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Employment & Labour

Employment reforms could overwhelm small businesses

Doug MacLeod

Several recommendations outlined in a recent report aimed at reforming the province’s Employment Standards Act could increase labour costs and will likely be met with resistance from small employers, says Toronto employment lawyer Doug MacLeod.

Among the 47 recommendations contained in the Law Commission of Ontario’s final report on vulnerable workers and “precarious work” are more protection for temporary foreign workers and the creation of a “benefits bank” for workers without coverage. Read Toronto Star

“Employers are not required to provide benefits to any employees. For these employers who decide to offer employee benefits the cost can be up to 25 per cent of total compensation. Extending benefits to part-time employees in these workplaces on a pro-rated basis would significantly increase labour costs,” explains MacLeod.

“I think the priority should be educating workers on their rights and enforcing the existing legislation. I don't think in this economy there will be much appetite for substantive change. You can expect resistance from the business community especially from small businesses which are already overwhelmed with record keeping and other obligations,” he adds.

Specifically, MacLeod expects significant push-back from small business owners on the recommendation to extend the personal emergency leave provisions in the ESA to workers in workplaces with fewer than 50 employees. “Doing so would present significant scheduling and planning issues for small employers; hence the reason for the current exemption,” he explains.

The report also recommends considering amendments to the ESA to ensure part-time workers are paid at proportionately the same rate as full-time workers in equivalent positions. However, MacLeod notes that this would significantly increase labour costs in workplaces with many part-time workers.

While the report suggests extending some ESA protections to self-employed persons in dependent working relationships with one client, he says, whether a person is an employee or a dependent contractor is a much litigated issue under the ESA and in the courts. “Including a definition of dependent contractor could reduce the amount of litigation on this issue,” he adds.

Another recommendation - to increase the amount of unpaid wages workers can recover from $10,000 to $25,000 - would also significantly reduce the number of wrongful dismissal actions and free up time in the courts for other types of actions, says MacLeod.

“The $10,000 cap is currently a problem for long-term employees who are owed termination and severance pay well in excess of $10,000,” he adds.

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