Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.
Canada’s Labour Code (CLC) is undergoing a substantial overhaul; significant amendments have already come into force. In a press release issued last year, the federal government announced that an Independent Expert Panel on Modern Federal Labour Standards (Panel) had been established to make additional recommendations for other potential amendments to the CLC with regard to the following issues:
- Federal minimum wage;
- Labour standards protections for non-standard workers;
- The “right to disconnect” outside of work hours;
- Collective voice for non-unionized workers; and
- Access to and portability of benefits.
The Expert Panel’s Report (Report) was recently released. The following is a summary of the Report’s recommendations:
A. Federal minimum wage
Currently, the CLC provides that the federal minimum wage is the minimum wage in the jurisdiction in which the federally regulated employee is usually employed. The Panel suggested abandoning this approach and establishing a freestanding federal minimum wage that would be adjusted annually.
B. Labour standards protections for workers in non-standard workers
Define “employee”, “independent contractor”, and “dependent contractor”
The Panel recommended that Part III, which covers the hours, wages, vacations, holidays and leaves of federally regulated employees of the CLC include (i) a definition of “employee”, “independent contractor”, and “dependent contractor”; (ii) a presumption of employee status; and (iii) deem “dependent contractors” to be employees.
Joint and several liability
The Panel recommended that federally regulated employers subject to Part III who enter into contracts with subcontractors or other intermediaries in the federally regulated private sector (FRPS), directly or indirectly, be considered jointly and severally liable for wages owed and statutory entitlements under Part III.
To make it easier for employees to qualify for entitlements that are based on length of service, the Panel recommended the inclusion in Part III of a definition of "continuous employment" that includes periods of layoff or interrupted service of less than 12 months.
Review existing regulations that set exemptions, exceptions, and special rules
The Panel recommended the establishment of a process to review existing regulations under Part III that set exemptions, exemptions, and special rules. It recommended that the review, “be based on the principles that Part III should apply to as many employees as possible and that departures or derogations of a standard through an exemption, exception or special rule should be limited and justifiable.”
Section 168 of the CLC provides that the provisions of Part III pertaining to minimum wage, annual vacation, general holidays and bereavement leave do not apply to an employer and employees who are parties to a collective agreement that confers on the employees rights and benefits "at least as favourable" as those conferred by the provisions with respect to length of leave, rates of pay and qualifying periods.
The Panel recommended that section 168 be clarified to ensure that an employer cannot rely on a greater benefit with respect to one standard to offset a lesser benefit with respect to another standard. It clarified, “In other words, an employer should not be permitted to average out the provisions in a collective agreement to see if, on average, or in total, they are equivalent to or greater than the standards in Part III.”
The Panel recommended adding a positive duty to comply with applicable labour standards when a federally regulated undertaking (i.e., a business or industry that is subject to the jurisdiction of the federal government) contracts with provincially/territorially regulated entities. This recommendation was based on the premise that employers should exercise due diligence to require their provincial and territorial subcontractors to comply with the labour standards that apply to them.
The Panel’s view was that if monetary labour standards are violated by the subcontractor and the subcontractor does not pay monies it has been ordered to pay, an employer that has not been diligent should be subject to an administrative monetary penalty, as provided for under the new Part IV (added to the CLC in 2017 and expected to come into force by mid-to-late 2020.)
Labour Program collaboration with counterparts
The Panel recommends that the Labour Program collaborate with provincial and territorial counterparts to develop clear guidelines to assist in the correct determination of jurisdiction for labour standards.
Trucking industry pilot project
In response to concerns it identified in its consultations, the Panel recommended that a pilot project be launched to explore possible changes to Part III and its regulations to address issues related to misclassification, pay and record-keeping practices, and other relevant matters in the federally regulated trucking industry.
C. Disconnecting from work-related e-communications outside of work hours
No statutory right to disconnect
The Panel did not recommend that there be a statutory right to disconnect at this time.
Workplace policies on issue of disconnecting
The Panel did recommend that employers subject to Part III of the CLC consult with their employees and issue policy statements on the issue of disconnecting, tailored to the specific context of their workplaces; among other things, these policies should clearly define the boundaries between work time and non-work time, address how labour standards protections are being respected, and set out expectations around response time for non-essential e-communications sent after hours.
Statutory definition of “deemed work”
The Panel recommended that Part III include a statutory definition of “deemed work” based on the principle that work includes the time when an employee is “effectively at the behest of the employer at or outside the workplace or worksite(s)”. The Panel’s view was that such a definition will ensure that workers will be able to effectively access labour standards protections related to the duration of work.
Compensation or time off in lieu
The Panel recommended that Part III provide a right to compensation or time off in lieu for employees required to remain on standby for potential demands from their employer.
The Panel recommended that further research be undertaken to evaluate, among other things, the impact of work intensification through e-communication on workers’ health.
D. Access to benefits and portability
The Panel made recommendations relating to the enhancement of access to benefits, which it recognized is a significant challenge for many workers in Canada, especially those engaged in non-standard work.
Definition of employee
As noted above in section (A), the Panel recommended that Part III include a definition of “employee”. The Panel reiterated this recommendation, stating that such a definition would ensure that workers who should be entitled to statutory minimums be able to access them, and will not be improperly classified as independent contractors.
Enroll part-time employees in employer-sponsored pension plans, where appropriate
The Panel recommended that where appropriate, part-time employees in the federally regulated private sector (FRPS) be enrolled in employer-sponsored pension plans.
Review of what can be done to help with issue of lost pensions
The Panel recommended that the federal government, led by the Canada Revenue Agency, review what it can do to help Canadians working in the FRPS with the issue of lost pensions.
Development of portable benefits model
The Panel recommended that the federal government explore, through stakeholder consultations and research, the potential development of a portable benefits model for workers in the FRPS.
E. Collective voice for non-unionized workers
Further study of legal barriers in Part I to union representation in FRPS
The Panel acknowledged that the existing legal framework has a need for alternative collective voice mechanisms for non-standard workers who are not employees. Therefore, it recommended further study, with extensive engagement of stakeholders, of legal barriers in Part I to union representation in the FRPS.
Provide funding to community organizations that facilitate participatory initiatives outside the workplace
The Panel recommended providing funding to community organizations that facilitate participatory initiatives outside the workplace.
Introduce anti-reprisal protection for concerted activities in Part III
To enhance workers’ willingness to join participatory initiatives through community organizations, the Panel recommended that:
(a) Part III states that employees have a right to participate in concerted activities; and
(b) Employees who have been dismissed, suspended, laid off, demoted or otherwise disciplined because they have exercised their right to concerted activity be protected against such reprisals.
Research barriers to effective performance of health and safety committees in non-union enterprises in the FRPS and how those obstacles can be removed
In its consultations, the Panel heard that existing mandated health and safety committees operate less effectively in non-union enterprises than they do in in unionized organizations. Accordingly, it recommended that the Labour Program initiate research on the barriers to the effective performance of such committees in non-union enterprises in the FRPS and how they could best be removed.
Benchmarking exercise to obtain systemic information on prevalence of joint workplace committees and related voice mechanisms
The Panel recommended that the Labour Program undertake a benchmarking exercise to obtain information on the prevalence of joint workplace committees and related voice mechanisms among non-unionized firms in the FRPS, whether and how worker representatives are chosen to participate, and how the effectiveness of these mechanisms is assessed.
Examine and analyze graduated models of legislated collective representation
The Panel acknowledged that graduated models of legislated collective representation are motivated by unsatisfied demand for collective representation in many Canadian non-union workplaces, and findings that many employees in non-union enterprises would prefer to participate in an employee organization that is not a traditional union when discussing workplace issues with management. The Panel recommended that further examination and analysis be conducted on graduated models of legislated collective representation, with extensive engagement of stakeholders.
Study feasibility of introducing independent legal framework to enable freelancers working for federally regulated broadcasters and truckers to organize collectively
The Panel recognized the specific challenges of collective voice freelancers in the broadcasting industry and truckers face, and that it would be beneficial to establish practical means to provide these workers with a framework that would enable them to express their views collectively. Accordingly, it recommended studying the feasibility of introducing an independent legal framework that would enable these workers (considered independent contractors) to organize collectively.
Study advantages and disadvantages of introducing legal framework to enable extensions of collective agreements in specific sectors in the FRPS where unionization rates very low
The Panel heard that several unions would support a system comparable to the Quebec decree system. Under that system, any party to a collective agreement may ask the Minister of Labour to extend the agreement to all enterprises and workers in a given sector and a specific territory. The Panel recognized that a comparable system could enable workers in sectors with low unionization rates to access an approach to collective voice that would be tailored to their reality. Therefore, the Panel recommended that further study be carried out on the advantages and disadvantages of introducing a legal framework to enable extensions of collective agreements in specific sectors in the FRPS where unionization rates are very low.
Bottom Line for Employers
As we know, the federal government’s strategy is to modernize the CLC incrementally. Federally regulated employers are encouraged to become familiar with the Panel’s recommendations as outlined above. Although we must await the government’s response to the Report, the Panel’s recommendations provide insight into what may be on the horizon for future amendments to the statute and the operation of federal employers.
This article was originally published by The Lawyer’s Daily (www.thelawyersdaily.ca), part of LexisNexis Canada Inc.