Written By Lori Sterling
In December 2019, the federal government released the report of an expert panel on the changing nature of work. The panel had delivered its report to the government in July 2019. In early August 2019, the government briefly released the report online and then removed it from its website during the election. The expert panel report foreshadowed the federal Liberal mandate for some, but not all, of its recommendations.
Here is what we can expect from the federal government in light of the expert report, election campaign promises and the Labour Minister's new mandate letter.
New Federal Minimum Wage
Currently, federal workers are subject to the provincial minimum wage in the province or territory in which they reside. This approach reflects local costs of living, but means federal workers doing exactly the same work could receive different wages.
The panel recommended a common federal minimum wage. Instead of setting a fixed wage rate, as is done in most provinces, it recommended a wage based on 60 percent of the median hourly wage of all full-time workers in Canada. This would result in a minimum wage of approximately $15 an hour. Alternatively, the panel suggested that the federal worker be subject to a minimum of 60 percent of the median wage in the province in which he or she resides.
Interestingly, the federal government chose not to adopt the approach of the expert panel. Instead, it simply stated in the Minister of Labour's mandate letter that the federal sector would move to $15 an hour in 2020 and thereafter, rising with inflation. As this reform could require legislation, the government would have to form a coalition with the NDP to get it passed.
This reform will affect only 7.4 percent of federal workers, mostly in transport, banking and telecommunications sectors. The new federal minimum wage approach would bring wages more in line with several provinces (Ontario, Alberta, British Columbia) but it would be significantly higher than wages on the east coast.
Additional Employment Standards Protections
The second main recommendation of the expert panel is that employment standards legislation define “employee,” “independent contractor” and “dependent contractor.” This is largely in response to concerns that online workers and subcontractors were misclassified as independent contractors.
The panel recommended that dependent contractors would be deemed employees who are then entitled to the full range of employment standards. Further, there would be a new statutory definition of independent contractor that would not be easy to meet. Independence would be determined by a variety of factors including: the absence of control and direction by the hiring party over the performance of work; the work is outside the usual course of the hiring party’s business; the worker usually works independently; and the worker carries the risk of profit or loss.
The Liberal mandate letter, however, did not adopt these specific recommendations. All it says is that the Minister will develop greater labour protections for people who work through digital platforms whose status is not clearly covered by provincial or federal laws. The government will likely consult on this issue given the absence of clarity in the mandate.
In order to respond to the changing nature of work, the panel also recommended:
- Joint and several liability in multi-employer situations. For example, if a subcontractor building a home does not pay their workers, the main contractor could be liable for wages.
- Where standards rely on an employee having “continuous employment” for a specific period of time, any layoff or interruption of service less than 12 months would not count as a break in service.
- That a definition of “deemed work” be included in the statute that would cover “stand-by” or “on-call” situations. Depending on how the definition is worded, it could catch workers who can be required to work at home outside standards hours.
None of these recommendations made it into the Minister's mandate letter although it is possible that some of them could be part of a package to protect online workers.
Right to Disconnect
Although the panel was asked to examine and make recommendations on larger structural and more innovative changes to the regulation of the workplace, it chose not to do so. For example, on the question of unpaid work monitoring emails after hours, it recommended that employers develop policies on responding to email traffic after hours.
Interestingly, although the panel was not in favour of a “right to disconnect” after work hours, the Minster's mandate letter specifically notes that she is to develop new provisions relating to the “right to disconnect”. The mandate letter notes that this should entail the right of workers to request that they not work extra hours.
Reforms Not Recommended
The panel declined to make recommendations on portability of benefits except to say that further study was warranted. The panel did recognize that for short term, temporary or part-time workers, it was difficult to obtain benefits but the panel was not prepared to tackle this issue.
The panel also did not recommend meaningful reform to increase opportunities for employees to voice their concerns in non-union shops. Because of the declining rates of unionization, the panel noted that there is less opportunity for employees to speak either individually or collectively in workplaces. However, the report only recommended further study on alternative models of labour relations. In the interim, it suggested limited protection for concerted activities that take place in non-union businesses (which is not likely to be very often) and funding for community organizations who assist workers.
The Minister of Labour's mandate is silent on the controversial issues of portability of benefits and the decline of unionization. Instead, the only other employment standard to make it into the Minister's mandate is that she add a new Family Day holiday for federal sector workers.
In sum, the clear message in the Minister of Labour's mandate is that almost all employment standard reforms were done prior to the October 2019 election. Going forward, the federal government has decided not to tackle the thornier issues considered by the expert panel except for enhancing protection for platform workers.
For further information, please contact John Gilmore, John Batzel, Sarah Parchello or Lori Sterling.