Revised: November 26, 2018
Written by: Arjun Dhir
That loud crash you heard? Don’t worry – that was just Ontario Premier Doug Ford derailing the province’s least favorite rollercoaster the Fair Workplaces, Better Jobs Act, colloquially known as “Bill 148”.
For those of you just tuning in, Bill 148 was originally introduced by the Ontario government in May 2017. Bill 148 ultimately resulted in the most significant amendments to Ontario’s employment legislation, the Employment Standards Act, 2000 (the “ESA”), that the province had seen in over a decade. Chief among the amendments included: a 29% increase to minimum wage, mandatory paid sick days and an increase to paid vacation entitlement.
However, due to the significant amendments coupled with a rushed timeline, many experts within the industry agreed that Bill 148 simply amounted to too much, too soon. Unsurprisingly, shortly after Bill 148 came into force on January 1, 2018, businesses of all sizes began to experience significant operational challenges, resulting in rising costs for consumers and a mixed bag of entitlements for employees. For instance, prominent coffee chain, Tim Hortons, issued a letter to their employees only three days after Bill 148 took effect, to notify them that they would be losing paid breaks, paid benefits, and other incentives as a result of the province’s minimum wage hike.
Thus, when the notoriously “pro-business” Progressive Conservative, Doug Ford was elected into office, the future of Bill 148 was immediately called into question. On October 23, 2018, Premier Ford took action in this regard, by countering the past regime’s legislation with one of his own entitled, Bill 47, Making Ontario Open for Business Act.
Bill 47, Making Ontario Open for Business Act
Premier Ford’s Bill 47 effectively repeals or modifies a number of the amendments to the ESA that were originally imposed by the Fair Workplaces, Better Jobs Act.
The key amendments are as follows:
- Minimum Wage Freeze – Minimum wage will remain at $14.00/hour. Further, minimum wage will be subject to annual inflation adjustment beginning on October 1, 2020.
- Modified Personal Emergency Leave (PEL) Entitlement – There will no longer be a universal right to two (2) paid PEL days. Instead, employees will be entitled to eight (8) unpaid PEL days available in the following circumstances:
- three (3) for “personal illness”;
- two (2) for “bereavement”; and
- three (3) to attend to “family responsibilities”.
- Medical Notes – It will again be permissible for an employer to request a medical note from a qualified health practitioner to establish an employee’s entitlement to PEL.
- Repeal of the New Scheduling Amendments – The new on-call provisions and the right to request a change to work schedule/location after three months will be repealed.
- Repeal of “Equal Pay for Equal Work” – Employers will once again be permitted to differentiate pay on the basis of employment status (e.g. part-time, casual, and temporary) and assignment employee status but not on the basis of sex.
- Repeal of Public Holiday Pay Formula – The averaging public holiday pay formula will be scrapped in favour of the prorating public holiday pay formula that is currently in effect.
- Repeal of Employee/Independent Contractor Misclassification – The legal onus will once again be shifted away from the employer and back to the worker when a dispute over their classification arises.
- Penalties for Contravention – The new penalties for violations of the ESA will be repealed. Maximum penalties will decrease from $350/$700/$1500 to $250/$500/$1000.
Bill 47 will not modify the following:
- “Three-Hour Rule” – The new rule will continue to take effect as scheduled on January 1, 2019. This rule stipulates that if an employee who regularly works more than three hours a day is required to report to work, but works less than three hours, the employee will be paid for three hours.
- Increase to Paid Vacation – Employees will continue to be entitled to three (3) weeks’ vacation after five (5) years of service.
- Domestic and Sexual Violence Leave – The current paid leave provisions dealing with domestic and sexual violence will be maintained.
- Other Miscellaneous Leaves – The enhancements made to Parental Leave, Pregnancy Leave, Critical Illness Leave and Family Medical Leave will remain intact.
Practical Implications for Employers:
While employers will find solace in the fact that Bill 47 may lessen their obligations – we believe there will still be significant widespread implications that accompany this new legislation.
One such implication involves the potential employee backlash that may occur if the Company modifies its existing policies to mirror the new legislation. For instance, consider Bill 47’s amendments to the PEL provisions. Throughout 2018, as per the ESA, employers have been providing their employees with the legally mandated 10 PEL days, including 2 paid days. It is likely that this minimum entitlement has been reflected in Company policies, Employee Handbooks and Employment Agreements. As of January 1, 2019, this raises a significant concern: what are the employee relations implications, now that employees will no longer be entitled to what was previously a minimum entitlement?
Now apply this same line of thinking to minimum wage. Throughout the year, many companies have been proactive and significantly enhanced their wage scales for those earning minimum wage, as well as for those earning above minimum wage, to provide employees with a greater entitlement than required. This practice has contributed to significant increases in overall labour costs for employers. However, despite Bill 47’s minimum wage freeze, employers will undoubtedly face difficulty re-adjusting wage scales as this entitlement has already been provided.
Bill 47 is set to come into force on January 1, 2019. We urge employers to plan accordingly and consider the ramifications that this new Bill may have on your particular business. If your organization requires assistance complying with this new legislation, we are here to help.
Disclaimer: this post is intended for educational and non-commercial purposes only and is not intended to be a source of legal advice to any person in respect of any particular legal issue; it does not create a solicitor-client relationship with any readers. If you have a legal issue or possible legal issue, please contact us.