Bill 139, “An Act to amend the Employment Standards Act, 2000 in relation to temporary help agencies and certain other matters,” was passed into law on May 6, 2009. The bill is aimed at protecting “elect-to-work” or temporary employees (referred to as “assignment employees” in the bill).
As the bill does not come into force until November 6, 2009, employers will have some time to prepare for the changes.
Application of the Bill
The bill affects any employer that (i) employs assignment employees, (ii) is a temporary help agency, or (iii) uses the services of a temporary help agency. The bill will not apply where the assignment employee is assigned to provide professional services, personal support services or homemaking services as defined in the Long-Term Care Act, 1994.
Elimination of Public Holiday Pay Exemptions
At the same time Bill 139 was introduced, a regulation was passed that entitled assignment employees to public holiday pay under the Ontario Employment Standards Act, 2000 (ESA) as of January 2, 2009. As a result, employers must now pay their assignment employees public holiday pay.
Changes to the ESA under Bill 139
The bill identifies a temporary help agency as the employer of the agency’s assignment employees, regardless of whether the employee is assigned work or not. A “client” is defined as a person or entity that enters into an arrangement with a temporary help 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.
The bill adds Part XVIII (Temporary Help Agencies) to the ESA. This new part has a number of noteworthy aspects:
The bill limits/restricts the fees that a temporary help agency can charge to its employees and clients:
- Fees to assignment employees ? An agency cannot charge employees for becoming an employee of the agency, for assigning work to the employee, for helping prepare resumes or prepare for job interviews, or for entering into an employment relationship with a client of the agency.
- Fees to clients ? An agency can only charge a fee to its clients for entering into an employment relationship with an assignment employee during the six-month period beginning on the day the employee first began to work for the client.
The bill prohibits temporary help agencies from restricting a client from:
- entering into an employment relationship with an assignment employee; and
- providing references to assignment employees.
The bill requires temporary help agencies to provide information (in writing) to their assignment employees regarding:
- the temporary help agency, including its legal name, its operating or business name and its contact information; and
- the client, for each new work assignment, including the client’s legal name, operating or business name, contact information, wages and benefits associated with the assignment, hours of work, a general description of the work, the pay period and pay day, and the estimated term of the assignment (if available).
Under Bill 139, the temporary lay-off provisions of the ESA will apply to assignment employees, with several modifications.
Most notably, under Bill 139, an assignment employee is considered to be laid off from a temporary help agency for a week if the employee is not assigned by the agency to perform work for a client of the agency during that week. Pursuant to Section 56 of the ESA, an employee on temporary lay-off is considered to be terminated after a certain number of weeks. However, in certain circumstances, some weeks are considered to be “excluded weeks,” and are not counted as part of the threshold used to determine if the time on temporary lay-off exceeds the time allowed under Section 56 of the ESA. An “excluded week” occurs where the assignment employee:
- is not able to work;
- is not available for work;
- refuses an offer by the agency that would not constitute constructive dismissal by the agency;
- is subject to disciplinary suspension; or
- is not assigned to perform work for a client of the agency because of a strike or lockout occurring at the agency.
Termination and Severance Pay
Under Bill 139, assignment employees will be entitled to notice of termination (or pay in lieu thereof) and severance pay under the ESA. Generally, termination and severance pay for assignment employees is calculated using the total amount of wages earned by the assignment employee during the 12-week period ending on the last day in which the employee performed work for a client of the agency, divided by twelve. This calculation determines the weekly wage, which can then be used to calculate the amount owing.
Protection from Reprisal
Temporary help agencies, as employers, are already prohibited from engaging in reprisals against assignment employees for asking questions about or asserting their rights under the ESA. Bill 139 will extend the prohibition against reprisals to clients of the temporary help agency as well.
Lessons for Employers
As a result of Bill 139, there may be increased costs associated with using assignment employees. The limitations on fees that can be charged, the entitlement to public holiday pay, and the entitlement to termination and severance pay may make it more expensive for temporary help agencies to maintain their businesses. The changes may therefore drive the temporary help agencies to increase the fees to clients that are not prohibited under the proposed amendments.
Prior to the bill coming into effect on November 6, 2009, temporary help agencies and their clients should review their agreements to ensure they are consistent with the new provisions of the ESA.