Employment Standards Act Amendments – Bill 147

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On November 23, 2000, the Minister of Labour introduced Bill 147, An Act to Revise the Law Related to Employment Standards also known as the Employment Standards Act, 2000. Bill 147 repeals the following pieces of legislation: the Employment Standards Act, the One Day’s Rest in Seven Act, the Government Contracts Hours and Wages Act, the Employment Agencies Act and the Industrial Standards Act.

Most of the provisions found in the current Employment Standards Act are also contained in Bill 147. However, almost all of the provisions have been reworded and renumbered in what the government calls an attempt to make the new legislation “easier to read and understand”. Numerous administrative and housekeeping changes are also made. As well, the Bill has incorporated portions of current regulations under the Act.

Bill 147 received Royal Assent on December 21, 2000. Only the parental leave provision respecting length of leave entitlement came into effect on December 31, 2000. The Act itself is expected to be proclaimed into force in the summer of 2001. The government is planning on consulting stakeholders regarding the drafting of regulations under the new Act.

The following is a summary of the significant differences between the existing ESA and the new ESA 2000:

HOURS OF WORK AND EATING PERIODS

Hours of work may not exceed more than eight hours a day (or if the employer establishes a “regular work day” of more than eight hours, the number of hours in the “regular work day”) and 48 hours a week. Currently, the Act provides that employees and employers can agree to work more than 48 hours with a Ministry of Labour permit. The new Act would do away with the Ministry’s permit system to work extended hours and allow a maximum of 60 hours per week with the employees’ written consent. The new Act would also allow such agreements to be revoked by either the employer or the employee after two weeks notice.

The new Act requires employers to allow employees the following daily and weekly free time:

  • a daily rest period of 11 consecutive hours off in 24 hours (does not apply to an employee who is on call and called in during a period in which the employee would not otherwise be expected to work);
  • freedom from the performance of work between shifts of eight hours unless the total time worked on successive shifts does not exceed 13 hours, unless the employer and the employee agree otherwise;
  • weekly and biweekly rest periods of 24 consecutive hours in every seven days or 48 consecutive hours in every 14 days

The limits on the hours of work and the requirement to provide daily or weekly rest periods would be subject to the following exceptions:

  • dealing with an emergency;
  • if something unforeseen occurs, ensuring the continued delivery of essential public services, regardless of who delivers those services;
  • if something unforeseen occurs, ensuring that continuous process or seasonal operations are not interrupted; or
  • carrying out urgent repair work to an employer’s plant or equipment.

The Act would continue to require a 30 minute meal break after each consecutive five hour period, but would now allow this to be broken into shorter periods if the employer and employee agree and the employee still receives a total of 30 minutes for eating. The new Act provides that an employer is not required to pay an employee for an eating period in which work is not being performed unless an employment contract provides otherwise.

OVERTIME

Overtime would remain payable after 44 hours of work in a week. The new Act could allow overtime to be averaged over a period of as long as four weeks by agreement between the employer and the employee to allow, for example, a compressed work week. The averaging of hours of work will be subject to regulations which have not yet been issued.

An averaging agreement is not valid unless it provides for an expiry date. The expiry date shall not be more than two years after the agreement takes effect where it involves an employee who is not represented by a trade union.

Existing averaging agreements will remain in effect for one year after the day this section of the Act comes into force or, in situations where an employee is represented by a trade union, the day on which a renewal collective agreement comes into force or, where no collective agreement comes into force, within one year after the expiry of the existing collective agreement.

An averaging agreement cannot be revoked before it expires unless the employer and the employee agree otherwise.

The new Act also allows employees to take time off in lieu of overtime pay at the rate of one and one-half hours of paid time off for each hour of overtime worked if the employee and employer agree and the paid time off work is taken within three months of the work week it was earned or, with the employee’s agreement, within 12 months of the work week it was earned.

PUBLIC HOLIDAYS

The new Act provides that all employees, including part-time employees, would be entitled to public holidays. The qualifying conditions for public holidays would be eliminated with two exceptions:

  • an employee would have to work the scheduled shift before and after the holiday in order to be entitled to pay for the public holiday; and
  • an employee would not be entitled to be paid for the public holiday if he or she agreed to work it and then failed to do so.

Neither exception would apply where the employee had reasonable cause not to work.

The new Act allows for greater flexibility for employees who work on a public holiday. The employee and employer may agree to substitute another day off with pay, or to provide premium pay of a further one and one-half hours for each hour worked.

VACATION WITH PAY

Vacation entitlement under the new Act would remain the same — two weeks after each 12 months. The current Act provides that employees must take vacation in a two week period or two periods of one week. An employee can now request that vacation be taken in shorter periods, ie., single days off at a time.

LEAVES OF ABSENCE

Pregnancy/Parental Leave

The pregnancy and parental leave entitlement under the new Act would mirror the recent changes to the federal Employment Insurance Act. Under EI, parents of children born or adopted on or after December 31, 2000 will be entitled to 35 weeks of parental benefits and 15 weeks of maternity benefits for birth mothers. Effective December 31, 2000, the Employment Standards Act would increase parental leave from the current 18 weeks to 35 weeks if the employee takes pregnancy leave, and 37 weeks if the employee does not. An employee’s employment would protected by the reinstatement provisions. Pregnancy leave would remain at 17 weeks.

The new Act provides that pregnancy leave may begin no earlier than the earlier of 17 weeks before an employee’s due date and the day on which the employee gives birth. Employees who do not return from pregnancy leave must provide their employer with four weeks’ written notice.

Emergency Leave

Employers who regularly employ 50 or more employees will be required to allow employees to take 10 unpaid emergency leave days per year. An employee is entitled to utilize these days in the following circumstances:

  • a personal illness, injury or medical emergency;
  • the death, illness, injury, medical emergency of an employee’s spouse, same-sex partner, parent, step-parent, foster parent, child, step-child or foster child, grandparent, step-grandparent, grandchild or step-grandchild, the spouse or same-sex partner of a child, brother or sister or a relative of the employee who is dependent on the employee for care or assistance; or
  • an urgent matter concerning those individuals.

The employee must advise the employer before taking the leave or as soon as possible after. An employer may require an employee who takes leave to provide evidence reasonable in the circumstances that the employee is entitled to such leave. The leave must be taken in complete days.

Employees taking emergency leave have the same reinstatement rights as an employee on pregnancy or parental leave.

TERMINATION AND SEVERANCE

The wording of the notice of termination and severance pay provision has been revised. The notice requirements upon termination remain the same.

The definition of “temporary lay-off” previously found in Regulation 327 has been incorporated into the new Act with amendments. A “temporary lay-off” now includes a lay-off of more than 13 weeks in any period of 20 consecutive weeks if the employee continues to receive substantial payments from the employer and the employer recalls the employee within the time set out in “an agreement between the employer and the employee” or “an agreement between the employer and the union”. The new Act also clarifies that an employee on lay-off is not considered to be terminated where no recall date has been specified, unless the duration exceeds that of a “temporary lay-off”.

The new Act also clarifies that periods of lay-off shall not be included in determining an employee’s period of employment for the purposes of notice entitlement.

The new Act provides that all time spent by the employee in the employer’s employ, whether or not continuous or active, is included for the purposes of calculating an employee’s entitlement to severance pay.

An employee who is on “temporary lay-off” could no longer be considered to have had his or her employment terminated merely because he or she was not provided with a recall date at the time of lay-off. Where an employer lays an employee off for a period longer than the period of a “temporary lay-off”, the employee’s employment is deemed to be terminated on the first day of the lay-off.

ENFORCEMENT

Reprisal

The new Act provides for a new general anti-reprisal provision which can be enforced by an order for reinstatement or compensation of an employment standards officer. Previously reprisals could only be enforced through prosecution.

Increased Fines

The maximum fine under the Act for an individual would remain at $50,000. However, fines for corporations are substantially increased from the current $50,000 to $100,000 for the first offence, $250,000 for the second offence and $500,000 for subsequent offences. The maximum jail term that could be imposed by the court on an individual would be increased from six to 12 months. Failure to comply with a reinstatement order made by a court would be subject to a fine of $2,000 a day for each day during which the employer failed to comply or, if the employer is a corporation, $4,000 a day.

Increased Powers of Employment Standards Officers

The new Act provides for increased authority for Employment Standards Officers to issue notices of penalties, compliance and reinstatement orders. Employment Standards Officers have enhanced powers to require employers to attend fact-finding meetings, answer questions, and produce documents during an investigation or inspection.

An Employment Standards Officer can now also issue a notice of contravention against an employer where a violation is found. The notice of contravention would impose a monetary penalty on the employer if the employer did not apply for review by the Ontario Labour Relations Board or if the notice was reviewed and upheld.

Employment Standards Officers will now have to the authority to order not only compensation but also reinstatement where a finding is made that an employer violated the leaves of absences, lie detectors, retail business establishments or reprisal provisions of the Act. An Employment Standards Officer is not required to hold a hearing when exercising this or any other power under the Act. The period for applying for a review of an order of an Employment Standards Officer is now 30 days, reduced from the current 45 days. The OLRB is now required to issue its decision in review applications within six months of the last day of hearing.

MISCELLANEOUS CHANGES

Information to be posted in the workplace

Employers will be required to post in the workplace material prepared by the Ministry of Labour that describes the rights of employees and the obligations of employers under the Act.

Payment of Wages

The new Act allows employers to pay an employee’s wages by direct deposit.

Deduction from an employee’s wages

An employer may withhold or make a deduction from an employee’s wages where required by statute or with the employee’s written authorization. The new Act provides that an otherwise proper deduction would be invalid if it were required to be remitted to a third person and the employer failed to do so. The amount of wages that would have priority over the claims of unsecured creditors of an employer would be increased from $2,000 to $10,000 per employee.

Record Keeping and Retention

The new Act provides for different retention periods depending on the type of record. Under the current provisions records were to be retained between two to five years. The new Act provides records are to be retained for a period of three years.

Employers will no longer be required to obtain Ministry of Labour permits for homeworkers. Under the new Act, employers will be required to keep information in a homeworkers registry for a maximum of three years.

See also “Parental leave, overtime rules among major changes in new Employment Standards Act and ESA 2000, GEA 2001 now in force” on our Publications page.