Thursday, December 2, 2010

Bill 68 - Chilling Employment Standards Complaints

On October 25th, 2010, Bill 68, the "Open for Business Act" received Royal Assent. The full text can be found here. The Bill amends several statutes, but my interest in it lies in the amendments to the Employment Standards Act, 2000. There's a Ministry Backgrounder that covers that material.

The changes are to the ESA complaint process, and are designed to reduce the Ministry's backlog, which the Financial Post pegged at 14,000 cases in July.

So what are the changes? To boil it down to it's simplest, the Ministry will be able to require complainants to take certain steps before it will investigate their complaints - namely, take it up with the employer first. In addition, the Employment Standards Officers will be tasked with attempting to settle the matter.

Encouraging settlement is a common way of dealing with backlogs. But sometimes, as in this case, it goes too far.

There have been many criticisms of Bill 68 because, firstly, it puts more barriers between an employee and their entitlements and, secondly, workers will be pressured to settle for less than their legal entitlements.

There's likely merit to both criticisms. I discussed earlier the reasons why the actual ESA complaints are likely the tip of the iceberg of ESA breaches: Such a power imbalance exists as to discourage employees from standing on their rights. Additional barriers, requiring employees to stand up to their employers first, may cause some complainants to abandon their complaints. (And that is the consequence; if an employee doesn't take the necessary steps, their complaint will most likely go away.)

In addition, most ESA complaints are questions of liability, not damages. Calculating damages is usually fairly simple arithmetic - do I get time and a half for overtime, or do I not? If the answer's yes, there's seldom much fight in how much that amounts to. (There are exceptions, of course, but it usually is pretty Boolean.) Settlement discussion usually involves compromise on both sides, and means that employees are going to be facing pressure to back off part of their entitlements.

So the backlog is going to be reduced by reducing the number of people who will voice their legitimate complaints, and by pressuring them into taking less than their entitlements early.

I have another objection to the Bill: Encouraging settlement doesn't encourage compliance up front. Telling employers "Most likely, your employees will have to talk to you about alleged breaches first, and you can settle it at that time or later for less than the employee's entitlements"...well, it tells employers that they can disregard their legal obligations right now and deal with it if an issue is ever raised, long before you're exposed to an unfavourable Order. It isn't completely safe, but the probabilities are in the right place for an employer: An Order to Pay has an administrative surcharge, and sometimes ends up being pretty subsantial. It's slightly punitive, and could generate a large expense all at once. Employers want to avoid Orders.

So there's risk. Even if you think you'll get away with a breach, it's costly if you get caught, so it's better to just meet your obligations on an ongoing basis.

On the other hand, if you know that your employee will likely have to talk to you first before an investigation will start, then it's too easy to sit back and wait for that to happen before looking into compliance. And since most employees will never raise an issue, it becomes much easier for the employer to ignore the requirements.


This blog is not intended to and does not provide legal advice to any person in respect of any particular legal issue, and does not create a solicitor-client relationship with any readers, but rather provides general legal information. If you have a legal issue or possible legal issue, contact a lawyer.

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