Labour Law

Bill 47 Proposes Significant Changes to Ontario Labour and Employment Legislation

October 24, 2018

Ernie Schirru

Summary and Overview

On October 23, 2018, the Ontario government tabled Bill 47, Making Ontario Open for Business Act, for first reading in the legislature.

Bill 47 makes many important changes to various pieces of legislation governing employment and labour relations in Ontario, principally the Employment Standards Act, 2000 (“ESA”) and the Labour Relations Act, 1995 (“LRA”). Bill 47 reverses many of the changes to the ESA and LRA that were enacted by the previous government in Bill 148 in late 2017, but does not constitute a straight repeal of Bill 148.

Bill 47 also makes changes to the Ontario College of Trades and Apprenticeship Act, 2009, which are not summarized here.

With respect to the ESA, Bill 47 does the following:

• Cancels the legislated hike of the general minimum wage from $14 an hour to $15 an hour effective January 1, 2019, instead freezing the minimum wage at $14 an hour until October 1, 2020, at which point it will be adjusted annually by the rate of inflation;
• Removes the entitlement to Personal Emergency Leave (PEL), which currently provides employees with ten days annually of leave (the first two of which are paid) to attend to personal or family illness or other urgent matters, and substitutes for it three unpaid sick days, three unpaid family responsibility leave days, and two unpaid bereavement leave days;
• Cancels a range of scheduling protections that were part of Bill 148 and were scheduled to come into force on January 1, 2019;
• Eliminates the right to equal pay for part-time, contract, temporary, and temporary help agency workers vis-à-vis full time workers;
• Repeals new public holiday pay calculations introduced by Bill 148;
• Scraps a provision introduced in Bill 148 that puts the burden on an employer to prove that a worker is an independent contractor rather than an employee;
• Maintains existing vacation entitlements, including three weeks of vacation for employees with five or more years of service, and maintains domestic and sexual violence leave;
• Delays the planned repeal of the provision excluding from the scope of the ESA persons performing work in a simulated job or working environment if the primary purpose is the individual’s rehabilitation (“sheltered workshops”).

With respect to the LRA, Bill 47 does the following:

• Eliminates card-based certification in the building services industry, home care and community services industry, and temporary help agency industry, while leaving it in place for the construction industry;
• Removes a provision introduced by Bill 148 by which a trade union can get an employee list upon demonstrating 20% support in the proposed bargaining unit;
• Restricts the ability of the Ontario Labour Relations Board (the “Board”) to amend or consolidate bargaining units;
• Takes away first collective agreement mediation and first agreement arbitration as of right, allowing the Board to order first collective agreement arbitration only under certain circumstances;
• Restricts the circumstances under which the Board can remedially certify a trade union without a vote by restoring the option for the Board to order a vote or a second vote, and grant additional remedies, where it decides the first vote does not reflect the true wishes of the employees;
• Removes the power of the government to expand enhanced successor rights protections for unions in “contract flipping” scenarios outside the building services industry, while maintaining such protections in the building services industry;
• Eliminates the requirement for an employer to reinstate a striking employee following six months of strike;
• Reduces the monetary penalties for violations of the LRA;
• Changes certain administrative processes, including allowing different forms of service of documents.

Changes to the Employment Standards Act

Minimum Wage Frozen at $14 an Hour

The existing ESA language provides for the general minimum wage to rise to $15 an hour on January 1, 2019.

Bill 47 proposes cancelling this increase and freezing the general minimum at its current level of $14 an hour until October 1, 2020, at which point it will rise on an ongoing basis with inflation.

This will result in the minimum wage being frozen for 33 months without compensation for the rising cost of living.

Sub-minimum wages for students under 18 and liquor servers remain in force, and will be frozen at their current rates of $13.15 an hour and $12.20 an hour, respectively.

Personal Emergency Leave Eliminated and Replaced with Reduced Entitlements

At present, workers are entitled to ten personal emergency leave (PEL) days per year, the first two of which are paid. These days can be used for personal illness or that of a family member, for bereavement, and for other urgent personal matters.

The new legislation eliminates personal emergency leave. Instead, it is replaced with three new types of leave. Employees will be entitled to three unpaid sick leave days for personal illness, three unpaid family responsibility leave days for family member illness or other urgent matters, and two bereavement leave days. In addition to reduced flexibility for employees caused by segmenting leave types, the total number of leave days is reduced from ten to eight, while the entitlement to have the first two days of leave paid is removed.

A new provision is inserted that specifies that where an employee takes a paid or unpaid leave under an employment contract where they would also be entitled to a specified ESA leave day, they are deemed to have taken a leave under the ESA. In other words, a single day of leave can count against both a contractual and statutory entitlement at the same time. This provision responds to varied case law about when a contractual greater right or benefit replaced PEL, and when it stood in addition to it.

In addition, while at present an employer cannot request a physician’s note from employees using PEL days, an employer will now be able to request a physician’s note where it is reasonable to do so.

To qualify for the new types of leave, an employee must be employed for two weeks with a given employer. This is a change from the current PEL provision, where an employee may take unpaid leave immediately upon starting work, and paid leave following one week of employment.

One note is that while prior to Bill 148 PEL applied only to employers with 50 or more employees, Bill 47 maintains the post-Bill 148 status quo by applying the new types of leave to all employers regardless of size.

Improved Scheduling Protections for Workers Scrapped

Bill 148 introduced a number of changes designed to provide scheduling security for workers. Many of these are not yet in force because they were scheduled to come into force on January 1, 2019.

Those planned to come into force on January 1, 2019 that are to be cancelled include:

• The right to request changes to schedule or work location after an employee has been employed for at least three months;
• The right to a minimum of three hours’ pay for being on-call if the employee is available to work but is not called in to work, or works less than three hours;
• The right to refuse requests or demands to work or to be on-call on a day that an employee is not scheduled to work or to be on-call with less than 96 hours’ notice;
• The right to three hours’ pay in the event of cancellation of a scheduled shift or an on-call shift within 48 hours before the shift was to begin.
• The record-keeping requirements that relate to the above-noted scheduling provisions.

The three hour rule is maintained. This rule requires an employee to receive three hours’ pay if they normally work more than three hours and are called into work, but sent home before having worked three hours.

Equal Pay for Employees Regardless of Status Eliminated

One of the most significant changes Bill 148 implemented was a requirement that all workers performing the same work be paid the same wage rate regardless of employment status. This made it presumptively unlawful to pay a part-time, casual, or temporary employee less than a similarly situated full-time employee.

Bill 47 proposes to eliminate any requirement for equal pay based on employment status. Only the longstanding requirement for equal pay on the basis of sex is maintained.

Bill 148 had a particularly large impact on the temporary help agency industry. Because the legislation required temporary agency workers to be paid the same as permanent workers, it made the use of temporary agency workers much less economical for employers. Bill 47 may lead some employers to again increase use of temporary agency workers.

Public Holiday Pay Calculation to Permanently Return to Old Formula

Bill 148 introduced a new formula for calculating public holiday pay. However, the previous Liberal government reverted to the old formula by regulation as of July 1, 2018, following concerns expressed by some employers about the new formula, with the intent to consult on how to proceed.

Bill 47 permanently maintains the old formula for calculating public holiday pay by restoring it to the statute. The default formula—subject to many qualifications—is as follows: “The employee’s public holiday pay for a given public holiday shall be equal to the total amount of regular wages earned and vacation pay payable to the employee in the four work weeks before the work week in which the public holiday occurred, divided by 20.”

No Change to Vacation Entitlement or Domestic and Sexual Violence Leave

The minimum vacation entitlement for employees remains two weeks for less than five years of service, and three weeks for five years of service of service or more. The third week for long-service employees is one of the changes introduced by Bill 148 that Bill 47 retains.

Domestic and sexual violence leave provisions that were brought in under Bill 148 remain intact.

Reverse Onus for Classification of Employees Eliminated

Bill 148 introduced a new provision that put the burden on an employer to demonstrate that an employee was an independent contractor rather than an employee—a “reverse onus” provision. Bill 47 scraps this provision.

However, workplace parties should note that it remains true as a matter of law that a worker’s true classification may be different from what their contract specifies. Courts will look to the substance of a relationship to determine how to classify a worker. The change introduced under Bill 47 will not change the underlying law around worker classification, but means a worker bears the burden of proof by default to show they are misclassified.

Phase Out of “Sheltered Workshops” Exemption Delayed

The ESA exemption for “sheltered workshops”—formally, “persons performing work in a simulated job or working environment if the primary purpose is the individual’s rehabilitation”—was scheduled to end on January 1, 2019. Bill 47 removes this date, and specifies the exemption will end upon proclamation. The government intends to delay the end of the exemption.

Sheltered workshops involve persons with disabilities employed separately from others, and have been criticized on the basis that they permit persons with disabilities to be paid wages that are often substantially below the minimum wage. The government’s intended long-term policy direction on this file is not yet clear.

Changes to the Labour Relations Act

Card-Based Certification Removed for Certain Industries, But Retained for Construction Industry

The new legislation proposes removing card-based certification for the building services industry, the home care and community services industry, and the temporary help agency industry.

This means that, absent a successful application for remedial certification due to employer unfair labour practices, a secret ballot would be required to certify a trade union in all industries other than the construction industry.

Bill 47 does not change the provisions of the LRA providing for card-based certification in the construction industry.

Applications for certification filed before the day of first reading of Bill 47—being October 23, 2018—will be disposed of under the prior rules permitting card-based certification in the specified sectors.

Applications for certification filed on or after October 23, 2018 that are not finally disposed of on the day the relevant section comes into force will proceed by mandatory secret ballot outside the construction industry.

Right of Trade Union to Employee Lists Eliminated

Bill 148 introduced a novel provision allowing a trade union to request an employee list if it could demonstrate 20% support in the proposed bargaining unit.

The new legislation would eliminate this provision.

Any application for employee lists that is outstanding on the day the relevant section of Bill 47 comes into force will be terminated.

The legislation further specifies that a trade union that has already obtained a list under direction of the Ontario Labour Relations Board (the “Board”) under this section must destroy the list immediately after the section comes into force. It is not clear how this provision will be enforced.

Board’s Ability to Consolidate Bargaining Units Restricted

Under rules brought in under Bill 148, the Board was given broad powers to consolidate bargaining units. Bill 47 restricts its ability to do so to circumstances where it deems bargaining units are no longer appropriate for collective bargaining.

Both the existing rules and the proposed new rules do not apply to the construction industry.

Any application for bargaining unit consolidation that is before the Board but has not been determined by it as of the date the new section comes into force will be determined under the new section.

Access to First Collective Agreement Arbitration Restricted

Bill 148 substantially enhanced access to first collective agreement arbitration, with an added provision for first collective agreement mediation.

The current process in essence provides first collective agreement arbitration as of right to a trade union, provided it meets certain administrative and procedural requirements.

Bill 47 eliminates the mediation stage, and curtails access to first collective agreement arbitration by reinstating criteria in effect prior to Bill 148.. First collective agreement arbitration will now only be granted where, in the Board’s opinion, collective bargaining has been unsuccessful because of the refusal of the employer to recognize the bargaining authority of the trade union, the uncompromising nature of any bargaining position adopted by the respondent to the application without justification, the failure of the respondent to the application to make reasonable or expeditious efforts to conclude a collective agreement, or any other reason the Board considers relevant.

The new statutory language reinstates the criteria in effect prior to Bill 148.

Where the Board has directed first collective agreement arbitration before the coming into force date of this provision, the arbitration will proceed pursuant to the existing rules.  Where parties are in first collective agreement mediation on the coming into force date, the mediation will cease immediately. Where an application for first collective agreement arbitration is outstanding before the Board, but the Board has not yet ordered first collective agreement arbitration as of the coming into force date, the application will be dealt with under the new rules.

Board’s Ability to Order Remedial Certification Limited

It has long been the case that the Board has a broad range of remedial tools at its disposal where an employer commits unfair labour practices during a union organizing drive.

Where the law has changed is what the Board must do when an employer commits unfair labour practices so serious that the true wishes of the employees in the bargaining unit were not likely reflected in a representation vote, or where the unfair labour practices prevented a trade union from demonstrating 40% support in the bargaining unit at the time the application was filed.

Prior to Bill 148, the Board’s default remedy in such circumstances was to order a representation vote, or a second representation vote as the case may be, and/or grant additional remedies to attempt to ensure that vote reflected the true wishes of the employees. Only if no other remedy were sufficient could the Board remedially certify a union without a vote.

Bill 148 eliminated the option for a vote or second vote under the above specified circumstances, meaning the Board had to order remedial certification.

Bill 47 restores the pre-Bill 148 language, meaning that, even in cases of very serious unfair labour practices, holding a vote or a second vote, and issuing additional remedies, will again be the Board’s default option, absent demonstration that such remedy would not reflect the true wishes of the employees.

Any application for remedial certification that is before the Board but has not been determined by it as of the date the new section comes into force will be determined under the new section.

Government’s Ability to Expand Successor Rights Outside Building Services Sector Eliminated

Under Bill 148, two new sections of the LRA were introduced regarding successor rights.

The first new section provided protection for unions in the building services industry in “contract flipping” scenarios. In essence, where a union has a collective agreement with a contractor providing services to a client such as food and cleaning, and the client switches building services providers, Bill 148 means a union’s bargaining rights automatically continue with the new contractor.

The second new section under Bill 148 permitted the government to extend by regulation similar protections beyond the building services industry, to employers directly or indirectly receiving public funds.

Bill 47 retains enhanced successor rights for the building services industry, while eliminating the government’s ability to extend them to other sectors by regulation.

As the government had never enacted regulations expanding enhanced successor rights beyond the building services industry, the change introduced by Bill 47 has no immediate practical effect.

Employers No Longer Have to Reinstate Employees After Six Months of Strike

Under Ontario’s labour relations system, the right to strike is protected in large part through an LRA provision specifying that an employer must reinstate striking workers upon termination of a strike, unless it has discontinued all or part of its business. This provision prevents an employer from permanently replacing striking workers.

Prior to Bill 148, this requirement only applied to the first six months of a strike. Bill 148 made it apply indefinitely, even where a strike exceeds six months.

Bill 47 restores the six month rule. In doing so, it tilts the balance further in favour of employers in long strikes, because they can legally threaten not to rehire striking workers following the end of a strike that lasts beyond six months.

Reduced Monetary Penalties for Breaching LRA

Bill 47 cuts the maximum fines for breaching the LRA from $100,000 to $25,000 for a corporation or trade union, and from $5,000 to $2,000 for individuals. This reverses the higher maximum penalties introduced by Bill 148.

Various Administrative Changes to Labour Relations Processes

Bill 47 introduces a number of novel provisions regarding administrative processes under the LRA.

Any notice or communication made under the Act will be able to be sent by mail, courier, fax, e-mail, or any other method the government chooses to prescribe.

Documents sent to the Minister by fax or e-mail will be deemed received the day they are sent if sent by 5:00 p.m., or the next day if after 5:00 p.m.

Decisions of the Board, no board reports, and arbitral decisions will be deemed to be released on the day they are sent.

As such, the language around when the parties enter a legal strike or lockout position is changed, such that they are deemed to enter a legal strike or lockout position 16 days after the release of the no board.

Parties should note that this is a technical change that does not change strike and lockout timelines. Rather than the statute indicating a 14 day cooling off period with the no board deemed received on the second day after it is mailed, the no board is deemed received the day it is issued and the cooling off period is extended to 16 days.

Practically speaking, this means the parties will still enter a legal strike or lockout position at the beginning of the 17th day following the issuance of the no board report.

There is also a new provision requiring the Minister to make available to the public copies of collective agreements.

A provision providing for educational support upon request for workplace parties is also eliminated.

Process for Legislation Moving Forward 

Bill 47 passed first reading in the legislature on October 23, 2018.

It will now proceed to second reading for debate, likely followed by a review by a legislative committee, followed by third reading and Royal Assent.

The government clearly intends that the new legislation be in force prior to the end of 2018. As the legislature is scheduled to rise on December 13, 2018 for the Christmas break, the legislation is very likely to pass by this date at the latest. The government has the power to impose a much shorter timeline should it choose to do so, as it has extensive powers to limit legislative debate. There may be opportunities for stakeholders to make submissions on the legislation, but it is anticipated these will be much more limited than those that took place for Bill 148.

There may be amendments made to Bill 47 through the legislative process. As the government has a large majority in the legislature, it has full control over the final form of the legislation, and we fully anticipate the legislation will pass speedily.

The date upon which most of the provisions will come in to force will likely be the date of Royal Assent, which could occur very quickly depending on the timeline chosen.

Koskie Minsky Ready to Advise on Application of New Legislation

We encourage our clients and others to consult us regarding how the new legislation may affect their particular situation.

This is particularly so for those with ongoing or anticipated litigation, bargaining, or strikes whose strategic position and interests may be impacted by the changes.