Ontario employers face a number of new challenges in 2018 as a result of the Fair Workplaces, Better Jobs Act, 2017 (“Bill 148”). To help employers navigate the many changes under Bill 148, we have outlined the key changes to employment standards and to labour relations that employers need to be aware of. We have also indicated planning actions to consider in view of these changes.

Employers should also be aware that the Ministry of Labour has published a new employment standards poster, which must be posted in a conspicuous place in the workplace and provided to employees.

1. Misclassification

Misclassifying employees as independent contractors, or other non-employees, is now expressly prohibited. In addition, an employer who takes the position that a complainant is not an employee must be able to prove their assertion. This change took effect under the Employment Standards Act, 2000 (“ESA”) on November 27, 2017.

Planning action: Employers should review their arrangements with independent contractors and other service providers to identify potential risk. Reviewing contracts is not enough ‒ the employer’s day-to-day expectations and the economic realities of the arrangement, among other factors, need to be taken into account. The law in this area is complex and evolving. Employers should accordingly obtain legal advice where there is any uncertainty as to the nature of the arrangement.

2. Equal pay for equal work

Pay rates can no longer be based on hours worked, e.g., full-time or part-time, or based on the term of employment, e.g., permanent, temporary, seasonal, casual, backup or supply.

Equal pay will be required where (a) employees perform substantially the same kind of work in the same establishment, (b) performance requires substantially the same skill, effort and responsibility, and (c) work is performed under similar working conditions. Exceptions apply for seniority or merit systems, systems measuring earnings by quantity or quality of production, or factors other than sex or employment status. Temporary help agency employees will also be entitled to the same pay rate as employees of the client where they perform substantially the same work. The equal pay provisions take effect under the ESA on April 1, 2018.

A transition period applies for collective agreements in effect on April 1, 2018. The transition applies until the earlier of the date the collective agreement expires and January 1, 2020.

Planning action: With more Canadians working part-time and part-year than in the past two decades,[1] improper differential pay rates are likely to be prevalent. Employers should review and update their policies and practices relating to pay rates. Reviewing and revising job descriptions to better differentiate among classes of employees may also be appropriate. Employers should also consider conducting an audit of their workforce to assess whether the new equal pay rules are met.

3. Related employers

Separate legal entities may now be treated as one employer if they simply carry on associated or related business activities. Previously, separate entities could only be treated as one employer if they had also acted in a manner which had the intent or effect of defeating the purpose of the legislation.

Canadian employers are increasingly employing fewer “traditional” employees,[2] in favour of “modern workforce arrangements” such as engaging third-party suppliers to provide on-site or off-site workers. This amendment helps such workers by relaxing the more strict principles in the previous version of the provision. This change took effect under the ESA on January 1, 2018.

Planning action: Determining whether a related employer relationship exists is no easy task. A detailed examination of business operations as well as the contractual arrangements with business partners is necessary to assess and protect against related employer liability. Forewarning enables the employer to adjust its working relationships and the terms of its contracts, among other strategies. Follow this link for further information about how we can assist employers in this area.

4. Leaves

Longer/enhanced leave entitlements now apply in a variety of situations:

  • parental leave increased from 35 weeks to 61 weeks for employees who took a pregnancy leave and from 37 weeks to 63 weeks for employees who did not take a pregnancy leave;
  • family medical leave increased to 28 weeks in a 52-week period;
  • critical illness leave increased to up to 37 weeks to care for a critically ill minor child and up to 17 weeks to care for a critically ill adult family member;
  • personal emergency leave[3] of 10 days is now available to all employees (with the first 2 days paid and the remaining 8 days unpaid); and
  • leave for employees who suffer a still-birth or miscarriage increased from 6 weeks to 12 weeks.

In addition, a new domestic or sexual violence leave has been added and provides up to 10 days and up to 15 weeks of leave in a calendar year, with the first 5 days paid and the remaining days unpaid. The Ministry of Labour previously indicated that the intent of the provision is to provide up to 17 weeks off – see the Ministry’s October 17, 2017 news release.

The new leave provisions are now in effect.

Planning action: Employers should prepare for workforce continuity issues as a result of the increased leave entitlements, including cross-training their staff on work assignments, and should budget for retaining replacement workers based on forecasted need. Employers should also develop guidelines for determining what kind of leave pertains and whether the leave needs to be paid or unpaid.

5. Payroll

Various incremental pay changes have been introduced:

  • the general minimum wage is now $14 per hour, increasing to $15 per hour on January 1, 2019;
  • vacation pay is now 6% for employees with a period of employment of 5 years or more (vacation time is 3 weeks for these employees);
  • employees will be entitled to (a) at least 3 hours of regular wages for a shortened shift if they regularly work more than 3 hours a day, and (b) 3 hours of regular wages if their shift is cancelled with less than 48 hours of advance notice;
  • on-call employees will be entitled to (a) at least 3 hours of regular wages if they are not called in or required to work less than 3 hours, and (b) 3 hours of regular wages if their scheduled on-call period is cancelled with less than 48 hours of advance notice.

The new vacation pay entitlements took effect on January 1, 2018. The 3-hour and on-call pay rules take effect on January 1, 2019. A transition period applies for collective agreements in effect on January 1, 2019 with conflicting on-call provisions. The transition applies until the earlier of the date the collective agreement expires and January 1, 2020.

Planning action: Employers who have not already done so should budget for increased payroll costs in 2018 and beyond. Where possible, employers should plan to give adequate advance notice of shift cancellations or temporary layoffs.

6. Union certification

A number of amendments to the Labour Relations Act, 1995 (“LRA”) support certification efforts. Both unionized and non-union employers should be aware of the following:

1) Unions have improved access to employee information. The Ontario Labour Relations Board (“Board”) may order the employer to provide the union with an employee list in respect of a proposed bargaining unit if certain criteria are met. In addition to employee names, phone numbers and personal email addresses are to be included if these were provided to the employer.

2) Automatic certification may arise if the employer contravenes the LRA. The Board is now required to certify the union if it is satisfied that the employer’s contravention resulted in (a) the true wishes of the employees not being reflected in a representation vote; or (b) the union not obtaining 40% support. The Board no longer has the option of ordering a representation vote (or another representation vote) and instead must certify the union for the bargaining unit the Board determines could be appropriate.

3) Card-based certification reinstated for certain industries. The Board may certify the union if it is satisfied that more than 55% of employees in the bargaining unit are union members. This provision applies only to the building services industry, the home care and community services industry and to temporary help agencies. Card-based certification remains in effect for the construction industry.

These changes are now in effect under the LRA.

Planning action: Some employers may expect increased organizing efforts as a result of these amendments. Positive employee relations are key to stemming union organizing. But it is not enough to simply talk about treating employees fairly. Commitment needs to come from the top and be institutionalized through the implementation of various policies and practices.

7. First collective agreements

Either party may now seek the appointment of a mediator where the parties are unable to reach a first collective agreement. The Board will appoint a mediator within 7 days of an application. The mediator’s role is to help the parties reach a first agreement.

A new mediation-arbitration process is the next step if the parties do not reach a first agreement in mediation. The application may be brought on or after 45 days after the appointment of the mediator. The test for the Board’s approval of appointment has fundamentally changed to entitlement based on the passage of time (the expiry of 45 days) provided the applicant has clean hands. Whereas the old test required intransigence on the part of the respondent. Where the applicant does not have clean hands, the Board can order the parties to engage in further mediation or dismiss the application. As with the old arbitration process, the purpose of the mediation-arbitration is to direct settlement of the first agreement.

This change is now in effect under the LRA.

Planning action: Bargaining of first collective agreements must be handled in a proficient and expedited manner. Professional advice is strongly recommended when negotiating every first collective agreement.