access of specific target groups was an important rationale for adopting regulations on temporary agency work at the European and national levels);
  2. an increase in the 1990s in temporary agency work throughout the EU, coupled with very disparate regulations, led to the perceived need for the EU to set common minimum standards for temporary agency work in order to prevent “unfair competition” between different member states and to prevent a “race to the bottom;” and
  3. to correct the negative working conditions for temporary workers who suffered a pay gap with those hired directly by the employers, together with the gap in training and in working conditions, as well as greater exposure to physical risks, intensity of work and accidents at work.

In most EU member states, the principle of equal treatment simply means that for the purposes of basic working conditions, the legislation, collective agreements, or other binding agreements (general company pay scales are included, as are company guidelines) applying to the sector of the user company or to the user company itself will apply to temporary agency workers. In a few member states, including in the UK, the working conditions that apply to the temporary agency worker are those that apply to a comparable employee at the same company.[241]

Exceptions from Equal Treatment:

Exceptions, called “derogations,” from the equal treatment principle, are permitted for temporary agency workers on open-ended employment contracts providing pay between assignments, to uphold collective labour agreements or based on agreements of “social partners”, who are essentially national employer and employee organizations. Any country which opts to derogate from the principle must take measures to prevent misuse:

  • five countries, including the UK, permit unequal treatment in pay when temporary agency workers have a permanent contract with a temporary agency, and are paid between assignments. In the UK, temporary agency workers with a permanent contract of employment are not entitled to equal pay for the duration of their assignments, provided that in the period between assignments they are paid at least half the pay to which they were entitled in respect of their most recent assignment, and not less than the national minimum wage;
  • ten states, including Germany and the Netherlands, allow collective labour agreements to deviate from equal treatment of agency workers. There has been criticism from academics as well as the European Trade Union Institute that the principle of equal treatment has been rendered moot in such cases; however, in many, if not all, of the ten countries, collective labour agreements have either introduced equal treatment clauses (after qualifying periods in some cases, such as the Netherlands, where it is 26 weeks), or else have negotiated for better wages than had been the cases pre-Directive; and
  • a third derogation is permitted by Article 5(4) where member states, in which there is no legal mechanism for declaring collective agreements universally applicable or for extending their provisions to all similar undertakings in a certain sector or geographical area, may, after consulting the social partners at the national level and on the basis of an agreement concluded by them, establish arrangements concerning the basic working and employment conditions which derogate from the principle of equal treatment. Such arrangements may include a qualifying period for equal treatment. In practice only the UK and Malta use this exception. In the UK, agency workers are entitled to full equal treatment at the user undertaking once they have completed a 12-week qualifying period in the same job with the same hirer.

Restricting Abuse of the Derogations:

The Directive further requires states to take appropriate measures to prevent misuse in the application of the exception and in particular, successive assignments designed to circumvent the provisions of the Directive. The risk of circumvention of the principles of equal treatment and equal pay is particularly high if the principles are not applied from the first day of the agency worker’s assignment, but only after a qualifying period, as it creates an incentive for the user undertaking to enter into successive short contracts with the agency in order to reset the qualifying period and therefore never face the obligation to pay equal wages.

The UK has adopted detailed measures to avoid misuse of its temporary work agency legislation by providing that, in case of a break of less than 6 weeks by an agency worker on assignment at a user undertaking, the qualifying “clock” is not reset to zero. In Ireland, only a gap of at least 3 months between two assignments would break the link.

Australia

In Australia, regulations are at the state level. Employment agents (i.e., THAs) must be licensed in most states and territories. Licensing involves making an application (i.e., filling forms and paying a licence fee). Assignment workers must receive at least the minimum entitlements in the relevant modern award (awards are in effect the governing terms and conditions of employment for a sector) and National Employment Standards or where the agency has its own enterprise agreement relating to wages and working conditions, that agreement.

Submissions

Employee-representative bodies, advocacy, and labour groups have argued that assignment workers in THAs are fundamentally vulnerable and experience:

  • lower pay;
  • difficulty understanding and exercising employment rights;
  • vulnerability in making complaints;
  • increased risk of injury on the job-site;
  • job instability;
  • deterioration of health;
  • unpredictable hours and income insecurity; and
  • barriers to permanent employment.

In addition, they suggest many become trapped in a precarious state and clients are increasingly using agencies to avoid employment regulation and other costs.

The differential between what is paid by the agency to the assignment worker and what is charged to the client is said to create an incentive for the agency to keep wages as low as possible and to keep the worker in that vulnerable temporary position for as long as possible. The wage differential between what is paid to the assignment worker and to the client’s employees for doing essentially the same work is also criticized as discriminatory and unfair.

Further, it is said that clients are able to avoid paying the real costs of accident and injuries in their workplace because they can pay cheaper WSIB premiums if the work is performed and injuries are sustained by assignment workers instead of their permanent workers for whom they pay premiums directly. It is also said that injured assignment workers are not properly integrated back into the workforce because the client has no obligation to do so and the agency obligation is fulfilled simply by putting the injured worker on the list for further referral to another client.

Client employers have argued that agencies provide flexibility in an increasingly competitive marketplace (i.e., labour costs savings associated with recruitment, termination and severance, workers’ compensation, benefits, training are all covered by the agency, not the client). THAs have been described as offering organizations “just-in-time,” “labour-on-tap,” or “no strings attached” workers.[242] Some submissions spoke to the important role THAs play in supporting business by matching workers with employers that have short term or finite needs to address peaks or valleys in personnel requirements (e.g., helping employers find coverage for leaves of absence as required by ESA). Such groups expressed concern that restrictions could reduce flexibility and competitiveness. Further, they have argued that the liability for ESA rights should remain with the agency (i.e., recommend not extending joint liability to items not under clients’ control such as vacation pay, PEL, termination pay, benefit plans, etc.).

Agency representatives similarly stressed the continued need for the sector to respond to:

  • unexpected business growth;
  • unexpected and long-term absences;
  • the need to bridge permanent replacements;
  • special projects; and
  • seasonal rushes, and pre-selection of candidates.

They also stressed the advantages that agencies provide to immigrants:

  • temporary work allows employers to evaluate employees whose credentials may be otherwise difficult to validate;
  • employees develop experience in Canadian job market; and
  • employees are able to form contacts with employers.

Agencies represented by ACSESS submitted that the existing ESA requirements introduced in recent years offer appropriate protections and any new protections would cause undue harm to the staffing industry.

ACSESS recommended that the government not legislate any wage parity provisions, arguing that there is no guarantee that temporary employees will be equally qualified to those they are replacing or working with, and that it would be an overreaching response to a complex range of factors.

Options:

(Note: See Chapter 4 for options in the labour relations context).

  1. Maintain the status quo.
  2. Expand client responsibility:
    1. expand joint and several liability to clients for all violations – e.g., termination and severance, and non-monetary violations (e.g., hours of work or leaves of absence);
    2. make the client the employer of record for some or all employment standards (i.e., client, agency, or make both the client and the THA joint employers).
  3. Same wages for same/similar work:
    1. provide the same pay to an assignment worker who performs substantially similar work to workers directly employed by the client unless:
      1. there are objective factors which independently justify the differential; or
      2. the agency pays the worker in between assignments as in the EU; or
      3. there is a collective agreement exception, as in the EU; or
      4. the different treatment is for a limited period of time, as in the UK (for example, 3 months).
  4. Regarding mark-up (i.e., the difference between what the client company pays for the assignment worker and the wage the agency pays the assignment worker):
    1. require disclosure of mark-up to assignment worker;
    2. limit the amount of the mark-up.[243]
  5. Reduce barriers to clients directly hiring employees by changing fees agencies can charge clients:
    1. reduce period (e.g., from 6 to 3 months);
    2. eliminate agency ability to charge fee to clients for direct hire.
  6. Limit how much clients may use assignment workers (e.g., establish a cap of 20% on the proportion of client’s workforce that can be agency workers).[244]
  7. Promote transition to direct employment with client:
    1. establish limits or caps on the length of placement at a client (i.e., restrict length of time assignment workers may be assigned to one particular client to 3, 6, or 12 months, for example);
    2. deem assignment workers to be permanent employee of the client after a set amount of time or require clients to consider directly hiring assignment worker after a set amount of time;
    3. require that assignment workers be notified of all permanent jobs in the client’s operation and advised how to apply; mandate consideration of applications from these workers by the client.
  8. Expand Termination and Severance pay provisions to (individual) assignments:
    1. require that agencies compensate assignment workers termination and/or severance pay (as owed) based on individual assignment length versus the duration of employment with agency (as is currently done). For example, if an assignment ends prematurely and without adequate notice provided but has been continuous for over 3 months or more, the assignment worker would be owed termination pay;
    2. require that clients compensate assignment workers termination and/or severance pay (as owed) based on the length of assignment with that client. Assignment workers would continue to be eligible for separate termination and severance if their relationship with agency is terminated.
  9. License THAs[245] or legislate new standards of conduct (i.e., code of ethics for THAs).

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