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Required New ESA Poster for Ontario Workplaces

The Ontario Ministry of Labour has prepared and published a new Employment Standards Act, 2000 (“ESA”) poster entitled “Employment Standards in Ontario”. The poster is version 6.0 in a long line of ESA posters and Ontario employers were required to post it in the workplace effective as of May 1, 2015. The poster outlines for employees their rights under the ESA and the requirements of employers under the ESA.

The Ministry’s rules regarding the new ESA poster are as follows:

  • The poster must be in English but if the majority workplace language is other than English and if the Ministry has version 6.0 available in that language, then both posters must be posted side by side.
  • Version 5.0 should be removed at the time that version 6.0 is posted.
  • In addition to posting the poster in the workplace, employers are also required to give a copy of the poster to each employee by June 19, 2015.
  • New employees hired after May 20, 2015 must be given a copy of the poster within 30 days of hire.
  • The poster may be given to employees in hard copy form, as an email attachment, or as a link to an internet database (but then only if the employer ensures that the employee has reasonable access to the database, a computer and a printer).
  • The poster is available in English, French, Arabic, Chinese, Hindi, Portuguese, Punjabi, Spanish, Tagalog, Thai and Urdu.

An English copy of the poster can be obtained at http://www.labour.gov.on.ca/english/es/pdf/poster.pdf and a French copy of the poster can be obtained at http://www.labour.gov.on.ca/french/es/pdf/poster.pdf. For copies of the poster in other languages, please go to the following link: http://www.labour.gov.on.ca/english/es/pubs/poster.php.

 

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Required New ESA Poster for Ontario Workplaces

Upcoming Employment Standards Blitz – Precarious Employment

Beginning in May 2015, the Ontario Ministry of Labour will begin a province-wide employment standards workplace inspection blitz targeting the janitorial, security, business services, fitness and recreation centres, amusement, and recreation sectors. The Ministry of Labour has labeled the blitz’s focus as “precarious employment”, likely due to the high occurrence of part-time and other atypical forms of employment in these sectors. This blitz follows the release of the Ministry of Labour’s results on its vulnerable and temporary foreign workers employment standards blitz last fall.  Those inspections found 171 non-compliant employers, recovering over $175,000 for 1,406 employees.  As is typical, the most common violations included non-compliance with the public holiday pay, vacation pay, and overtime pay requirements of the ESA.

Employers should keep in mind that part-time employees are protected under the ESA.  As such, they are entitled to minimum wages (currently at $11 per hour in Ontario, but soon to increase), vacation pay, public holiday pay, and overtime pay. These employees will also have rights upon termination, including under both the ESA and to sue for wrongful dismissal at common law.

Any employer found to be non-compliant with the ESA can face a compliance order, an order to pay, a ticket with a fine, a notice of contravention, or prosecution. These penalties can bring significant financial consequences. In 2012, a Mississauga operator of 25 fitness clubs was fined $100,000 for violating the wage provisions of the ESA.  In addition, with the amendments brought by Bill 18 now in effect, wage claims may grow, as there is no longer a monetary cap on the wage amount that the Ministry of Labour can order an employer to pay per employee.

In addition to the sectors targeted by this blitz, employers across the province may face stricter regulations and increased enforcement, as the Ontario government undertakes a formal review of both the ESA and the Ontario Labour Relations Act to address the rise of precarious employment.

Upcoming Employment Standards Blitz – Precarious Employment

BC and Ontario Employers Take Note: Upcoming Minimum Wage Changes

Ontario
Last fall the Ontario Employment Standards Act, 2000 was amended to index increases to the minimum wage to Ontario’s Consumer Price Index.  Putting that into effect, Ontario is raising the general minimum wage from $11 to $11.25 per hour, effective October 1, 2015.  The minimum wage rates in Ontario for jobs in special categories (liquor servers, homeworkers, students, etc.) are increasing at the same time, and those can be found here:  Minimum wage rates.

BC
The B.C. government has announced that it will also index increases in the general minimum hourly wage and the liquor server wage to B.C.’s Consumer Price Index.  As a result, effective September 15, 2015, the BC general minimum wage will increase from $10.25 to $10.45 and the liquor server wage from $9.00 to $9.20 per hour.  Also effective September 15, 2015, the daily rate for live-in home support workers and live-in camp leaders, as well as the monthly rates for resident caretakers and the farm worker piece rates (for harvesters of certain fruits and vegetables) will be increased proportionate to the 20-cent increase in the general minimum hourly wage.

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BC and Ontario Employers Take Note: Upcoming Minimum Wage Changes

On the Radar Screen: the Stronger Workplaces for a Stronger Economy Act, 2014

As we reported in a previous blog post that can be found here, the Stronger Workplaces for a Stronger Economy Act, 2014 makes some significant changes to several Ontario statutes.  The legislation received Royal Assent on November 20, 2014 and a copy can be found here, but the significant changes include the following:

1. Starting on October 1, 2015, it provides for increases (but not decreases) to the minimum wage under the Employment Standards Act, 2000 (the “ESA”) based on the Ontario Consumer Price Index. The CPI will be announced by April of each year, with the minimum wage change to come into effect on October 1.  This will likely result in the minimum wage changing incrementally every year, creating an additional administrative burden on employers who pay their employees at or near the minimum wage.

2. It eliminates the $10,000 cap on the recovery of unpaid wages through Ministry of Labour Orders to Pay under the ESA.  This provision comes into force on February 20, 2015, although the cap still applies to orders made in respect of wages due prior to the date on which the provision comes into force.

3. It requires employers to provide each of their employees with a copy of the most recent poster published by the Ministry of Labour that provides information about the ESA. An employer must provide available translations of the poster if requested by an employee.  The poster must be provided to all employees within 30 days of the day on which the provision comes into force, and thereafter (for new employees) within 30 days of the day on which an individual becomes an employee of the employer.  This provision comes into force on May 20, 2015.

4. It increases the period of recovery of unpaid wages (i.e. the limitation period) under the ESA to two years, and gives Ministry of Labour inspectors the ability to order an employer to conduct a “self-audit”, whereby it examines its own records to ensure it is in compliance, after which the employer must report back to the officer on the level of compliance.  This provision comes into force on February 20, 2015.

5. It expands employment protections to cover all foreign employees who come to Ontario under an immigration or foreign temporary employee program (previously the protections had only been in place for live-in caregivers).  This provision comes into force on November 20, 2015.

6. It creates “joint liability” for a temporary help agency and its client for certain ESA violations, such as the failure to pay regular wages, overtime pay, and public holiday entitlements.  Although the temporary help agency still has the primary liability, the client is now jointly liable.  This provision comes into force on November 20, 2015.

7. It amends the Workplace Safety and Insurance Act to add “temporary help agencies” as a recognized definition, and to assign workplace injury and accident costs to the client of a temporary help agency when an employee is injured while performing work for the agency’s client.  This provision will come into force on a future date to be proclaimed by the Lieutenant Governor, so it is unclear when it will take effect.

8. It expands coverage under the Occupational Health and Safety Act to include unpaid co-op students and other unpaid learners, which will give them protections such as the right to know about workplace hazards and the right to refuse unsafe work.  This provision came into force on November 20, 2014.

9. It amends the Labour Relations Act, 1995 in respect of the unionized construction industry’s “open period”, to decrease the time when construction workers can change their union representation (or apply to remove their union) from three months before the expiry of the current collective agreement down to two months.  This provision comes into force on May 20, 2015.

Particularly in respect of the changes to the ESA, these expanded powers will likely result in an increase in claims made to the Ministry of Labour, as this process is generally cheaper and faster than court-based civil litigation.

On the Radar Screen: the Stronger Workplaces for a Stronger Economy Act, 2014

The Dangers of Unpaid Employment in a Start-Up Company

Unpaid internships were discussed in an April 8th posting in this blog and it is clear that most Ontario interns have to be paid.  But what about employees in start-up companies?  Can employers provide them with stock options, shareholdings or the promise of future payment in lieu of current payment of wages?  The short answer is that except in certain defined circumstances, employees must be paid wages, and they must be paid on a regular basis from the time that they begin working for a company.

The Employment Standards Act, 2000 (Ontario) (the “ESA”) defines an employee as “someone who performs work for an employer for wages”.  In turn,  the term “wages” is defined as “monetary remuneration”.  Section IX of the ESA requires employees to be provided with “at least the prescribed minimum wage”.

The Regulations under the ESA have some exemptions in relation to Section IX, but they are limited and generally only apply to certain defined professionals (eg. doctors, lawyers, engineers, architects, teachers), commissioned salespeople, and other specified groups of employees (certain student employees such as camp counselors, and janitors/superintendents who reside in the building that they are responsible for).  It is particularly important for start-up companies to note that there is no wages exemption under Section IX of the ESA for information technology professionals, managers, supervisors or executives.

In addition, because the ESA expressly prohibits employers and employees from entering into an agreement to circumvent the provisions of the ESA, it is not possible for a company founder or similarly-placed employee to agree to forego wages during the start-up period.  The potential risk to a company which permits employees to work without receiving at least minimum wage, is that the employee can make an unpaid wages claim, which in turn can also be a liability to the directors and officers of the company.  In addition, a failure to pay wages as earned can lead Canada Revenue Agency to have a claim for unpaid tax and other withholdings which should have been made.

While there are risks with entering into independent contractor agreements, particularly if the contractors are actually employees under various legal tests, sometimes the safest path for a financially strapped start-up is to consider short-term contractor arrangements until the company is on its feet and generating revenue which can be used to cover payroll for employees.  This can be a tricky area to navigate and should never be done without legal advice, but done properly, it is a better and safer option than failing to pay employees during the initial start-up period.

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The Dangers of Unpaid Employment in a Start-Up Company

School Board Taught a Costly Lesson: Court Upholds Reinstatement with 10 Years of Back Pay

Ms. Fair was employed by the Hamilton-Wentworth District School Board (the “Board”) from 1988 to 2004, when her employment was terminated.  During her employment, Ms. Fair had developed a psychiatric disorder, namely, generalized anxiety disorder.  She took a disability leave on October 2, 2001, as a result of depression and post-traumatic stress disorder related to the stress of her job.  When the Board determined it could not accommodate her, the Board terminated her employment in July 2004.  At that point, she filed a human rights complaint, alleging discrimination based on disability.

Due to amendments to the Human Rights Code in July 2008, Ms. Fair was given the opportunity to, and did, refile her complaint as a “transitional application” under the transitional rules that were put in place at that time.  The result of this refiling was that for the first time, Ms. Fair formally identified the remedies she was seeking, including the remedy of reinstatement.  The result:  years after dismissing her, the Board learned that she was seeking reinstatement as a remedy.

In February 2012 the Tribunal finally issued its decision on liability, and concluded that there were in fact positions into which Ms. Fair could have been placed without causing undue hardship, but the Board had failed to make the attempts to do so.  As such, the Board had failed in its duty to accommodate.

In 2013, the Tribunal issued its decision in respect of remedies.  The Tribunal rejected the Board’s argument that the length of time between the termination and the decision made it unfair to order reinstatement.  The Tribunal ordered the Board to reinstate Ms. Fair to a suitable position, being a position at or equivalent to the position she was in before the termination of her employment in 2004.  The Tribunal also ordered the Board to compensate Ms. Fair for her loss of earnings for the entire period between her dismissal and the reinstatement, less any mitigation earnings, as well as $30,000 for compensation for the injury to her dignity, feelings and self-respect.  Since Ms. Fair had earned minimal amounts since her dismissal, the amount owing was in excess of $400,000, plus pension and CPP adjustments and compensation for lost medical benefits, and a gross-up for tax (given the lump sum payment).

Not surprisingly, the Board filed for review of the decision with the Divisional Court.  The Board made a number of what might be called “technical” arguments about the decision, including that the Tribunal breached its duty of fairness in the way the hearing was conducted, that there was a “reasonable apprehension of bias” because of certain comments made by the Vice-Chair during the hearing, that the Tribunal failed to properly follow its own Rules, and that it had not provided sufficiently detailed reasons for its decision.  The Divisional Court rejected all of these arguments, holding that there was no reasonable apprehension of bias on the part of the Tribunal, and that there were no procedural defects in the conduct of the hearing or in the decisions that had been issued.

The Board also argued that the Tribunal’s decision was unreasonable.  The Board tried to attack the portion of the decision in which the Tribunal found that there was no appropriate accommodation made by the Board.  The Board argued that it had made a number of accommodations for Ms. Fair, and that the Tribunal’s conclusion that the Board had not met the standard of undue hardship was unreasonable based on the evidence.

The Divisional Court rejected the Board’s arguments, and found that the Tribunal’s conclusion was supported by the evidence.  The Court held that the Tribunal’s decision was reasonable, considering that the Board had taken a number of steps to avoid finding alternate employment for Ms. Fair, including a refusal to consider alternate roles and failing to seek out further medical evidence it needed to accommodate her.

In terms of the remedy, although the Court agreed with the Board that reinstatement was an “uncommon” remedy before the Tribunal, the Court held there was nothing unreasonable about such a remedy.  The Court justified its conclusion by referring to the broad remedial authority of the Tribunal, and as well the Court referenced the unionized workplace setting, where reinstatement is not unusual where there has been a breach of a collective agreement.

With respect to the fact that so much time had passed between the dismissal and the order of reinstatement, the Court held that the goal of the remedial provisions of the Code ought not to be “thwarted” because of the passage of time, particularly since the delay was largely beyond the control of Ms. Fair.

There is a significant body of case law on the duty to accommodate disabilities in the workplace, and the high threshold needed to meet “undue hardship”.  Were it not for the remedy (reinstatement with 10 years of back pay), this decision would not likely have raised eyebrows.  There are relatively few cases in which the Tribunal has awarded reinstatement as a remedy, but certainly the award of reinstatement in this case, and the significant monetary damage award that followed, serves as a warning to employers about the risks inherent in the human rights process.

Ultimately, this decision underscores the importance of lining up any defence – and assessing the relative strengths and weaknesses – early on.  It also demonstrates that the Courts will in general defer to specialized tribunals when it comes to fact-finding and remedial issues, so employers should not expect that Courts will readily relieve them from onerous decisions at the Tribunal.  One thing is clear:  if reinstatement is sought as a remedy, care should be taken on the employer side to ensure that the case is strong, and that it proceeds expeditiously through the system.  In that sense, delay can certainly work against the employer where reinstatement is on the table, so employers should make every effort to ensure the case moves forward as quickly as possible.  In that sense, if there is a real risk of reinstatement, delay could be said to work against the employer.

Of course, given the nature of the decision and the “costs” of the remedies (both financial and logistical), it can be expected that the Board will carefully consider seeking further review from a higher level Court.  We will continue to watch the evolution of this case if/when it works its way to a higher level of authority.

School Board Taught a Costly Lesson: Court Upholds Reinstatement with 10 Years of Back Pay

Unpaid Internships Receive Poor Report Card from Ontario Ministry of Labour

Recently, the Ontario Ministry of Labour released the results of its recent internship inspection blitz, revealing that many internship programs violated the Employment Standards Act, 2000 (the “ESA”).  In this blitz, the Ministry targeted the advertising, public relations, computer systems design, consulting services and information services industries, among others. The Ministry found 31 employers with internship programs, of which 13 were violating the ESA.

The most common violations included:

•   failure to pay employees the minimum wage

•   failure to pay vacation pay

•   failure to pay public holiday pay

Altogether, the Ministry issued 37 orders, including a total of $48,543 in back pay for those interns who the Ministry deemed were “employees” under the ESA.

These results point to the need for employers to carefully consider whether their “interns” will actually be viewed as “employees” under the ESA.  As the Ministry warned in a 2011 publication, just because someone is labeled an “intern” does not mean that an employer can hire that person without compensating him/her like any other employee. Last April, Jeff Mitchell and Virginie Dandurand wrote a post explaining the limited scenarios in which an employer can hire someone to perform work without providing the minimum standards of compensation required by the (Ontario) ESA and the Québec Act respecting Labour Standards.

Employment standards are not the only area where unpaid interns are receiving attention in Ontario. Bill 18 (a.k.a. the Stronger Workplaces for a Stronger Economy Act), which would give interns in Ontario protection under the Occupational Health and Safety Act, is already in the process of being passed by the Ontario government. As well, one private member’s bill has proposed requiring that employers post their interns’ rights as employees and creating a new complaints system. So far, there is no legislation being tabled in Ontario to modify or repeal the existing statutory exception that legalizes certain unpaid internships. Nevertheless, the results of this blitz demonstrate that employers offering unpaid internships would be well advised to ensure that they meet the narrow criteria established by the province.

Unpaid Internships Receive Poor Report Card from Ontario Ministry of Labour

Compliance Reminder – New Statutory Leaves in Ontario

Employers should be aware that effective as of October 29, 2014, statutory leaves of absence in Ontario under the Employment Standards Act, 2000 (the “ESA”) will be expanded to include the new “family caregiver leave”, “critically ill child care leave” and “crime-related death and child disappearance leave”.  These leaves of absence are in addition to the current Ontario “organ donor leave”, “family medical leave”, “personal emergency leave”, “pregnancy leave”, “parental leave”, “reservist leave” and “emergency leave – declared emergencies”.  Details of the new leaves of absence are as follows:

1.  Family caregiver leave – Up to 8 weeks per year can be taken in order to take care of a family member with a serious medical condition.

2.  Critically ill child care leave - Up to 37 weeks per year can be taken in order to care for a critically ill child under the age of 18.

3.  Crime-related child death and disappearance leave - Up to 52 weeks can be taken if an employee’s child disappears and it is probable that the child disappeared as the result of a crime.  If a child dies as a result of the crime, the leave period is increased to up to 104 weeks.

Each of these leaves of absence are unpaid, and under each leave time off can be taken by the employee in bits and pieces rather than altogether.  Employees using the critically ill child care leave may be eligible for Employment Insurance benefits for a portion of the leave; however guidance should be sought from Service Canada, as the leave provisions do not match up precisely with EI benefit eligibility.

As a reminder, the current statutory personal leaves of absence which are already in place in Ontario are the following:

(i)  Personal emergency leave – Up to 10 days of leave per year to deal with a personal emergency, illness, injury or urgent matter for oneself or a specified family member.  Personal emergency leave is only required in workplaces with 50 or more employees in Ontario.

(ii)  Family Medical Leave – Up to 8 weeks of leave per year to provide care or support to certain family members for whom a qualified health practitioner has issued a certificate stating that the family member has a serious illness with a significant risk of death occurring within a period of 26 weeks.

(iii)  Organ Donor Leave – Up to 13 weeks of leave per year for those employees who have undergone surgery for the purpose of organ donation.

(iv)  Reservist Leave – Time off for reservists to assist with international and domestic emergencies, for the period of time required to assist with the operation.

In addition to the above leaves, all employers should be aware of their obligations to provide pregnancy and parental leave under the ESA.

Employers should review their employee handbooks prior to October 29th in order to determine how the new leaves fit with existing statutory and non-statutory leave entitlements.

Compliance Reminder – New Statutory Leaves in Ontario

Significant Changes Proposed to Ontario’s Workplace Laws

Ontario’s government introduced workplace legislation on July 16, 2014 that would affect five labour and employment statutes in the province. Significant changes that are proposed in the Stronger Workplaces for a Stronger Economy Act, 2014 include:

  • Eliminating the $10,000 cap on the recovery of unpaid wages by employees through the Ministry of Labour claim process under the Employment Standards Act, 2000;
  • Increasing the limitation period to two years for employees to recover unpaid wages through the Ministry of Labour claim process under the Employment Standards Act, 2000.  The current limitation period is six months or one year depending on the type of claim;
  • Requiring employers to provide each of their employees with a copy of the most recent poster published by the Ministry of Labour that provides information about the Employment Standards Act, 2000. An employer must provide available translations of the poster if requested by an employee;
  • Making temporary help agencies and their clients jointly and severally liable for unpaid regular wages and unpaid overtime pay;
  • Requiring the Workplace Safety and Insurance Board to assign workplace injury and accident costs to temporary help agency clients when an employee is injured while performing work for the agency’s client;
  • Extending the safety protections under the Occupational Health and Safety Act to unpaid workers receiving training under prescribed conditions;
  • Decreasing the construction industry’s open period, when construction workers can join a different union close to the end of the term of their collective agreement, from three months to two months;
  • Expanding employment protections for foreign nationals who are in Ontario under an immigration or foreign temporary employee program. The protections include a prohibition on charging a recruiter fee or taking possession of the foreign national’s property, such as their passport or work permit; and
  • Tying future minimum wage increases under the Employment Standards Act, 2000 to the Consumer Price Index. The new minimum wage will be announced by April 1 of each year and will come into effect on October 1.

It is currently unclear when the proposed changes will be passed by the Ontario legislature. We will keep you apprised of any developments.

A copy of the Stronger Workplaces for a Stronger Economy Act, 2014 can be found here: http://www.ontla.on.ca/bills/bills-files/41_Parliament/Session1/b018.pdf

Significant Changes Proposed to Ontario’s Workplace Laws

Yet Another Reminder on the Importance of Careful Drafting of Termination Clauses…

As if employers needed one, we now have yet another decision invalidating a termination provision for failure to comply with the Employment Standards Act, 2000 (the “ESA”)Miller v. A.B.M. Canada Inc., 2014 ONSC 4062 (CanLII).

Mr. Miller applied for and obtained the position of “Director, Finance and Business Process Improvement”.  Prior to commencing employment, he had signed an employment contract, which contained the following elements of “remuneration”:

  • A base salary of $135,000 per year;
  • Pension contributions up to a maximum of 6% of base salary; and
  • A car allowance of $680 per month.

The employment contract contained the following provision in respect of termination without cause:

“Regular employees may be terminated at any time without cause upon being given the minimum period of notice prescribed by applicable legislation, or by being paid salary in lieu of such notice or as may otherwise be required by applicable legislation.”

 Mr. Miller commenced employment on September 1, 2009 and was dismissed on a without cause basis on January 26, 2011. The primary issue was whether the termination provision limited Mr. Miller’s entitlement to the ESA minimum (two weeks), or whether he was entitled to common law pay in lieu of notice.

After examining the clause and considering case law (including Wright v. Young and Rubicam Group of Companies and Stevens v. Sifton Properties Ltd.), the Court came to the following conclusions:

  • the length of the notice period in the contract, being “the minimum period of notice prescribed by applicable legislation”, was effective to rebut the presumption of reasonable notice according to common law, and as such (provided the remainder of the contract was valid), the amount of notice was legitimately established in the contract as being the ESA minimum; but                                     
  • the contract breached the ESA requirement that if pay in lieu of notice is provided, all benefits must be continued.  The contract only required the payment of “salary” in lieu of notice. The failure of the contract to require payment of the 6% pension contribution and the car allowance rendered the clause contrary to the ESA, and void for all purposes, such that Mr. Miller was entitled to common law pay in lieu of notice.

The Court also made the observation (although technically this was not a required part of the decision and would be considered obiter), that the wording of the provision at issue will determine whether it is enforceable, rather than the actual actions of the parties.  In other words, if a provision is unenforceable because it does not comply with the ESA in some respect, the fact that the employer does actually comply with the ESA will not render the provision at issue enforceable.

Interestingly, the Court held that although the termination provision was invalid, Mr. Miller “cannot escape bearing some responsibility for the fact that both parties entered into a contract which fell below ESA standards”, which seems to suggest that the Court still considered the contract when assessing the common law notice period. Ultimately, after considering Mr. Miller’s age (39), length of service (17 months) and position (Director, Finance and Business Process Improvement), the Court awarded three months of pay in lieu of notice at common law.

Mr. Miller thus received three months of pay in lieu of notice, rather than the minimum two weeks pursuant to the ESA.  This case stands as yet another reminder that termination provisions must be carefully drafted to meet the ESA in every respect, or they will be subject to attack, resulting in the employee potentially being entitled to common law pay in lieu of notice.

Miller v. A.B.M. Canada Inc., 2014 ONSC 4062 (CanLII)

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Yet Another Reminder on the Importance of Careful Drafting of Termination Clauses…