As we progress through 2015, Ontario’s employment standards laws are slowly evolving as the provisions of Bill 18, the Stronger Workplace for a Stronger Economy Act, come into force.
The government has repealed the cap on recovery of unpaid wages. The removal of the cap is a welcome change as there was never any real rationale for a $10,000 limit. Still, the retention of the cap for wages due prior to Feb. 20, 2015, is unnecessary.
The increase in the maximum time period for the recovery of wages is another welcome change. Employers may now be on the hook to pay wages that became due in the two years prior to the filing of a complaint or the commencement of an inspection, although there’s again an unnecessary exemption for amounts due prior to Feb. 20, 2015.
There are many amendments to the temporary help agency provisions of the legislation. Chief among the changes is a beneficial provision permitting employees of temporary help agencies to make joint and several claims against both the agency and the client for outstanding wages. This and other amendments to assist employees of temporary help agencies will come into force in November.
There are several other significant amendments, but what puzzles me is the lack of reform to significant aspects of the employment standards legislation dealing with termination, severance, and the many odd exemptions
relating to hours of work and overtime.
Minimum employment standards relating to notice of termination or pay in lieu are in need of major overhaul.
Capping notice or pay in lieu at eight weeks regardless of the length of employment beyond eight years of service remains a major defect in the legislation.
Even minimum notice periods for workers employed for less than eight years require strengthening. Admittedly, the notice requirements are minimum standards. But many employees and even some employers aren’t aware of the common law requirement to provide reasonable notice for contracts of indefinite duration.
Capping the notice requirement at eight weeks results in uninformed employees receiving inadequate termination packages or, if they are aware, forcing them to retain counsel to obtain their common law entitlement.
The severance pay requirements of the Employment Standards Act are an inadequate response to the miserly notice provisions. That’s because they only apply to employees with at least five years of service.
Also, the severance pay requirements only apply to employers with an annual payroll of at least $2.5 million, thereby excluding many employees. But even if the employer owes severance pay, the maximum payout for notice and severance, regardless of the years of service, is 34 weeks (eight weeks in lieu of notice plus 26 weeks of severance pay). That falls well below the soft cap of 24 months at common law.
For the purposes of this discussion, I’m ignoring the controversy over whether the payroll calculation covers employees only employed in Ontario. Having said that, there’s no reason why we shouldn’t amend the legislation to broaden the severance pay requirement and remove any uncertainty by either eliminating the payroll threshold or making it explicit that it’s the worldwide payroll that governs.
As it is, the current minimum-notice and severance-pay standards create a trap for the uninformed. Many employees don’t challenge packages providing the legislated minimums. Many employers require prospective employees to sign employment letters incorporating the minimum standards, thereby releasing them from their common law obligations. They know that wrongful dismissal awards invariably exceed the minimum standards.
To prevent this injustice, we must strengthen the notice and severance-pay requirements under the Employment Standards Act. This would serve to provide better packages to terminated employees and in some cases eliminate the need to litigate to recover a wrongful dismissal award. By reducing litigation, both employers and employees would benefit.
Along with reform of the termination and severance requirements, there’s a need to examine and eliminate many of the unfortunate exemptions to the provisions for hours of work and overtime in the legislation.
The act’s myriad special rules and exemptions to the provisions are creatures of ancient history intended to benefit special interest groups that have been successful in their lobbying efforts.
How else can we explain exemptions for those who install or maintain swimming pools, information technology professionals, certain workers in the entertainment production industry, landscape gardeners, employees who transport or lay sod, fishing or hunting guides, employees who breed and board horses on a farm, and those working in a host of other widely diverse areas?
While Bill 18 provides many welcome amendments, the government must go further in modernizing this legislation, especially when it comes to protecting employees when they need it the most — upon termination — and with respect to working hours and overtime.
Alan Shanoff was counsel to Sun Media Corp. for 16 years. He currently is a freelance writer for Sun Media and teaches media law at Humber College. His e-mail address is [email protected].
