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Employment Law Changes - Consumers will pay the price.

After two years of study a report suggesting changes to the Employment Standards Act of Ontario has been released and it includes 173 recommendations.

Included among them is phasing out over three years the ability of employers to pay students under the age of 18 $10.70 per hour as a minimum wage instead of $11.40. Given that the present practice is a form of age discrimination, it makes sense.

It is recommended that part-time, casual, contract, temporary, and seasonal employees should be paid the same hourly rate as full-time employees doing comparable work unless there is a basis in merit or seniority to differentiate. The question becomes whether, in the long run, implementing this recommendation will lift the income of part-time workers or suppress the income of full-time workers. Businesses that do not make a profit close. If overall labour costs significantly diminish or eliminate profit, they have to be controlled somehow for businesses to survive. How much profit is enough profit? I am not going there. If adopted, these rules apply to the five-person stand-alone retail outlet as well as the multinational chain. I am going to speculate that large chains are better able to absorb these extra costs and adjust their business plan than a small stand-alone surviving on thinner margins.

On the other hand, why, as between two people with the same seniority doing the same job, should the part-time person earn less than the full-time person? Given the increase in part-time workers in our economy and the increased difficulty in obtaining full-time employment, there is clearly a fairness issue involved.
It has been suggested that after five years of service employee should get three weeks of paid vacation a year.

While this recommendation will again increase costs to employers, compared to European standards it is nothing. In fact a number of other provinces already require it.

On the good news side for employers, the report recommends eliminating the requirement of employers to seek approval from the Ministry of Labour in order for employees to work more than 48 hours in a work week and up to 60. This will affect full-time employees but will of course do nothing for the myriad of people working two or three part-time jobs to make ends meet.

If the government is going to adopt this recommendation it needs to make sure that it spends more money and time investigating reprisals and sanctioning employers for discriminating against an employee who has declined to work more than 48 hours in a week. While the change suggested would eliminate the need for government approval, it would not change the fact that employee consent is required in most work places for working more than 48 hours in a week.

Even with increased enforcement a perfect balance will not be struck. It is trite to say that if you refuse overtime often enough, some way, somehow, your resentful employer will likely get back at you. They will do it in ways you will never prove were as a  result of you wanting to have a life outside work.

Right now employers are permitted to pay people who serve liquor $9.90 an hour instead of the  regular minimum wage of $11.40. The report recommends this be phased out. Of course the lower wage reflects the assumption that liquor servers earn tips and invariably make more than other non-tipped minimum wage workers. I have never been consulted by a liquor server who did not earn significantly more than the minimum wage when tips are included. I am not sure that this recommendation makes sense. The vast majority of these recommendations redistribute wealth. That’s not necessarily an awful result. We already do it in many ways, not least of which is through our tax bill. Sooner or later the market adjusts to changes like these and the costs passed along to the end consumer. That would be you. I am not saying that is a bad thing, I’m just saying it is a true thing.
Ed Canning practices labour and employment law with Ross & McBride LLP, in Hamilton, representing both employers and employees. You can email him at ecanning@rossmcbride.com.
Ed Canning
Ed Canning
P: 905.572.5809