Bill 139, the Employment Standards Amendment Act (Temporary Help Agencies), 2008, which was adopted by the Ontario legislature, has now received Royal Assent and will come into effect on November 6, 2009. This new legislation was adopted as part of the Ontario government’s overall plan to reduce poverty in Ontario (the “Amendments”).
The Amendments will significantly change how the Employment Standards Act, 2000 (the ”ESA”) requirements apply to temporary employees, temporary help agencies and their clients. The Amendments will not, however, apply to temporary employees who perform professional services, personal support services, or homemaking work for a community care access corporation.
The Amendments are intended to provide greater rights to temporary employees, such as the extension of termination and severance pay entitlements, and will remove some of the barriers to permanent employment. An overview of the most important Amendments is provided below.
The ESA will include the following defined terms:
- "assignment employee" means an employee employed by a temporary help agency for the purpose of being assigned to perform work on a temporary basis for clients of the agency;
- "client", in relation to a temporary help agency, means a person or entity that enters into an arrangement with the agency under which the agency agrees to assign or attempt to assign one or more of its assignment employees to perform work for the person or entity on a temporary basis; and
- "temporary help agency" means an employer that employs persons for the purpose of assigning them to perform work on a temporary basis for clients of the employer.
Termination and Severance
An Assignment Employee will be deemed to have been “terminated” within the meaning of certain parts of the ESA, and will be entitled to notice, or payment in lieu thereof, under section 57 of the ESA.
There will be special exceptions and rules for dealing with the termination of Assignment Employees, such as: temporary lay-offs and weeks excluded from the calculation thereof, notice of mass termination, changing wage rates or other terms during the statutory notice period, calculating the amount of statutory notice and pay in lieu thereof, and calculating severance pay.
Generally, termination and severance for Assignment Employees will be calculated in a similar manner to regular employees under the ESA, with regard to his or her years or months of employment and wages in the weeks prior to the termination date.
Elimination of Temporary Help Agency Fees and Restrictions
The Amendments provide that a Temporary Help Agency may not:
(a) Charge an Assignment Employee a fee for the following activities:
- being hired by a Temporary Help Agency;
- giving or offering a work assignment to perform temporary work for Clients or potential Clients;
- assisting or instructing an Assignment Employee for preparing resumés or preparing for job interviews; or
- becoming an Employee of a Client of the Temporary Help Agency.
(b) Restrict an Employee from becoming a Client’s employee;
(c) Restrict a Client from providing references for an Assignment Employee of the Temporary Help Agency; or
(d) Restrict a Client from entering into an employment relationship with an Assignment Employee, or charge a fee in connection with same.
A Temporary Help Agency may charge a fee to a Client only when an Assignment Employee has become employed by the Client within six months of the day he or she first began to perform the temporary work assignment.
A Temporary Help Agency must provide information to an Assignment Employee about the Temporary Help Agency when he or she is hired. Also, a Temporary Help Agency will be required to provide information to an Assignment Employee about the Client for which he or she has been assigned to perform work, including information about compensation, hours of work and the estimated term of the assignment.
The Amendments prohibit a Temporary Help Agency or a Client from engaging in any reprisal of an Assignment Employee who, among other activities, asks a Client or Temporary Help Agency to comply with their obligations under the ESA, or makes inquiries about, or exercises or attempts to exercise, his or her rights.
A “reprisal” includes intimidation, refusal to allow the Assignment Employee to perform work for a Client, termination of an assignment, or otherwise penalizing an Assignment Employee or threatening to do so.
Temporary Help Agencies and Clients that contravene the new provisions face new enforcement measures, including investigation by an employment standards officer, orders to recover any fees paid in contravention of the ESA, and orders for compensation. Assignment Employees may also seek reinstatement.
“Elect to Work” Exemptions Revoked
When Bill 139 was introduced, the government enacted Reg. 438/02 to remove the exemptions concerning “elect to work” employees. Effective January 2, 2009, “elect to work” employees are no longer exempt from ESA requirements regarding public holiday pay. Since many Assignment Employees have flexible work arrangements that allow them to refuse work, they are often considered “elect to work” employees. The ESA public holiday pay requirements now apply to such workers.
The government has announced on several occasions, both at the introduction and passage of Bill 139, that following the passage of Bill 139 it will make another regulation to remove the termination and severance exemptions for “elect to work” employees. We will provide a further update in the event that new regulations are proposed.