The Year in Ontario Employment Law
This is why pencils have erasers. Less than a year after revising their HR policies for Bill 148, HR directors had to re-revise them for Bill 47, the Making Ontario Open for Business Act. Here’s a chronology of the roller coaster that has been the past 12 months in Ontario employment law.
June 7: After 4 years of Liberal rule, the people of Ontario elect a new Progressive Conservative (PC) government that has run on promises of repealing the $15 minimum wage and other employment law changes adopted by its predecessor.
June 29: The new PC regime implements a government hiring freeze, effectively scrapping Liberal plans to hire 175 new Ministry of Labour ESA inspectors before year’s end (although 75 inspectors have already been hired).
July 26: In one of its first legislative moves, the new PC government secures adoption of a bill ending a CUPE strike at York University and requiring that all outstanding issues be resolved via “a fair dispute resolution process” before the fall semester.
October 23: The Ontario Assembly tables Bill 47, aka Making Ontario Open For Business Act, proposing to peel back a big chunk of Bill 148, the massive Liberal ESA reform legislation that had taken effect on Jan. 1. Perhaps the most dramatic provision is the freezing of the minimum wage at its current $14 per hour, thereby derailing the increase to $15 scheduled for Jan. 1, 2019. The table below summarizes all of the Bill 148 provisions that are being rolled back and that are being left intact.
Bill 47 vs. Bill 148: ESA Changes Being Repealed & Retained
|ESA PROVISION||BILL 148||BILL 47|
|Minimum Wage||*$14 on Apr. 1, 2018
*$15 on Jan. 1, 2019
|*$14 Jan. 1, 2019 thru Sept. 2020
*Annual increases tied to inflation starting Oct. 2020
|Personal Emergency Leave (PEL)||*8 days unpaid + 2 days paid
*Mandatory for all workplaces
*Employer may not require doctor’s note
|*Package of up to 8 days’ unpaid leave including:
>3 days personal illness +
>2 days bereavement +
>3 days for family responsibilities
*Mandatory for all workplaces
*Employer may ask for doctor’s note *Minimum 2 weeks consecutive service required for eligibility
|Domestic or Sexual Violence Leave||*New leave of up to 10 days taken individually + up to 15 weeks taken in full weeks
*First 5 days must be paid
*Minimum 15 weeks consecutive service required for eligibility
|Parental Leave||*May start as late as 78 weeks after child is born or first comes into employee’s custody, care and control
*May last up to 63 weeks (61 weeks for employees who also take pregnancy leave)
|Pregnancy Leave||Employee whose pregnancy leave begins after Jan. 1, 2018, and who isn’t eligible for parental leave may end their pregnancy leave either 17 weeks after leave began or 12 weeks after birth, stillbirth or miscarriage, whichever comes later||Unchanged|
|Family Medical Leave||Increased from 8 to 27 weeks over 52-week period||Unchanged|
|Child Death Leave
|Up to 104 weeks for child’s death regardless of whether crime-related||Unchanged|
|Crime-Related Child Disappearance Leave||Up to 104 weeks for child’s crime-related disappearance||Unchanged|
|Pay for Public Holidays||Wages earned in pay period immediately before holiday divided by hours worked to earn those wages||Old prorating pay formula of calculating public holiday pay as total regular wages earned and vacation pay payable to employee in 4 work weeks before the work week in which the public holiday occurs, divided by 20|
|Substitute Holiday Notice||Employer must provide written statement to employee who opts to take a substitute day off||Unchanged|
|Minimum Vacation Entitlement||*2 weeks after each vacation entitlement year if employed less than 5 years
* 3 weeks after each vacation entitlement year if employed 5 or more years
|Minimum Vacation Pay||*4% of wages if employed less than 5 years
* 6% of wages if employed 5 or more years
|Equal Pay||Employer may not base pay differential for same work within establishment on employee’s employment status||Employer may base pay differential for same work within establishment on employee’s employment status|
|Employee Schedule Refusal Right||Right to refuse employer request to work unscheduled day on less than 96 hours’ notice||Refusal right repealed|
|Employee Right to Request Schedule Changes||*Starting Jan. 1, 2019, employees may request changes to their schedule or work location after 3 months’ employment
*Employer must notify when approved change comes into effect or reasons for denying change
|Request rights repealed|
|Call-In Pay||At least 3 hours pay for employees who are on-call or scheduled to work who:
*Are called to work but work less than 3 hours; OR
*Aren’t called to work, e.g., if their shift is cancelled within 48 hours before it’s due to start unless cancellation due to circumstances beyond employer’s control
|Overtime||Calculation of overtime for employees who get different wages for different work based on actual work performed during the overtime hours, rather than average of the different wages||Unchanged|
|Misclassification of Employees as Independent Contractors||In cases alleging misclassification of employee as independent contractor (and thus exempt from ESA) employer has burden of proving that the individual is not an employee||Person claiming to be employee rather than employer has the burden of proving that he/she is an employee|
|Penalties||Minimum administrative penalties for ESA violations of $350/$700/$1,500||Minimum administrative penalties for ESA violations of $250/$500/$1,000|
November 1: While Bill 47 steals the headlines, scheduled changes to Police Record Checks Reform Act background checking rules for employment and other purposes quietly take effect. Although the privacy rules are stricter, the new process makes life easier for employers by establishing a uniform procedure for checks that were previously currently subject to 3 different sets of rules: criminal records checks; criminal record and judicial matters checks; and vulnerable sector checks.
November 23: The Making Ontario Open For Business Act clears the Assembly and goes into immediate effect. In addition to the ESA provisions, Bill 47repeals pro-union changes to labour relations and collective bargaining rules contained in Bill 148. Highlights:
- Repeal of card-based certification rules in home care, building services and temporary help agencies;
- Repeal of rules requiring employers to provide unions with at least 20% support a list of employees (and certain personal information) in the bargaining unit;
- Restoration of pre-Bill 148 requirements for OLRB certification of a union to remedy an employer’s misconduct;
- New requirement that the OLRB decide if a vote, new vote or certification is the right remedy for the employer’s misconduct;
- Elimination of the OLRB’s power to review and consolidate newly certified with existing bargaining units;
- Restoration of the pre-Bill 148 6-month limitation period on an employee’s right to reinstatement after the start of a strike or lock-out; and
- Repeal of Bill 148 first collective agreement mediation rules
December 6: The PC government initiates a second wave of employment law changes by tabling Bill 66, The Restoring Ontario’s Competitiveness Act. The most notable provisions are those purporting to cut ESA red tape, including elimination of the requirement that employers:
- Post the MOL ESA poster in the workplace as long as they give each employee a copy;
- Secure government approval for overtime averaging agreements; and
- Limit the term of averaging agreements with union employees to a maximum of 1 year.
January 1: The third layer of Bill 47, changes to the skilled trades and apprenticeship system rules designed to cut red tape and employer costs, take effect. Highlights:
- Setting of all journeyperson to apprentice ratios, i.e., calculation to determine how many apprentices an employer can train based on how many journeypersons it employs, at 1-to-1;
- Moratorium on trade classifications and reclassifications (of which the government believes there are way too many); and
- Winding down of the Ontario College of Trades to be replaced with a new model.
March 1: New Ontario WSIB Policy 17-01-10 takes effect providing for limited workers’ comp coverage of medical marijuana as a last resort treatment for the following work-related conditions:
- Neuropathic pain;
- Spasticity from spinal cord injury;
- Chemotherapy-induced nausea and vomiting;
- HIV or AIDS-related loss of appetite; and
- Pain and other symptoms in palliative care.
April 4: The Ontario Assembly passes the Restoring Ontario’s Competitiveness Act legislation. In addition to the ESA provisions described above, Bill 66 revises collective bargaining laws by providing that Ontario municipalities, school boards, hospitals, colleges, universities and other public bodies are deemed “non-construction employers” for Labour Relations Act purposes. Translation: They have to let employees organize and bargain collectively but no longer have to comply with the strict collective bargaining and labour relations rules that apply to the construction industry.
Bill 66 also revises pensions laws. Highlights:
- Right of single-employer pension plans to merge into jointly sponsored pension plans without government approval;
- Right of plans to use electronic communication as default method; and
- Right of insurers to accept beneficiary designations made electronically if plan members prefer.
May 21: New DB plan funding rules take effect requiring plans to provide both annual and biennial statements listing the plan’s estimated transfer ratio and SIPPs (except certain joint plans) to identify target asset allocations for asset allocations listed in the Regs.
May 29: Buried deep within the newly adopted Ontario budget bill (Bill 100) is a set of proposed changes to apprenticeship training and certification rules. Highlights of so-called Schedule 40:
- Ban on performing “restricted activities” unless individual has an appropriate certificate or is an apprentice in the trade that includes the restricted activity;
- Ban on hiring or allowing unqualified person to perform restricted activities;
- New apprenticeship training requirements; and
- Government inspections to enforce compliance and issue penalties for violations.
June 5: Public sector employees in Ontario, unionized or not, won’t be getting any big raises in the coming years if newly tabled Bill 124 passes. Although the Bill doesn’t impose wage freezes or rollbacks, it does limit salary and overall compensation increases to 1% for a 3-year period after the employees’ current collective agreements expire. Needless to say, the unions have come out strongly against the bill which they contend torpedoes the collective bargaining process.
June 8: The Ontario government replaces FSCO, the pensions regulatory agency, with what it claims is a much more modern and efficient new agency called FSRA (the Financial Services Regulatory Authority) responsible for regulating not just Ontario’s pension plans but also its insurance companies, loan and trust corporations, credit unions and mortgage brokers.
In the Ontario Pipeline—Pay Transparency
One piece of Liberal employment reform that has so far managed to elude the PC chopping block is the Ontario Pay Transparency Act, 2018, which has received Royal Assent but won’t take effect unless and until it’s officially proclaimed. Whether the PC will actually issue such a proclamation—and if so, when—remains highly uncertain. The idea of the law is to ensure men and women equal pay for equal work by requiring employers to provide information about their wage history and identify any gender gaps. Organizations with 100 or more employees would also have to issue annual pay transparency reports starting May 15, 2021 (May 15, 2020 if they have over 250 employees). For the law to go into effect, the government will have to create implementing regulations setting out the crucial details, particularly with regard to the calculation for identifying gender-based wage gaps and procedures for reporting them. But don’t hold your breath.
Top 5 New HR Cases in Ontario
Here are summaries of what we consider to be the 5 most important employment cases decided in Ontario over the past 6 months.
1. Company Must Pay $546K for Trying to Intimidate Fired Employee
You committed fraud and we’re firing you for cause, a manufacturing company tells a sales rep. The rep. suggests that he’ll be hiring a lawyer. That would be a bad idea, the company advises him because we’ll counter-claim and things will get very expensive. The rep. goes ahead and sues for wrongful dismissal; the company says the termination was for cause and asserts $1.75 million worth of counter-claims. After an 11-day trial, the judge dismisses the counter-claim and finds that the termination was wrongful and the company tried to intimidate the rep. Result: $546K+ in damages, including 19 months’ notice, an unpaid bonus, $25K in aggravated (aka Wallace) damages for inflicting stress in the way it carried out the dismissal and $100K in punitive damages. The company appeals to the Ontario Court of Appeal but the high court upholds the ruling on every count and orders the company to pay $35K in legal costs for the appeal [Ruston v. Keddco MFG. (2011) Ltd., 2019 ONCA 125 (CanLII), Feb. 19, 2019].
2. Ontario High Court Thwarts Uber’s Attempt to Stop Drivers’ ESA Class Action Suit
Uber drivers filed a $400 million class action lawsuit against the company for not paying them their ESA benefits as employees. Uber claimed the suit violated the boilerplate contract language saying the agreement was governed by Netherlands law and requiring all disputes to be submitted for arbitration in Europe. The lower court agreed and “stayed,” i.e., blocked the suit. But the Ontario Court of Appeal reversed finding that the arbitration clause was unconscionable and an illegal attempt by Uber to contract out of its ESA obligations. Result: The class action can go forward except in the unlikely event the Canadian Supreme Court decides to hear the case and ultimately rules in Uber’s favour [Heller v. Uber Technologies Inc., 2019 ONCA 1 (CanLII), Jan. 2, 2019].
3. Securities Trader Wins Nearly $300K for Constructive Dismissal, Defamation
Like so many in the profession, a stock trader racked up big losses in the financial crisis year of 2008. Insult to injury came when the firm demanded she post an extra $50K as reserves to repay the losses. She refused and left the firm after it suspended her from trading. In the database of traders maintained by the securities regulatory agency, the firm listed the trader as being fired for cause and engaging in unauthorized trading. It then sued her to recover the trading losses; she countersued for constructive dismissal and a host of other things. And she won. The court ordered the firm to pay her $288,144, including 6 months’ termination notice, $25K for defamation (the false information the firm posted on the database wasn’t privileged) and another $25K in punitive damages. The Ontario Court of Appeal upheld the trial court on every count and ordered the firm to pay an additional $35.5K to repay the extra legal costs the trader incurred in defending herself in the appeal [Hampton Securities Limited v. Dean, 2018 ONCA 901 (CanLII), Nov. 9, 2018].
4. Ontario Court Nixes Harassment Tort
We all know that workplace harassment is illegal. But is it a tort? In other words, can employees who claim they were harassed file lawsuits for money damages against their employers and co-workers in civil court? While other cases have hinted at this question, a March Ontario case is the first in Canada to tackle the question head on. It began when an RCMP employee brought a tort lawsuit against members of management for allegedly bullying and harassing him at work. In 2017, after a long trial, the trial judge said there was, in fact, a harassment tort and that the defendants were guilty of committing it. So, it ordered them to pay the victim $141K in damages and $825K in legal costs. After nearly 2 years, the case reached Ontario’s highest court, the Court of Appeal, which found that the trial judge was wrong in recognizing a harassment tort. New torts need to grow out of previous cases and can’t be created “out of whole cloth,” except in extreme cases. And “this is not a case whose facts cry out for the creation of a novel legal remedy,” the Court concluded [Merrifield v. Canada (Attorney General), 2019 ONCA 205, March 15, 2019].
5. Arbitrator Reinstates Transit Worker Fired for Refusing to Take Drug Test
Foremen found a worker asleep in his car 30 minutes after he was scheduled to report for work. After waking him, they noticed that his eyes were bloodshot and that he was walking and talking unusually slowly. The foremen suspected the worker was under the influence and asked him to submit to drug/alcohol testing under the organization’s fitness for duty (FFD) policy. The worker refused and was fired. The key question: Did the organization have reasonable cause to do a FFD test on the worker? The arbitrator said no and reinstated the worker. As usual, it came down to the witnesses. Most of them testified that the worker seemed “very alert” during the shift and was normally sluggish and fatigued. The Ontario arbitrator found the foreman who testified against the worker to be less credible and suggested that his “negative history” with the worker might have been his motivation in demanding that he be tested under the FFD policy [Toronto Transit Commission v Amalgamated Transit Union, Local 113, 2019 CanLII 36521 (ON LA), April 24, 2019].