Thursday 12 September 1996
Employment Standards Improvement Act, 1996, Bill 49, Mrs Witmer / Loi de 1996 sur l'amélioration des normes d'emploi, projet de loi 49, Mme Witmer
Canadian Advanced Technology Association
Mr Norm Kirkpatrick
Mr Mike Cannata
Service Employees International Union of Canada
Mr Robert Buchanan
Mr Ian Sellors
Communications, Energy and Paperworkers Union of Canada, Ontario region
Ms Denise Norman
Mr D'Arcy Martin
Durham Region Coalition for Social Justice
Ms Colleen Twomey
Ms Judy Mitchell
Canadian Federation of Independent Grocers
Ms Mary Davies
Retail Council of Canada
Ms Elizabeth Mills
Ontario Mining Association
Mr Patrick Reid
Mr John Blogg
Mr John Keenan
Low Income Families Together
Ms Naomi Berlyne
Ms Hilary MacKenzie
Muskoka Legal Clinic
Ms Jo-Anne Boulding
Mr David Miller
Toronto Musicians' Association, Local 149, American Federation of Musicians of
the United States and Canada
Ms Marnie Niemi
Ontario Public Service Employees Union, Local 595
Mr Barry Weisleder
Ontario Coalition for Better Child Care
Ms Katheryne Schulz
Canadian Auto Workers, Local 2213
Mr Pino Crognale
Canadian Federation of Students
Ms Victoria Smallman
Mr Joe Polito
Ontario Sheet Metal Workers' and Roofers' Conference
Mr Jerry Raso
Canadian Auto Workers, Local 1980
Mr Ron Hendrikx
Federation of Women Teachers' Associations of Ontario
Ms Margaret Gee
Ms Carol Zavitz
Provincial Building and Construction Trades Council of Ontario
Mr Alex Lolua
Mr Joseph Duffy
Canadian Union of Public Employees, Local 3903
Mr Michael Kanter
Mr Val Patrick
University Settlement Recreation Centre
Ms Cassandra Wong
STANDING COMMITTEE ON RESOURCES DEVELOPMENT
Chair / Président: Mr Steve Gilchrist (Scarborough East / -Est PC)
Vice-Chair / Vice-Président: Mrs Barbara Fisher (Bruce PC)
*Mr John R. Baird (Nepean PC)
Mr JackCarroll (Chatham-Kent PC)
*Mr DavidChristopherson (Hamilton Centre / -Centre ND)
Mr TedChudleigh (Halton North / -Nord PC)
Ms MarilynChurley (Riverdale ND)
Mr DwightDuncan (Windsor-Walkerville L)
*Mrs BarbaraFisher (Bruce PC)
*Mr SteveGilchrist (Scarborough East / -Est PC)
Mr PatHoy (Essex-Kent L)
*Mr Jean-MarcLalonde (Prescott and Russell / Prescott et Russell L)
Mr BartMaves (Niagara Falls PC)
Mr BillMurdoch (Grey-Owen Sound PC)
*Mr Jerry J. Ouellette (Oshawa PC)
Mr Joseph N. Tascona (Simcoe Centre PC)
*In attendance /présents
Substitutions present /Membres remplaçants présents:
Mr DougGalt (Northumberland PC) for Mr Chudleigh
Mr MorleyKells (Etobicoke-Lakeshore PC) for Mr Maves
Mr JohnO'Toole (Durham East / -Est PC) for Mr Carroll
Mr E.J. DouglasRollins (Quinte PC) for Mr Murdoch
Also taking part /Autres participants et participantes:
Mr ChrisStockwell (Etobicoke West PC)
Clerk / Greffièr: Mr Douglas Arnott
Staff / Personnel: Mr Avrum Fenson, research officer, Legislative Research Service
EMPLOYMENT STANDARDS IMPROVEMENT ACT, 1996 / LOI DE 1996 SUR L'AMÉLIORATION DES NORMES D'EMPLOI
Consideration of Bill 49, An Act to improve the Employment Standards Act / Projet de loi 49, Loi visant à améliorer la Loi sur les normes d'emploi.
CANADIAN ADVANCED TECHNOLOGY ASSOCIATION
The Chair (Mr Steve Gilchrist): I'll call the meeting to order. Good morning, all, on this our final day of hearings on Bill 49, An Act to improve the Employment Standards Act.
We'll start right away with our first presentation of the morning, from the Canadian Advanced Technology Association. Good morning, gentlemen. Just a reminder we have 15 minutes for you to use as you see fit, divided between either presentation time or question-and-answer period. With that, the floor is yours.
Mr Norm Kirkpatrick: Thank you very much. My name is Norm Kirkpatrick. I'm executive director for the Canadian Advanced Technology Association. I should mention that the handout that is in front of you there is essentially for reading afterwards. It just has some literature on the trade association and some information on Cybermation, which is here with me today. We did not prepare a written brief on it. We preferred instead to have the dialogue today, so I'll begin that now.
We are very appreciative of the opportunity to speak to the committee and we wanted to say that, on behalf of CATA, we do support the improvements to the Employment Standards Act in Bill 49. We believe it's a very positive step.
In order to share our perspective today, I wanted to spend a few minutes just explaining who we are. The Canadian Advanced Technology Association is headquartered in Ottawa, and we have offices across the country as well as an office in Markham here in the Toronto area. We are a national trade association, and what is somewhat unique, we are multi-sector. So CATA is not simply information technology; we are a trade association that also includes aerospace companies, medical devices, biotech instrumentation. It's a very wide band of advanced technology organizations that come together and share their interests in promoting the development of research and development in Canada, of innovative Canadian-based products and R&D in promoting their exports for the country.
CATA represents approximately 65% of the advanced technology community, and certainly the bulk, or a large portion, of our members are based in Ontario. Some of the companies you would know that are members and on our board are Corel, Calian Technology, Newbridge Networks, Fulcrum, JetForm, as well as established companies like IBM, Northern Telecom and Apple. So it's a fairly broad range.
Our mission is to act as a catalyst to stimulate enterprise growth among our members and throughout the industry. We do that through a variety of ways with services to help them be more competitive, with different kinds of events, strategic alliances, working on the Software Human Resource Council, sponsoring Connect.IT, and what we try to do is to bring the investors together with the entrepreneurs and the companies and help them forge the necessary resources and alliances to compete internationally. So we want to attract investment.
One of the interesting things is that the common thread throughout it all today is becoming software. To give you an example, Allied Signal Aerospace, a $165-million operation here in Toronto, creates the air quality control systems for all the big planes that you and I fly on. That is primarily a software product now. So you have a lot of software engineers, and it seems no matter what member we go into, in what part or what niche, software is the common thread. So knowledge workers are playing a very large role.
At this stage, to provide a perspective -- and I hope to also have some time for questions -- I've asked Mike Cannata of Cybermation Inc to come and talk to you a bit about his business and how he sees the changes that lead to our belief that we should have improvements to the act. So I'll turn it over to Mike at this point.
Mr Mike Cannata: Thanks, Norm. Obviously we're a CATA member and we share the perspective of CATA. I'll just tell you a little bit about our business and then I'll tell you a little bit about what some of our challenges are to keep in touch with.
We provide software for large data centres. It's very mission-critical software that helps data centres run efficiently. Probably about 85% to 90% of our business is outside of this country. We are headquartered in Markham and we are one of those fast-growing software companies that is employing a number of people year after year after year. We grew our revenues this year 80%; the year before that it was 60%. Last year we had 30 employees; this year we have 50 employees; next year we'll have 75 employees. We're looking at gross to be probably from $9 million to $14 million or $15 million next year. We're earning about 30% pre-tax, so we're paying a good amount of taxes into the Ontario government as well.
When I say we're mission-critical software for large data centres, for a company our size our customers are quite recognizable. We manage the data centres. Our software helps manage the data centres for people like American Airlines, Cathay Pacific, every government location -- the Hong Kong government data centre, the Singapore government data centre, the data centres in California -- some of the large insurance companies such as Allstate Insurance -- every one of their data centres in the United States -- people like JC Penney -- very recognizable names of customers.
Our primary product is our people. Software is what's in people's heads and supporting that is what's in people's heads. We've got a very talented and very educated workforce, and one that we spend a significant amount of time in educating and training. I think last year we averaged about 15 or 16 days of classroom training for our employees. I looked at a recent survey, and I think in Canada the average of companies is about two days. So it's the type of thing you spend a lot of money on.
We feel that we treat our employees quite exceptionally. To give you an idea, the people who support this mission-critical software -- you can imagine that data centres, if they're relying on a piece of software to make them run efficiently and they're running 24 hours a day, seven days a week, they expect the kind of support you need to run those data centres, the type of people who can answer very high-skilled, technical questions almost immediately on the phone. So the type of people we have in both development and technical support are the kind of people to whom we end up paying salaries in the $50,000- to $80,000-a-year range. We have programs that ensure that every one of our employees participates in a bonus program. We have group RRSPs that are based on profit sharing, so this last year every individual in our company got a $2,000 contribution to their group RRSP, as an example. Every one of our employees is a shareholder in the company. These are the kinds of compensation programs we put together for the type of people we have.
When I talk about flexibility, some of the things that are important for us to have and some of the challenges that we have, given that most of our business is outside this country, we've got things such as people who absolutely have to work on Canadian and Ontario statutory holidays, because in the US they're not and people expect the people to be around. We need to have people at the end of phones who are able to answer technical questions well into the night. Right now, after a period of time -- I think it's 8 o'clock at night -- we're putting people on pagers, but as the company grows, we're going to have to go to seven-day-a-week, 24-hour-a-day, round-the-clock support for data centres around the world.
Some of the challenges we're looking at right now, what makes more sense for us, is looking at doing it here or do we open up a support centre in a place like Australia, where we can switch the phones over at 8 o'clock at night so that we get the same kind of support 24 hours a day, seven days a week. So the kind of issue that we wrestle with is making sure that whatever legislation is in place, it's flexible enough for skilled knowledge workers and not hampering.
That's just my little bit of background. Certainly, we're open to any questions you may have.
Mr Kirkpatrick: I'd like to open it up for any questions now that you may have, if we have one or two minutes.
The Chair: We certainly do. In fact, there's about two minutes per caucus. Of course, we'll start with the official opposition.
Mr Jean-Marc Lalonde (Prescott and Russell): Thank you, gentlemen. You said that your association supports the amendments or the changes brought in to the ESA. Are your people, your employees, all unionized?
Mr Kirkpatrick: The majority of the members are non-union within CATA. We have a large proportion of organizations that are the small, fast-growing, high-tech companies which are started up by two, three, five, 10 employees and grow like that. So in the majority of cases, they are not.
Mr Lalonde: The ones that are part of a union, are they aware of all the changes that were brought in by the government?
Mr Kirkpatrick: I would hate to say that is the case. I'm not certain if it is. We haven't polled it. We do different fax polls on different things. What we did was talk to a wide number of the members on a lot of different issues, and part of it too was looking at change. In general what's coming back to us is that the organizations that are members of CATA have such dramatically different organizational structures, they're so fluid and the job rules are changing all the time, they're actually creating positions to support the products. As a result, I guess what we're saying is that the legislation and regulation -- we believe it is necessary to have it, but we believe it needs re-engineering, just as we're constantly re-engineering these companies, if that makes sense to you at all.
Mr Lalonde: I know there is great competition in that field, but I believe that the fringe benefits are pretty good in your group. Still I wonder if the employees who belong to unions are fully aware of all the changes that were brought in, because I haven't seen one union rep come in front of us saying they are in favour of the changes brought into the ESA.
Mr David Christopherson (Hamilton Centre): Thank you for your presentation. It was very interesting. A lot of areas you raise are not covered by ESA and there is some work to be done to make it better. I want to ask you one question with two parts to it. First, are you aware, in giving your support to Bill 49, that you will be denying people who probably have very little to do with your companies -- minimum wage workers, low skills, many of them new Canadians -- the right to claim for money they are owed from bad bosses, and in amounts that you might think relatively small -- $50, $75, $100 -- as a result of these changes? Are you aware that they will be denied their rights to access that kind of money through the ministry, which is a right they now have? Second, in the broader review of the Employment Standards Act, would you be in favour of legislation that would protect workers who are on contract and who are part-time and temporary who right now have very little protection in the law?
Mr Kirkpatrick: I'll answer the second part first. The attitude among our members whom we've talked with is that they want to be strong corporate citizens. They want to be fair with their employees. In fact, they are the most valuable asset and becoming a larger and larger portion of these organizations. Whether he makes a hardware product, you know, it's still in software where the competitive advantage is. I think we're finding that they would be very supportive of that.
With regard to the first point you made, I would have to say that probably not all the members are aware of that detail. Our understanding is that there will be a phase 2 to this that will get into a lot more detail, and we expect that some of these things probably would be revisited under that.
Mr Christopherson: Just so you know, there is no indication of that from the government at this point.
Mr Kirkpatrick: At this stage the feeling we've got is, we live in such a dynamic environment, with competitive change happening so rapidly, that if you don't adjust quickly and make changes in your organization and react, then you may turn around and find your market is gone and some offshore competitor has taken the market. From that point of view we're saying that with the massive change that has gone on and the dynamic restructuring in the economy, surely, without even getting into detail and trying to justify this, there has to be re-engineering done within the employment laws.
The other thing is that CATA is actively involved. We want to attract investment into the country, and it's not only an issue of ensuring that Cybermation, as it grows, tries to keep those jobs here. We want those jobs here. We want that research and development here. We've got to solve those problems. Some of that is going to take a flexible structure and there are going to be mistakes made, and we have to try to make as few as possible as we go there.
Mr John R. Baird (Nepean): Thank you very much for your presentation today. Many firms you represent are located in and around my constituency. Our community, which has been hit very hard by the federal government's decision to lay off 45,000 public servants, would be in really rough shape if it weren't for the high-tech sector. It's been leading the economic growth. In the last year there have been about 30,000 net new jobs created in the region and it's all been led by the high-tech sector.
Some of these companies have permanent signs bolted in their lobbies welcoming new employees because there are just so many. I was out in Newbridge last month and they were welcoming 25 people a week, every week, into the company. That's absolutely extraordinary. I noticed the unemployment rate in Ottawa-Carleton, which was deemed to be one of the worst areas about two or three years ago, is down to 7.7%, so there's still a long way to go.
You mentioned flexibility, which I think is interesting. I think this points to the need for a comprehensive review of phase 2 of the Employment Standards Act because this act wasn't written with the high-tech sector in mind. When this act was written in 1974 we didn't have people dealing with companies around the world on an instant-by-instant, moment-by-moment basis.
You mentioned switching a system over to Australia. With great respect to Australians, we don't want you to switch the phones over to Australia. We would prefer more jobs here in the Ontario, particularly when you look at the contracts that some of these high-tech companies have entered into, with Telecom switching systems in China and the Far East; it's just a really exciting part of the Ontario economy. I guess your industry will have to be a big part of the consultations with respect to phase 2, because we have to look at the new economy when we're establishing phase 2, take a comprehensive view of the Employment Standards Act, because the act simply wasn't written to take your industry, on a global basis, into account.
Mr Kirkpatrick: I totally agree with what you're saying and support that. In fact, another challenge we have that's tied into this as well is ensuring that we have the job opportunities and work environment to keep the young people we're graduating here, because we've got a lot of jobs we can't even fill within the high-tech industry, and we're competing with the high-tech companies south of the border. All you have to do is look in the Globe and Mail at the ads to see who is coming up and recruiting. These people are being attracted to go down and work for Microsoft and some other companies, being taken straight out of university. We need those people here as well. We need that creativity. We need the Cybermations to grow. We're really welcoming and receptive and wish to participate in phase 2 as you work through this.
Mr Baird: These are the type of jobs -- at Newbridge the average salary is $60,000 and the average age is 32 -- we dream about.
Mr Kirkpatrick: That's right.
The Chair: Thank you both for taking the time to come and make a presentation before us here. We appreciate it.
SERVICE EMPLOYEES INTERNATIONAL UNION OF CANADA
The Chair: That leads us to the Service Employees International Union regional office. Good morning. Welcome to the committee.
Mr Robert Buchanan: Good morning. I assume you all have a copy of our brief. Because of the time lines we've been restricted to, I would prefer, if you don't mind, just summarizing our brief and picking up on the most salient points and concerns the service employees have with Bill 49. My name is Robert Buchanan. I am the research coordinator with SEIU in Canada. With me is Karen Cobb, a research analyst with the Service Employees International Union.
We welcome the opportunity to present our views to you today on this most important piece of legislation. SEIU, for those who are not aware of our union, has a very long tradition of organizing and representing workers in very low-income and vulnerable workplaces. Our history started off with organizing building and service employees: janitors, cleaners, and at the time, elevator operators. We have moved into long-term-care facilities, hospital workers, foodservice workers, home workers and still maintain our tradition with janitors and cleaners.
Let me start off by saying that SEIU is appalled at what this government is doing to the working people in this province, both union and non-union, through pieces of legislation such as Bill 7, Bill 26, which gutted the Pay Equity Act, and now Bill 49. Our understanding was that Bill 49 would have allowed the overriding, in collective agreements, of minimum working conditions such as severance pay, overtime, public holidays, hours of work, vacation pay and wages. While we understand that the minister has reconsidered, at least for the time being, on this most important issue, we believe it needs to be addressed. Furthermore, later on in my discussion I will provide you with an example of how ill-conceived this bill really is.
You should know that 80% of our membership does not have the right to strike, that 80% is governed under the Hospital Labour Disputes Arbitration Act. That means that if employers and unions don't resolve a collective agreement through the negotiation process, contract resolution is conducted by a board of arbitration or an arbitrator. What Bill 49 would do, in our opinion, is provide arbitrators with the power to award substandard provisions within our collective agreement, considering that we would not have the right to strike on such provisions.
What is even more important is when you consider the impact that arbitrators are restrained under with bills such as Bill 26. I remind you of schedule Q which, among other things, requires an arbitrator to look at the ability to pay. Therefore we ask you, will an arbitrator consider awarding certain substandard provisions at the expense of improving the working conditions of people who are governed under the Hospital Labour Disputes Arbitration Act?
We also see Bill 49 as a move to privatize the enforcement mechanisms of working standards within this province. What is this going to do? It's going to increase costs not just for the unions but also for the employers, because now unionized employees are going to be required to fight those substandard actions by the employer through their collective agreements.
I ask you to consider this: Does a rights arbitrator have the preview that employment standards officers have? We suggest to you that under the Ontario Labour Relations Act they don't. In fact, one of the most significant things about the Employment Standards Act is the investigation tools which the officers have. Rights arbitrators historically don't have those tools.
One other issue that raises tremendous concern to us is the time lines within filing a complaint under Bill 49. We believe they are very ambiguous, ie: Is bringing time lines down from two years to six months just for non-union or is that for unionized employees? Or will unionized employees have to have provisions in their collective agreements which speak to time lines in which to file a complaint?
Speaking of non-union employees, we believe that the minimums and maximums set by Bill 49 are unjust and don't stop and will not stop the abuse of employers. We will provide you right now with an example of such abuse.
In a nursing home in Leamington, in southwestern Ontario, there is a group of women -- I stress that there are only women working there -- low-paid, $12 an hour, who have decided to join SEIU as a union. Historically these people were required to be at work 15 minutes before and 15 minutes after the shifts. They were not paid for these 15 minutes. The union has filed a complaint under sections 17 and 21 of the Employment Standards Act. We have calculated that certain people within this nursing home are going to be owed a total of over $150,000.
I ask you to consider this legislation and the options. If these people had decided not to join the union, and there are people working within the home who will not be unionized, they would have been capped under Bill 49 at $10,000 apiece. Some of them, I remind you, who are only making $11 or $12 an hour, are owed over $22,000.
Bill 49 suggests that if they don't want to have the cap and want to fight this in the courts, that is an option. I suggest to you that someone who earns $12 an hour, merely $22,000 a year, does not have the financial capability to fight this in civil courts. That's an unrealistic suggestion to impose on these people.
However, these people did decide to join a union and it was our union. Because of certification under Bill 49, they have lost their rights under the Employment Standards Act. In fact, now they must fight this violation under their collective agreement. I remind you that nursing home workers are covered under the Hospital Labour Disputes Arbitration Act; they don't have a collective agreement, and they will not have a collective agreement until they negotiate one or seek one through a board of arbitration, which means incredible time delays that these people are subject to.
In addition to that, the previous problem that I raised to you before about arbitrators: Will an arbitrator, under first contract arbitration, under HLDAA, consider the magnitude of the employment standards and hence provide these people with lower working conditions than they rightly deserve?
The problem has even more magnitude under first contracts when you consider the right-to-strike sector. A great example would be the cleaners who work at Queen's Park, represented by SEIU Local 204. If in fact those cleaners were fighting for a first contract, which they are, and there were violations of the Employment Standards Act, which there may be, and with your Bill 7, where is the leverage that the employees have to require an employer to, first, stop the violations of the Employment Standards Act and, second, most importantly, to get a collective agreement which they can work under?
That concludes my comments. Finally, I would strongly urge this government to stop its attack on working people by repealing all of the anti-worker legislation that you have imposed on this province, including that found in Bill 49. Thank you for this opportunity.
The Chair: Thank you. That allows us just over a minute and a half per caucus, commencing with the third party.
Mr Christopherson: Thank you very much for your presentation, and thanks for the example. I think it's important that the government members, with whatever limited influence they may have in caucus, have the ability to truly understand the depth of the damage that Bill 49 will do to both union and non-union workers, and I can only hope that they've been listening carefully and will go back and talk to their political masters.
I want to just run by you, because I don't have an awful lot of time to get into details of things, the fact that the government and, mostly, chambers of commerce -- some other corporate associations but mostly the chambers of commerce -- have come in and are quite frankly surprised, they claim, that unions aren't more supportive of this flexibility opportunity that's being afforded them, not so much under Bill 49 now but certainly in the broader review.
As succinctly as possible, can you give further reasons why you're not interested in having any contract contain standards that are below the Employment Standards Act?
Mr Buchanan: "Flexibility" is a very relative word, and I would suggest to you that flexibility is only possible when the people who are sitting at the bargaining table have a relationship which is balanced. Right now, with the pieces of legislation that have already been passed by this government, the bargaining table is not balanced; it's tipped in favour of the employer. Until the balance is restored, then flexibility is not flexibility; it turns into abuse.
Mr Christopherson: That's crucial, because they really believe that unions walk in, lay down on the table what they want and because it's big unions and big labour they can just demand anything and therefore no union would ever accept a collective agreement that has anything that's bad for their members. Clearly, they don't understand the bargaining relationship.
Mr Buchanan: I'd be delighted to take any member from caucus or the majority into a negotiation session with me at any time. I'm sure they'd see that it's a lot different.
Mr Christopherson: Excellent presentation. Thank you.
Mr John O'Toole (Durham East): I had 10 or 15 years in the labour relations field with a large unionized company and did see the influence and ability of the unions and have a lot of respect for that. More specifically on the example you used, I believe the six months and the other limitation aspects of this bill, the very importance of -- I'd like you to explain somebody making $25,000 a year, that's what you said --
Mr Buchanan: Yes, $22,000.
Mr O'Toole: Most standard work weeks are based on 40 hours; times 52 weeks, that's 2,080 hours times 12. Figure it out. A lot of public people don't work 40 hours, which isn't in the act, and much of your union group doesn't.
I'm not opposed to unions at all, but the point is this: Why let the abuse go on? I challenge you that these people that are owed $30,000, that's the travesty of the current system, that it's allowed to go on, the accumulation of employees being violated by -- if there are, and I'm sure there are -- bad bosses. What we tried to do is to bring it to the surface more quickly so less people are abused, and repeat offenders, those perpetrating companies, should be taken to task and held accountable. That's where the collections comes into it. If I'm a collector, my only function is to collect the money, and I don't get paid until I get it, on behalf of the employee.
I want you for a moment to take off your ideological hat and think that these things can be improvements. If you can make an argument that they aren't, then you're saying the current system works, and you just told me you've got people who are owed $30,000. That tells me the system doesn't work.
Mr Buchanan: No, sir, I didn't suggest to you that the current system works; I suggested to you that your system will not work. I suggest to you that our current system can work, and I suggest to you that you should improve what we already have instead of eroding what we had worked very hard to fight for.
Mr Lalonde: Thank you for your presentation. I do have major concerns too with the $10,000 cap and also with the six-month limit to file their complaint. I'd just like to know, what was the reason for asking the employees to work 15 minutes before time and also 15 minutes after time? In my past experience with one of the nursing homes, the union had gone in; the fact that they had to reduce the number of beds to meet the government requirements of the building, the union refused the reduction in staff. They said, "To be able to make both ends meet, we will have to reduce the staff." So they've gone ahead, they say, "Well, no, we will work half an hour more every day to compensate for the additional staff that you would have to hire or to reduce." I'd just like to know, in this case, what was the regular working-hour shift on this one?
Mr Buchanan: Seven and a half hours are the regular working-hour shifts.
Mr Lalonde: So they end up working 48 hours a week, then.
Mr Buchanan: Let me just say to you, sir, that this isn't the only place where this government has removed minimum standards. They've also removed minimum standards in long-term care. They've removed the requirement of the number of nursing hours per bed per resident. In fact, now you have nurses who are working twice as hard as they were ever working before and more patients in severe care than there ever were before. But that aside, most of the people within this workplace were working seven and a half hours a day.
Mr Lalonde: When they start doing, let's say, half an hour more a day, did they get paid for that additional half-hour a day?
Mr Buchanan: They will now, because they've joined a union.
The Chair: Thank you both for taking the time to appear before us and make a presentation.
I don't see anyone, but I'll make a call none the less for Durham Region Coalition for Social Justice.
The Chair: Seeing no response, I see our subsequent presenter, Mr Sellors, has already arrived. Mr Sellors, I wonder if we can invite you to come forward. Good morning. Welcome to the committee. Just a reminder, we have 15 minutes for you to divide as you see fit into either presentation time or a question-and-answer period.
Mr Ian Sellors: Mr Chairman and members of the standing committee on resources development, my name is Ian Sellors. I am pleased to appear before each of you today as an employer and a taxpayer in Ontario. It is my personal view that the objective of labour standards legislation is to provide a set of minimum standards to the employer community, both small and large, to use as a guide when developing their policies and procedures related to their employees. This definition also provides the employees with the minimum standards that their employers should adhere to.
As an employer and a principal in Total Credit Recovery, our human resource assets are critical to our success. They don't appear on our balance sheet, but in fact our employees' efforts and contributions are the single most important asset in our company.
Currently, all related provincial jurisdictions have collection problems to one degree or another. Alberta, as an example, has developed the philosophy of abuser pays. They have successfully legislated provisions into their act that passes along the cost of collection of delinquent orders to the employers who do not comply with payment. This mechanism in itself fosters the speedy recovery of delinquent accounts on behalf of the victims, the employees, at little or no cost to them.
With respect to Bill 49, I will defer on the general debate of its overall merits to others who are more informed. I offer my personal support, however, and comments on Bill 49 and, more specifically, the subsection which deals with the collection of unpaid accounts, the costs associated with collection and the distribution of moneys collected and the definition and powers of the collector.
The associated provisions contained in section 73, relating to the collection of fees and disbursements, will have a positive impact on the recovery process at no incremental cost to the Ontario government. This initiative can be aptly termed socially responsible and has the capability to return increased recoveries directly to the victims, the wronged employees.
Additionally, this enlightened process will send a strong signal to the business community that the government is serious about enforcing orders. In fact, I would speculate that the abuse of employees by unscrupulous employers will be reduced simply because of increased enforcement of outstanding orders.
The abuse associated with non-compliance of orders remains a major challenge, and the remedy to neutralize non-payment and provide an additional tool for enforcement is available to each of you to support. Regardless of your political persuasion, the fact of the matter is that your support of the relevant sections associated with the collection of delinquent accounts will be viewed as a positive contribution by your constituents.
Consider the benefits: The personnel of the Ministry of Labour will be able to focus on its core business by contracting out unpaid orders under the employee wage protection program. The Ministry of Labour's resources will be able to be redeployed for more efficient and effective use. Increased collection activity by the private sector will reduce non-compliance with the Employment Standards Act. Lastly, the employee victims will be the beneficiary of increased recovery at a faster rate.
At Total Credit Recovery, we have had the privilege of dealing with all three levels of government over the past six years. Our experience leaves no doubt in my mind that a well-managed collection process will be beneficial to all concerned. In closing, ladies and gentlemen, I solicit your support on the appropriate sections and encourage speedy passage and implementation.
The Chair: Thank you, Mr Sellors. That affords us two and a half minutes per caucus. The questioning this time will commence with the government benches.
Mr O'Toole: Thank you very much, Mr Sellors. I'm very supportive of your interpretation of the collections aspect; I believe you're in that business of collecting. I have just a couple of questions on that. You said you've had some experience with all three levels of government today. Could you briefly give me some idea of what that is.
Mr Sellors: Certainly. Thank you for your question. Perhaps I can provide you with a little bit of my personal background. I have been in the credit collection industry for over 25 years and specifically in the collection industry for slightly more than 20. During that period of time, I've had an opportunity to work with a variety of governments throughout North America: state and municipal, provincial, municipal and Canada, as well as for the last six years with the federal government.
There's no doubt in my mind that limited resources that are available to administrators, whether they be in the private sector or public sector, have a negative impact on the potential recovery of outstanding accounts. There's no doubt in my mind, further, that the involvement of a third-party collection company can have a positive effect on recovering moneys specifically owed to the victims associated with labour standards orders. The federal government has been utilizing the services of collection companies for a number of years, and very successfully. The provincial government of Ontario, as well as others, have been utilizing the services of collection companies.
I'm an advocate of abuser pays. I'm advocate of the Alberta legislation. I don't want to confuse abuser pays with user pays, but when you have a non-compliant company which is taking advantage of workers, I think we have a social responsibility to remedy that. The collection process, by including the private sector, will provide a solution to that problem.
Mr O'Toole: Thank you for that extended response. Just one comment. The fee for your service -- I just want to be on record as saying that this should not be borne in any case by the employee who has earned some money. What's your view on that, him or her paying to have their own money collected?
Mr Sellors: Unfortunately, I don't know the statistics that are available today in terms of the success that the Ministry of Labour has with recovery of orders, but I would venture to guess that it would probably be in the 25% to 30% band. In other words, 70% to 75% of the orders that are made are unpaid. There's a cost to service. I believe the legislation provides for the employer, the abuser, to pay the cost. I think in some cases there may be a practical remedy to pass along part of the costs to the employee, but it's the story that something is better than nothing, perhaps, that exists today.
Mr Lalonde: Thank you for your presentation. You touched mostly on the collection part in a good part of your brief. Don't you think the two years of investigation and also the two years to settle are way, way too long? Because most of the time, those employers are not paying the employees properly. If the employees have to lodge a complaint, it's because they are already in financial difficulty.
If we are to wait two and two to get the whole thing settled and all the money paid back to the employee, there's a great chance that this 75% of the people who are already not being paid will not be reduced because the effect -- as I said, most of the time, the employees are in financial difficulties.
I think there should be a clause in there that we should add in the ESA that the commission or the cost of service should be added on to the amount owed to the employees and also it should be all reduced to one year, not any more than that. Also, when the employer sees that his credit record would be affected, he might do his best to try and settle the complaint that was lodged.
Mr Sellors: I agree with you. As a general rule of thumb, the longer it takes, the more difficult it is to collect. I would like to see the process speeded up. I'm not sure, in practical terms, about one year, six months, or what those time lines should be, but there's no sense ragging the puck. If there's an issue, it should be dealt with. The remedies are available, and the faster the collection process begins, the more successful it will be for the victim or the employee who was wronged.
Mr Christopherson: Thank you for your presentation. We appreciate you coming forward today.
Is it fair to say that whether it's 75%, 25% or 100%, you need a viable company in existence to go after? In other words, if they've already gone into bankruptcy, there's not much you can do with them?
Mr Sellors: That's correct, sir.
Mr Christopherson: Just this week Mr Tascona, one of the Tory backbenchers who, as I understand it, used to be an employment standards officer himself, made the statement, and it's there in Hansard, that 50% of the money that's outstanding is because of bankruptcy. That would sort of put the lie to the argument the government has put forward that they can only collect 25 cents because it's inefficient and that if they go to private sector somehow you'll be able to change those numbers. The reality is, based on what you've just said, that if 50% of that money is outstanding because they're bankrupt, then not you or any other collection agency, unless some of your competitors are better than you, and I don't imagine you believe that -- that money is gone, and you're not going to change that.
Mr Sellors: That's correct. You can't get money that isn't available. I think, going back to M. Lalonde's point vis-à-vis the timing issue, that could be very helpful. On the other hand, hopefully the economy will improve, but there's no miracles out there. You have to collect from a viable entity.
Mr Christopherson: I've listened long enough, and I thought it's time that we put this 25 cents in its proper perspective. The reality is, if Mr Tascona is right, and I would assume that he is, 50% means that you're not going to be able to put a major dent in those numbers.
Mr Sellors: Just one point, though, sir. If 50% of the outstanding bills or outstanding orders are the result of bankruptcies, perhaps the remedies are available through the time lines that are associated with getting involved earlier in the process. In fact, if that 50% is put aside and you can't collect on it, then what is occurring if 25% is in fact accurate? The success rate is only half of the available money. Let's improve on half of the available money.
Mr Christopherson: I would assume you consider yourself both an expert and a professional.
Mr Sellors: I have a broad range of experience and I try to operate my business in a professional fashion, yes.
Mr Christopherson: And I have no reason to doubt that or question that. I mean that quite sincerely. I only ask you that because I wanted to ask you: If you suddenly, tomorrow, in the blink of an eye, went from being the owner and operator of your own private corporation and suddenly became a public servant, your skills wouldn't be lowered or changed in any way? You'd still be an expert professional at what you do.
Mr Sellors: That would be my attributes, I guess. My personal attributes would be carried forward.
Mr Christopherson: My last question. It's fair to say, I think, that corporations exist to make money. I mean, that's the purpose of them; that's how our system works. Fair?
Mr Sellors: I have never found any difficulty with the word "profit."
Mr Christopherson: Right, and I don't either. That's the way the system works. I've asked this of other representatives from the collection agency world and they were, in my opinion, and it's there in Hansard, forthright enough to be completely honest in their opinion, and I have no reason to doubt that yours would be any different.
Is it fair to say that your company would make more money -- and I'm not casting any aspersions on your motivation because I've made the claim that making profit is okay. But is it fair to say that the more files you close and clean up, the more money your corporation would make?
Mr Sellors: I believe there's a relationship between efficiency and profitability. Any company that is efficient and that has a market available to it should be profitable. Any company that is inefficient will likely leave some profit on the table and may even subject themselves to financial difficulties through mismanagement.
Mr Christopherson: The only problem we have in our party -- that's why I've kind of gone through this process -- with moving to the private collection agency is that the raison d'être of going after the bad boss should be to get 100% of the money back, without any question. We just don't see how that can be translated into a private sector that also has, as a legitimate right, to build in a profit margin. So even if it's not an efficient case, for that employee who needs that 500 bucks, the government should move mountains to make that happen, whereas from a corporate efficiency, profit-making point of view, that may not be good business, and therefore the employee loses because the government has taken this out of their responsibility and handed it over to yours.
Mr Sellors: I have difficulty with that, sir, from the standpoint that it is the responsibility of any contractor to enter into an agreement with the client for a responsible work plan, a responsible objective and a responsible collection process. I truly believe the private sector can be helpful in the recovery of additional moneys at no incremental cost to the government, and that would allow the government to redeploy those resources that are on the payroll today to more meaningful tasks. Whether we can collect 100 cents on the dollar or 75 cents on the dollar, I think what we're going to bring to the table is the professionalism and the skill sets to be able to maximize what is available.
As an employer, the quid pro quo could be in play as well if we have an unhappy employee. So I think it sends a great signal to the business community: "Hey, do it right the first time." If we can reduce the number of orders or number of complaints coming to the labour standards people, that means it won't be as expensive to process. Maybe the time lines can be improved. Maybe through the improvement in time lines, the collections can be made faster.
Mr Christopherson: Thank you, and I thank the Chair for his indulgence.
The Chair: Thank you, and not to be unfair to Mr Sellors in allowing all the questioning to be extended, but I'd hoped that the next group would have shown up by now. Unfortunately, we've gone well over our time. But thank you, Mr Sellors, for taking the time to come and make a presentation before us here today.
Mr Sellors: I'm delighted, and good luck to the committee.
The Chair: I think we have no choice but to declare a 15-minute recess and trust that we have the next group show up by their appointed time at 1015. The committee stands recessed until 1015.
The committee recessed from 0958 to 1003.
COMMUNICATIONS, ENERGY AND PAPERWORKERS UNION OF CANADA, ONTARIO REGION
The Chair: If I can call the meeting back to order a little ahead of schedule, fortunately our 10:15 presenters have arrived a bit early. We welcome the Communications, Energy and Paperworkers Union of Canada, Ontario region. Good morning and welcome to the committee.
Ms Denise Norman: Good morning. My name is Denise Norman. I am a national representative with the Communications, Energy and Paperworkers. My colleague is D'Arcy Martin. We're two full-time representatives with our union and we're here today to voice our concern on the Bill 49 proposals.
We are a union that represents many industries across this province -- the telecommunications industry, the media industry and many of the natural-resource-based industries. We have about 45,000 members in Ontario and we have ongoing dealings with major employers such as Bell Canada, Northern Telecom, GE, the Toronto Star, the Globe and Mail, the CBC and TVO. On the energy side, we deal with more of the oil-based industries here in Ontario, and with the paper industry.
Most of these major employers in this province fall under the provincial jurisdiction for safety and health laws, the Employment Standards Act, the Labour Relations Act and all those areas. We have had our differences in the past with these employers; there's no question. However, on a day-to-day basis we really haven't had a lot of problem having to refer to the Employment Standards Act with these employers.
Unfortunately, that hasn't always held true with all of the employers of members we represent. There are smaller workplaces and we feel some of these employers sometimes have little integrity, because it seems we're always having to take them to task, referring to our collective agreement and then end up having to go to employment standards. Really, that's the last kick at the cat we ever get to ensure that workers' rights are upheld and that they don't violate the basic rights we have in this province.
Our position on this issue right now is that the Employment Standards Act is already weighted in employers' favour. We don't have a level playing field right now, let alone with the proposed changes you're introducing.
We know you've had hearings across this province -- you've been a busy committee -- but we really want to remind you about the presentation that was made on August 19 by Gord Wilson of the Ontario Federation of Labour. Their position is very clear -- and we agree with it -- that the standards should not be eroded. They shouldn't be negotiating. We have to have basic standards and they shouldn't be difficult to get. Enforcement should not be contracted out or privatized, at any length. They spoke for us then and we're concurring again today with that position.
We all know that the minister withdrew section 3, subsection 4(2), of the draft, flexible standards, and we hope you continue with that path because we can't destroy what we have as a basis now. As far as we're concerned, if there are changes to be made, let's make them positive. We also need to know reasons why you're making these changes, what is at the end of the tunnel.
A lot of times, the labour movement has been accused of self-interest, of only looking after ourselves. That's true in a way -- you can make that statement -- but we don't apologize for that. We have work to do. We have a responsibility to our membership. We have in the past promoted employment equity. That's an issue that faces us today. Whether you like it or not, it's there. A lot of times our membership didn't even fall within that issue, but we promoted it. It's important to convince my brothers, my male counterparts in my union at my workplace, that it's important that my wages are a reflection of what theirs are. We have to have equal basis on that part.
We don't agree with Bill 49 for the simple reason that we feel it's moving the cost back to the worker, back to the union. You're going to cap the amount of money they're going to obtain under the changes. We all know what time frames are like and how things can get delayed. The worker has no choice in the matter. They're going to be caught in the system. It's too rigid. To modernize for the sake of modernizing is one thing, but there have to be good, valid reasons.
A couple of issues we really want to bring to light have happened in the past. You may remember that back in December 1994 the Oshawa Times newspaper closed. Those were our members. There were 27 members there with more than five years of service, and they were owed severance under the existing act. Those claims are just recently settled. It took that long to get those things out of the way. A third of them, nine people, were over $10,000. They were settled in their favour; they got what they were owed. Not to say what they had to go through, all of the finances and all of the personal tragedy they went through on that part, the existing stuff isn't perfect but at least they got what they were owed. Under your changes now, they won't get that. That's where we are today.
I want to turn it over to my colleague D'Arcy. He'll continue on and just say where he's coming from and what our position on that part of it is.
Mr D'Arcy Martin: We move in page 3 of our brief to a couple of personal statements. I just want to say something personal as we go into it. My uncle was a Conservative MPP. It's depressing for a union rep to have to say that, but we always have difficulties in families. He was my namesake, and we've moved ahead.
Mr Jerry J. Ouellette (Oshawa): Smart uncle.
Mr Christopherson: They evolved.
Mr Martin: We evolved. Where are you?
A number of my family actually remain Conservatives, I'm discouraged to say, even in my own generation. What we're talking about is a community where we can live together, a community where we have some basic standards. As what I would have to call red Tories, my family have always been deeply involved in the community of Hamilton on a voluntary basis, with their own political convictions but with the sense that people have to live together and there have to be some common understandings that we work from.
That's what's demoralizing about this case, this situation we're looking at here. From the point of view of the people I represent -- and heaven knows there are a lot of them in Hamilton, but as Denise pointed out, there are thousands of them across the province in different places -- this pulls the floor out. It creates a climate of anxiety to which you can only respond by being confrontational, because you feel that your right to exist is threatened. That's what this whole climate promotes.
We've got a couple of cases. One I was personally involved in. This is a newly organized workplace up in Markham. I'm not giving the details here. I'm not identifying this employer. I'm not out to score points in that regard, but here's the kind of thing that goes on: It was a non-unionized workplace. You have your basic standards, employment standards, about overtime for the week. Right? The way they would operate it is they would work the people Monday through Friday. On Friday they'd say, "Can you come in Saturday?" The person would come in Saturday and then, if you were a favourite of the supervisor, what would happen is you'd score your overtime and then work Monday through Friday the next week, and all is well, the standards are honoured.
If you aren't a favourite of the supervisor, what happens is that the following Tuesday you're notified not to come in Wednesday, your services won't be required Wednesday, and then they average out the hours through the two weeks, which is the biweekly pay period, and you wind up, having worked the Saturday expecting overtime, at the end of the two weeks you get a cheque for straight time. Are you following me on how that works? It's a nickel-and-dime sleazy little trick to play favourites with some people and to punish others. That's the kind of thing that exists under the existing legislation, and because you've got too weak an enforcement system these kinds of practices continue. If you stand up against it, you're in trouble. People don't stand up against it until eventually they get organized and form a collective voice, a union, and we move from there.
That kind of thing shouldn't require a union. That should be something which is a basic floor to which all workers are entitled, that they're not going to get jerked around for nickels and dimes. I think the system we have in place now creates punishment for the honourable employers and an incentive for the fly-by-night operators. When you eliminate the floors and start making things flexible, that's where we're headed. That's the case that's on the bottom of page 3.
As Denise has pointed out -- we're in the middle of page 4 -- this kind of nickel-and-dime, fly-by-night operation is covered up in the current climate by buzzwords like "globalization," "competitiveness," "right-sizing" and so on. We're dealing with organizations that are right-sizing -- big ones. We're dealing with ones that are globally competitive. Northern Telecom is not the corner store. These are major operations. Some of them have unpleasant practices and we deal with those. Sometimes the union doesn't pull our own weight and we have to deal with that. But the people we're dealing with are globally competitive. They're right-sizing and they're not touching minimum standards. They're operating so far above the floor that these standards are not even an issue, and don't tell me that to be competitive you have to go below minimum standards. I can introduce you to all these companies that are listed on the first page of our brief that are globally competitive. Minimum standards are not about that; they're about giving permission for fly-by-night little operators to jerk people around for nickels and dimes.
Here's a situation on the bottom of page 4, another one. The person has been working 22 years. She is told at 5 pm on a Friday that the outfit is going to be shut. She hasn't got wages. She hasn't got severance. She's having to fight this stuff through. There are loopholes we won't trouble you with, but she would be in a situation where all of the weight of that would fall back on her as an individual and on her union. The union is not equipped for that. The union was not set up for that. Our understanding was that there was a floor above which we were going to operate, and we could operate in that way. We're dealing with issues like racial harassment, sexual harassment. We're operating above the floor too, and you're trying to drag us back into having to deal with overtime, having to deal with vacation entitlements. When people lose their jobs and they're hurting and they're demoralized and they're financially losing the basis of their livelihood, they're at their weakest possible point. You're dumping it back on the union to do that work?
In conclusion, we feel that this great leap backwards is really inappropriate, unnecessary. It has nothing to do with productivity. It has nothing to do with globalization. It has nothing to do with competitiveness. In fact, we do deal with some organizations directly on an ongoing basis that are of this smaller character. We don't just deal with the big shops. We've got a courier service, in fact a couple. We're dealing now with telemarketing sweatshops, we're dealing with nursing homes, we're dealing with co-op housing, people who do maintenance, little operations with three or four employees.
In those places, this has nothing to do with globalization and competitiveness either. Nobody else is going to come in from Taiwan in order to provide the maintenance in the co-op. The courier service, by its nature, is a localized outfit; it does have a national and international chain. But what's happening here is that people are taking advantage of the rightward swing in the political climate to roll back gains and get back to the good old days when they could be in the saddle and they could run things. It's unacceptable.
We say on page 6 that we deal with different employers, small and large, profitable and unprofitable, forward-looking and Neanderthal, and you're building something for the Neanderthals. The unscrupulous are rewarded, the honourable are punished. Instead of dealing with real moving forward -- we're not just trying to hang on to the history here. We're not here presenting from nostalgia. What we're saying is yes, let's move on. Let's move on to telework. Let's deal with these telemarketers. Let's deal with the franchising, self-employment, home offices, the real challenges of employment standards, instead of taking the pieces that are already working in the places that we now operate and rolling those back so that we have to argue about stuff that we resolved 30 or 40 years ago.
We cite as our final authority the eminent labour relations expert Lily Tomlin, who says that in the rat race, even the winners are just rats. The people of Ontario deserve a little better than that from the political leadership. That's our presentation, Mr Chair.
The Chair: Thank you. I didn't want to cut you off. We've just gone over the 15-minute mark, but thank you very much for taking the time to come and make a presentation before us today. We appreciate it.
DURHAM REGION COALITION FOR SOCIAL JUSTICE
The Chair: I'm informed that one of the earlier groups is now with us, the Durham Region Coalition for Social Justice. I invite them to come forward, please. Good morning. Welcome to the committee.
Ms Colleen Twomey: Good morning. Sorry we're late.
The Chair: The clerk is making copies of the presentation for the committee members. You'll have that briefly.
Ms Twomey: The Durham Region Coalition for Social Justice welcomes this opportunity to make submissions to the standing committee on resources development regarding Bill 49, amendments to the province's most fundamental workplace standards legislation.
The Durham Region Coalition for Social Justice is composed of individuals and representatives of community groups such as churches, social activists and labour union locals. We are also a non-partisan, non-profit organization. We have gender parity and equal representation from both community groups and individuals. We are affiliated with the Ontario Coalition for Social Justice, Action Canada Network and the Canada Health Coalition.
Our role is to promote issues of social justice and environmental improvement. We aim to counter those who would subvert democracy and compromise the quality of life all people have a right to expect. It is the position of the Durham Region Coalition for Social Justice that the employment standards legislation is among the most fundamental pieces of labour legislation for ordinary people in this province. The purpose of this legislation is to provide minimum workplace standards for all workers in Ontario, including minimum wage, the legal workweek, overtime, vacation pay, pregnancy leave and notice to protect workers from the exploitation handed out by the province's worst employers.
In fact, Bill 49 opens the door to a new world of opportunity for employers to cheat and steal from their employees. Furthermore, we submit that any amendments to this legislation must enshrine a basic principle of continued improvement in the employment standards of workers so that they may be protected from the excesses of the labour market.
The truth is that Bill 49 is not just a few housekeeping changes but involves drastic changes in the enforcement of employment standards, limits on claims, the privatization of the collection of claims, new limits on claims and employment standards protection being stripped from collective agreements, although we will not be speaking to this last amendment.
The Durham Region Coalition for Social Justice represents employed as well as unemployed people. Although Bill 49 is particularly detrimental to the rights of the working people of this province, it is also harmful to society as a whole.
Limits on claims: Under Bill 49, there will be a $10,000 cap on claims. However, no minimum has been announced. We have deep concerns over this amendment, as workers are often owed more than $10,000, even in sectors known for low wages such as the garment industry, domestic work and foodservices. The minimum will also insult and be harmful to low-wage earners. Recent cases include a garment worker owed over $20,000 in wages, vacation pay and termination pay, and domestic workers owed over $10,000 in unpaid overtime pay, termination, vacation pay and severance. In fact, workers must accept this limit on their claim if they want enforcement from the government.
Employers are given permission to make it a practice to keep their violation of the Employment Standards Act under the minimum amount in any six-month period. To collect a claim above $10,000, a worker must launch a private lawsuit in civil court. The Ontario legal aid plan does not cover employment law, and very few legal aid clinics will accept these cases. Workers who can't afford lawyers simply won't have rights under the Employment Standards Act. Why should an employer who has stolen more than $10,000 from an employee be let off the hook for paying it? Shouldn't they be penalized instead of rewarded?
The following is a real account of one of our members and her ordeal with an employer in commercial publishing:
"The book publisher I worked for at my last paid job was not the typical publisher with a low profit margin, but a very profitable commercial publisher with business connections with some of the high-profile CEOs who are busy putting people out of work through layoffs and corporate takeovers. I came to my job there with an extensive university education and courses in the book publishing business, and no one at our company had a written contract. As executive assistant to the publisher, I frequently worked many 60-hour weeks, although at the time of hiring, my hours were to be 35 per week. I was on a salary of $25,000. I really had no job description and for 8.5 months I was a temp filling in for a person on maternity leave, until I was made permanent and had medical insurance and other benefits.
"The staff turnover was well over 100% by the time I was fired without notice, with two weeks' pay. Nervous breakdowns and high rates of absenteeism were common in my workplace. Reporting directly to the CEO and co-owner of the company, I was not permitted to attend an appointment which could only be secured during office hours with a mammalogist, even though this was for a scheduled mammogram following a breast tumour operation. I was fired when I asked for a promised job review and salary raise. Although I had performed as described, putting in many hours of overtime, and had never had any indication that my performance was inadequate, I was fired without notice when I asked for this review. At this time, I had also been given a letter from the office manager in support of a new mortgage on a first house.
"At the time, I suggested to my employer that alternately I would like to resign, and if firing was insisted on, I had a valid employment standards case. My employer laughed at this and under these conditions, I retained a lawyer. A year and a half later, I received an additional payment of four weeks' salary from my former employer in an out-of-court settlement. Today, I would not have access to legal aid to resolve this case. As it was, six weeks' pay has not gone a long way to compensate for nearly two years of unemployment as this is my status at present."
Time limits on claims: Under Bill 49, workers are cut back on the amount of time they have to file a claim with the ministry from the current two years to six months, but still up to four years' wait for the ministry to investigate claims and collect money owing. The initial two-year filing period for recovering money owed to employees is an essential component of enforcing the current set of rights found in the act. Despite the act's prohibition against disciplining or discharging employees for launching standards problems, understand their vulnerability in filing a complaint while maintaining employment with their employer in these circumstances.
The current law allows for these employees to recover up to two years of wages while they worked for employers that were violating their rights. Thus, past violations of the law are not left unaddressed. Consequently, over 90% of employment standards complaints arise after workers have left their employment, and the average time for a claim to be considered by an employment standards officer is nine months.
These employees tolerate violations of the terms or conditions of their employment, and if not, they are terminated. Given the difficulty in finding employment in a depressed labour market, leaving employment is often difficult and can take long periods of time.
In contrast, the two-year period allowing the Ministry of Labour to initiate a proceeding and two more years to prosecute a claim to recover money owing to an employee is excessively long. This period considerably delays, and therefore denies, justice for workers forced to linger through the complaints process. However, an employer's time to appeal an employment standards officer's decision is increased from 15 to 45 days.
Ms Judy Mitchell: Under Bill 49, the Ministry of Labour will not enforce the act in situations where it deems the violations may be resolved by other means. Bill 49 forces workers who file claims to decide to use either the Ministry of Labour claims process or go to court. They will have to make this decision at the start, often without knowing which option would be better for them.
Will Ministry of Labour staff explain all the implications of this decision in the first language of the worker? How many lawyers are willing to explain those implications for free? Will most people find this intimidating and confusing? Their decision cannot be changed. They cannot get legal aid for taking employment law cases to court.
Since employers cannot be made to pay twice for the same thing, why force employees to choose between filing a complaint with the ministry or following the process of common law within the courts? Some employees take their employers to Small Claims Court for money owed under the Employment Standards Act because they need it sooner rather than later.
There are often lengthy delays before employment standards claims investigations begin. The investigation takes anywhere from three to 12 more months, and then the employer can still stall payment. The way to solve this problem is to make sure that Employment Standards Act claims are resolved in a reasonable period of time.
Some employees sue for unjust dismissal, and the courts often award more termination and severance pay than the Employment Standards Act actually calls for, but because of the legal costs, this law is only practically available to long-service, high-ranking employees. It seems that a better way to protect the most vulnerable workers would be to bring the Employment Standards Act into line with common law.
Also under Bill 49, unionized workers will not be able to make a claim through the ministry but will have to file a grievance. Unions, and not the government, will have to enforce employment standards for their members. Denying publicly funded enforcement mechanisms under the Employment Standards Act amounts to flagrant discrimination against unionized employees; it also prohibits certain segments of the taxpaying public from having access to the publicly funded enforcement mechanisms under the act.
Access to the Employment Standards Act by unionized employees was an inexpensive and relatively expeditious method of proceedings, having proved useful particularly in situations of workplace closures and with issues such as severance and termination pay. If the standards in the act are truly minimum standards, they should be enforceable in a like manner in respect of all employees in the province.
Arbitration is not a substitute under the Employment Standards Act because there is no investigative component by a neutral third party in the arbitration process. The effect of the proposed amendment is that the enforcement of public legislation has been contracted out to workplace parties. In other words, it has been privatized. If cost savings need to be made, they should be done fairly, not in a way that punishes a certain segment of the workforce disproportionately.
The Ministry of Labour is notoriously weak at collecting moneys owed to employees by employers. In 1995 the Ministry of Labour's collection department was closed and its duties given to already understaffed regular investigation departments.
Bill 49 gives private collection agencies the job of collecting money owed to workers by their employers. These agencies can push for a quick and lower settlement to get their own fees sooner. Workers are often encouraged to accept incredibly low offers by employers. In one case the Ministry of Labour wanted workers to settle for five cents for every dollar owed. Anyone who has had expertise with private collection agencies knows that the prime objective is to obtain a quick settlement.
The idea of private collection agencies presents some pretty horrific pictures. Certainly the Durham Coalition for Social Justice is very concerned that the proposed amendments will reduce employees' entitlements under the act, and we have stated repeatedly that the most vulnerable employees in the province will suffer the greatest disadvantages.
Clearly the government has signalled that it has little interest in maintaining employment standards for all its citizens, and we have to recommend some administrative changes. We recommend that anonymous complaints be allowed, with full investigation audits of employers' practices triggered by anonymous complaints; mandatory posting of the act in all workplaces; and severe penalties for firing a worker for attempting to enforce the act. Thank you.
The Chair: Thank you very much. We appreciate your taking the time to make a presentation here before us this morning.
CANADIAN FEDERATION OF INDEPENDENT GROCERS
The Chair: With that, we'll move to a presentation from the Canadian Federation of Independent Grocers. Good morning. Welcome to the committee.
Ms Mary Davies: Good morning. My name is Mary Davies. I'm with the Canadian Federation of Independent Grocers. Joining me this morning is Grace Galati, one of our retail members. They own Galati Bros Supermarkets. They have six stores here in the Metro Toronto area. Hopefully Grace can help with any questions we may have following the presentation.
The Canadian Federation of Independent Grocers appreciates the opportunity to provide input on the perspective of independent grocers as small business operators across the province into the current and future focus of the Employment Standards Act. The act plays a critical role in ensuring that clarity and fairness characterize the relationship between employers and employees.
The provisions and regulations of the act have evolved over time, and we believe that this evolution is an ongoing process as the factors characterizing our marketplace and the priorities and values of society continually change. Therefore it is necessary and timely that the government review and update the act to ensure it is relevant and operating effectively to meet the needs of employers, employees and the government.
The Canadian Federation of Independent Grocers is a non-profit trade association founded in 1962 to further the unique interests of Canada's fully independent and franchised supermarkets. Of CFIG's 3,800 members across Canada, 34% are located in Ontario, which represents over $4 billion in retail food sales in the province. CFIG members are located in every urban and rural community in Ontario and employ more than 50,000 people. Members include Galati Bros Supermarkets, Highland Farms, Longo Brothers Fruit Markets, G.A. Love Foods, Farm Boy, IGA, Your Independent Grocer, Knechtal, Mr Grocer, Food Town and Loeb, to name a few.
In announcing the first part of a two-phase reform process, the labour minister stated that the act will "cut through years of accumulated red tape, encourage the workplace parties to be more self-reliant in resolving disputes and," most importantly in our view, "make the act more relevant to the needs of today's workplace." Since the start of the 1990s many retail sectors of our economy have been seriously affected by major competitive pressures. It's important to understand what some of these pressures are as they influence some positions we have taken in relation to the Employment Standards Act.
(1) There is continued economic uncertainty. Despite Ontario's economic recovery, consumer confidence, thus spending levels, have continued to remain low and price deflation has characterized the grocery category.
(2) Increased competition from new retail formats has also had an influence. The establishment of the large discount format stores in the Ontario market and the growth of established mass merchandisers that now carry a substantial portion of grocery products on their shelves have provided formidable competition to the traditional grocery channels.
(3) Overstoring: An excess of retail square footage continues to characterize the grocery industry as square footage among traditional supermarkets continues to grow as a means of capturing market share even when, in some areas, the current population levels do not sufficiently cover this support.
Finally, high operating and input costs for business has also played a role in the competitive position. There are two areas in particular which increase costs for independent grocers. First, independents tend to offer a higher level of service as a competitive advantage -- for example, more department clerks and front-end personnel -- and as a result, proportionate to larger competitors, independents experience higher labour costs. Second, due to new retail formats entering the market, many grocers have of necessity invested in major renovations or new stores to remain competitive. Obviously, building and new equipment are a costly venture. In the long term, hopefully it will prove to be useful investment.
Collectively these factors have created an extremely difficult economic environment for independent grocers and as a result have required grocers in both rural and urban communities to keep their costs in line while balancing the needs of the customer. Labour accounts for the single greatest cost for the grocer based on wages, benefits and all payroll taxes. While a specific review of the provisions will be taking place, as we understand, in the second phase of reforms, there are two key issues for independent grocers that we want to address up front in this process.
The first is the setting of the minimum wage. During the first half of the 1990s, independent grocers were not only forced to reduce the overall number of people they employed, they also had to replace a number of full-time employees with part-time workers. This was not only due to market conditions and increased payroll taxes but also the result of major increases to the minimum wage within a very short period of time. In moving forward, an essential reform is to depoliticize the policy of minimum wage increases and establish affordable benchmarks for determining what the minimum wage level should be at any one time.
The second issue we want to mention relates to Sunday shopping as a regular business day. While not initially supported by all retailers, Sunday opening has become a regular business day. For many grocers, Sunday has become one of the top three days in terms of sales volume for the week, but it is important to note that Sunday opening has simply spread the existing sales over seven days instead of six. As a result, independents are seeking to have Sundays treated as a regular business day rather than a voluntary day for employees. Because employees can presently opt out of working on Sunday, it creates scheduling problems; therefore many employers have to pay premiums to obtain the labour required.
CFIG will be seeking these changes to the act as a part of the phase 2 reform process.
In responding to the reforms in Bill 49, while there are a number that CFIG supports -- including the use of private collection agencies if it ensures efficiency and collection rates improve, and the setting of minimum and maximum amounts for employment standards claims -- there are four areas of particular interest to the independent grocer.
The first area deals with the limitation periods for claims, proceedings and appeals. CFIG is very supportive of the proposed revision in Bill 49 which would limit the ability of employees to file claims with the ministry up to six months. We agree that this change will make claims easier to investigate and settle, as the timely gathering of information will ensure that it is accurate and that the witness's testimony is still relevant. The older the complaint, the longer and more difficult will be the investigation with its resulting higher costs. In addition, this change will bring the Ontario provision in line with other provincial jurisdictions.
CFIG also supports the proposed change to increase the time limit to appeal orders from 15 to 45 days. The increased appeal period provides a more reasonable time in which to allow the parties: (1) to negotiate a settlement in lieu of an appeal; (2) more fully consider the merits of filing an appeal; and (3) make the necessary payment of the amount of the order and administration costs to the director in order to apply for the appeal.
The second issue deals with negotiation of employment standards and collective agreements. This proposed amendment is closely linked to the outcome of the more detailed review of the Employment Standards Act as part of the phase 2 reform process. Some of the flexibilities that employers with both union and non-union employees are seeking in such areas as hours of work, overtime pay and severance pay, to name a few, will hopefully be part of a revised Employment Standards Act.
With this goal in mind there is still merit in investigating the opportunity for employers and employees to negotiate their own standards for hours of work, public holidays, overtime pay, vacation pay and severance pay if the negotiated standards, as a package, provide greater rights or benefits than those in the act.
The ability to assess greater rights or benefits as a package will help achieve greater self-reliance and flexibility, but there are a number of questions in terms of calculating the value of one benefit over another, for example. CFIG supports the opportunity to consider this further in the second phase of reform.
The third item addresses the avenues for addressing alleged violations of the Employment Standards Act.
As a first line of dispute resolution, CFIG supports the granting of power to the employment standards officer to resolve a complaint upon the mutual agreement of both parties before the complaint investigation is completed and that these settlements are binding on the parties. This so-called in-house dispute resolution mechanism should be more efficient and effective in resolving complaints, resulting in lower costs for employers, employees and government.
Currently non-unionized employees are able to have employment standards disputes dealt with by the courts as well as by the employment standards branch. Unionized employees are able to file grievances under a collective agreement to be dealt with in the grievance and arbitration process and may also file complaints with the employment standards branch.
The ability for employees to take concurrent action can be as unmanageable and costly for employers as it can be for the other parties involved. In addition, in cases where a claim is made in the courts and to the employment standards branch, public resources are being tapped at two separate levels. This can be inefficient and unnecessary. Individuals should always be able to exercise their right to pursue their case in the courts but not as a multiple venue to determine where the best settlement can be reached. CFIG agrees that in cases of disputes involving non-union employees, they must decide whether to file their claim with the ministry or pursue a civil action in the courts.
Finally, clarifying entitlement to pregnancy and parental leave: At present, many grocers with both union and non-union employees already ensure that employees taking pregnancy or parental leave continue to accumulate vacation time during their absence from work. Therefore, this amendment to the act supports an existing practice of many employers. But CFIG members do not support accumulating vacation entitlement for a workplace leave of absence for any reason other than pregnancy or parental leave. This diminishes the effectiveness of the vacation entitlement provision and can be misused by employees. In addition, this practice would be unfair to those employees who have worked the full 12 months and are clearly entitled to an increase in vacation time. Therefore, this amendment should only apply to employees taking pregnancy or parental leave.
In conclusion, CFIG appreciates the opportunity to provide input into the proposed changes in Bill 49 and supports the two-stage process for the employment standards reform. This review process is timely, and we believe that many of the initial phase 1 amendments will encourage workplace parties to be more self-reliant and ensure that the act continues to be more relevant to the needs of today's workplace.
We would urge consideration of the issues and questions that we have raised to clarify the proposed amendments and ensure that they meet the needs of small businesses like independent grocers.
The Chair: Thank you very much. This affords us one minute per caucus for questioning.
Mr Lalonde: Thank you for your presentation. I have one question. You say that you agree with the limitation period for the claims, but you didn't touch at all on the period for settlement and also the two-year period that the employer will have to remit the amount of money owed to the employee. Don't you think one of the reasons we only had 24% of successful settlements in the past was because of the lengthy period of time that was given to the employer to settle and also to do all the research, the investigation?
Ms Davies: Yes, actually, we wouldn't disagree with that. While we didn't touch upon that in our statement this morning, we do agree that it's something that needs to be tightened up and that the whole area relating to non-collection is an issue that does need to be addressed by the ministry in this reform process.
Mr Christopherson: Thank you for your presentation. I would assume, and I mean this quite sincerely, that your members would not be interested in being able to compete by being able to pay below minimum wage. That's not one way that you'd want to be able to compete with your competitors.
Ms Davies: No, it's not.
Mr Christopherson: Right. I think, then, it's fair to say that we've established the idea that there are certain minimums that workers are entitled to, and the Employment Standards Act, of course, is the workers' bill of rights where there's no union. That's all they have.
When I looked at the competitive issues that you face, the overwhelming majority of them have nothing to do with the actual workers themselves. So one of my difficulties is understanding, if you agree that there are minimum standards that no one should have to work under and that most of your competitive things are not related to that particular law and that that's the absolute minimum standard that's around, why would you support a piece of legislation that lowers those minimum standards, which this does?
Clearly, presentations all across the province have shown that certain rights and minimum standards that workers have, particularly non-union, as individuals, are being taken away by Bill 49. I mean, you don't have globalization to use as an argument, because a store on the corner is not going to be competing with a store in Hong Kong. Would you not agree, though, that we ought to maintain absolute minimum standards which no worker should have to work below in the province of Ontario?
Ms Davies: Absolutely. I don't think we've said otherwise. We strongly support the need for a strong Employment Standards Act. So my question back is, where has Bill 49 reduced the critical employment standards?
Mr Christopherson: A number of issues have come up. First of all, there's the inability now of a worker to claim back to two years' money they're owed. This is going to limit it to six months. The government's giving itself the right to regulate a minimum claim level, which means they could peg it at $100 or $200, and if your claim is below that, the ministry will not move it for you; they will not move that file along. If you can't afford to hire a lawyer and you can't afford to take time off work, that money's going to be gone. We're dealing, of course, with the real bottom-feeder employers, I grant you that, but these are the minimum standards that we're talking about. There's now going to be a cap of $10,000 on how much the Ministry of Labour will fight for a worker to get back. Right now, there's no cap.
So there are three clear areas that we've heard over and over in every community where rights are being taken away and the standards are being lowered, and by offering such blanket support for Bill 49, you're in agreement with that.
Ms Davies: Just to respond and to close, we would disagree with your points that those items are lowering the standards in terms of shortening the claim period or in setting the maximum. That maximum is substantially over what was set in 1991, prior to eliminating it. Looking at our own industry, we think that more than addresses, for the employee, claims being made. So we would disagree.
Mr Christopherson: Fair enough, but by that argument we should go back to the 1900s legislation, because that was once different too. We're not supposed to move backwards.
Mr E.J. Douglas Rollins (Quinte): Thanks for your presentation. It's reassuring to think that with the wisdom that the government has seen in Bill 49, there are some people out there who support it even though our opposition across the floor totally disagrees with the ability that you as a private individual can conduct a reasonable amount of goodwill between you and your employees to be able to have to work on Sundays and holidays and things of that nature. You people pay extremely well in many cases. I think it's imperative to have that kind of expression brought forth. Believe me, there are some bad bosses out there, and there are probably some in your industry too, who use their advantage over them, but there are many who aren't. Do you know of many complaints through the standards through your group or not, or do you hear of them?
Ms Davies: We did a fairly extensive survey of our members. There are 1,300 in total across the province. Not to say that you won't always find bad apples in any sector -- that always has to be addressed -- but we clearly had very strong support from the majority of the members for the proposals put forward in Bill 49 and for looking at the next phase.
One of the things that clearly came forward, and Grace can probably back this up as an employer with six stores, is how critical the Employment Standards Act is in ensuring that it's black and white in terms of what is acceptable and what is unacceptable in the workplace.
The Chair: Thank you both for taking the time to make a presentation before us here this morning.
RETAIL COUNCIL OF CANADA
The Chair: That leads us now to the Retail Council of Canada. Good morning. Welcome to the committee. Good to see you again.
Ms Elizabeth Mills: Thank you. My name is Elizabeth Mills. I'm the director of government relations at the Retail Council of Canada. We appreciate this opportunity to address the committee this morning to reflect our views on Bill 49.
The Retail Council of Canada is a national not-for-profit trade association representing 7,000 Canadian retailers, 90% of whom are independently owned and operated. We represent over 65% of Canada's retail store volume. Affiliated with our council are approximately 100 sectoral-specific and regional associations whose members, among them, account for a substantial additional percentage of retail volume.
The retail industry accounts for approximately $187 billion in sales, of which Ontario represents 40%, or $75 billion. The Ontario retail sector employs approximately 532,000 employees. The Ontario retail sector employs one out of eight workers. It is estimated that the top 40 retail firms in Ontario employ just over 50% of the workers in the province in the retail workforce, while the smallest 80% of the retailers employ less than 12%.
The retail industry's interest in ESA reform stems from the characteristics that make the industry unique and challenging. In fact, while the framework of the ESA has not changed in many years, the retail industry itself has been constantly changing and challenged. The myriad of exemptions and exclusions that have been made to the ESA outside of that framework in the past only highlight the need for a comprehensive reform. The Retail Council of Canada views the changes proposed in Bill 49 as a point to begin a much-needed process of more comprehensive review, and the retail council is glad this government intends to progress to a second phase of reform.
The retail sector is a fast-paced sector characterized by constant change and numerous, ever-evolving opportunities. The industry's vibrancy is evidenced by the ongoing proliferation of new store types and configurations, from the entry of big-box category killers, wholesale clubs and specialty niche retailers to the emergence of regional power centres and, though still embryonic, home shopping on cybermalls.
The retailer's goal is always to keep one step ahead of the competition without losing sight of the consumer, who is increasingly demanding top value, selection and convenience. Retailers are responding by honing their marketing, pricing and merchandising policies, giving customers an expanding range of shopping options.
There are other challenges testing the mettle of retailers today. Whether economic or demographic in nature, retailers are responding to the challenges facing the industry by reducing their costs to keep product prices competitive. They are computerizing their operations, adopting just-in-time supplier policies, launching strategic partnerships with vendors and exploring new promotional avenues, including database marketing, to better understand and target the consumer. Pioneering efforts are also being made in such non-store retailing areas as CD-ROM catalogues and the Internet. All of these pressures demand greater flexibility and adaptability to rapid change.
The retail workplace is a dynamic environment for both the retail employee and the employer. In our workplaces, work schedules are flexible to meet the customer's needs. Shopping for food basics to large appliances, clothing to luxury items occurs in a myriad of settings and time frames. The retailing industry also relies heavily on the use of part-time employees to serve the demands of customers at the lowest cost. This reliance stems from Canadians' very uneven shopping pattern habits, with surges of customers shopping on certain days and during certain hours, never one that is constant.
For many merchants there's also a seasonal pattern which requires varying levels of staffing for different times of the year. The flexibility of part-time workers meets the needs very well, at a competitive cost. Part-time retail employees are part of a unit's employment pool. This concept results in a very different employment relationship than is traditionally conceived of. Part-time employees in a unit's employment pool constitute a group of people who will normally be scheduled to work a certain number of hours per week at times agreed to between the employee and the manager. There's considerable flexibility and the employees, both casual and regular part-time, can and do adjust to the timing of the number of hours. Additional hours may be offered, which the employee is free to accept or decline. Employees may trade times with the agreement of management, and times of work may be varied with the agreement of both the employee and the manager. This arrangement serves the retailer very well in permitting both flexibility and cost control. It also serves the many needs of employees who experience other demands on their time and value the flexibility it offers, especially to students and second-income earners.
The challenge of ESA reform is to facilitate this diversity and flexibility in the best interests of both parties and to provide appropriate, effective protection. It is also evident that a traditional command-and-control model does not work, as this system is both unresponsive, inappropriate and ineffective.
The kind of flexibility that allows workplace parties to compete and thrive is what we are striving for. Innovation within the workplace is the hallmark of success in retailing today. These same characteristics need to form the basis of a comprehensive review of the ESA that brings into focus the answer to basic questions: What is the objective of the act and its regulations, and how do we achieve those objectives with flexibility and innovation that attracts and encourages economic growth and employment in retailing, an industry that is struggling?
The Retail Council of Canada supports a two-stage process of reform. This first stage deals primarily with efficiencies in the system. The second stage, as outlined by the government, offers a more comprehensive program dealing in its effectiveness. The goals of reform can only be realized when the comprehensive review of the ESA is undertaken to update and modernize the framework of the act to match the current and future potential of Ontario's workplaces and industries. Bill 49 is a good first step and recognizes the role of legislation in protecting effectively the interests of employees. It makes the system more efficient. The second stage of reform could make the system more effective in different and new environments.
The Retail Council of Canada supports the following goals of reform:
This bill should continue to protect minimum employment standards in Ontario. The changes proposed are a first step towards improving the protection of minimum standards in Ontario as the Ministry of Labour is allowed to focus its resources on those most vulnerable.
This bill should also allow the Ministry of Labour to effectively and efficiently use its resources to improve administration and enforcement of the standards to vulnerable employees; to reduce the ambiguity of interpreting and understanding the ESA by simplifying definitions and using plain language; to streamline procedures to ensure complaints are resolved fairly and expeditiously.
These reforms should encourage greater self-reliance and flexibility among the workplace parties as we are challenged.
The government has indicated that the proposed changes to the ESA, as outlined in Bill 49, are only a first step to meet these goals. This provides us an opportunity to examine Bill 49 against these goals of reform and measure the magnitude of work that remains to be achieved in phase 2 of reform.
Does Bill 49 change the essential minimum standards? In our view, Bill 49 does not change any of these standards. There will be an opportunity to discuss these standards later this year. However, by streamlining the administration of the act in several areas, it does allow the Ministry of Labour the opportunity to better focus its resources on the enforcement of standards and the protection of employees.
Does Bill 49 make it easier to understand? Yes, the changes made to the entitlements, particularly around pregnancy leave and parental leave, offer greater clarity and understanding. It is, however, just such clarity that employees and employers across the province are seeking in other areas of the act. More plain language and a modern framework will go even further to create an ESA that can be easily communicated so workplace parties can clearly understand their rights and obligations under the act.
Does Bill 49 target enforcement and streamline administrative systems? Yes. This is perhaps the single greatest contribution of Bill 49. The introduction of limitation periods, maximum and minimum claim amounts and the choice of procedure to pursue -- the ministry or the courts -- settling disputes before investigation, the use of private collection agencies and others better leverage the impact of resources, as they are limited, towards its legislative responsibilities.
Does Bill 49 promote innovative approaches that foster self-reliance? I think Bill 49 does this. It encourages and asks unionized workplace parties to work more cooperatively together. We support the use of the unionized grievance procedures, as outlined. It will encourage dialogue and creative solutions to evolve first from within the workplace. In stage 2 of reform, it would be beneficial to examine and assess the opportunities for non-unionized workplaces to use their own internal grievance methods as well. Bill 49 therefore offers a hint of flexibility that should be considered in all workplaces.
In examining the limitation periods for claims proceedings and appeals, retailers view this as a first positive step that brings timely resolution to workplace issues. The six-month limitation period moves Ontario in line with the other provinces where national retail chains, both grocery and general merchandise, operate -- Alberta, British Columbia, Manitoba, Newfoundland and Nova Scotia. It adds clarity to the investigation of claims, due to the timely reporting and evidence collection.
Minimum and maximum amounts for employment standards claims: The retail council would expect that the $10,000 maximum limit amount to cover the majority of claims in the retail trade is appropriate. The retail trade is predominantly part-time and one that pays modest wages. Where this threshold is exceeded, it will more likely involve a senior employee and/or a more complex dispute, where a court case may be a more appropriate avenue for addressing alleged violations of the Employment Standards Act.
The retail community, whether unionized or non-unionized, would prefer to resolve some disputes internally, either through the collective agreement grievance procedure or an approved internal dispute mechanism. It encourages communications and fosters self-reliance among and between the workplace parties. The preference is to resolve disputes cooperatively, rather than use formal and expensive adversarial methods. This provision allows those most informed about the issue to react in a responsive way that leads to creative and tailored solutions for the workplace. The retail council believes this will be beneficial for the union and non-unionized workplaces, and employees in particular.
The provision for the claimant to elect either the ministry or the court will eliminate the notion of shopping for the best adjudication, eliminate duplication and focus the resources of the ministry on those employers and employees seeking assistance, whether that's information or support.
The authority to settle complaints at the outset will provide officers with greater flexibility, expedite dispute resolution and therefore, again, reduce the cost of retailers, employees and the ministry.
We support the use of private collection agencies. This, along with several other measures like clarifying the entitlement to pregnancy and parental leave and the additional administrative measures outlined in Bill 49, adds to the efficiency of the act and actually supports the one principle that retailers are all commonly supporting too, which is that consistency and clarity are needed.
Bill 49 is urgently needed, but more urgently needed is the second phase of reform. The ESA is particularly out of date with respect to the retail industry's current and future challenges. Like the retailer, the ESA needs to keep Ontario one step ahead of the competition without losing sight of the consumer: employees and employers of the province who are increasingly demanding top value, selection and more convenience of access. Bill 49 is a positive first step.
As the Ministry of Labour introduces these proposed elements of flexibility, there will be some workplaces which will require assistance and will seek direction or guidance as the relationships in the workplace change.
The Retail Council is also looking forward to the upcoming discussion paper that the ministry has announced will be released later this fall to continue the process of reform.
All of this is respectfully submitted.
Mr Christopherson: Thank you very much for your presentation. You may have seen in the media over the last couple of days the sweatshop fashion show that I think made quite an impact on the people here. There is now an effort under way to establish ethical practices in sourcing and production by women's apparel producers and sellers. I'm advised that there was a questionnaire sent out to 40 of the senior officers of major women's apparel retail chains in Canada, many of those here in Ontario. I wondered if the people who are pushing to advocate those ethical practices being established can count on the retail council, not only to be supportive, but to be an active participant in ensuring that those kinds of ethical practices are brought about. Can I ask you what your level of commitment would be and what you might be prepared to do to help?
Ms Mills: With respect to the questionnaire, I was actually advised also by a group this morning. I received a copy of a letter that was sent to the president of the Retail Council of Canada outlining their request for further assistance. Certainly, the Retail Council of Canada, along with the experience that I think is probably more public in the United States -- several sweatshops have been exposed in that area as well. We will be pursuing what we think is an appropriate path of support. We are concerned about ethical standards within the industry. This topic has been raised by our members and the retail council is looking at options that we can do to explore it. I will commit to get back to you, Mr Christopherson, and the committee, if you would like, about the action we will be taking.
Currently, our members are also seeking information from their national headquarters across the border, as well as their counterparts in other countries, to see what is the appropriate venue for retailers who often purchase their goods offshore to ensure that when we are making purchases, to the best of our knowledge, our suppliers are treating their employees with the same respect that we expect our employers in the province to do.
Mr Christopherson: Good. That's encouraging. Would you be prepared to meet with the group to talk about these sorts of things in a face-to-face meeting?
Ms Mills: I would certainly go back to the retail council and ask its members and our president to do that. I think that would be a good idea.
Mr Christopherson: I think it would be very helpful if you could do that.
Ms Mills: No problem; I'll be happy to address that question to them.
Mr Baird: Thank you very much for your presentation. We appreciate it. You brought up on page 8 of your brief the issue with respect to private collection agencies. I guess one of the biggest disincentives to both workers coming forward to make a complaint and the employers who are ordered to pay money is that right now we are only collecting 25 cents on the dollar. Workers say, "Why would I bother going through the whole process and fearing retribution from my boss if I came forward?" if they know that there is only a 25% chance they are going to get the money that is owed to them. Conversely, it becomes a bit of joke among employers. Why would any unscrupulous employer pay if they don't have to? Regrettably, the last two or three governments, ours included, haven't been able to collect more than 25 cents on the dollar. In your experience, do you think that bringing private collection agencies would provide a greater incentive for those companies that are ordered to pay up?
Ms Mills: There's an incentive to pay up, but from our side too there's another view. We use private collection agencies. Our companies, if we have purchases through credit cards or other options for payment, would also have experience with and exposure to this system. The introduction of the ministry using those same services is one that companies would be familiar with and I think the employers would favourably look at that as a more regular method of collecting.
Mr Baird: Why would your members use collection agencies? Why wouldn't they just do the work themselves?
Ms Mills: It's a very expensive internal process. In a streamlined, competitive environment you cannot expect a large retail chain or a small retail chain to incur that kind of expense, especially if somebody else has the expertise and the resources fully devoted to it on the outside.
Mr Baird: So your members would farm that out to collection agencies because those collection agencies could do a much better job than your members could in collecting that money? That's exactly my view within the government.
Mr Lalonde: Thank you for your very good presentation. I would imagine that the majority of the employees you represent would be in fast food stores and all those places like that?
Ms Mills: Actually, retail is general merchandise, grocery and apparel. Fast food is with the Ontario Restaurant Association.
Mr Lalonde: So it's not within your group?
Ms Mills: No.
Mr Lalonde: In the past, did your group understand very well the previous ESA?
Ms Mills: Yes.
Mr Lalonde: You had to work at the time with the complaints you received from the employees and refer to the ESA?
Ms Mills: We don't often get the employees asking questions. What we often have is an employee-employer relationship and a request for information by the employee, or an employee saying that there is something wrong in their relationship and the employer is also seeking information and clarification.
Mr Lalonde: Have you had the experience with some of the employers that have received complaints or claims for not paying holiday pay or overtime or statutory holiday pay?
Ms Mills: No. We don't get those complaints coming to the Retail Council of Canada, but what we do end up with is a lot of questions for clarification. The act is very difficult for those employers, especially the smaller retailers, to understand. What they're looking for is not only an ability to understand their obligations but then also to have mechanisms to explain those rights and obligations to their employees. Often, what we've found is that with the provision of some clear information, either the fact sheet system that's currently being developed by the ministry or some policies that are within the ministry -- we call the ministry on their behalf and find out the information and pass it along -- those disputes are often resolved without going further than that. Seeking information through either the retail council or through a clearly, more easily understood act is often useful.
Mr Lalonde: On page 8, you refer to private collection agencies. I fully agree with you in this case that the amount paid to the collection agency should be on top of the amount of money owed to the employee, because at the present time I don't think we have seen anyplace that this amount or the commission has to be paid by the employer. But you would agree with this, that it has to be paid by the employer?
Ms Mills: The collection fee?
Mr Lalonde: Yes.
Ms Mills: It's being eliminated, is it not?
Mr Lalonde: I don't know if it has been eliminated, but you have shown that --
Ms Mills: To the employers who pay the order on time, the collection fee would be eliminated. That's the current practice.
Mr Baird: There would be no fee.
Mr Lalonde: Yes, but if the employer is not paying within the period of time required, who should be paying the collection fee?
Ms Mills: I think that would be the employer, just as when you are charged a fee outside.
The Chair: Thank you Ms Mills, for making a presentation before us this morning.
ONTARIO MINING ASSOCIATION
The Chair: That takes us now to the Ontario Mining Association. Good morning and welcome to the committee.
Mr Patrick Reid: Thank you, Mr Chairman. My name is Patrick Reid. I am the president of the Ontario Mining Association. John Blogg is manager of industrial relations for the Ontario Mining Association and John Keenan is vice-president of human resources, Falconbridge. These are the two experts. Mr Blogg will make the presentation on behalf of the Ontario Mining Association. We'll all be available to answer questions.
Mr John Blogg: We are not going to read the presentation. I'm sure you've heard just about everything that everybody has said over the last few weeks. I will preface the presentation with what we think is some new information that provides our industry with some disturbing facts that lead us to support Bill 49.
I should say in advance of that, though, just for those people who may be new to the Legislature, a little bit about the Ontario Mining Association. The OMA was set up in 1920 as a non-profit organization to represent the collective interests of the mining industry. Today the OMA represents about 43 companies, including operating mines, diamond drill operators, mining contractors and industry service suppliers, which are everything from actuarial firms to equipment suppliers. Our industry provides 72,000 direct and indirect jobs to Ontarians, over $4.2 billion in annual personal and corporate income and $1.1 billion in revenue to the provincial government.
Our industry was pleased to see the minister take the bold step to revamp the Employment Standards Act as a whole. It is our view that for too long this statute has been unwieldy to understand, administer and enforce and that there needed to be some clarity so that all workplace parties could understand what the act was really saying, and for employers, so we could more easily work with our employees and comply with the requirements of the statute.
We looked at a recent jobs study that was done by the Organisation for Economic Co-operation and Development. It was released in 1994. That study reported that there were 35 million people unemployed in OECD countries, of which Canada is one, and perhaps 15 million more who have either given up looking for work or are unwilling to take part-time work. The jobs study concluded that structural unemployment, or the component of unemployment that is not cyclical and persists into economic recovery, grows from the gap between pressures on economies to adapt to change and their ability to do so. You've heard some people say that part of the reason for unemployment is the technological move over the last several years. This jobs study looked at the technological change in the 25 countries and concluded that it was not a cause of structural unemployment. What the job study did say is the following:
"Adaptation is fundamental to progress in a world of new technologies, globalization and intense national and international competition. The potential gains may even be greater than those which flowed from the opening up of economies after World War II. But today, OECD economies and societies are inadequately equipped to reap the gains. Policies and systems have made economies rigid, and stalled the ability and even willingness to adapt. To realize the potential gains, societies and economies must respond rapidly to new imperatives and move towards the future opportunities.
"It is an inability of OECD economies and societies to adapt rapidly and innovatively to a world of rapid structural change that is the principal cause of high and persistent unemployment."
When they looked at Canada they said we had a rather inflexible labour market, with both strong employment growth and a strong upward trend in unemployment over the long term. That caused us to be really concerned about where we're going in an industry that is constantly changing and has been for some time, moving towards high technology but moving out of lockstep with how legislation is applied. We felt, and we believe, that legislation needs to keep in touch with the new realities of the workplace environment. One of what the OECD study calls "outmoded" regulations we felt was the Employment Standards Act.
In our support of revamping the Employment Standards Act we have laid out four principles on page 3 of our submission. We find that Bill 49 begins to address three of the four in that Bill 49 looks at the administration of the act and at how the act will be enforced. It also deals, from our perspective, with what's commonplace anyway: the representation of unionized members with employment standards complaints. It has been the practice for some time that the union would represent employees, their members, with Employment Standards Act complaints, and this act enshrines in statute that this is how complaints in those types of workplaces should occur. We fully concur with that.
What is also interesting that comes out of the jobs study report, and one which our industry has known for some time, and we have been moving towards resolving the problem -- Mr Keenan has been an active member in this area -- is the fact that workers are becoming more knowledgeable. The "knowledge" worker is becoming the real resource. While industries are trying to deal with that in a positive manner in their workplaces, regulations are becoming a bit cumbersome in allowing the employer to take advantage of the "knowledge" worker. We hope that after phase 2 of the reform is known and put into place, these types of impediments to our industry moving forward in a positive way with our unions and clients will be resolved.
We have a concern with one part of Bill 49, and you've probably heard this from a number of employer groups and maybe even some labour groups: section 20. We believe that the present wording of section 20 of the bill may be providing -- we don't know this; we don't know what the intent of the government is for sure -- an unintended result. In stating that the arbitrator who resolves complaints through the collective agreement process has the same powers as an employment standards officer under his normal powers, you may be giving him more power than what is intended.
Furthermore we have concerns with regard to how the arbitrator's decision would or could be appealed and the standards that would be necessary to allow an appeal to occur. You've heard from others, I am sure, that under arbitral jurisprudence the decision must be appealed by way of judicial review, and the standard to successfully overturn a decision requires that the decision be patently unreasonable. It's our contention that the judicial review process is extremely expensive and the burden extremely onerous. We believe that it may be beneficial to have a more accessible and affordable appeal mechanism in place in these situations.
It is also important, in our view, to ensure that section 20 does not expose the act to abuses or use to pursue other agendas. Arbitrators should only be allowed to deal with substantive standards such as vacation pay, public holidays, termination pay, severance pay, pregnancy/parental leave, minimum wage, hours of work etc. Excluded should be such things as benefits plans, sale of business, related employers and policy issues as they add a dimension in complexity that could lead to unintended results. If limits are not provided for in section 20, the section could be used to further a bargaining agenda, which we don't believe should be the intent of the Employment Standards Act. Consequently we think there need to be some language changes with section 20.
On page 6 we've given you a list of conclusions as to why we believe that the Employment Standards Act needs to be changed. If those changes are put in context of the objectives we have set out in this submission, unions, employees, employers and the government too would be well served by those changes.
As a final comment, we in the mining industry know very well that change is never easy. We have been evolving for a number of years and have experienced those kinds of pains that go along with change. We also know that change in legislation that tries to provide basic protection while at the same time providing flexibility is among the toughest type of legislation reform to perform.
However, as pointed out in the OECD study, the greatest threat to job creation and protection is the jurisdiction's inability to reinvent its regulatory environment so that it will work today and tomorrow in a manner which is good and right for all its citizens.
To quote the OECD study one last time, "Motivation to protect people from at least the worst vicissitudes of economic life, governments, unions and businesses has progressively introduced labour, market and social policy measures and practices which, in achieving their intended ends, also have had the unintended but more and more important side-effect of decreasing the ability, and sometimes also society's will, to adapt."
We think the major problem we have seen over the years is that inability to want to adapt. We are hopeful that with Bill 49 as the beginning of the move, with the Employment Standards Act, to change, if we work together we can get a piece of legislation that does not reduce minimum protection for those who have it under the current law but allows the flexibility and needs of the business community to move forward in what is now a global marketplace.
The Vice-Chair (Mrs Barbara Fisher): Thank you very much. That leaves us with officially a minute per caucus, but as I see it right now we don't have a further delegation.
Mr O'Toole: Thank you, John. It's good to see you again. I'm pleased the government is getting along with the OMA. That's not the Ontario Medical Association; it's mining.
Mr Blogg: We're the good OMA.
Mr O'Toole: That's my attempt at humour. For the record, we are getting along with the OMA.
I think the OECD report, which I've read, addresses the issues of change in the world of work. I think it should be more widely read. Our youth certainly have to look forward to the changing dilemma. Perhaps some explanations that you've given -- have you read the Carr-Gordon report, which talks about barriers to growth? The whole Ministry of Labour, technically, is seen as kind of a barrier to job creation. I'm not criticizing the individuals; I'm saying the philosophy. Have you read the report?
Mr Blogg: Yes. We have read the Carr-Gordon report.
Mr O'Toole: Do you support the view that there have to be some responsive business types of things done in that ministry, not just Bill 49?
Mr Blogg: Yes.
Mr O'Toole: Good. The one technical question you've raised which I perhaps support is the arbitration, the appeal process. What kind of a review or appeal process, particularly in the judicial review, would you like to see? A tribunal?
Mr John Keenan: I don't think we've really come to grips with that to know how to answer the question. Our concerns are expressed. It could be. What we would like to see is something a lot simpler, not something that would potentially take up the time of the courts.
Arbitrators' decisions in the province, by and large, are accepted by the parties and very few -- I don't know what the percentage is -- ever go for judicial review. Our concern is that because of the complexity of the issues that may come before arbitration as a result of these amendments, this might increase. While it may tie up the courts too, it will certainly extend the period.
Our view is that there should be some form appeal built right into this, a very simple, straightforward appeal, perhaps an appointment of an oversight or review process by the minister, sort of like arbitration on top of arbitration but within a very tight time limit, similar to the type of situation that, as far as time limits and process, exists for section 46, I think it is, arbitration. The detail of it we really haven't --
Mr O'Toole: Does the OMA intend to participate in the part 2 review of the employment standards?
Mr Blogg: Yes, we do. In fact, there isn't an awful lot of meat in Bill 49 for us. Our industry exceeds standards right across the board. We've dealt with very little in the bill because there's very little in the bill that deals with us, but phase 2 is where we think there will be a lot more interest of our members.
Mr Lalonde: I too had a similar question to the one that Mr O'Toole had, but I'm just going to go to the other one immediately. Don't you think the period of time they allow for investigation is still quite too long: two years to investigate and two years for the claimant to get paid the money that is owed to them?
Mr Blogg: Yes. The shorter the period of time, of course, the clearer the facts are when you put facts on the table. The bill talks about reducing the time limit for lodging a complaint from two years down to six months. Any of the legal people I've talked to over the last several months, in all forums of law, say the quicker you can get the facts out and get them in front of a review of some sort, the more chance there is of a right decision being made, because people then aren't guessing what the facts were and there's a clear vision of what the facts were on all sides. So I think two years is too long. I think our industry supports the shortening up of the time frame, both the time frame to lodge a complaint and the time frame of payment to the worker.
Mr Lalonde: I really feel that instead of reducing the number of enforcement officers from 150 let's say to 45 or 50, we should have kept those enforcement officers in place and made sure the investigations start immediately when the complaint is lodged. At the present time, the fact that we have two years -- it was known in the past that employees or enforcement officers will put it aside probably and wait for the commencement of the 13th or 14th month to start to investigate. This way, they know they have two years, but if they know they only have a year to investigate, the fact that we only go back six months instead of two years, it should shorten the period of time for investigation.
Mr Blogg: All of us have a tendency to work within the time frames given us. So if you shorten the time frame, you do a better job or you do a quicker job.
Mr Lalonde: That's right.
Mr Christopherson: Thank you for your presentation. Let me begin by acknowledging the importance of the mining industry to the Ontario economy, and not just because of the jobs that are created but because of the economic stimulation, everything. It's a very important part of our economy and I wanted to make that statement.
You make a statement on page 4 that says, "It is clear from our reading of the bill that the implied changes to the Employment Standards Act will enhance employees' protection under the statute, not strip them away as some have suggested." Being one of the "some," I'd like to ask you about a couple of parts of the bill.
I would argue that there's been irrefutable evidence -- others would argue differently -- all across Ontario that, simply put, putting a cap on how much money you can claim through the Ministry of Labour when currently there is no cap, regardless of the fact that you can go to the courts -- there are other remedies, those remedies cost money and that's money that you otherwise wouldn't have to pay if the law was left where it is. So I would argue putting that cap anywhere takes away a right.
Further, putting in place a minimum threshold that says, "If the threshold is $200 and you've got a $100 claim, the ministry won't move that claim for you; it will not pursue that $100," for someone who's a minimum-wage employee, which is what we're dealing with here, rather than many of the better paid people who are lucky enough to be in a union, they're going to lose that money -- the filing fee is $65, $70 -- and/or they're going to have to take time off work. It's just not going to be practical, and the bad bosses -- not the good ones but the bad ones -- are going to take advantage of that.
I would say to you that those two examples suggest and make very clear that indeed there are rights that are being taken away and watered down. So I would ask you how you would reconcile what I've suggested to you with what you said about this bill enhancing the existing law.
Mr Blogg: It's our view when reading this legislation that by shortening up the time frame and by changing the enforcement sections of the act, what it allows is this government to get at the workers most in need quicker, to identify them, to focus on them, to ensure that they are getting the protection of the statute. With the cap on how much the employment standards officer can allow -- I think that's what you're getting at, and that's a $10,000 maximum -- I think you know the statistics out of the Ministry of Labour say that the people who go for claims larger than that are 4% or less. The people who are at the lower end, though, I think if they can get the case into the courts sooner and have the enforcement officers being able to focus on them on a faster time frame, they're not going to be disadvantaged. They are going to have their claims heard and paid for.
Mr Christopherson: A number of things -- no?
The Chair: No.
Mr Christopherson: Too bad. There's a good debate there to be had, but thanks for the dialogue.
The Chair: Thank you, gentlemen, for taking the time to make a presentation before us here today. We appreciate it.
LOW INCOME FAMILIES TOGETHER
The Chair: That leads us now to Low Income Families Together. Could they come forward, please. Good morning and welcome to the committee.
Ms Naomi Berlyne: Low Income Families Together is an organization which is governed by low-income people and whose members are all low-income people. We work in popular education, community economic development and advocacy. This brief was prepared by a committee made up of staff and members.
We have examined the proposed changes to the Employment Standards Act in Bill 49 and have found that the result of this bill will be the weakening of employment standards, particularly in the area of enforcement. This will have an adverse effect on the most impoverished and vulnerable workers in our society, who are predominantly women, people of colour, immigrants, refugees and young people.
Sectors where a lot of low-income workers are found include: the garment trade; domestic work; industries where employee turnover is high, such as foodservice and commercial fitness clubs; and small businesses which do not require a lot of capital investment.
Employment standards are supposed to provide a basic minimum below which employers cannot go because it would be detrimental to individual employees and to our society as a whole. Recent governments have not kept the legal minimum wage up to the cost of living. A single person working full-time at the minimum wage is now 12% below the poverty line, and the earnings of a single parent with one child are 35% below the poverty line.
When employers do not pay living wages, society picks up the tab for the resulting poverty which ensues, for example, for the services needed for the children who are never able to develop fully and the increased health care costs. Ontario's current employment standards are low in real terms and in comparison to western Europe.
The enforcement of employment standards legislation has always been a low priority at the Ministry of Labour, with a very small percentage of its budget, but now the current government is attempting to decimate the few resources which are still dedicated to it.
In 1987, the report of the Ontario Task Force on Hours of Work and Overtime noted that non-compliance with employment standards legislation was likely to be common because it was extremely unlikely that violations would be detected; if they were reported and investigated, hardly any penalty would be imposed; and if the moneys they owed were to be assessed, they could probably get out of paying some or all of the amount, as very few efforts were being made to force employers to pay up.
In this context, the current government's emphasis on self-reliance is ridiculous. The various governments of Ontario of the last two decades have been relying on employers to respect employment standards, and it is evident that it has not worked. Roy Adams of the Department of Labour studies at McMaster University has estimated that one in three employers violates employment standards. Since employees can be fired for no reason in Ontario, it is somewhat preposterous to say that they should be self-reliant. Ninety per cent of the employment standards complaints received at the Ministry of Labour are made by employees who are no longer working for the employer they are complaining about, proof that most workers know they would face firing or intimidation if they reported on their current employer.
Hardly any random inspections of workplaces have been carried out since the early 1980s, so employers have very little to fear. The Employment Standards Act does give the ministry the power to prosecute in certain circumstances, but they have only ever done so in remarkably few cases, in line with the low priority with which the enforcement of employment standards has always been treated.
The current government claims that Bill 49 will streamline the act and encourage compliance. We could not find any evidence of this. It appears that employees' rights are being taken away, usually to the benefit of the employer, and there's no requirement for the employment practices branch to deal with their complaints more expeditiously.
The government is proposing to shorten the claims period for workers from two years to six months. The only remedy that would be left to an employee for violations which occurred more than six months before is to take their employer to civil court. Since the Ontario legal aid plan does not cover employment-related cases, for low-income people that means having no way of getting the wages they are owed, as paying a lawyer is beyond their means. The ministry, however, still has two years to investigate the complaint and another two years to get the employer to pay up. Most low-income workers live from paycheque to paycheque. Having to wait so long for the wages they are entitled to often causes a lot of hardship: inadequate nutrition, overcrowded housing and the inability to buy winter clothing. Reducing the claim period to six months would in fact discourage compliance.
Imposing new maximum and minimum amounts for employment standards claims is also depriving low-income workers of the wages they have earned. It is not that unusual for employees to be owed more than $10,000 in unpaid wages and overtime, vacation and termination pay. Even in sectors where wages are very low, such as the garment industry, domestic work and food services, employers would be able to deny their employees their basic rights in every way they could, knowing that they would never have to pay more than $10,000.
This bill also empowers the minister to set a minimum amount for employment standards claims through regulation. This would enable exploitative employers to keep their violations under the minimum amount for six months. Then they would get to keep the money and their employees would have no way of recovering it.
In this bill, it is also proposed that the collection of the moneys which investigations assess employers owe their employees be handed over to private sector collection agencies. If a private citizen does not pay their rent or the dentist, or fails to make payments on a purchase agreement, they very soon find themselves in the Small Claims Court and have their wages garnisheed. If anyone fails to pay their taxes, Revenue Canada has very prompt and effective ways of enforcing the law. If an employer fails to respect the law, however, and does not pay his debts after a government investigation into these violations of the law, there are hardly any sanctions.
Due to totally inadequate staffing and the low priority which has been accorded to those in the worst jobs, the Ministry of Labour has always been incredibly weak at collecting those unpaid wages. There are always very few staff assigned to this, and then in 1995, the government did away with the collection staff and added collections to the duties of the employment standards officers who already had far too much work. Now the current government wants to wash its hands completely of this. Bill 49 would privatize collections and give private collectors the authority to make settlements for less than the amount the employee is owed. The way the government envisages paying the collection agencies would encourage this.
The private collector would not collect any fee until an account was settled, so there would be an incentive to settle as quickly as possible in order to collect the fee. The same motivation would also lead to accounts which are difficult to collect being ignored. Essentially, all the government is doing in this measure is making employers, who will now have to pay both an administrative fee and a fee for the collector, and employees, who are now more likely to receive less than the full amount of unpaid wages, pay much greater costs than the government ever had to spend on its collection staff.
There is no evidence of the government's assertion that private collection agencies are more efficient or cost-effective than collections by its own staff. On the contrary, figures for the nine months -- April to December, 1995 -- show that for each dollar the government spent on its own collection service, it got $6.30, while private collection agencies only raised $3 for each dollar in expenses it charged the government. And a recent Management Board review found that the government's own collection agency was much more cost-effective than the three private agencies that the government used, both in 1994 and 1995.
The one and only motivation for all the changes proposed in Bill 49 appears to be the elimination of staff at the employment practices branch. It does nothing to prevent violations and encourage compliance.
These are our recommendations:
In order to maintain social cohesion in our society, it is essential that a proactive approach be taken to providing minimum working conditions which are livable and penalizing those who do not respect the law. This does not have to be at the public's expense. If strict penalties were imposed for violations, as with every other type of legislation, that would cover the cost of investigations and also discourage violations.
The minimum wage should be set at no less than the poverty level for a single person. That would mean increasing it by about $1 an hour.
Hours of work should be no more than 40 hours a week, and overtime pay should be paid at the rate of time and a half for all hours in excess of the standard or time in lieu. This would help create jobs.
There should be a right to paid bereavement leave of three days for close family members and an automatic extension to one week with unpaid leave for those families who do not live on this continent. The same provisions apply to all workers under provincial jurisdiction.
There should be protection from dismissal, suspension, layoff, demotion or discipline because of any absence due to illness or injury.
There should be protection from arbitrary dismissal, including an obligation for the employer to provide written reasons for dismissal if the employee so requests.
There should be protection from sexual and personal harassment in the Employment Standards Act. The act should contain a definition of harassment, including sexual assault, verbal abuse and innuendo, and remedies such as damages, education and compliance procedures.
The employment practices branch should have a database to track employers who repeatedly violate the act.
There should be wide public education about employment standards. A summary of the standards should be posted in all workplaces in the main languages of the workforce of that workplace.
There should be routine spot audits, especially in industries where violations are common, and extended audits of companies about which there are complaints.
The two-year claims period should remain.
There should be no limit on the amount owed.
The current accessible process of the employment practices branch handling all the claims should be retained and should continue to do collections.
There should be a strict time limit on the processing of claims. The current time limit of two years leads to unacceptable delays in receiving the money they are owed for low-income people.
The employment practices branch should use the certificate procedure to enforce payment. The use of this procedure is discretionary, but seeing that so many violators don't pay at all or don't pay the full assessment, it should be a routine matter.
Those who violate the Employment Standards Act should be charged the full cost of the investigation of the complaint and the collection of the wages owed.
The Chair: Thank you. That's just over 12 minutes, so we have about one minute per caucus for questions. This time it will commence with the official opposition, Mr Lalonde.
Mr Lalonde: Thank you for your presentation. I have a few questions. Before I go to the questions, I would say that every employee or every person who works at the minimum wage should at the end of the year receive a bonus from the government, because today I don't know how a family can live on the revenue of just a little over $14,000 a year.
You referred to the $10,000 limit. I would say it's very rare that you would have a claim for over $10,000, but if the government is getting claims of over $10,000, it would mean that those people had been working and not receiving proper pay, or the employer had not recognized or not followed the employment standard.
What do you think about having the six months' claiming limit, the limitation period for a claim of six months?
Ms Hilary MacKenzie: We think having it limited to six months is quite unacceptable. It should be kept to at least the two years. It's very difficult for an employee to complain while they're still in their current employment, because they can then be fired or intimidated. Therefore, if you limit it to six months, they probably haven't been getting quite a lot of the moneys they're entitled to over all the extent of their employment with that employer, but they would only be able to do anything about the six months prior to leaving that employment, because for low-income people, going to civil court isn't an option. You can't get legal aid now for employment-related cases, so anything owed prior to those six months they wouldn't be able to do anything about.
Mr Lalonde: In your case, with the maximum limit of $10,000, there will be very few complaints about the fact that the limit is $10,000.
Ms MacKenzie: There have been a number of cases, and in very low-wage sectors. There was one in domestic work and there was one in the garment trade. They're not common, but they do exist.
Mr Christopherson: Thank you very much for your presentation. You may have heard the presenters just before you -- the Ontario Mining Association. They contend that Bill 49 actually enhances employees' protection under the Employment Standards Act.
The government has shamelessly named this An Act to improve the Employment Standards Act, and you should know, on this the final day of our public hearings, which the government didn't want to have in the first place, that all across Ontario we've heard submissions, the majority of which were from the same perspective as yours, and not one government member has been prepared to come clean and admit that this is taking away rights. I'd just like you to take a moment to look at the government members and give them your best shot, in a very succinct fashion, to please understand that this is not about politics, that this is about the rights of the most vulnerable people in our society, because so far they're not coming out of their bunker on this issue and they're standing behind what is clearly a misleading title and a misleading argument. There they are.
The Chair: Thank you, Mr Christopherson. Moving to the government.
Mr Baird: Thank you very much for your presentation. We appreciate it. I noted that on pages 5 and 6 of your presentation you spoke about the collections process. This is an issue that's come up quite a bit. The experience of this government, and more importantly, the previous NDP government, is that the NDP found there was no correlation between how much resources were put into the collections and the result, that there were certain restrictions the government had on collecting: lack of expertise, lack of many of the resources that the private sector puts into collections.
You mention on page 5, for example, that there were always very few staff assigned to collections and that in 1995 the government did away with the collections branch. Actually that was done away with in 1993 by the NDP government. Mr Mackenzie, who was the minister then, who I think is very well regarded certainly around Queen's Park, did away with it because he felt the amount of resources his department put into collections didn't really yield a better result. I guess he was right, because in 1993 he was collecting 25 cents on the dollar, and for the last two years we've been collecting 25 cents on the dollar. So despite having discharged 10 employees and closed down the collections branch, we're still bringing in what I think is an abysmal collections rate, and we're not satisfied with that. Our hope is that trying a different way will yield better results. Our goal has got to be 100%, there's no doubt about it.
The one terrible thing about collecting 25 cents on the dollar that is even bigger than the workers not getting the money they're entitled to is that it sends a message out to every other worker: "Don't bother complaining, don't bother coming forward, because even if you go through all the hoops -- you find out about your rights, you approach the ministry, you file a claim, there's a full investigation, there's an order issued, the appeal period expires -- even after you've jumped through all six of those hoops, there's still only a one-in-four chance you're going to get your money," which I think just sends a terrible message out. Our view is that the collection agencies would be able to improve that. As well, we'll have to look, a year or two years from now, to see what the results of that are and obviously be accountable for that. I think it will be better, and then we can try to find as many ways as possible to further augment that in the complete review.
Ms MacKenzie: We did look into this matter in quite a lot of detail. The example I've cited here, that's true, that's not the collections within the employment practices branch, that's the government's own collection agency, which I understand covered various things.
In the government's own collection department, covering various ministries, I understand, their collections are a lot more effective than private collections. You don't have any evidence that private collections will be more efficient. I think why it didn't work in the employment practices branch is that a very low priority was being given to everything there, absolutely everything, and there were very few people working on this. You need, first, the legal power to do it. The money should be collected in the same way that everything else is. If I don't pay my rent, there's a court order. As we said earlier, when it is assessed that an employee is owed something, a court order should be made at that point. It's not real, and employers know that they can get away with it.
Mr Baird: With the abysmal performance, though, of the provincial government over the last three governments, going to private collection agencies certainly couldn't be any worse than it is now. I think it can only be better, and obviously we'll be accountable for that. I think it will be better. There will obviously be people watching, and I'm sure that it will be better. It can't be any worse, that's for sure. It's certainly an honest attempt to try to do better.
Ms MacKenzie: But the way private collections work is they're paid a fee.
Mr Baird: By the deadbeat employer.
Ms MacKenzie: They're paid a fee, so their motivation is to settle quickly. The employees are paid by how much they collect, so nobody wants to go anywhere near the difficult-to-collect account.
Mr Baird: They'll make more money.
Ms MacKenzie: It doesn't have any relation to justice or the need.
The Chair: We've now passed 20 minutes, so thank you both for taking the time to make a presentation before us here today. We appreciate it.
With that, the committee stands recessed until 1 o'clock.
The committee recessed from 1156 to 1303.
MUSKOKA LEGAL CLINIC
The Chair: I declare the meeting to be reconvened. We welcome our first presenter of the afternoon, Muskoka Legal Clinic. Good afternoon and welcome to the committee. Just a reminder that we have 15 minutes for you to divide as you see fit between either presentation time or a question-and-answer period.
Ms Jo-Anne Boulding: Good afternoon. My name is Jo-Anne Boulding, and I'm a lawyer with the Muskoka Legal Clinic. The clinic serves the entire district municipality of Muskoka. We are located in Bracebridge and we also have a satellite office in Huntsville. As you are no doubt aware, we provide a variety of services, including summary legal advice and representation in the area of law called poverty law.
We have prepared written submissions on the changes proposed in Bill 49. Our experience is with non-unionized workers. Muskoka is a vacation area, and much of the work is seasonal and in the construction or service industry. Consequently, we have many small businesses or employers. We have both represented workers in their claims to the employment standards branch as well as referring them directly to the officers for assistance. Our experience has been that the branch is underresourced and basically acts as a collector of moneys owed.
Shorter complaint period and investigation period: Currently, a worker has up to two years to file a claim with the branch. Further, the worker can recover any money owed to him or her up to two years.
The reality of worklife, as clearly shown by the ministry's own statistics, is that workers file claims after they are no longer working with their employer. Bill 49 says workers will now have only six months to make a complaint, and the investigation will only look at the past six months of the employer's practices. Meanwhile, the Ministry of Labour has four years to get the employer to pay a worker.
With high unemployment, workers need the two-year complaint period. Many workers endure great hardships and violations of their basic rights in order to have a job. The two-year period is absolutely essential. The act is ineffective in protecting workers who lodge claims while they are still employed. Over 90% of the claims filed are done so after the worker has left his or her employment. Bill 49 forces workers to choose between their rights or a job.
It is unrealistic and not truly an alternative to require workers to enforce their claims beyond the six months or over $10,000 in the courts. The new section makes the worker's choice between a complaint to the branch or to the courts exclusive. It also assumes that the worker knows the value of the complaint right from the beginning. This is often not the case.
This act is the only protection for workers. These changes are basically leaving workers at the mercy of their employers.
Access to justice for low-income workers is denied. Bill 49 tells workers to go to court instead of the Ministry of Labour. While the government claims that the purpose for this change is to eliminate duplication in legal proceedings, its effect will be to deny access to justice for workers. Essentially, Bill 49 will force workers who are owed more than six months' wages or more than $10,000 to go to court. Ontario legal aid is not available for employment law matters. If workers are unaware of their legal options, either because they cannot afford a lawyer or were unable to get timely legal advice, and they do not withdraw their claim with the ministry within two weeks of filing it, they will be denied any redress through the courts. Under the current system, workers are entitled simultaneously to pursue their remedies under the act and any additional remedy in civil court.
Introducing private collection agencies to settle workers' claims: Bill 49 proposes to privatize the collection function of the Ministry of Labour's employment practices branch. Since the branch mainly functions as a collection agency, this is a major change. Nothing in Bill 49 addresses the problem of preventing violations. This is a major shortcoming of the proposed changes.
In 1994-95, out of the 9,468 assessments made against employers, 2,771 went uncollected. In dollars, that means $47.8 million was not collected.
Private collectors are authorized to collect the money owing to the worker, the administrative charge imposed by the ministry, and their own fee and disbursements. When a private collector collects less money from the employer than the total owing, Bill 49 authorizes the collector to apportion it between the worker, the ministry and the collector in a prescribed manner. The prescribed manner is not indicated. The government is again abandoning workers. Will they now have to pay a collector in order to recover wages that they are owed? The violating employer should pay all costs associated with the order.
These provisions create an incentive for the private collector to compromise or settle with the employer who owes the money for less than the worker is legally entitled to. Workers will lose as collection agencies push for a quick settlement and payout. Vulnerable workers will be pushed to accept low offers.
The proposed changes to the act weaken enforcement of the standards. New limits on time and quantum of claim make a gift of the excess to the abusing employer. The new collectors can be expected to encourage workers to further compromise their claims by settling for a lesser amount.
There should be real sanctions for non-compliance with standards. If it costs the unethical employer to breach the standards, then he will stop. Bill 49 is a gift to employers who violate the act. It forces workers to choose between their jobs or their rights. Workers want their basic rights enforced effectively.
What is needed to improve the enforcement and administration of the act:
Prevention of violations: As I stated, nothing in the bill addresses the issues of violations. Unless a worker files a complaint, there is virtually no way to detect whether employers are abiding by minimum standards. Thus there is little chance that employers who violate the act will be detected, and if they are, the costs are minimal. This creates an incentive for employers to violate the act. It is simply unfair to workers to not be able to enforce their minimum standards. It's also unfair to those employers who willingly abide by the act to compete with those employers who violate it.
Preventing violations of the act: education of both workers and employers of their rights and responsibilities; require posting of those rights and responsibilities in the workplace; shift the focus from collection to prevention; use individual claims to trigger audit of the employer's records; prosecute repeat offender employers; prosecute employers who fire workers who lodge claims, as reinstatement without a union is ineffective.
Improving enforcement and collections: keep the two-year filing and the two-year claim period in the act; tighten up the time limits available to the ministry to investigate, issue an order and initiate a prosecution; increase use of the certificate procedure to improve the collection of assessments against employers. Instead of a discretionary policy, the filing of certificates in court should be a routine matter of enforcement.
Employers who violate the legislation should pay the cost of collecting the money owed to the worker.
Institute a fee schedule based on the violation, the amount of money owed and the complexity of the matter. This can be done without turning the collection function over to private collection agencies, which are not directly accountable to public policy.
All settlements for less than the money owed to the worker should be scrutinized by the ministry and permitted only as a last resort to prevent tipping an employer into bankruptcy. There should be no maximum limit on the quantum of an officer's order.
If collection agencies are given the responsibility for collecting moneys owed to workers, their fees should not be deducted from the workers' share of the settlement.
It is our submission that the proposed changes do not assist workers in this province to have their minimum employment standards enforced. We would ask the committee to reject the bill and to hold public consultations with both employers, workers and their advocates so that the proper standards are in place, with violations by employers dealt with fairly and speedily by employment standards officers.
The Chair: Thank you. That allows us two minutes per caucus for questioning. This time the questioning will commence with the third party.
Mr Christopherson: Thank you for the presentation. We have heard from the government, a government that continues to hold a public position that this act is an improvement to the existing standards, and one of the lame arguments that they've been trotting out is that somehow the move from two years to six months is a benefit. This is a biggie for them. This is as about as good as they can do, and it just doesn't wash.
I gather you're -- yes, you are -- a barrister and solicitor. I'd like to hear your thoughts on the argument that the ability to have a claim filed sooner rather than later is a greater benefit, since they like using those kind of comparisons, than the ability to go back two years. That's what they say, that by shortening the time period, it keeps the case fresh and the trail hot and all that stuff. They refuse to acknowledge the damage it does to people who are stuck in positions. Could you just comment on that for me?
Ms Boulding: Employers are required to keep fairly extensive records, so I fail to see how the two years or the six months changes the evidentiary value of what's needed to prove a case. All it does is cut off the time limit that an employee, who may not even be able to make a claim, is allowed to. The records have to be kept for five years for tax purposes and for two years for provincial record purposes, so the evidence is there. It needs to have a number of people in the offices doing the investigations.
Mr Christopherson: The government is next in the rotation of speaking and I hope they take you on, because you understand this sort of thing better than I, being a trained lawyer. And since they're so proud of that line of defence of this shameless act, I hope they're prepared right now to turn their attention to that issue with you. The parliamentary assistant to the minister is here and I'd really love to see him take you on on what you just suggested, because then maybe, in the dying moments of these hearings, we can get at the real truth. I want to thank you for coming forward today.
Mr Ouellette: Although Mr Christopherson attempts to lead our questioning in a certain direction, I will follow up with a couple of questions. You agree with the two-year period, then?
Ms Boulding: It isn't a two-year period that's proposed; it's a six-month period that's proposed.
Mr Ouellette: But you're agreeing to maintain it for two years.
Ms Boulding: I would like to see the two-year period maintained, yes.
Mr Ouellette: So you agree with the two-year period?
Ms Boulding: Yes, I would like to see it maintained.
Mr Ouellette: Do you agree, then, that the two-year period is a form of restriction, even if it is two years?
Ms Boulding: Is it a restriction of what?
Mr Ouellette: It's a time constraint.
Ms Boulding: Yes, it's a time limit, absolutely. I agree it's a time limit.
Mr Ouellette: You've already agreed with the two years, and you've also agreed that it's a restriction, so you thereby agree that there should be restrictions.
Ms Boulding: No. I've told you what I think. I think that the two-year period that's currently in the act should be maintained. If you're asking me, do I want to draft the act and have no time period, that would be my first choice. But I'm trying to deal with the realities of what's possible in the political process.
Mr Ouellette: But the position you've put forward is to maintain the two-year period. You didn't ask for an extension of it at all.
Ms Boulding: Yes, that's the position I'm putting forward.
Mr Ouellette: That's to follow up on Mr Christopherson's position.
We've had earlier presentations regarding seasonal work. You stated in your presentation that seasonal work is one of the main employers in this area. We've heard from other sectors that said this would really benefit, this legislation, in those areas. What's your position on that?
Ms Boulding: No, I don't agree with that.
Mr Ouellette: The belief was that a lot of summertime students and other areas that work, that try to get as many hours as they can, this would allow that flexibility to take place. You're saying that this wouldn't assist those individuals?
Ms Boulding: I've only been speaking about violations. I haven't addressed the issue of how many hours they can work in a week or in a summer. There may be students who wish to not have any minimum so that they can earn a great deal so they can afford to pay the increased costs of education in this day and age, but my position is that there should be a mandated number of hours a week, there should be mandated overtime after that position, and seasonal workers would benefit from those kinds --
Mr Ouellette: You think, then, we should limit the students' abilities to earn income to pay for those expenses later on in life?
Ms Boulding: I think that people deserve to have a fair living wage, and that includes overtime when you work more than a mandated number of hours in a week, yes.
Mr Lalonde: Thank you, Madam. One of my points was clarified when Mr Ouellette just asked you the question. I fully agree with you that the two-year period should stay there and also the two-year claim period in the act; two years to file and two years for the claim period. But in fact we're recommending in the act that it will go down to six months for the period to lodge a complaint, and also you'll be able to only go back six months to do the claim. The two-year period that the government is giving for the investigation is way, way too long, especially when you refer to the Muskoka area. I know it's a vacation area. The employers are going in there just for four, six or eight months, and then they disappear.
The 90% of claims that we have from people who are lodging their claims after they leave their jobs, really, I just can't see how we'll be able to increase or to come up with a better result at the present time. I really feel that as soon as you have a complaint it should be deposited at the Ministry of Labour, they should accept anonymous complaints and immediately the Ministry of Labour should start investigating, especially in this case. All the tourist areas are affected the same way. But would you agree that the two-year period for investigation and the two-year period after that, added to the two-year period for investigation, is way, way too long?
Ms Boulding: Yes, it is, it's extremely long, because it can take up to four years before it's over and you still may not have the employer that pays at the end of that time period.
Mr Lalonde: Especially when you have enough evidence, and very often when the complaint is lodged it's because you have something to back you up in your complaint that you're depositing.
The Chair: Thank you for taking the time to make a presentation before us here today.
The Chair: That takes us to our next presentation, Mr David Miller. Good afternoon. Welcome to the committee.
Mr David Miller: Thank you very much, Mr Chair. I'm the Metro councillor for Toronto for the area of High Park-Parkdale. Prior to getting elected in 1994, I was a barrister and solicitor, and a very large part of my practice was in the area of employment law. In both of those capacities, I have a great deal of knowledge with respect to the Employment Standards Act, both from a political point of view, representing an area where there are many people working near minimum wage who need its protection, and from the point of view of representing clients for many years. It's in both of those capacities that I'm making my submissions today.
I'm going to try, in the few minutes I have, to summarize some points in my brief. As they may be a little bit legalistic and perhaps dry, I want to say at the beginning that most of the changes proposed in this legislation, except for one or two housekeeping matters, are, in my view, completely wrong. The result of them, from a practical point of view, will be that the most vulnerable people, the people who really need the protection of the Employment Standards Act, will not be protected. I think that's abundantly clear. The second reason they're wrong is that this legislation has penalties for violating it; people can go to jail and have gone to jail, and companies can be severely fined when they violate it. The scheme that's proposed in this legislation is going to definitely result in an incentive for disreputable employers to break the act. I really don't believe this Legislature should be passing legislation that encourages lawbreaking.
In my brief I make a number of points, and the first one relates to the flexible standards. I understand from the minister's announcement that she intends to defer discussion of this until the act is fully reviewed. While I applaud that, I wish to say that the idea of having flexible standards itself makes no sense. A standard is a standard. If you apply it to another context which is not dissimilar, criminal law, you certainly don't have a flexible criminal law. There's no reason, from my point of view, why it's appropriate to say that something is a standard and then say it's not by making it flexible. I believe certain people have addressed that other than me.
The second issue I'd like to address is enforcement under a collective agreement. I make a number of points in my brief, but there are three I'd like to highlight today. The first point is that from a public policy point of view, requiring unions to enforce the Employment Standards Act on behalf of their members is going to result in different people having different rights. Some unions are larger and more powerful than others. Some are more successful at fighting grievances. The result will be that persons who are employed by an employer that has a small or weak union may not be able to have their rights protected, despite being set out in law, whereas those who belong to a larger union will.
Given the labour law changes that you've made, there's certainly reason to believe that you would have an uneven and unfair application of the law. If you're going to have a law that sets out minimum standards, it should be enforced consistently across the board.
The second problem is that the decisions with respect to such matters will be made by arbitrators. These are private individuals who will make their own interpretations of the act, which will then be subject to appeal only by way of judicial review at Divisional Court -- and I note that an earlier brief, I think from the Canadian Federation of Independent Business, pointed out that the standard for that is patently unreasonable -- which means that you will have different interpretations of the same act by a number of arbitrators, and it will be very difficult to resolve those interpretations.
This is a very real problem, because one of the benefits of the Employment Standards Act is that it's simple. Employers know that they have to pay overtime after a certain number of hours, employers know that they have to pay one week's notice per year of service when they terminate somebody, plus severance if applicable. If you enter into a regime where arbitrators are going to make widely varying decisions on these matters, you will make it much less certain what the obligations under the act are. This will have a very real cost to employers, this will hurt employees and it will also be a cost to the government, because the provincial government will have to intervene in certain judicial review applications to ensure consistent interpretations of the act. That's a very real cost and a real problem.
My third point is that from strictly a legal process point of view it's much more effective to have an act such as this adjudicated by the same people, an expert tribunal. That's why, for example, in the labour relations field you have the Ontario Labour Relations Board and not courts. This is a well-established principle, and it hasn't varied under different political parties. When you remove adjudication from the expert tribunal, which in this case is the office of adjudication, and give it to people who are essentially private individuals, you are really abdicating the government's responsibility to ensure its law has a consistent meaning, and you're inviting problems. When you have the same people ruling on the same act, you get consistent interpretations; for the reasons I said a few minutes ago, that benefits employers, employees and the government.
The third issue I'd like to address is the enforcement provisions for non-unionized employees. My first comment is that you run into some of the same problems that I've just mentioned with respect to the interpretation of the act, because you will have courts interpreting the provisions of the act and it will take time for them to come up with consistent interpretations.
The second point, and this doesn't seem to have been brought out in the briefs I just read from the business side, is that there will be much more litigation, which is going to cost employers. If you take an example of somebody who's terminated, in the past if they had a substantial right to severance pay, in my experience, people would simply accept their termination and severance pay, which under the act would now have to be paid in seven days, and wait to see if they got a new job. If they got a new job within the time period of the severance, there would never be a lawsuit. You are now forcing people to sue, by the six-month limitation period and by the $10,000 limit. It's going to result in a vast expansion of litigation which may be needless and people need to do it to preserve their rights, and it will cost employers, it will cost employees and again will cost the government. The court system is already overburdened.
The third point is that these provisions requiring employees to sue don't seem to recognize that the principles of law with respect to wrongful dismissal are different than those with respect to terminations under the Employment Standards Act. You are going to get very bizarre court cases in which courts are required to determine whether a person has been wrongfully dismissed and then required to determine under the act whether there is wilful misconduct or some of the other enumerated heads. It's quite clear at law that those are very different things. It's been very useful to have a simple way of determining those issues under the Employment Standards Act, and combining them is going to create very real problems and some very bizarre jurisprudence.
The fourth point I'd like to make here is that the $10,000 issue is going to create unfair and inconsistent enforcement with respect to employees at the same company. I experienced a number of cases where companies violated employees' Employment Standards Act rights, several employees at the same time. What will happen here is that if there are several employees who have the same violation and one is over $10,000, that person will have to sue. They can't subpoena the Employment Standards Act officer as a witness, so you don't know if they'll have the same evidence, and you'll have a couple of employees whose rights may be enforced swiftly and others who are required to go to litigation. That simply doesn't make sense. One of the things it's going to do, again, is encourage employers to break the law because it's to their advantage, since they won't have to pay as much money.
The final area I'd like to address briefly is the use of private collectors. I think this is entirely wrongheaded, because the problem with the act is not the same problem private collection agencies usually deal with, which is people running up their credit cards and not being able to pay. The enforcement problems under the act arise from two things: bankrupt businesses -- and your government has already severely limited the rights of employees to collect their termination and severance pay by the changes to the wage protection fund -- and secondly, because there are not enough powers granted to the director under the act to obtain documentary evidence of who owes the business money; for example, they're essentially required to file an order in court, as a private litigant would, and then use court enforcement procedures which are very slow. If the act was amended to provide some special measures to allow them to seize business records, not to establish just the claim but to establish who owes the business money and where the bank accounts are and so forth, the enforcement problems could be fairly quickly remedied.
In conclusion, I strongly urge the committee to take all of these amendments and put them into a process in which the whole act is evaluated. There's no need to rush into these. It's hard to escape the conclusion that the need to rush is driven by fiscal targets and not by a coherent analysis of the act. There are many, many technical problems of the act which I haven't had time to go into and the larger problems dictate to me that these changes should not go ahead because they will harm, not just employees but the interests of employers, particularly employers who are fair and pay the amount due on time, because they will be in a worse position than those who choose to circumvent the act and are allowed to do it because the enforcement provisions have been weakened.
The Chair: Thank you. That allows us just slightly over one minute per caucus for questioning. This time it will commence with the government.
Mr Baird: Thank you very much for your presentation. We appreciate the time you took to present it. On page 3 of your presentation, under subsection 2, "Enforcement Under a Collective Agreement," you write, "Employment standards are not something that are negotiated between parties," yet virtually every provision under the Employment Standards Act in a unionized environment, if not every one, would form part of a collective agreement. For example, the minimum wage. I would expect the vast, vast majority, approaching 99% of collective agreements, would have above the minimum wage. Could you tell me, as a union member, if I came forward if I wasn't being paid the minimum wage, for example, wasn't getting my vacation time, why wouldn't my union represent me?
Mr Miller: They may not have enough money. They may have a number of other grievances. There are numerous reasons why it may be impractical for a union to be able to represent every single employee who has a complaint about a breach of a standard. The point I'm making here is that these are standards, they're legislated standards, they're law, and government should enforce law. The parallel in the private sector would be saying to Eaton's: "You have to go enforce shoplifting. We're not going to enforce that criminal law any more. If you want a shoplifter prosecuted, you have to hire a private lawyer and bring him down to the court and prosecute the person."
Mr Baird: They do have to enforce it. They do have to have their own store security, though, because we don't have enough money to have --
Mr Miller: They do not have to have their own. They choose to have their own store security. That's an entirely different issue.
Mr Baird: Because the police won't provide the enforcement for them every day. They lose millions of dollars every week across the country so they have to have private security guards to watch their store merchandise because the police will not be there to enforce it on an hour-by-hour basis.
Mr Miller: Yes, but they do not have to go to court, hire their own lawyer to prosecute somebody who's alleged to be shoplifting. In essence, is it the same thing? Employment standards aren't something that parties have negotiated and said, "I'm going to be paid this." This is a minimum set out by law because we recognize as a society we need these minimums.
Mr Lalonde: Once again, thank you for your presentation. You point out on page 3, "From a public policy point of view it is simply wrong to have rights under these standards be enforced by a private entity such as a trade union." I fully agree with you in this case because we will have two different interpretations. Even in court many times the lawyers have different interpretations. Even if you go to the Supreme Court you have different interpretations by the judges. In this case, do you think it's going to be fair for the people or the employees who will lodge a complaint that at times it could be on the same day that the Ministry of Labour could be holding some hearings or having some debate on complaints lodged that you would have one group represented by a union and the other group represented by the enforcement officer? Do you expect that at times there will be quite a difference of opinion?
Mr Miller: Yes, I agree with you completely. I think it's very unfair and will result in some employees not having their legal rights enforced from any practical point of view.
Mr Lalonde: Would you say that it would have been better off for the government to keep the enforcement officers and train them properly so they could handle all cases?
Mr Miller: And perhaps hire some more, yes.
Mr Christopherson: Thank you, councillor, for your presentation. I'm sure you'd be interested to know, since you just left the same place I did at noon, and for the benefit of others who weren't, there was an exercising of democratic rights to protest outside the Ministry of Labour at noonhour today, not unlike demonstrations we've had all across Ontario during these hearings. There was a large number of people there. Councillor Miller was there also lending his support, as he has here today at these hearings.
What you need to know is that since you and I left the protesters wanted to have a meeting with the minister because they don't believe that this committee is truly listening to the presenters, and that as a result, the word I have is that elevators were shut off, the police were called yet again, having to call in the police to protect this government from the people it governs, and already one person has been charged with trespass and the situation remains unresolved at this moment.
It's important that the record reflect the fact that the struggle continues on this issue. This is not a political process when we're talking about these kinds of minimum standards and the rights you're taking away, and this is what it has led to. Once again you've had to call in the police to hold off the very people you purport to represent as the government of the day.
The Chair: That takes us to 16 minutes, well past our time.
Mr Miller: Thank you, Mr Gilchrist.
The Chair: Thank you for making your presentation before us here today.
The Brampton Board of Trade has cancelled its appearance and next up would be the Toronto Musicians' Association, Local 149, AFM. Are they in attendance? I don't suppose there's anybody from Ontario Public Service Employees Union Local 595 here yet, by any chance? Seeing neither, the committee will stand recessed for 10 minutes to allow the other group to arrive.
The committee recessed from 1336 to 1347.
TORONTO MUSICIANS' ASSOCIATION, LOCAL 149, AMERICAN FEDERATION OF MUSICIANS OF THE UNITED STATES AND CANADA
The Chair: I welcome the Toronto Musicians' Association, Local 149, AFM. Good afternoon and welcome to the committee.
Ms Marnie Niemi: Thank you. As you'll notice from the brief, which has probably been distributed to you at this point, I'm not Bobby Herriot. I'm about 80 years younger and I don't have a thick Scottish accent. I don't play the trumpet at the Old Mill, so you wouldn't have danced to the wonderful rhythms of my band. I am Marnie Niemi. I'm the field services coordinator at the Toronto Musicians' Association. So I'll obviously be changing the draft you have before you as I go along. The beauty of being a musician is that we learn to do it by ear, so I'll be doing that today.
Mr O'Toole: We'll keep on beat.
Ms Niemi: Keep on beat. That's right.
The Toronto Musicians' Association: We're a local chapter of the American Federation of Musicians of the United States and Canada, Local 149. Our membership of 4,000 professional musicians covers all types of musical employment imaginable, with a jurisdiction of Oakville in the west, Oshawa in the east and as far as Huntsville in the north.
I'm here today to express the grave concerns the TMA has with Bill 49. Although we are relatively new to the trade union and labour scene, we have been representing musicians in their workplace concerns for almost 100 years here in Toronto. "Being a musician myself" -- this is the Bobby Herriot stuff -- "you may have seen me perform at the Old Mill or the Royal York or on the CBC over the years." Myself, I'm an orchestral flute player, so you may have seen me perform with a variety of freelance small orchestras around town or playing jazz flute in any of the smoky bars around town as well. No, I don't play the Swinging Shepherd Blues, if that's what you're wondering.
I feel that there's always a need for help when it comes to a musician enforcing their rights, either under a collective agreement or employment law. As I said, we're a rather small and specialized local here in the midst of so many well-known and powerful trade unions, but in North America Toronto is one of the five largest locals of the American Federation of Musicians. In fact, virtually all of the work done in Canada musically is done right here in Toronto. Our members work in every type of workplace imaginable, from the concert stage at Roy Thomson Hall to the opera or ballet pit at the O'Keefe Centre -- soon to be Hummingbird Centre -- the nightclubs on Queen Street West, the hotel piano bars, Phantom of the Opera, Beauty and the Beast, the CBC, in the recording studios, making film scores, TV and radio jingles or platinum-selling pop recordings, just to name a few.
While you are no doubt fascinated with the work we do as professional musicians in this the third-best city for music theatre in the world -- after New York and London, of course -- you must be wondering, what do professional musicians need the current Employment Standards Act for? The answer is pure and simple: protection. Our agreements are as varied as the places we work. Some are long-term employment; others short-term. Some workplaces have commercial agreements; others collective. While most professional musicians are members of the Toronto Musicians' Association, not many are actually covered by collectively bargained agreements.
Since enforcement of any contract or law seems to be the most pressing of our concerns at the TMA, today I'll talk mostly about the impact on both the unionized and non-unionized workplaces for musicians of Bill 49.
First, unionized workplaces: Many of our long-term employers have master agreements with the TMA. This includes employers like the Toronto Symphony Orchestra, the National Ballet of Canada, the Canadian Opera Co, Mirvish Productions and Livent Inc. Great effort is spent in the negotiation of these contracts.
Since employment standards legislation provides for certain minimums, the TMA has never had to address these situations in either bargaining or their enforcement. As you know, the amendments in Bill 49 call upon trade unions to incorporate employment standards issues into the normal sphere of union representation. This places a small local like ours in a doubly difficult position.
First, we are constantly encountering difficulty with negotiations due to the cutbacks in government funding. As such, employer demands for decreased vacations, concerts for free and longer working hours are the norm. We have yet to see any proof that this current trend in bargaining, if attained, yields any increases in either ticket prices or artistic quality. These are already the strike issues that threaten Toronto's vibrant cultural identity. The implementation of Bill 49 would exacerbate any constructive efforts on the parts of the musicians and their employers to keep the music scene afloat.
Why? If TMA reps like myself, being one of two for the whole city of Toronto, were required to enforce employment standards provisions, I can assure you that there would be even less protection for musicians in this city than is the current level. Not only are we overwhelmed by the volume of current employer violations of negotiated agreements, but we have neither the training nor the time necessary to investigate a multitude of employment standards issues.
Bill 49 directs unionized employees to utilize grievance and arbitration provisions in collective agreements to resolve employment standards issues. The cost of arbitration, as some of you may know, is in the ballpark of $2,000 a day. Frankly, this is money that the TMA and our cash-strapped, non-profit employers simply don't have. It would be most unfortunate if we were forced to take on employment standards issues and were ultimately unable to deliver with the representation that is required of us by law. Of course, I would be brought before the Ontario Labour Relations Board for a failure to represent under the Labour Relations Act. Unions were created for the purpose of collective bargaining, not the active enforcement of every type of employment-related legislation.
How will Bill 49 impact on our bargaining processes? If the TMA were to have several claims against an employer for violations of employment standards during negotiations, it is entirely possible that the employer could make an agreement's settlement conditional upon our dropping the employment standards claims. This only reinforces potential abuse by the employer community. It's ridiculous to imagine that in this age of civilized industrial relations, if we refused to toss in an employment standards claim to settle a contract, we'd be out on a picket line. Once an employer can get away with these abuses, the minimum standards will then become maximums.
Second, non-unionized workplaces: This is where the majority of our membership is working. Although these musicians may hold membership in the American Federation of Musicians for a variety of reasons, collective bargaining is not usually their prime concern. These workplaces are usually quite small, using from only one musician up to 60, but often for a short period of time. Some musicians make use of AFM contracts to protect themselves, but most musicians are unable to convince their employers to sign these contracts. It is for these musicians that a publicly based system of enforcement and collection is vital.
Bill 49 gives the non-unionized musician the responsibility to solve employment standards issues by other means. These other means, as we well know in the music industry, are the civil courts. We all know how long a court case can take and the exorbitant legal fees one must incur. Employers will always have money to spend on lawyers and court costs. Is it fair to ask musicians, who are living from paycheque to paycheque just to make guitar and insurance payments and feed themselves, to launch a lawsuit against a club that has not paid them in weeks? Just as a matter of course, the average income for a musician in Toronto is under $12,000 a year. That's the majority of our membership. When the total amount recoverable to non-unionized employees is $10,000 and a five-piece band hasn't been paid in weeks, $10,000 minus a collector's fee really doesn't amount to much.
This decision is made all the more difficult by the pressure to be hasty. For example, a musician may make a claim with the Ministry of Labour, knowing there's a ceiling of $10,000 minus the collector's fee. That musician has only two weeks to decide whether they wish to pursue civil action. This is not nearly enough time to retain legal counsel, consult with them, obtain a legal opinion and then have the time to discuss the ramifications of either recourse with the relevant band members, their spouses etc.
Another difficult situation we have with non-unionized workplaces is similar to that case we heard about a few months ago of restaurant workers working for tips and not wages. Not to tell tales out of school, but there is a symphony orchestra here in Metro Toronto that puts on concerts in an illustrious concert hall, takes in ticket sales of $25 a person and pays some professional musicians nothing, all the while proclaiming to the concert-going public that they are a professional symphony orchestra.
Like the restaurant workers working for tips, these musicians play for free in return for a favour from management. They hope management will hire them for work outside this orchestra's concert season. Most disturbing of all is that they have to sit beside other professional musicians who are being paid. They may work with these other musicians in other orchestras and get paid for that work, but here they do not. Since there is no union contract, the musicians' only recourse is the Ministry of Labour employment standards branch.
All in all, the TMA feels that our rights as workers and musicians should not be made harder to obtain and that enforcement should remain in the capable hands of the Ministry of Labour. We've all grown up under common minimum standards. I implore you to maintain these minimum standards. Don't erode them or make them negotiable. Don't create a system of lax enforcement and collections that reinforces employer abuse of these minimums. The trade unions can't address every issue in the workplace. Please don't ask me personally to take on these additional issues and all of their subsequent liabilities.
I'd like to commend you on the proposals regarding the accrual of entitlement to vacation pay, seniority and service during pregnancy and parental leave. I think this is only fair.
In closing, on behalf of all of my fellow musicians, all 4,000 of us in Toronto, I ask the standing committee to consider this amendment very carefully. Do not sacrifice the overall standard of living and industrial relations system in Ontario for housekeeping purposes or deficit reduction.
Thank you for your time and I look forward to your questions.
Mr Lalonde: Thank you for your presentation. I'd just like to know, how many employees within the organization are working for minimum wage? What percentage?
Ms Niemi: It depends on the actual employer. There are music festivals that happen within our jurisdiction where the musicians are paid what is actually less than minimum wage.
Mr Lalonde: We know that being a musician is a tough business.
Ms Niemi: Yes, it is.
Mr Lalonde: Unless you become professional. You pointed out in a section that I highlighted here that employees will only have two weeks to decide whether or not they wish to pursue civil action.
Ms Niemi: That's my understanding.
Mr Lalonde: I fully agree with you that two weeks is not enough, because you have to consult a lawyer at times to see which way would be the best one to go, either to go through an enforcement officer or to go to the civil court. In this case you would see this extended; this two weeks should be at least 30 days.
Ms Niemi: At least. Obviously our members, as I tried to point out, don't have a lot of financial resources and their ability to find legal counsel initially -- it's not something that musicians deal with on a daily basis; secondly is their ability to pay for that legal counsel. To my understanding, legal aid doesn't fund employment-related cases, so you'd have to have some means of paying for that legal counsel as well. It takes longer than two weeks to come up with some idea.
Mr Lalonde: Exactly, because you have to go to the right lawyers who are aware of the employment standards.
Ms Niemi: That's right.
Mr Christopherson: Thank you very much for your presentation. In the course of travelling across Ontario, we've heard from just about every wage-earning walk of life there is. In fact, yesterday we had an organization representing scientists and engineers who felt as threatened, for the same reasons, as you, and yet if you've had any chance to follow in the media what's been happening, the government still refuses to even admit this takes away anything, let alone the extent of the takeaway of rights that workers are about to lose. And you won't hear them admit it today if the rest of the time has been any indication.
The parliamentary assistant has been keenly interested in the issue of unions and representing the Employment Standards Act under the collective agreement. Maybe you could just expand again and enforce the argument as to why this is an unfair, unasked-for burden on your organization and how ultimately your members are going to potentially lose rights or the ability to enforce their rights as they now exist.
Ms Niemi: There's a couple of things. Obviously, as I said, unions were created for the purpose of collective bargaining. We're there to secure standards and working conditions above the minimums. If we are forced with the responsibility of pursuing every possible violation that occurs, beyond things that we've never had to think of -- as I said, we're a small union. There's myself and one other colleague here representing 4,000 musicians in this city. Simply enforcing contract violations of an agreement that both parties have agreed to takes all of our time.
As such, I personally worry about the fact that musicians will come to me and say: "I played this music festival and I made $300 and I was working nine hours a day and I was being billeted in someone's wealthy cottage in Muskoka. What are you going to do about it?" The difficulty for me is I have to look at all the other work that I have to do and say to the musician, "Is there some other way that you yourself can handle this?" The difficulty obviously is being brought up before the labour board for not representing them fairly, but it's a hard question of the simple economics of the situation.
Mr Ouellette: Thank you very much for your presentation. I know another organization that has similar problems. It's an organization of outdoor writers. What happens there when they are denied payment is they communicate through their organization to the other members and effectively shut down anybody from writing for those magazines or papers and that. Does your union not communicate, or can they not communicate, to the membership to effectively stop players from playing in a place, to stop customers from coming in, and shut them down?
Ms Niemi: Yes, there is that ability. Many types of unions have similar boycott mechanisms.
Mr Ouellette: Is that what your union does?
Ms Niemi: The AFM is very hesitant to pursue any sort of internal discipline or any type of boycott. If legislation is available to regulate employment relations between an employer and the employees, we'll do everything we can to facilitate that process, but we're not particularly interested in organizing boycotts.
Mr Ouellette: But in the same way that you had said to your membership that if there were some way they could take care of it, obviously the government has a function there to address the bad bosses but we can't -- we would like to think we could be the be-all and end-all, but in cases where you have the ability to shut down an operation that is a bad boss, I think you should take the initiative to try and convey to your membership not to participate or support continuing the support of the bad boss.
Ms Niemi: Yes, there is that possibility. We do look at that. But the thing is, as I'm sure everyone here in this room has heard, there's not a lot of work out there. There really isn't a lot of work. So people don't want to put a strike on their employer as a collective effort, because it's something, at least it's a job, and there's a hope of some ongoing, continued employment there. If there's a legal way they can have an outside third party like the Ministry of Labour come in and say, "Look, folks, this is the situation; let's resolve it," we want to continue. We want to make sure our musicians are working well into the future. We're not interested in shutting the place down.
The Chair: Thank you very much for taking the time to make a presentation before us here.
ONTARIO PUBLIC SERVICE EMPLOYEES UNION, LOCAL 595
The Chair: That leads us now to the Ontario Public Service Employees Union, Local 595. Good afternoon and welcome to the committee.
Mr Barry Weisleder: Good afternoon. My name is Barry Weisleder and I'm a member of the executive board of the Ontario Public Service Employees Union, representing 100,000 members across the province, including the Ministry of Labour workers charged with enforcement of the act that you are now reviewing, the same workforce this government is cutting to weaken enforcement of existing standards. I'm also president of Local 595, representing some 1,000 substitute teachers at the Toronto Board of Education, among the most poorly paid and insecure workers of the school system workforce, who need protection rather than further exposure to exploitative employer practices.
I come today to add my voice to the many who have demanded that Bill 49 be scrapped. We need stronger employment standards, not weaker ones. Bill 49 is an evil piece of work, an all-too-fitting companion piece to previous anti-worker legislation and a sign of what is to come if the government has its way. The majority on this Legislature committee know full well what you are doing. So does the Conservative government at Queen's Park, whose party name should reflect its true political direction, which is why I lovingly call them the Reform-a-Tories.
You are simply letting employers off the hook so they don't have to pay workers all that they are owed. You are forcing workers and unions to carry much of the burden for enforcement and costs. You are imposing new rules to set a very short time limit and restrict the amount of money that can be claimed when an employer breaks the law. You are abandoning government enforcement in favour of private for-profit collection agencies, which would shortchange many workers owed money by the employer. All this under the thin guise of housekeeping. If this be housekeeping, then this be a bawdy-house and House Madam Harris is prostituting the principles of public service and public good under very thin covers. You should be ashamed.
We take little solace from the fact that the government has backed off its proposals to allow employers to try to bargain standards that are well below legislated standards on hours of work, overtime pay, holidays, vacation and severance pay. This retreat shows that protest works, but it offers no serious relief to working people. The Reform-a-Tory regime states that this odious proposal will be part of a more substantial attack on labour legislation later this year.
Let's look at some specific provisions of Bill 49. Section 28 on privatization comes to mind. Obviously, OPSEU is very concerned when vital public service work, which we take pride in performing at cost for the people of Ontario, is contracted out to for-profit agencies, doubly so when that work defends the living standard of workers who suffer from illegal employment practices. This is the case with section 28 of Bill 49. We urge committee members to ask some hard questions about the gaps in accountability inherent in these amendments.
Public employees report through the deputy minister to you as legislators. The effectiveness of our work can be directly scrutinized, notwithstanding intended cuts of well over $4 billion to the public service by 1998. Employment standards officers and their co-workers do not have a direct pecuniary interest in the percentage of an assessment for back wages collected from employers. In contrast, what incentive does a private operator have to make every effort to recoup the full rate of assessed wages owing to an employee?
Further, why are there only passing references in the new section 73.0.2(1) as to the conditions that the director can impose on private collectors on "reasonable fees and disbursements"? Why are there no provisions setting out sanctions for private operators who collect assessments through fraud or coercion? Why was it not evident to the drafters of Bill 49 that permission for private collectors to arrange compromise settlements in the new section 73.0.3 raises the likelihood of abuse and further exploitation of workers?
These serious questions must be addressed. They are among the reasons why we label the provisions in Bill 49 to privatize collections as reckless. If more evidence is required, one need look no further than last year's study of the central collection services agency within Management Board. This review found that public service functions have a much better rate of return than private collectors and a better cost-to-revenue ratio. Central collection services took in $12 million for the provincial treasury last year.
The same review expressed concern about the cost of private sector agencies being used by the ministry. Fees were averaging 23%, and the tactics, language and practices of private collection agencies, including creaming more lucrative accounts, were found to be troublesome. We submit that many serious questions remain about privatized collections and that therefore the full review of the Employment Standards Act should precede any decisions about them.
OPSEU is fully aware of the weak rate of recovery of funds by the employment practices branch. Dedicated employment standards staff require many more resources to prevent violations in the first place, to conduct audits to seriously fine and prosecute lawbreakers, and to protect complainants from reprisals. Clearly, with 20,000 formal complaints a year and five times as many general inquiries, this is no time to lay off 400 ministry staff, over 10% of those working in enforcement. Professor Judy Fudge of Osgoode Hall Law School effectively described in her study of the ESA how the meagre resources put towards recovering funds on behalf of cheated workers contrasts markedly with the recent spending spree to recoup alleged welfare fraud.
Let's look at section 20. This section eliminates access by union members to the investigation and enforcement services of the Ministry of Labour. It compels anyone cheated by an unethical employer to grieve, with their union incurring the expense of private arbitration for protection of rights that fall under a public statute. As with the privatization of collections, we question amendments that put enforcement of a vital component of public legislation at the mercy of the private arbitration process. Should victims of crimes be obliged to pay the local crown attorney to prosecute the abuser, and should arbitrators be expected to have the investigative resources and expertise of the Ministry of Labour in adjudicating increasingly complex matters?
What about sections 19 and 21: access to enforcement, non-union? OPSEU is deeply troubled by the proposed act at these sections because they force non-unionized workers with complaints to make an either/or choice between access to the employment standards branch and a lengthy civil suit that few people can afford. Onerous time limits of just two weeks are also imposed on this unacceptable choice.
These new conditions on access to justice are exacerbated by a new maximum claim limit of $10,000, with few exceptions, on recoverable moneys for back wages, vacation, severance and termination pay. Hundreds of awards are being made every year in excess of this new cap. It is only reasonable to expect that the most modestly paid workers in the province are also the least likely to be able to pay legal fees or withstand a very lengthy wait for a civil suit to be completed.
OPSEU members are workers drawn to public service. We frequently assist victims of rogue employers when they visit the legal clinic, social services and health care facilities that we staff. Based on this experience, we urge you to safeguard open access to publicly funded ministry services where employment standards claims ought to be pursued without the imposition of a maximum.
Section 32: By replacing the existing two-year limit on claims for back pay with one of just six months, the drafters of Bill 49 fail to recognize the serious hardships that are bound to follow. Vulnerable workers naturally take a much longer time to feel safe enough once they have moved to a new job or to become well informed enough to assert their rights. It is inappropriate to impose legislation that radically diminishes such complainants' ability to recover moneys owed to them. This restriction is particularly worrisome when coupled with the other limitation period changes at section 32 in which prosecutions under the act may now take a total of four years.
Bill 49 is part of a reactionary pattern of anti-labour legislation which so far has included the right to scab; provisions making it harder for unions to organize and to fight to maintain and improve workplace rights; rollbacks of workers' compensation that will cut benefits to injured workers and coverage from any workplace injuries and make it much harder to appeal a decision; and the disbanding of the Workplace Health and Safety Agency, drastically cutting funds for one of the best health and safety education programs anywhere.
So we're dealing with a government which has abandoned any pretence of social responsibility and one which is catering to the corporate élite whose systematic tax avoidance created the provincial debt that some people are so preoccupied by.
Big business wealth and political prowess buys legislators, it buys laws and is supported by media hype to convince Ontarians that there is a deficit crisis. The only true deficit is a moral deficit, and it is exemplified by Bill 49.
I want to say, not just to this committee but particularly to the people who follow these hearings through the media coverage they attract from time to time, that Bill 49, its predecessor Bill 7 and all the billions of dollars of cuts to services, jobs and human rights are the reasons that labour and community groups are fighting back.
This is the reason why on October 25 Metropolitan Toronto will be shut down. We need to convey a message to this government that without justice there can be no peace, no business as usual. On October 25 trains, buses, streetcars and unionized cabs will come to a halt. Offices, factories and schools will be closed. Essential services like hospitals will be on skeleton staff. On Saturday, October 26, the biggest rally in Canadian history will overflow the front lawn of the Legislature. This is a protest against the evil that some have done and intend to do more of. It also forms a living picture of what Ontario will look like if laws like Bill 49 come into effect: a picture of paralysis.
We say to the government, you can't hide behind the rhetoric of workplace self-reliance and less red tape. Ontarians realize in growing numbers that Bill 49 and similar attacks on the rights of the majority represent a right-wing corporate agenda. You've faced four city-wide general strikes across Ontario. The biggest one is coming to Toronto on October 25, and if that doesn't persuade you to withdraw Bill 49 and reverse the cuts and reinstate the 400 Ministry of Labour staff who handle the 20,000 formal labour standards complaints a year, and the 100,000 general inquiries, and if it doesn't cause you to rescind previous reactionary legislation, then we are headed for a province-wide general strike that will either bring this government to its senses or bring this government to its knees.
If you were on your knees you would be able to look the workers of Ontario straight in the eye, because that's where you've put us with your laws and your budgets. We don't intend to remain there, however. We are standing up for labour standards; we are standing up for health and safety; we are standing up for public service and jobs and quality living conditions; we are standing up for ourselves, our neighbours, our children and those who will follow them. We owe no less to Ontario and to its future. Bill 49 does not represent the future; it represents the past, a very ugly past of extreme exploitation of working people, total job insecurity, a corporate paradise of human and environmental abuse, all in the service of superprofits for a tiny minority of big owners. That's a road we do not intend to travel with this government or any other.
We'll see you on October 25 and we invite the people of Ontario to join us on that occasion. I'd be happy to take any questions, if you please.
Mr Christopherson: Thank you, Barry, for your presentation. I want to take you back to the issue of contracting out the collection services. You raised the idea of the easier cases, the more profitable ones being skimmed off the top and others left behind. Can you expand on that in terms of the types of cases that are not as likely to be pursued as heavily by an organization whose, rightfully, primary motivation is profit and not necessarily the recovery of the money?
Mr Weisleder: Where the sums may not be very sizeable, where there's not a lot in it for the collection agency, depending on what incentives the collection agency is given in terms of reward for performance, there could be a very serious lack of enthusiasm about carrying it out, and that means that a lot of workers, particularly in small workplaces, more often not organized workplaces, will be vulnerable and will suffer the abuse of being deemed to be right in the eyes of the law but not getting the compensation they're justly entitled to.
Mr Christopherson: The other question on this is, do you see any impediment whatsoever from your co-workers being trained to the same level of expertise that one might have in the private sector? Is there some particular makeup of persons who work in the public sector that would prevent them from acquiring those skills?
Mr Weisleder: In the public sector there are standards about training and ensuring that staff are equipped in a non-partisan way to carry out their duties. In the private sector I don't know that this bill even speaks to what the standards will be for training of those who are to carry out collections and enforcement. It's a wide-open field and a Pandora's box, I feel, that we're opening.
Mr O'Toole: Thank you very much, Barry, for your presentation. I know the members of OPSEU are well familiar with the challenge of downsizing.
Mr Weisleder: We don't see it as a challenge. We see it as an assault.
Mr O'Toole: By the workers?
Mr Weisleder: The provincial government acting on behalf of its financial backers.
Mr O'Toole: The workers at OPSEU have the right to demonstrate, and Leah Casselman and the leadership have some tough decisions to make. That's really what this is all about. This whole thing is about change.
I guess there has been an ugly past, perhaps the last 10 years, of overspending and that kind of behaviour, irresponsible behaviour, I might add. I'm going to ask you a very simple question and I'm not sure if there's an appropriate correct answer. I'd just like your opinion; you're a thoughtful person. I'm making this up as I go along. Which would you prefer to see here: 50 people making $22 an hour or 100 people making $12 an hour, working?
Mr Weisleder: I'd like to see everyone making a living wage. I'd like to see free collective bargaining. I'd like to see a proper standard prevail in the province.
Mr O'Toole: What is that, though? What I am trying to find is the point of equilibrium. When there's an excess supply of, say, cars or furniture they have to put them on sale. It's a supply issue, really, in the broadest sense. I don't think we made that up.
Mr Weisleder: Let me answer your question with a question.
Mr O'Toole: What happens with equilibrium, though? The price falls, right?
Mr Weisleder: Magna Corp, which is headed by Frank Stronach, who makes in excess of $4 million, $5 million, $6 million a year --
Mr O'Toole: Wayne Gretzky makes more. What's your point?
Mr Weisleder: -- employs a lot of workers at just above minimum wage. We're looking at a model where there's more equity in society rather than less, less polarization rather than more, and this kind of legislation that your government is studying and considering is going to worsen that situation.
Mr O'Toole: I guess technically you're criticizing Frank Stronach for creating hundreds of thousands of jobs. Is that the argument you're making?
Mr Weisleder: I think labour is a source of wealth in society and that he has the pleasure of being able to take a lot of the wealth created by his workers for his own self, and not pay taxes, and your government does not see fit to impose taxes on wealthy firms, the big banks, the billion-dollar-earning banks. If you did, we wouldn't be discussing this legislation.
Mr O'Toole: Mr Christopherson this morning mentioned that the word "profit" is very acceptable. Do you agree with that?
Mr Weisleder: I think profit is acceptable if it flows to society.
Mr Lalonde: Gentlemen, according to Bill 49, if an employee wants to file a complaint or claim, he will have to deposit a grievance to your union.
Mr Weisleder: Yes, if it's a unionized workplace the union must file a grievance, and the individual no longer has recourse to go to the employment standards branch.
Mr Lalonde: On average, how much do you think it's going to cost the union to proceed with the investigation that will have to be taken?
Mr Weisleder: Undoubtedly this brings a whole range of complaints under the aegis of the union and the collective agreement, and we know that the average grievance taken to arbitration costs in excess of $4,000 just for a one-day hearing, with representation from our side and sharing the cost of the chair of the board of arbitration. It's hard to estimate the total cost this will involve, but it's going to involve hundreds of thousands of dollars just for our organization to bear the burden of this additional responsibility.
Mr Lalonde: The fact that you will not have access to the enforcement officer, and having the number of employees you represent, are you going to have the staff in place to respond to all those grievances that will come to your union office?
Mr Weisleder: As you know, and as the previous questioner implied, we are having to restructure our organization. Because of the layoffs this government is imposing on the public service -- we're already losing millions of dollars in revenue and we are dealing with that situation -- it will be next to impossible to deal with this additional burden of responsibility with respect to representation through the grievance procedure that employees now have the right to pursue directly to the employment standards branch.
Mr Lalonde: Would you say it would have been better for all to go through an enforcement officer so they would have the same interpretation?
Mr Weisleder: Certainly.
Mr Baird: Mr Chair, I just have one quick question, if there's unanimous consent for me to ask it. Do you mind?
The Chair: I don't mind, Mr Baird.
Mr Baird: This has come up, and I mean this with the best of intentions: How many employment standards complaints would your local have put forward in the last year, the last two years? The issue of expense is one that's come up a number of times. Would you be able to provide that to us? I would be very interested to know how many employment standards complaints came from your local and how much that would cost your union.
Mr Weisleder: How many claims have been put forward or would be put forward?
Mr Baird: Have been put forward.
Mr Weisleder: To be frank, not very many, but I also came as a member of our provincial executive for the union, representing members in more than just one local. We're also concerned about the status of employees who belong not only to other unions but who have no union at all. I wouldn't want to mislead the committee to think that in our local, where we have about 400 people on the job every day, 900 on a roster to be called out when needed, there's a great volume of employment standards complaints from the local alone. But for the union as a whole, to which my members and the local pay dues to fund the overall operation, it will be a matter of great concern. That's why we bring our concerns to you.
The Chair: Thank you very much for taking the time to appear before us today.
ONTARIO COALITION FOR BETTER CHILD CARE
The Chair: That leads us now to the Ontario Coalition for Better Child Care, if they could come forward. Good afternoon. Welcome to the committee.
Ms Katheryne Schulz: Thank you. My name is Katheryne Schulz. I am the public education coordinator for the Ontario Coalition for Better Child Care.
The Ontario Coalition for Better Child Care is deeply concerned about the impact that Bill 49, the Employment Standards Improvement Act, will have on early childhood educators in the child care sector.
Child care in Ontario is a billion-dollar industry, employing over 20,000 full-time staff. Child care professionals are among the lowest-paid workers in Ontario, and 95% of our sector is non-unionized. Staff in child care centres rely on the basic protection provided under the Employment Standards Act to ensure that they are paid minimum wage for their work, that they are paid for hours worked and that they are given proper notice or severance pay when their employment ends.
Ontario's home child care providers, on the other hand, are not covered by the Employment Standards Act. Home child care agencies and the Ministry of Community and Social Services, through the Day Nurseries Act, set out the number of children cared for, the ages of the children, discipline methods, health and safety issues and the need for inspections of licensed providers. The agencies provide a contract, set wages, provide clients and do routine inspections. While the coalition absolutely supports the regulation of home child care settings and the support role of home child care agencies, we also believe home child care providers deserve at least the basic protection provided under the Employment Standards Act.
Changes to the Employment Standards Act, coupled with changes to child care funding and regulation, cause grave concern to the child care sector. In its July 21, 1995, economic statement the Ontario government signalled its intention to review the province's early childhood education and care programs. Since that time it has cancelled $100 million in child care spending and taken a number of steps to reduce government involvement in the provision of child care services. These actions have had a major impact.
A survey of municipal children's services departments completed by the Ontario Coalition for Better Child Care in February 1996 indicates that 4,743 of the original 14,000 Jobs Ontario child care subsidies have been lost to date and another 3,600 will be eliminated by the end of this year, 19 child care programs have closed, 408 jobs have been lost, 12 regions have frozen their subsidy intake, 16 areas have increased user fees to subsidized families, and 12 community-based planning groups have lost their funding.
Over the past six months the provincial government has conducted a review of Ontario's child care system. The recommendations which were released last week, entitled Improving Ontario's Child Care System, confirm our coalition's predictions that the province intends to privatize and deregulate the child care sector.
The changes recommended in the child care review, combined with cuts to public funding for child care, will mean massive job losses and changes in working conditions for child care staff. Unlike before the introduction of the wage grant, many staff now have 15 to 20 years in the field. Those who are laid off may not get proper notice or severance because the operator is either unable or unwilling to meet their obligations. Asking staff to choose between filing under the Employment Standards Act and civil action is unfair. Filing a civil suit is expensive, and in many cases staff would only risk the expense of a civil suit with a favourable ruling under the act.
With fewer employment opportunities, and deregulation devaluing the usefulness of her experience and degree, staff whose rights are being violated under the Employment Standards Act will be less likely to come forward or will wait longer to file a complaint. The proposal to reduce the amount of time an employee has to file her complaint from two years to six months will mean that many staff forgo their basic rights in favour of keeping their jobs.
One of the child care review's recommendations is to replace wage grants for child care staff with a lower "stabilization" grant which will be spent at the operator's discretion. The elimination of wage competition in this sector will result in downward pressure on pay and working conditions. Coupled with for-profit sector expansion, we can expect an increase in the number of complaints from child care staff under the Employment Standards Act.
The Ontario Coalition for Better Child Care condemns this government's callous disregard for the safety and wellbeing of Ontario's children. Its current approach to child care policy sees child care as a business in competition for the disposable income parents have to spend on substitute care for their young children. The fact that quality of care for children is compromised, that basic health and safety standards are reduced and that our most vulnerable children lose access to developmental programs becomes incidental. Having cut early childhood educators' salaries, increased their workloads and made them redundant by replacing them with less-qualified workers, this government then moves to dismantle their last basic protection under the Employment Standards Act.
The Ontario Coalition for Better Child Care calls upon the province to make real improvements to the Employment Standards Act by making the following changes: (1) stronger enforcement; (2) no exemptions from the act; (3) a $1 increase in the minimum wage; (4) overtime pay after an eight-hour day and a 40-hour workweek; (5) more protection for home workers and teleworkers; (6) equal pay for part-timers; (7) three weeks' vacation and more paid holidays; (8) paid breaks; (9) rights to sick leave and personal leave; and (10) just-cause protection.
I'll take questions now.
Mr Rollins: Thank you for your presentation. I have great concerns over some of the documentation that you have chosen to write down in these numbers, where there are some job losses that you predict.
Ms Schulz: We're not predicting job loss, sir; they've already taken place.
Mr Rollins: It's funny to listen to the numbers that Janet Ecker, who has just done a study in this, puts out. This government has spent an extra $600 million more on child care this year than any other --
Ms Schulz: Janet did not study the impact of the changes and the cuts she's already made. She went around the province and talked with some selected child care providers and child care experts. She did not, as the coalition did, call around to every municipal children's services department and ask them what losses they have in fact suffered. When she is asked how many subsidies have been lost, the only response she has is an aggregate number that she can't account for, sir.
Mr Rollins: We're still spending more on child care now this year than we ever have before and --
Ms Schulz: No, you're not sir. Actually --
The Chair: Order. This works much better when one person asks a question and the other person answers.
Mr Rollins: My point is made. Thank you.
Mr Lalonde: I have a few questions.
Ms Schulz: Can I just make a statement also?
The Chair: Perhaps in response to whatever Mr Lalonde asks.
Ms Schulz: Okay, thank you.
Mr Lalonde: Many of your educators are on staggered hours; they're not on regular hours. They could come in at 6 o'clock in the morning and then go back home at 11 and then come back at 2 o'clock.
Ms Schulz: We have some part-time, yes.
Mr Lalonde: I really think at the present time, knowing that educators in child care are among the lowest-paid employees in Ontario, there's a reason for it -- because the people just can't afford at the present time the child care costs per day. It comes up to around $40 a day per child in some instances. Being a former mayor, I know what it is.
The government is planning to pull out of the wage grant that was awarded to all the child care educators. If they do, you are going to be not among the lowest-paid but probably the lowest-paid employees in the province. The problem, though, arises that probably the standards are too high. If I look at the province of Quebec, it's one educator per eight children from the age of 15 months up to four or five years old. But in yours, is it 3 to 1 at times?
Ms Schulz: No. Actually, it depends on the age group of the child, so the 3 to 1 you are referring to is infant care. When you get into threes and fours, you're actually talking a ratio of 1 to 8, which they're now suggesting should move to 1 to 9 or 1 to 10, when in fact the average across the country, with the exception of Saskatchewan, is 1 to 8. All of those ratios that you're talking about and the standards that you're talking about are not standards that have been pulled out of a hat or been designed for child care staff's convenience. Those are minimum standards that the research shows are necessary for healthy child development.
The difficulty here is that when you start to pit wages and working conditions against regulations you're in a very circular situation because wages and working conditions are key predictors of quality of child care. It's the combination of well-paid, well-trained staff and regulations that produce quality care. You can't trade one or the other off against each other and expect to have the same quality of care, which at this point is minimum in terms of research on child development.
Mr Lalonde: Within your organization, how many of them are public day care and private day care?
Ms Schulz: Our organization represents non-profit child care programs. Public child care programs are run by municipalities. For-profit child care programs are represented by the Association of Day Care Operators of Ontario.
Mr Lalonde: So you don't represent municipal day care?
Ms Schulz: We have a couple of municipal programs that are members, but the vast majority of our membership are non-profit child care programs, which incidentally provide the vast majority of child care in the province.
Mr Christopherson: Thank you, Katheryne. I think you still had a couple of more blows that you wanted to lay upon the body politic of Mr Rollins, so I'll give you the chance to do that.
Ms Schulz: I just wanted to make the point that despite Ms Ecker's claims that this provincial government is spending more on child care than ever before, when Ms Ecker is talking about that she is not taking into account cuts to child care spending that were made between 1995 and 1996. She disregards those cuts, and they were $100 million. She also adds in a $200-million commitment that was announced in the budget, $40 million a year over five years for child care, money which we have not seen a dime of. I would certainly be happy to recalculate my numbers, Mr Rollins, if you have a cheque for me today, but we haven't seen that money. We have no indication of when it's going to be spent or where. So we think it is somewhat unreasonable for this government to walk around talking about the amount of money it is spending when in fact it is spending less and we have no indication of where that money is going to come from or when.
Mr Christopherson: Great. I wanted to visit something that you mentioned earlier, and that is the relationship between the wages paid, the working conditions and the quality of care that's provided for children. In the past, up until now, we've talked pretty much about bad bosses in the commercial context, by and large, with some exceptions, but certainly not as it relates to children as directly. We've heard from some of the government members that a bad boss employer won't last long in business because it's not good business to be a bad employer etc, but it's all at the commercial level. In a case where we've got the real bad bosses, where we've got real bottom-feeder types no one would want in the business if they knew about them, what kind of possible care, or lack of, are we talking about in terms of the children of our province?
Ms Schulz: The important point to make is that before there was public funding for child care staff wages there was a large, appreciable difference between the wages that were being paid in the commercial sector and the wages that were being paid in the non-profit sector. Then we had what we call DOG, direct operating grants, which was money that went to both for-profit and non-profit operators and elevated people's wages to some degree. Then we had WEG, wage enhancement grants, which went only to non-profit operators because it wasn't felt that subsidizing private operators' employment costs was an accountable way of spending public funding, so the non-profit sector rose again. Interestingly, so did the commercial sector, come up to meet that standard, even though it wasn't receiving the public funds to do it, and that was because it had to compete with the non-profit sector for trained, qualified staff.
What we worry about at this point is that now that we're seeing that grant in the non-profit sector go, the squeeze is on for non-profit programs. They're going to be in the very difficult situation, as Mr Lalonde pointed out, between choosing higher parent fees in order to pay their costs or lower staff wages. So the squeeze is definitely on for them and the parent boards that run them. We are, of course, advising all of our members to make serious plans for what to do if they close so that they can honour employment standards if they are forced to shut down.
In the commercial sector what's going to happen is that this is the opportunity now to bring wages back to where they were pre-1989 -- and even before that -- bring them down as low as they can. This is their big incentive, and they're going to start to expand, so they're going to be the only game in town for employees looking for a job.
Mr Christopherson: What's the average wage right now?
Ms Schulz: It's about $22,000.
The Chair: We've gone over time, unfortunately, but thank you much for making a presentation.
CANADIAN AUTO WORKERS, LOCAL 2213
The Chair: That takes us to our next presentation, Canadian Auto Workers, Local 2213. Good afternoon. Welcome to the committee.
Mr Pino Crognale: Good afternoon. The following submission is made on behalf of CAW Local 2213 in Mississauga and representing 45 concerned workers and members of this local, including myself. We are all full-time employees of Air Canada Vacations, a nationally recognized tour operator and wholesaler. The bulk of our workers are in the company's Mississauga office, with a smaller group located at Lester B. Pearson airport, in Terminal 2. For the last three years we've been involved in a very long and tough struggle with our company. Included in this struggle was a difficult organizing campaign, a half-hearted attempt by the company to negotiate a first collective agreement with us and, finally, a five-week strike in 1994 over the Christmas period.
It is ironic yet important to keep in mind that all during this time of struggle, even though the NDP was still in power and such labour laws as Bill 40 were in place, it seemed to us that the playing field should have been, at the very least, level. Sadly though, the opposite was true.
To complicate matters further, we now have the current government telling us essentially that workers have had it too good for too long and drastic changes are needed to restore some sort of balance between workers and their employers. These changes will have a profound effect on the lives of working class people and their families. It strips away any sense of hope and security we had and could rely on, which brings us to Bill 49 and the negative impact we feel this bill will have on workers across Ontario.
Under flexible standards, prior to Bill 49 it was illegal for a collective agreement to have any provisions below the minimum standards set out in the Employment Standards Act. Bill 49 allows a collective agreement to override the legal minimum standards concerning issues such as severance pay, overtime, public holidays, hours of work and vacation pay if the contract confers greater rights when those matters are assessed together. Consequently, what this means is that employers will now have the ability to put on the bargaining table more issues which were formerly part of the minimum legislative standards. It will allow employers to roll back long-established fundamental entitlements such as hours of work, the minimum two weeks' vacation, severance pay and statutory holidays by comparing these takeaways to other, unrelated benefits which, together, can be argued to exceed the minimum standards.
The impact of these new bargaining demands by the employer will be especially felt in the bargaining units where employees do not have sufficient bargaining strength to resist employer demands. With these new pressures and demands being forced on to bargaining units, the inevitable will take place: an increase in labour disputes leading to strikes and lockouts. A strong argument can be made that there has already been an unusually high number of labour disputes in the province since the Conservatives were elected. Much of this can be attributed to the new sense of empowerment the corporations are feeling with, first, the gutting of Bill 40 and, now, the proposed changes to the Employment Standards Act.
Enforcement under a collective agreement: Currently, under the Employment Standards Act unionized employees have access to the considerable investigative and enforcement powers of the Ministry of Labour. The Bill 49 amendments eliminate recourse by unionized employees to this avenue and instead require all unionized workers to use the grievance procedure under the collective agreement to enforce their legal rights. Additionally, there would be a $10,000 ceiling on all claims for violations of the Employment Standards Act, where currently there is no maximum, and a six-month time limit for filing claims; currently it stands at two years.
Under this bill, union members will not be allowed to use Ministry of Labour enforcement procedures. Instead, their unions would be required to bear the cost of complaints for violations of legislated minimum standards. This measure would prove too costly for almost any union, and furthermore, the reduced number of claims as a result of this would pave the way for layoffs of about 45 enforcement jobs in the Ministry of Labour. Our union is strongly opposed to these new measures and feels that the government should be kept in charge of enforcing employment standards for the workers and not their unions.
Enforcement for non-union employees: Bill 49 reduces the time for workers to file claims from two years to six months. The Ministry of Labour investigation will also only go back six months instead of two years. Workers know they may be fired if they complain to the ministry, so they will wait until they have moved on to new jobs before filing a claim. The six-month limit will force workers to choose between their rights and their jobs.
Bill 49 limits the amount a worker can claim through the Ministry of Labour to a maximum of $10,000 and allows the minister to set a minimum claim amount as well. Even the poorest-paid workers, such as domestic workers and garment home workers, have had claims larger than $10,000. Any minimum amount is a gift to employers, an amount they can legally rip off workers.
The use of private collectors: Proposed amendments to the act intend to privatize the collection function of the ministry. A fundamental problem with regard to the act for some time has been the failure to enforce standards. This is especially true with regard to collections because the most frequent reason for the ministry's failure to collect wages for a worker has simply been the employer's refusal to pay.
Instead of enforcing the act, the government would rather absolve itself from enforcing the act and farm out the problem to a private collection agency. These agencies can push for a quick and lower settlement in order to get their own fees sooner. Furthermore, the CAW is very concerned that employees, particularly the most vulnerable, will feel pressured to agree to settlements for less money than what is actually owed to them for reasons of expediency or getting less is better than nothing. We want the system of government enforcement maintained and even improved.
To conclude my brief, I'd like to say that in our own personal experience at work, despite only very modest gains achieved by our first collective agreement, things have definitely not improved. The lack of cooperation shown by the company thus far is both frustrating and counterproductive. One year from now, when our contract expires, and if Bill 49 as it stands becomes law, we are probably facing the prospect of accepting unfair and unreasonable demands by our company or a long and costly strike. The company could even simply lock us out on September 1 and not even bother to try to negotiate a fair collective agreement, when there really is no incentive or reason for them to do so. We truly hope this does not happen.
The CAW demands the minister either radically alter Bill 49 or withdraw it completely.
The Chair: Thank you very much. That allows us just over a minute and a half per caucus. We've been a little tolerant about exceeding the 15 minutes, and in deference to the groups that are scheduled to appear afterwards, I would ask members to respect the time constraints, all three parties. This round the questioning will commence with the official opposition.
Mr Lalonde: You might have mentioned at the beginning how many members you have. Did you mention that?
Mr Crognale: Yes; 45, approximately, who work at Air Canada Vacations who are represented by this local of the CAW.
Mr Lalonde: So 45 members?
Mr Crognale: Yes, 45.
Mr Lalonde: The average salary would be?
Mr Crognale: Gross annual, approximately anywhere from $19,000 to $21,000 gross.
Mr Lalonde: In the low range.
Mr Crognale: Yes, very.
Mr Lalonde: Do you feel it is discriminatory to have the union members having to deposit a grievance, because of the fact they are members of a union, instead of having the services of the enforcement officer whenever there's a claim?
Mr Crognale: Absolutely. It's an extra burden on the unions, very costly, if the grievance is not settled in the first two steps, to go to arbitration. To this point, we have filed quite a number of grievances since getting our first agreement last year. To my knowledge, perhaps one or two minor ones were solved in the first two steps with the company. The rest are going to arbitration. So it is very costly.
Mr Lalonde: Are you going to be able to afford to have a person take over the enforcement officers' jobs to do the investigation?
Mr Crognale: For a bit maybe, but eventually, as this continues, it will become very costly. Our local is financially strapped.
Mr Lalonde: So in your opinion it should be all handled by government enforcement officers?
Mr Crognale: Absolutely.
Mr Christopherson: Thanks for your presentation. You talked about strikes. How do you feel about the idea that you might have to take your members or try to take them out on strike just to maintain current standards that are already in law?
Mr Crognale: It's very disheartening. It's a year from now that our contract will be up, and already the tension and the mood, the morale, is very low, and the prospects don't look good for us. Our Mississauga office is unionized, as well as our smaller Vancouver office. The Montreal office is not unionized. They tried to organize them. Basically, the company will transfer all calls and work to the Montreal office if we go on strike.
Mr Christopherson: So, contrary to what government backbenchers might think, it's going to be difficult to convince your members that they've got a strike they can win, given the current political, legislative climate that we're in.
Mr Crognale: Absolutely.
Mr Christopherson: Is it fair to say that if that happens, you're either going to go on strike and there's no guarantee you're going to win -- again contrary to what some believe, that every time you go on strike you win; oftentimes you go on strike and you lose -- or you would just avoid going on strike and have to accept something? Is it fair to say that in two rounds of bargaining you could begin to see two standards? They talk about this greater benefit, but at the end of the day if they keep trading them off in concessionary bargaining, after a few rounds of negotiations you could theoretically, and possibly realistically, see each standard one by one being traded off in negotiations and then lost to a further round of concessions when it's not part of the comparison process. Is that possible too?
Mr Crognale: Yes, that's a fair analysis. Quite frankly, I can't see us, in our case, going any lower than what we've got in our first collective agreement; it's quite modest, and most first agreements are. But the way the company is treating us thus far, compared to what we've got, is disheartening.
The Chair: Thank you, Mr Christopherson. That's already two minutes and 10 seconds.
Mr O'Toole: Thank you very much, Pino. Did you have a written submission?
Mr Crognale: I did, but I didn't have enough copies.
Mr O'Toole: That's fine, because I'd heard it totally before, almost word for word, with the exception of yours, so I have it on record. I'm not sure where you actually got it. I'm not trying to be smart. It's almost word for word from a previous presentation, which is important to hear it over and over again.
I guess my point is this: Your industry -- and no fault of yours and no fault of Mr Christopherson or of mine -- the world of work is changing. I know people in the vacation or tourist business who operate from their home, and they are worldwide connected. I forget the system it's called. They log on to some kind of reservation system, and they operate from their home.
Do you think that the world of work in tourism and vacation packaging and that kind of thing and marketing is changing? Will we always have to go to the Mississauga office? I think that's prehistoric. I should be able to do it right from my office down here, log on and -- I can now today, this very day. The world of work is changing; that's what we have to look at. It's not because of all of the previous labour legislation while you were negotiating your first contract and didn't have the support you needed at that time. How do you respond to that? This is the reality.
Mr Crognale: I'm not sure what your question is, Mr O'Toole.
Mr O'Toole: My question is -- the world of work is changing, and in your specific field, the Vancouver office or the Montreal office or the home office, that's the reality, and that's not because of this government. We're trying to adjust legislation that's over 20 years old, that's rather ineffective, that doesn't address the changing nature of work itself.
Mr Crognale: Like I said, quite frankly, if we go any lower than what our collective agreement currently stands at, I just can't see the company, with their responses to us, while they've made $120 million, coming from the manager's mouth at a recent meeting, $120 million in gross annual profits they made last year --
Mr O'Toole: Air Canada Vacations?
Mr Crognale: Air Canada Vacations. We're a wholly owned subsidiary of Air Canada. They're doing quite well.
Mr O'Toole: You can log on the Web now and book a vacation.
Mr Crognale: That's too bad; it really is.
Mr O'Toole: I know it is, but that's the way it is.
Mr Crognale: Well, it doesn't have to be.
The Chair: Thank you very much for making a presentation before us here today. We appreciate it.
CANADIAN FEDERATION OF STUDENTS
The Chair: Which leads us now to the Canadian Federation of Students unions. Good afternoon. Welcome to the committee.
Ms Victoria Smallman: Thanks. Actually, that's the Canadian Federation of Students. We are a membership-driven organization, not an association-driven organization, just to clarify.
The Ontario component of the Canadian Federation of Students, that is CFS Ontario, represents over 110,000 college and university students at over 20 post-secondary institutions across Ontario. We're pleased to take this opportunity to respond to the proposed changes to the Employment Standards Act, particularly as these changes will affect students or workers who have recently graduated from a post-secondary institution.
Given the current crisis in youth unemployment, as well as the increasing pressure on students to find meaningful summer or part-time work so that they can continue to access education, these proposed changes are of particular concern to the federation, whose members are among the most vulnerable of workers.
Student employees are primarily part-time, seasonal or contract employees. Many work in the retail or service sectors, largely unorganized sectors, and therefore rarely have the protection of a collective agreement.
Now, we're not talking small numbers here. In 1994-95, 73% of undergraduate students at York University were working for pay during the academic term and worked an average of 23 hours per week. Interestingly enough, the number of full-time students working for pay during the academic term increased substantially between the years 1991 and 1994-95, by 11%. So I think that shows that people are needing to take on more part-time work in order to continue their education.
In 1990, 32% of students worked in the service industry, 21% in clerical positions and 22% in sales. These are all industries characterized by larger proportions of part-time, evening and weekend and/or low-wage work. Students were three times more likely to work in the service occupations than the overall employed population and twice as likely to work in sales occupations.
The largest proportion of students working in the service sector -- this is in 1990 -- worked as bartenders, serving personnel etc in the accommodation, food and beverage industries, generally minimum-wage jobs with low rates of unionization and unstable working conditions.
The Employment Standards Act, then, is the only protection available to many student employees, and it is vital that the legislation and its enforcement mechanisms meet the needs of these highly vulnerable and highly transitory workers.
Students are being hit from all sides at the moment. Last week, Ontario university students paid an additional 20% in tuition and college students paid an extra 15%. This is the largest tuition hike in the province's history. Unfortunately, youth and students have experienced, at the same time, incredibly high unemployment rates; 18% unemployment for youth in July. This is at a time when students need employment the most; that is the time they're trying to earn money so that they can go back to school and cover such a massive increase in tuition.
Other costs associated with post-secondary education have also risen. Students are being charged a variety of user fees at our institutions for services as varied as library and computer use, health counselling and job placements. Add to this the stress of a full course load and at least one part-time job, and you'll see that most students don't have the time or the energy to deal with an unreasonable employer, not to mention find another job or deal with complicated complaint mechanisms or a legal challenge in the case that maybe they have wages owed to them.
The Canadian Federation of Students is extremely concerned about the ministry's proposal to "encourage the workplace parties to be more self-reliant in resolving disputes." We feel that the proposal will discourage students from resolving disputes; they simply can't afford to, in any sense of the word. We fear that students will either fail to seek compensation to which they are legally entitled or that they will be forced to stay in an unsatisfactory or abusive employment situation just because they don't have the time or the energy or the money to be able to deal with a lawsuit or anything like that.
The federation feels that the rules and mechanisms for forcing employers to comply with employment standards need to be enhanced, not deregulated or eliminated. Even under the current legislation, millions of dollars owed to Ontario workers go uncollected. The current mechanisms for ensuring that employers comply with employment standards are inadequate. If the government can't force employers to give employees their money, how can employees be expected to do so themselves?
Students, who are often intimidated by employers and reluctant to stand up for their rights, are not likely to bring legal action against an employer who owes them money, either because they are unfamiliar with the system and unaware of their rights or because the costs and time associated with legal actions far outweigh the amount of money they are owed. Because many of the proposed changes force employees to pursue litigation, and because litigation is not an acceptable solution for students, Bill 49 will prohibit students from achieving resolution in conflicts with employers over wages.
Student workers, as vulnerable, transitory and frequently unorganized workers, need minimum standards and they need standards that will be strictly enforced by government. We are extremely concerned about the suggestion that unorganized workers negotiate minimum standards with their employers. Student workers are simply not in a position to be able to do this.
There is a huge power differential in the employer-employee relationship, particularly in the sectors where students are often employed. To be able to negotiate fairly, you need a level playing field. This does not exist in workplaces that have a high turnover of employees. Given the high student and youth unemployment rate, there is always somebody waiting in the wings to take over your job if you dare to stand up for your rights. Student employees simply do not have the power to be able to negotiate fair working conditions or fair standards with their employers, and many employers understand this far too well.
Students at the moment have been put in a rather desperate position. As education becomes more expensive, students are forced to accept undesirable employment situations if they want to stay in school and avoid building up a huge debt load. Youth unemployment is at an unacceptably high level. Even recent graduates are forced to settle for so-called "McJobs" so that they can start paying back their student loans.
While stories about PhDs driving cabs may be apocryphal, I can tell you that there are many MAs and PhDs out there working as sales clerks, waiters, telemarketers and administrative assistants. I'm a graduate student myself, and in the two years I spent between degrees I worked as a hotel front desk clerk, waited tables and sold computer software by telephone. I certainly do not regret having worked these jobs, and I was fortunate enough to have had fairly good employers, although I will say that I did not receive any compensation or credit for proofreading the manual for the software company's product.
This is a dilemma that many underemployed students or youth encounter. Your boss asks you to put your hard-earned skills to work on a project or a task unrelated to your duties -- perhaps copywriting, editing or fixing a computer problem. Although you will not receive compensation, with the exception of the promise of possible promotion -- which, in the experience of myself and many people that I know, will never come to fruition -- you're happy to be using your brain and your education for once. Because of this and because this person is your boss and you can't really afford to be fired and risk defaulting on your loan, you take on the extra task.
Of course, these requests rarely stop at one, and soon you may find yourself the unofficial and unpaid copy editor, researcher, graphic designer or computer support person for the company. From the employer's perspective, nothing could be better. They get two employees for the price of one and can avoid the cost of having to pay a full-time editor, researcher, graphic designer or computer support person, or the even higher cost of contracting one out.
In addition, I think there are some areas that the act does not cover and that need to be looked at by the Ministry of Labour, where I'd like to see future legislation. So while I have the opportunity to have your ear, I'm going to talk about them.
Right now, the boundaries between education and training are becoming quite blurry and there is a real need for some regulations and standards for situations where students are performing work as part of their education: co-op programs or work placements, for example.
Some universities are developing courses in so-called applied psychology and applied humanities in which students are being asked to pay tuition for the privilege of performing work for the university such as research for a faculty member or running tutorials for lower level undergraduates. This is work that was previously done by unionized teaching or research assistants either at the graduate or undergraduate level. Having an opportunity to gain some experience that might help you in a future job search is extremely valuable, but exploitation of student labour is not acceptable and we'd like to see some standards put in place for these work situations where it's unclear whether you are an employee or a student.
The current legislation, even without the proposed amendments, is far too dependent on employee complaints about employers who violate standards. We would like to see the government take a more proactive approach, beginning with more public education about employee standards, which may include the posting of a summary of the act in the workplace.
Students in particular need more mechanisms for preventing violations. Students are unlikely to file complaints against employers. The current reliance on the complaint mechanism does not prevent violations or enforce standards in workplaces where employees are ill-informed about their rights or too intimidated or too desperate for work to complain. The responsibility for ensuring that Ontario's workers are treated fairly should not rest solely on the shoulders of these workers. Government and employers have an equal investment in enforcing standards, and the ministry should be spending more time on developing incentives for employers to comply rather than ways to discourage employees from complaining.
I do know that several organizations have made recommendations for different types of mechanisms for this, so I'm not going to repeat what they say. I will, though, add that in addition to public education, routine audits or inspections of workplaces in sectors that are notorious for violations should be undertaken, and there should be more protection from retaliation for employees who choose to complain. These two, I think, are of most interest to student workers because of the working conditions and the sectors they are employed in.
I think I'll end there and see if you have any questions.
The Chair: Thank you. We have only about 40 seconds per caucus for questions, but if anyone has a brief question or comment, we'll start with Mr Christopherson.
Mr Christopherson: That really doesn't leave a lot of time. Given all the things that you've said, and given the fact that this government purports to always be worried about the future, I often wonder whose future it is they're worrying about and whose future they're taking care of. You represent an awful lot of young people who are going to be in that future. What are your peers feeling as they look down the next few years?
Ms Smallman: I think that pretty much there's a universal feeling of despair, desperation, frustration and anger. I think that is reflected in the fact that students don't often complain about bad working conditions because they're just struggling to survive. This is why they rely on standards like this. We don't see a lot of job creation; what we see are a lot of incentives for employers. But we also at the same time see a rising debt load. So we're sort of being hit from all sides and it is creating a rather desperate atmosphere among youth.
Mr O'Toole: Thank you very much, Victoria. I commend you for appearing here, and that shows that there's a lot of potential and optimism when I see students like yourself willing to take grasp of their own life. That's really a new era. I have five children and I wish they were as aggressive as you are. That's the way it's going to be. For some reason, it's become that way in the world today -- hard to say.
I'll just ask you a question on the tuition increases. I formed a group of students in my riding and asked them to submit a report to me about the impact of tuitions. Do you know what they said to me? They said: "It's ridiculous. The academic year at university is ridiculous: 12 to 15 hours a week, six months, when the four years could be compressed into three." That was submitted to the Ministry of Education. They have creative solutions to the past way of doing things. Do you think that we have to look at different ways of doing things in education, perhaps even in the world of work?
Ms Smallman: I think the reality is that many students are juggling work and education at the same time. I don't think the academic year could be shortened and still have it --
Mr O'Toole: It's six months.
Ms Smallman: It's eight months, actually.
Mr O'Toole: It's six months. Check it out.
Ms Smallman: Of actual class time, I suppose, but I don't think it could be shortened.
I think we do have to look at alternative sources of funding for education other than tuition, because given the fact that students can't find jobs even to support themselves right now with the existing costs, some creative solutions need to be looked at from all sides. But I don't see that coming from the Ministry of Education and I don't see that coming from the government in terms of job creation either.
Mr Lalonde: The average workweek hours for a student are, what, 23 hours?
Ms Smallman: The average? At York University last year, students worked an average of 23 hours a week.
Mr Lalonde: The minimum salary for under 18 is what?
Ms Smallman: The minimum salary? I don't know if you could really break it down. I'm sure it's under --
Mr Lalonde: Or the minimum wage?
Ms Smallman: The minimum wage for under 18? This wouldn't cover my members, because my members are all 18 and over.
Mr Lalonde: They will all be over 18?
Ms Smallman: Yes. But it's not substantial, no.
Mr Lalonde: I know it's less than $6.85.
Ms Smallman: We are talking people who are earning less than $7 an hour for the most part, right.
Mr Lalonde: What would you like to see as a minimum standard?
Ms Smallman: In terms of wages? I couldn't even hazard a guess at what a minimum wage should be. What I'm looking at more is sort of standards in terms of working conditions, job security and paid vacation, and enforcing standards for employers; for example, the restaurant that is forcing its workers to live solely on tips, that type of thing. Currently the minimum wage isn't being met by a lot of employers, so we do need to take a look at that. I think there are many students out there living under the poverty line, and this has to be looked at, but I couldn't hazard at what the minimum wage should be.
The Chair: Thank you very much for making your presentation before us here this afternoon.
The Chair: That takes us to our next presentation, Mr Joseph Polito. Good afternoon and welcome to the committee.
Mr Joe Polito: Good afternoon. My name is Joe Polito. The title of my presentation is "Bill 49, Who We Are and What We Value; The Employment Standards Act: Key to Economic Renewal." I want to thank you all for the opportunity to provide feedback to your commendable two-part initiative of revising the Employment Standards Act. I also want to commend you all on giving full attention to so many presenters who I know probably are repeating many arguments. I'll try to take a different tack. I also want to thank my MPP, Doug Ford, for his assistance, and MPP John Hastings, who was on a call-in show and returned my call after the show was over.
My presentation will focus on a few modest goals through changes in the ESA: to save billions of dollars for taxpayers annually; to increase profits by billions of dollars annually; to improve our international competitiveness; to reduce unemployment; to address the concerns of employment equity and affirmative action advocates; and to reduce provincial and municipal expenditures. More on that later.
I readily admit that I'm here as an advocate, but not for the right or the left or for the public sector or the private sector, for business or for government expenditures. I'm an advocate for society as a whole. Thus, one minute I would recommend that we lower taxes for business, and on the other hand I would recommend that we create more freedom for workers.
Sages tell us that our laws, particularly like this one, are a statement of who and what we are, so I'd like to use these 15 minutes to focus on that.
Our identity, I think, is strongly linked to the roots of the North American capitalistic miracle, the strongly principled people who left religious and political repression in Europe in search of freedom and opportunity to fulfil their potential. Scholars tell us that these people brought the religious work ethic to free enterprise. It was characterized by hard work, honesty, self-reliance, justice, mutual respect and all those other qualities we're all familiar with. This was a time when such business people were famous for sealing a business deal with a handshake. Their admirable business skills were only a part -- a very important part -- of a life which has been governed by spirituality and ideals, as with that classic Dickens character Ebenezer Scrooge after his memorable visit on Christmas Eve.
Spirituality and idealism are still abundant in Ontario. All the great religions are represented here and we have armies of citizens who are humanitarians, environmentalists, politicians, feminists, human rights activists, anti-racists, members of terrific charities and volunteer groups and so on. We will go to considerable expense to ensure travel, building access and washroom services for the disabled even if such consideration might decrease our competitiveness.
Many of the fine Ontarians I've just described are in business. The vast majority of our business people appreciate an ESA which permits them to treat their employees fairly and humanely while competing efficiently. The ESA prevents less scrupulous employers from gaining an unfair competitive advantage by exploitative practices.
I think in sum we're a pretty darned good society and we should be proud.
What do we value? I think we all agree that a job is the best social program. It gives esteem, sustenance and dignity. It allows people to contribute to the wealth of the nation rather than depend on it.
Efficiency in the private sector and in the public sector benefits us all. Efficiency in the private sector is promoted through ensuring competition, and I think this bill would like to try to do that; hence our record exports and a disappearing balance-of-payments deficit that we've been experiencing the last few years.
Democracy with a mixed economy and a vibrant private sector is the best way to manage our resources, meet the needs of the people, improve the quality of life and provide a just and safe society. Red tape and waste can obstruct investment in a vibrant private sector. Conversely, legislation is necessary to set the standards for child labour, workplace conditions, health and safety, dismissal procedures, the length of the workweek, holidays and many other items, even if it affects our competitiveness. Our trading partners must improve exploitive working conditions, child labour and environment-threatening practices.
In part one, I'm suggesting here that we ensure that these housekeeping rules that you're looking at right now reflect who and what we are. I'd like them to ensure that we are not tempted to sacrifice our ideals in the name of some law-of-the-jungle version of business competition. I'd like them to ensure that we enforce the law with the same resolve which you are recently applying to truck safety.
Problems with the ESA: First, I think there is a problem with enforcement. Second, it permits rampant discrimination. The ESA has unintentionally created a caste system of workers -- temporary workers, part-timers, contract workers, home workers etc -- who can be treated differently from more conventional classes of employees. We are unmatched in the world at embracing diverse backgrounds, religions and philosophies from all parts of the world. However, there's a horrible blind spot, I think, in our current situation in our drive for equality and justice, and it exists in the Employment Standards Act.
Third, the act has not responded to a gradual increase of women in the employment participation rate. The impact on the family has been profound. Supermoms are up at 6 in the morning to make breakfast, ready the children. They drive them to day care by 8. They're at work by 9, pick up the child at 6, make dinner for 7. They have an hour of quality time, put them to bed. They do their chores. They go to bed and the cycle resumes the next day. These women are reliving the life of the infamous coal-mining families. It's not right.
Coincidentally, this week's current newsstand issue of Business Week rates the best companies for their efforts to help employees combine work and families.
The fourth is the failure to recognize the impact of increased productivity on the job market. Scholars tell us that with breathtaking speed in this last century, we've progressed from having 50% of the workforce feeding the nation to 1%. The same process is being repeated over and over again. Our manufacturing jobs are actually going down. Energy production, roadbuilding, construction, you name it: We're getting more efficient at it. As Mr O'Toole said, it's a new world.
There's always been a concern that this process will lead to a shortage of work or overproduction and a strain on our environment. Scholars observe that these concerns have been largely overcome by expansion of endeavours. People today have jobs that produce goods and services which were previously undreamed of. However, it's paramount to understand that this expansion was only part of the solution. From 1800 to 1950, economic gains, social changes and legislation had reduced the workweek from 80 to 40 hours. The workweek has not been reduced since, perhaps because of some of the unintended results of some of our legislation and some of the payroll taxes that have been mentioned like UIC and CPP.
Fifth, there's been an inability to contribute to solving the crisis in youth employment. We have to do something for our children, our nieces, our nephews, our sons, our daughters etc. This young lady who just made a presentation is evidence of what a terrific group we have out there, and we've got to give them an opportunity.
The journalistic champion of free enterprise, the Economist, and perhaps the best magazine I could ever recommend, expressed some of these concerns recently. On the cover of its August 24-30 issue, it asked, "Why Work So Long?" In addition, though the article does not refer to it, there's a graph in it which reminds us that the average hours worked per year per employee in Japan has dropped from 2,100 to 1,900 in the last five years. Consequently, despite the protracted economic slump, Japan's unemployment rate has barely budged. If the hours did not decline 10%, it's conceivable that Japan's unemployment rate would have gone from 3% to 13%.
In our zeal to get Ontario back to work, we are vulnerable to several myths. Myth 1: payroll taxes are job killers. The fact is, they are high, but they're not that onerous. If 300,000 of the current 581,000 unemployed were hired and by some miracle all were earning enough to pay the maximum of about $2,000 in UIC and CPP, it would only cost $600 million. If each of those new workers, when they were unemployed, cost taxpayers half as much as some experts suggest, that would be a saving of $6 billion. That's not a bad payback.
Fact: The two great job killers have been a tight monetary policy and a failure to shorten the workweek. Incidentally, they're also the two great causes of debt growth in the last little while.
Myth 2: The economic stagnation of the last seven years was the result of an inability to compete. Our safety net, payroll taxes and government services contribute significantly to this problem.
It's not true. The stagnation was the product of a restrictive monetary policy which killed domestic demand, raised the dollar to a business-crippling level and ruined many great business traditions, such as the Reichmanns, the Hermants of Imperial Optical, and Confederation Life. I'd recommend the book Unnecessary Debts for more clarification on the cause of stagnation.
Fact: If we're not competitive, why are we having an incredible boom in exports? We're enjoying a trade surplus of staggering proportions, and I might say that Ontario is leading that. In fact, it's so large that it may lead to the same kind of trade relations discord with the US which they've had with Japan recently.
Fact: Because of this monetary policy, governments were forced to spend much more money on the safety net, and their revenues were greatly reduced and this put us in a very serious fiscal bind.
Myth 3: Stimulating growth by assuming debt and risking inflation is the only way to reduce unemployment.
Again, from 1800 to 1950, we reduced the workweek from 80 to 40 hours.
Models for the Employment Standards Act: In Japan, I've referred to the fact that in the last five years they've dropped their average workload 10% for their employees, and it's not surprising. There's an emphasis on team effort in Japan versus our tradition of individuality. In their scheme of things, it makes no sense for a small percentage of the population to pay almost the entire cost of an economic slowdown, to lose their jobs, their homes, their cars and perhaps even their families, when everyone could share in the slowdown, almost painlessly, by reducing their hours.
Just very recently, several of the major banks have recognized the diversity of employment patterns that have developed and have taken steps to make the different categories of workers, part-time employees etc, eligible for benefits.
The province and many of the municipal governments are active in allowing employees the right to choose less work. They can take leaves, they can work part-time, they can job share etc.
A thumbnail sketch of the required changes that I would recommend:
First, I would enable workers to choose less work through provisions which permit job sharing, leaves, part-time work, refusing non-emergency overtime, substituting lieu time for overtime etc. This would have the net effect of reducing the amount of work done without imposing it. This is something we could do immediately. Just as it is important to unleash business, it is also important to unleash workers. It's important to take the collar off, to remove the employment straitjacket so people can reduce the workload if they wish.
We should also end the few overt and embarrassing sources of discrimination. It's a caste system. It is the equivalent of an apartheid system in the world of labour. It's an embarrassment.
Finally, we could reduce the workweek progressively from 44 to 36 hours. I would suggest here that we would classify the hours over 36 hours as overtime but retain the current rule for qualifying for time and a half. We don't want to put more costs on business. In economic booms, employees could work more hours; in slumps, their hours would be reduced rather than suffer layoffs.
The cost savings -- that's where you get to the good part: It is said by experts -- I've tried to check it out as best I can -- that we spend annually $64 billion on the unemployed. Ontario's share of that is over $22 billion. I've broken it down here, and I've checked these figures and they seem to be pretty accurate:
UIC is $5.2 billion. Welfare is $7 billion. Health is a little more difficult to determine, but I know there are a lot of people who are getting therapy and on drugs and seeing doctors because they're unemployed, they've lost their jobs and their families and so forth.
Crime: The suggestion was $2 billion by the experts. I think it's a lot higher. In Japan, the unemployment rate has been lower for decades and their crime rate has been vastly lower, and those costs associated vastly lower.
Education: I just heard this young lady say people keep coming back to school. They're trying to get into the workforce. They're trying to get the skills. They keep coming back or they stay in longer. Sometimes it's a condition of welfare. This figure would far more than exceed -- I'm sorry. Am I running out of time?
The Vice-Chair: You have about one and a half minutes to go.
Mr Polito: Savings to business -- this is a better part: If we could get the UIC down, we could save over $2 billion for the workforce in Ontario, and with very little extra cost to CPP.
It is said that if we cut down the workweek by 10%, there would only be a 5% increase in hiring. That translates into a 5% jump in productivity for business. That's a 5% reduction in the $173-billion wage bill. That's an increase of almost $9 billion in profits, which is over 25% of the current $30 billion in Ontario. I think the business lobbyists are missing a real winner on that one.
Finally, I think it would really help to contribute to fulfilling the campaign promises that we witnessed in the last election: cutting waste without reducing services; reduce the number of abusers of social assistance; reduce taxes; create more jobs.
All the efforts to cut the waste, the duplication, top-heavy administration, to find more efficient ways, don't seem to be enough to meet the goals of the government.
We are hearing about people having terrible delays for operations, school boards closing and the kindergarten program and so forth. That is a reduction in service, and we all want to avoid those things. Reducing the workweek would do that for you.
In conclusion -- I'll skip over to page 9: If you want to increase business profits dramatically, reduce the UIC payroll tax, reduce the unemployment rate dramatically, reduce provincial and municipal expenditures, reduce their debts, improve productivity and competitiveness, improve the quality of life for all citizens, address the desires about employment equity and affirmative action -- because much of the concern I think about bias may actually be due to the horrible unemployment prospects of all new entries, regardless of their background -- then use the Employment Standards Act to make a big change. You've already made a remarkable change in terms of our tax structure. You have very emphatically broken a 30-year-old tradition. Here's almost a 50-year-old tradition of keeping the workweek static, and it's unrealistic. It's ludicrous.
I've given my own questions and answers here, and I'll look at a couple of those questions.
Would you give 10% to 20% of your workweek for other people? Yes. I'm already doing that. This way, we would at least get leisure time in return. Much of the money we earn is transferred to some level of government to cover the income, welfare, health care, day care and housing needs of the unemployed. Somehow we've gotten ourselves in a ridiculous situation to give up leisure time to work for unemployed persons, who wish to work for themselves. It's absurd. In Japan, they're not doing that. I think we have something to learn from them.
What about people who wish to work more? I think --
The Vice-Chair: I do need to interrupt you.
Mr Polito: That's fine.
The Vice-Chair: We're now at about a minute and a half over and we're running behind anyway.
Mr Polito: I apologize.
The Vice-Chair: Thank you very much for coming today.
Mr Polito: I want to thank you all again and the best of luck in your endeavours.
ONTARIO SHEET METAL WORKERS' AND ROOFERS' CONFERENCE
The Vice-Chair: Could I please have a representative of the Ontario Sheet Metal Workers' and Roofers' Conference come forward. Good afternoon. For those present, would you please introduce yourself.
Mr Jerry Raso: My name is Jerry Raso. I am legal counsel for the Ontario Sheet Metal Workers' and Roofers' Conference.
On behalf of the Ontario Sheet Metal Workers' and Roofers' Conference, I'd like to thank this committee for giving us time to make submissions on Bill 49.
The Sheet Metal Workers' and Roofers' Conference represents approximately 10,000 workers in the province of Ontario. We represent both construction and non-construction workers in the industrial sector, and we're very glad to be able to make submissions on Bill 49.
I think a good starting point is today I read in the newspaper that the Premier made a speech in England this week where he talked about the quality of life in Ontario and how he is very proud of the high quality of life we have and it's very important. If the Premier is sincere about this, then the first thing he can do is withdraw 99% of Bill 49. This bill is not about improving the quality of life in Ontario; it's about reducing that for workers in this province.
There are two sections of the bill which should be kept and which we applaud. The first is clarifying entitlement to vacation pay, which makes it clear that it is to be based on 12 months of employment, whether or not the employment is active, and the second section is ensuring pregnancy or parental leave is included to determine length of employment, length of service. Other than that, the rest of it should be withdrawn.
Officially, this bill is called An Act to improve the Employment Standards Act, and we've heard the Ministry of Labour call it housekeeping; in fact, it is neither. The official name of this bill should be An Act to gut the Employment Standards Act, because that's what this is about. This government started that with Bill 7 when it attacked the employee wage protection fund by reducing the maximum you can claim from $5,000 to $2,000 and by removing termination and severance pay from the employee wage protection fund. That is an attack on the act. It does nothing to help workers when you are owed money by an employer and the most you can get is $2,000, when this government reduces it from $5,000, and this is a continuation of that. It is clear that it is nothing more than an attack on the act.
My first point is that this bill attacks and violates some very fundamental principles, which no one in this room can deny. The first principle is that in a civilized society there should be minimum standards which should not be violated. This bill violates that principle.
The second principle, and in a capitalist society: Contracts should not be broken, they should be honoured; that includes employment contracts. If an employer owes money to a worker, that contract should be honoured and that employer should have to pay, especially given that the contract involves time that has been spent by the worker, hours spent, and the contract is that you get paid for those hours worked. This act violates that.
The third principle is that if there is a right, there must be a remedy to enforce that right. The provisions in this act, which create a maximum of $10,000, which create a minimum which can be set, which reduce time limits, which force people to choose between filing a complaint and taking an action in the courts, violate this principle, because all of those sections enforcing the act, helping workers find a remedy to their rights, are broken.
There are two other principles here. This act is fiscally irresponsible. By forcing workers to make claims in courts, it's going to increase court costs, and that's taxpayers' money that it's going to cost, and it's going to increase litigation for all parties. Employers are going to have to spend more money, employees are going to have to spend more money and the government is going to have to spend more money. There are a lot of drafting problems with this bill, problems that are going to create much litigation.
Another issue is in terms of construction. We specifically have two problems unique to us. This bill contradicts the act in terms of the employee wage protection fund. I'll get to that in a second. There's a catch-22, and it effectively excludes us from the employee wage protection fund. I don't think that was intentional; I think that was a drafting problem and it should be fixed. The other one is also a drafting problem. When it states that unions have to file a grievance instead of filing a complaint to the employment standards branch, it has excluded section 133 of the Labour Relations Act, which is our section, which gives us the right and which tells us to go to the labour board for our grievances, and that's not in there.
The first section, and I think the most important, is the provision in terms of contracting out of minimum standards when the contractual terms and conditions provide a greater right when assessed together. I'm aware that has been removed, but I'm also aware that the intention is to bring it back at some later point. It's our position that it should not be brought back. This is a vicious attack on the Employment Standards Act, and it is intentional to destroy or to remove the floor. What it's doing is it is bringing these minimum standards which we accept as the floor to the bargaining table. It is stating that this is no longer the floor.
The first thing it's going to do is cause a lot of litigation. There are a lot of drafting problems with this bill, and this whole concept of contracting out when assessed together it provides a greater right, as a lawyer, I can tell you I think that is an impossible principle to determine. How can you possibly take non-monetary factors, compare them with monetary factors and compare them with mixed factors and come up with some answer that this is greater? You cannot do that. It's not possible to do. What is going to happen is that all the parties are going to end up in the court system to try to determine what this bill means, and it's going to cost a lot of money to everyone.
The second point is that it is not going to improve labour-management relations, it's going to hurt them. The whole concept of the Employment Standards Act is that this is the floor. In labour relations, we negotiate to try to improve from the floor. This bill will remove the floor, and it will say that everything is open now. Now employers are going to go to the table and say, "You've had something for the past 35 years or whatever, but too bad, we want to take it away." That is not going to help labour-management relations whatsoever. It's simply going to lead to confrontation, and it's going to lead to strikes and strife. The rest of the world will know this, and that will not improve investment in Ontario.
Thirdly, if employers do succeed in lowering the floor and eliminating employment standards, what's going to happen is that it's going to breed resentment in workers. It's going to harm workplace relations. Anyone can tell you that unhappy workers are not productive workers. Also, if their standard of living is reduced, if their wages are lowered and if they are insecure workers, they are not going to spend, and that is going to hurt the economy because it's going to lower spending. So don't bring this section back.
My second point is that Bill 49 proposes to establish a maximum of $10,000. This is shameful, and it's offensive. There is no legitimate reason whatsoever to put a claim of $10,000 on an employment standards complaint. This will not benefit the Ministry of Labour whatsoever. This will not benefit workers. The only group that will benefit from this is unscrupulous employers, because this will tell them, "If you owe money, you don't have to pay them more than $10,000, because they can't file a complaint to the employment standards branch." If they're poor and they can't get a legal aid certificate, because they can't now, they're not going to file a civil action in court either. So it's telling unscrupulous employers: "Don't pay, because we will not help the worker. We will allow you to steal money from that worker."
One good example is the case of domestics. I know of a case where a domestic was working. She was told by her employer, "All you get is room and board." It turned out that they were violating the act. They paid less than the minimum wage. The money owed to her was about $70,000. What is she going to do under this bill? She can't go to the employment standards branch, because you're going to put a ceiling of $10,000, and she's not in a position to go to court. So you have told that employer, "You can rip off this woman, and we will help you do it."
The second point of this is that there will be workers who will file claims in court. What you're doing is you are overburdening a court system which is in a crisis state right now. The court systems do not need these types of cases. It makes no sense when you have a specialized agency such as the employment standards branch, which has the personnel, the skills and the training, and which is specialized in this area of law, to say: "You can't handle the claim, because it's for $12,000. That person has to go to court." Why would you burden the court system for no logical reason whatsoever?
The other aspect of the bill which is offensive and again which violates the principle of where there's a right, there must be a remedy is the limitation period, reducing it from two years to six months. There's no logical reason for doing that either. There are a lot of reasons why people do not file claims. The two main ones are either they don't know about their rights, which is very common, or poor workers, vulnerable workers, are not in a position to file a complaint, they're afraid. By reducing the limitation period, you are just making this situation worse. It makes no sense when at the same time you're increasing the time limit to file an appeal from 15 to 45 days. That's hypocrisy.
The other aspect of the bill that's wrong is enforcement. For unionized employees, you're telling them that they can't go to the employment standards branch, they have to file a grievance. The people who wrote this bill obviously do not understand the relationship between grievance arbitration and government legislation.
There are a lot of technical problems with this. The first one I mentioned, and again I think it's an oversight, is that the act does not include arbitrators appointed under section 133 of the act or arbitrators appointed under sections 48 or 49 of the act. What are those people supposed to do? When they file a complaint with the board, the employment standards branch, they're going to say: "You've got a collective agreement. You have to file a grievance." When they file a grievance, the arbitrator is going to say: "I don't have jurisdiction over this grievance. This is not about the collective agreement, it's about the Employment Standards Act. You have to go back to the branch."
What happens when the agreement differs from the act on issues such as time limits? What if the time limit in the collective agreement is less or more? Will an arbitrator be able to extend the six-month limitation? What happens when there's an issue of arbitration such as the employer saying, "This worker is not covered by the collective agreement," or the employer says, "I'm not covered by the collective agreement"? What happens then? Another question is, where does an appeal go from the decision of the arbitrator? Does the employer or the employee go to the court system under judicial review or do they use the appeal structure of the act? None of these questions is clear under this act, and the result, again, is that there's going to be a lot of litigation, there's going to be a lot of time and money wasted in the court system and wasted by employers and employees answering these questions.
Finally on this area, it's wrong to deny unionized employees the right to file a complaint with a government agency over the violation of a public statute. We feel that's a discrimination under the Charter of Rights and Freedoms. There's no justifiable reason why any taxpayer should be denied access to a government agency or tribunal.
Another question is, is forcing or requiring private arbitrators to interpret a government act what this government really wants? Private arbitrators, when they interpret legislation, must be correct in their interpretation, meaning there's going to be a lot of judicial review or appeals of arbitrators' decisions and again a lot of time and money wasted.
Enforcement for non-unionized employees: forcing workers to choose between the court system or the employment standards branch, especially if they are owed more than $10,000. You're requiring them to use the court system when the court system does not need this extra time and expense.
One area which I mentioned which is of particular concern to construction is the employee wage protection fund. This bill talks about having to choose between filing a complaint or going to the court system. The employee wage protection fund in the Employment Standards Act requires that construction workers do both. Before you can make a claim to the fund, you have to file a construction lien and a statement of claim, which is an action. The act says workers in construction can't do both, so that is denying us access to the employee wage protection fund. We're going to have to choose between the act or a statement of claim and a lien. The choice is going to have to be done very, very quickly because of the time limits imposed in this act. It's not right.
The other thing which hurts this government in terms of this is that under the act, when we do both now and we do a claim for lien, the money we recover from the wage protection fund, the government can then go after that employer to recover those funds. With the way this act is worded right now, that will not be possible for this government.
The Vice-Chair: Excuse me, Mr Raso, I don't mean to interrupt, but we've exceeded 15 minutes already, if you could just summarize the rest maybe in a half-minute.
Mr Raso: Okay, I'll sum up. People in the labour movement in Ontario frankly were not surprised by the attacks on the labour movement. We understand that this government hates unions and it hates the 35% of workers they represent, but this act also attacks non-unionized workers, in the ways we've just explained.
Early on in her term, the Minister of Labour said that she represents the other 65% of workers in Ontario who are not members of unions, that she has to look out for their interests. Yet what does this act do for non-unionized workers, and what does Bill 7 do? It reduces the maximum from $5,000 to $2,000; it eliminates termination and severance pay; it puts a maximum of $10,000 that they can claim; it will impose a minimum; it will reduce the limitation period for non-unionized workers to file claims; it will force them to choose between the courts and the ministry, which is a catch-22 because if they go to the branch it's a maximum of $10,000, and if they go to court it's a lot of time and money. It will force them to accept less than 100% of what they're owed. This seriously puts into question the Minister of Labour's credibility and integrity.
The Vice-Chair: Thanks very much for coming to present today.
Mr Baird: Madam Chair, I was wondering if I could ask the committee for a five-minute recess so I could consult with another member of the committee.
The Vice-Chair: All agreed? Agreed. The committee will recess for five minutes.
The committee recessed from 1546 to 1602.
The Chair: I call the committee hearing back to order and apologize for the delay. I would like to note for the record that we have a written brief that's been submitted by a gentleman from the Canadian Auto Workers, Local 1285, who was going to make a presentation this afternoon, but he elected to simply drop it off. I would commend that brief to all the members for their reading.
CANADIAN AUTO WORKERS, LOCAL 1980
The Chair: That leads us now to Canadian Auto Workers, Local 1980. Good afternoon and welcome to the committee.
Mr Ron Hendrikx: Thank you very much. My name's Ron Hendrikx. I am the president of CAW Local 1980 and I'll be presenting on its behalf. I'd also like to introduce Enno Tonn. He's our recording secretary. Monica Jain was not available to attend today.
I've been trying to reduce my workweek this week, but I had to stay up till 9 o'clock to put this brief together, so it's not working. We have some recommendations. I'd like to read what I have on the second page to the standing committee on resources development. This is an overview of what we are going to be recommending and should summarize our position on the bill.
First of all, I'd like to thank you for providing us with the opportunity to present our views on Bill 49 and the Employment Standards Act.
In the years that we have worked for our employers we have all been affected by the introduction of new technology, lean production, downsizing and increased work hours for those remaining. The corporations react by explaining that only with more of the same will they be able to compete in a global economy. This ideology pits worker against worker, country against country, standard against standard.
Yet in our early years we learned in public school that the growth of new technology would release each one of us to a life of relative leisure to pursue our pastimes, interests and occupational goals. As a society, we would also be released from the chains of poverty, unemployment and the crime that goes along with both. A thriving middle class would evolve as the benefits of new technology were distributed as equally as possible.
How long will we have to wait for what appears to be an impossible dream? It seems that as long as technology remains the private property of the corporate employers there will be no sharing of productivity benefits to the workers who produce them. The promised life of leisure will be disproportionately allocated to the unemployed, who are not needed, and the wealthy, who own the means of production.
What is required is a redistribution of the available work to more fairly distribute not only the income but also the leisure created by increased productivity. Achieving a fair balance between work and leisure will be a major focus of our submission as we ask for a shorter workday, a shorter workweek and more paid vacation.
We would also like to address the issue of scarce public resources that has been indicated by the minister as one of the reasons for Bill 49 to begin with. The issue of scarce public resources is not one that is isolated to the Ministry of Labour but rather appears as a feature in many ministries and governments at the federal, provincial and municipal levels. The solution to the problem lies with balancing government budgets to ensure that the revenues collected meet the needs and provide the services the public demands.
Reducing government because of a financing shortfall is not the answer. It will not give us the level of protection necessary to protect the public from corporate violations of workers' rights. For example, a lumber company may claim trees are its most valuable resource and yet clear-cut every single one of them if left to its own global economy. Similarly, the multinational corporations will do the same to the human resources of the world without any regulation. This is the purpose of the Employment Standards Act.
It is our submission that the present level of protection has been inadequate largely due to financing shortfalls and inadequate staff. Shifting the responsibility for enforcement on to employees, their unions or, worst of all, the corporations is not a solution. We propose instead that the government eliminate deficit financing and tax those interests from which it now borrows. We propose increasing taxes to profitable corporations and the wealthy, and applying the provincial sales tax to the sale of shares, bonds, debentures, foreign currencies and miscellaneous financial instrument commodities.
Our submission includes a recommendation that the government become more involved in the administration of the act. To this end we ask that the government increase and collect the penalties and fines that should be applied for violations of the act. Any proposed action by the government to reduce, water down or otherwise erode any aspect of the act would be in opposition to this submission. Any changes which limit the options of employees in obtaining justice are opposed by this submission. Any limits to the claims workers can collect are opposed by this submission. Any attempt to privatize any aspect of administration of the act, including private collection agencies, is opposed by this submission.
We ask that the standing committee mail us a copy of its recommendations when they become available. On behalf of Local 1980, I thank the committee for its attention in this matter.
Mr O'Toole: We've heard a number of presentations from the CAW. It's a very formidable union, well schooled and with very capable representation.
You mention on page 1 -- and I'm not trying to be smart or confrontational; I'm really trying to find out where we find this balance you referred to. Are you saying that your membership wants a reduced workweek? I gather that's what you're saying.
Mr Hendrikx: That's correct.
Mr O'Toole: With a commensurate loss in pay?
Mr Hendrikx: This is an issue that would not be shared across the entire membership of our bargaining unit.
Mr O'Toole: I feel that, because I've heard other presentations on a 32-hour week, a 36-hour week, which may be the international solution. Don't you feel that everybody wants the dignity to work?
Mr Hendrikx: That's correct.
Mr O'Toole: Don't you feel that all work has dignity whatever sector it's in, whether it's the trash industry or recycling or whatever? Don't you feel that all work has dignity?
Mr Hendrikx: Yes.
Mr O'Toole: Shovelling on a farm, that kind of thing?
Mr Hendrikx: I agree, yes.
Mr O'Toole: I guess the other thing is that idle time draws to mind that if all the days were playing holidays, then to play would be as tedious as to work. Do you know what I'm saying? Leisure time and time that people aren't employed or fully gainfully employed creates a kind of malaise. What do people do? You're implying that the benefits of a leisure society are something we should look forward to. I don't think it's worked. I personally think that if you look over the last 10 years the pursuit of free time has worsened the family situation, the individual's life, for the pursuit of materialism. That's basically the dilemma we're in. Everybody wants more and we're caught up in that.
I'll just draw one more thing to you. I'm rambling around here a bit. Do you think we should oppose change in automation? You often hear the term "Luddites," who opposed the Industrial Revolution. They tried to break all the machines.
Mr Hendrikx: That's correct, yes. They broke all the machines.
Mr O'Toole: Nobody believed Henry Ford when he thought that these would create hundreds of thousands of jobs in the auto sector 100 years ago. What are the jobs of the future?
Mr Hendrikx: I'll refer to each one. The first one was an issue of, does my membership always agree with working less overtime? I'd like to point out that one of the problems and reasons for people working more overtime has a lot to do with job security. People who don't see themselves as having a very secure job work a lot of overtime, whereas if you were in a job that was more secure you wouldn't feel the need to do it because there wouldn't be that urgency to try to get your time in now. This is what we see within our bargaining unit and one of the reasons a lot of them do work some overtime.
The second issue is as far as how leisure is spent, and my observation and the observation of a lot of very active people is that you require the time to deal with social justice issues; you need the time to become aware of the laws and your human rights and what governs society; you need the time to be active on the school board, to become a member of the board of trustees; and you just simply cannot be a socially active person when you're working 10 hours a day. You're seriously limited in the amount of community involvement that you can do. You may be able to be more financially secure, but the cost is that you're excluding yourself from participation in the community. Does that answer your question? It may be a fairly idealistic answer, and not everybody's going to feel the need to spend their time in this manner.
Mr O'Toole: A lot of people do, though.
Mr Christopherson: Thanks, Ron, for your presentation. Throughout the hearings across the province a number of the government backbenchers have had this notion that unions are all-powerful, particularly when they think -- my interpretation is -- of the auto workers, CUPE, the Steelworkers, UFCW and all the acknowledged larger, very effective unions. They believe that as soon as the union bosses come rolling into the negotiating room and slam down their demands the management starts quivering on the other side and signs as quickly as it can. Therefore, some of their questioning has been, "Why on earth would a bargaining committee, on behalf of their members, sign a collective agreement that has standards in there that are not in the best interests of their members?"
The reality, as I remember it back in my days with the CAW, is that in many cases you've got a really huge imbalance in place, and quite often during tough times, especially tough economic times like now, you're signing collective agreements that have concessions in them or have less than what you'd like, or you're having to go out on strike because the employer feels very strong and puffed up with a lot of strength, and with this government they're all becoming more emboldened. Do you see the potential in this ability to negotiate standards below the ESA where, first of all, unions might have to go on strike just to hold on to rights that they currently have in legislation? Is that a realistic possibility?
Mr Hendrikx: For our particular union, I don't think the employer would do that -- and I do know a lot of precedents within the CAW -- but there are corporations that would table those demands. I think even more dangerous is when you have a large degree of unemployment and a lot of insecurity, as we presently do, or more than we used to. People don't really want to go on strike, it's not something that they really want to put their families through and they're going to have to really think about whether or not they're going to accept the lower standard before they do. My fear is that some will take it.
Mr Christopherson: Do you think that there's any real, practical way of trying to compare monetary and non-monetary rights as contained in the Employment Standards Act and say, "There's a package that is of greater benefit"? Do you think there's a practical way of doing that, which is what the government seems to feel can be done?
Mr Hendrikx: I don't think there's really a way that you can compare them. In any event, the arbitrators are only able to really award monetary things, to a large degree. The types of things that you might order a corporation to do as an officer working within the ministry would not be in the same way shifted to the arbitrator. In other words, in the Employment Standards Act there are certain things that they can award, and an arbitrator can only award certain things. They have limits in their powers; they aren't the same. In the same way an officer under the Employment Standards Act has greater access to information and can ask for certain documents, myself as, say, chief steward would not have the same access to those documents. To shift the responsibility on to me to take up an Employment Standards Act claim immediately puts the victim at a disadvantage in trying to put the case together. They don't have the same power.
The Chair: Thank you very much for appearing before this afternoon and making a presentation. We appreciate it.
FEDERATION OF WOMEN TEACHERS' ASSOCIATIONS OF ONTARIO
The Chair: Now to the Federation of Women Teachers' Associations of Ontario, if they could come forward. Good afternoon. Welcome to the committee.
Ms Margaret Gee: Good afternoon. My name is Margaret Gee. I'm the president of the Federation of Women Teachers' Associations of Ontario. I'll just make some introductory remarks and then my colleague, Carol Zavitz, who has written the brief, will talk in much more detail. I also have with me Marilyn Roycroft, whom many of you know as our media representative.
The federation represents 41,000 women who work as teachers in the public elementary schools in this province. As teachers, our members are not covered by the Employment Standards Act, as you know. The provisions there relating to hours of work, minimum wage, pay for overtime work, public holidays and vacation do not apply. Teachers' working conditions are governed by other laws and by our own collective agreements. Nevertheless we are extremely concerned about how the proposed changes to the Employment Standards Act will affect the lives of most other working people in Ontario: many of our spouses, our children and families, our co-workers in the schools and the parents and families of the children we teach every day.
Bill 49 will make it much easier for employers to exploit and abuse their employees with impunity. For non-unionized workers, the Employment Standards Act is the only protection against unscrupulous employers. The protection provided by the act is naturally most important to the most vulnerable workers, and these include many women working in the garment industry and service industries, and domestics.
By weakening, and we do believe weakening, the Employment Standards Act, the government is once again attacking the most vulnerable members of our society. Bill 49, if passed, will escalate the insecurity in employment, vulnerability to abuse by employers, poverty, disfranchisement, despair and rage of Ontario citizens. This initiative is squarely on the government's agenda of eliminating and privatizing government services and handing employers increased powers vis-à-vis their employees. Bill 49 will turn the Employment Standards Act against the very people it was designed to protect. Calling these changes "housekeeping" is a serious misrepresentation of the intent and effects of Bill 49. We find it insulting to all of us, and I'm referring to our 41,000 members. We call on the government to strengthen the Employment Standards Act, not to weaken it.
Ms Carol Zavitz: We have three main areas of concern. The first is with the enforcement of the act if Bill 49 passes. We think that enforcement of legislation should be public, but Bill 49 privatizes areas of enforcement and leaves it up to individuals working in unorganized workplaces and to unions in organized settings to compel employers to meet their legal obligations. Bill 49 would force many individuals to pay for enforcing basic rights.
Bill 49 severely limits an individual's access to public enforcement through Ministry of Labour claims. By filing a claim, an individual would lose her right to take her employer to court as well and to pursue there any rights under common law that are greater than the statutory minimum. Similarly, somebody opting to take court action can't file an employment standards claim for benefits to which the act clearly entitles her. An employee who successfully enforces her rights under the new act would receive only the bare minimum or, after waiting a long time and spending a lot of money, her full legal entitlement.
The enormous expense involved in taking action through the courts simply rules that out for many people, particularly since legal aid no longer covers employment-related cases. However, Bill 49 would make court action the only option available for anyone with a claim longer than six months or over $10,000 or under an undisclosed minimum amount.
Another way in which Bill 49 proposes to privatize enforcement of this act is by forcing unions to pay for enforcing the standards they haven't negotiated. If Bill 49 passes, unionized workers would have no access to public enforcement through the Ministry of Labour or through the court system. They would have only one avenue for enforcing the act: the grievance and arbitration provisions contained in their collective agreements.
Arbitration is really effective in enforcing a negotiated agreement. It should not be used to enforce legislation. In the first place, involving lawyers and arbitrators in the enforcement of employment standards increases the cost of enforcement compared to ministry procedures. These increased costs would be borne by unions and by employers.
The other really serious problem affects only the labour side: unions and organized working people. Unions, under this bill, would face greatly increased liability. Once unions have to start enforcing the act as well by grievance, their caseloads would skyrocket and decisions would have to be made about which cases could go forward. Deciding to enforce a certain minimum standard here might mean a union couldn't enforce a clause of a collective agreement there or vice versa. In either case, a union member who disagreed with a particular decision could complain of unfair representation, and the union would face yet another legal proceeding to defend its decisions.
The third way in which employment standards enforcement will be privatized is by contracting out the work of collecting the money owed to workers by employers. This is a simple gift to business. It eliminates more public sector jobs and has serious implications for other workers. We predict that collection agencies will be more interested in protecting their own profits than in collecting the full amount owing to a worker if collection is the least bit difficult. In practice, we believe workers will face enormous pressures from collection agencies to settle for less than their employers owe them.
Our second major area of concern involves the limitations imposed on processes, decision-making periods and amounts recoverable under the act. Under Bill 49, workers have less time to file a claim, employers have more time to appeal an order and the government retains a very long time line for carrying out its obligations.
Any worker knows that she'll probably be fired for filing an employment standards claim. There is no effective protection against employer reprisals. A worker will usually try to keep her job even if her boss is violating the Employment Standards Act and will file a claim only when she's fired or gets another job or can't stand it any more and quits. Imposing a six-month limitation for a worker to file a complaint means that someone who hangs on to her job for longer than six months couldn't recover all her pay or benefits through a claims process. She would be forced to choose between her job or her rights unless she knew she could afford to hire a lawyer later on in the piece to enforce her rights. But we're talking mostly here about non-unionized, minimum-wage workers who have already been cheated out of wages or benefits. How likely is it that people in such circumstances could afford to pursue their rights in court?
The proposed $10,000 max for employment standards claims puts a worker in the same kind of no-win situation: either to claim only part of what she's owed through the ministry or hire a lawyer to get the whole amount through the courts.
Bill 49 also allows the government to create a minimum claim amount. Imposing such a limit in regulations rather than going through a public process will make it very hard for anybody to know what their enforceable rights really are. If a minimum claim is established, those employees who are owed the least amount of money will have no option but to go to court to get it back. This is tantamount to telling employers that they can withhold any amount of money under the minimum with total impunity since few workers will see the point in pursuing a claim that will be all eaten up by legal costs.
Anyone whose claim is for more than six months or more than $10,000 or less than some undisclosed minimum will, then, be denied access to government services to force their employers to pay up. They will be obliged to use the courts if they can afford it. This is unlikely, and employers know that.
However, people who can afford to enforce their rights through the courts would be using an already overburdened justice system, which is also publicly funded. Court proceedings don't cost less than claims processes. Diverting a big portion of Employment Standards Act enforcement to the courts is a foolish use of court time and of public resources.
Viewed from this perspective, it becomes clear that the primary purpose of Bill 49 is to discourage workers from enforcing their rights in full and to protect employers from having to live up to their legal responsibilities.
Our third area of concern is with the part of the plan that's been postponed, that part that would allow employers and unions to negotiate provisions that violate minimum standards if the negotiated package as a whole provides greater rights or benefits than the act. This approach is totally inconsistent and incompatible with the whole idea of minimum employment standards. We're glad the government has withdrawn the proposal and hope it never resurfaces, for reasons outlined in our brief, which you have.
This provision would have created massive uncertainty and spawned a whole industry of interpretive litigation. It would have been another intrusion in a labour relations climate already more volatile, confrontational and biased towards the employer as a result of last year's amendments to the Labour Relations Act. This change also would have convinced many employers who have so far been able to operate within their legislated minimum obligations to pressure employees to give up conditions that we have seen as basic in Ontario for decades now.
Before I make my concluding remarks, I want to make it clear that there is one part of Bill 49 which we support: the changes clarifying that employees are entitled to certain benefits based on length of employment or service whether or not the employment was active. Settling this issue, particularly with respect to pregnancy and parental leave, is valuable.
In conclusion, we want to live in an environment where we can earn a living wage, preserve our health and be involved in our families. We want laws that protect workers against unscrupulous employers and we want those laws effectively enforced. We want a government that protects social justice for all citizens and provides an infrastructure to support all of us.
We're not saying here that the Employment Standards Act as it currently exists is good enough either. The standards provided are too low, too many workers are excluded and enforcement is slow and ineffective. This act needs to be strengthened to provide better protection for the most vulnerable workers who depend on it.
We're calling on the government to enact the provisions in Bill 49 dealing with pregnancy and parental leave entitlements; withdraw the rest of the changes proposed in Bill 49; and introduce amendments to the Employment Standards Act which strengthen it by (1) raising minimum standards for hours of work, minimum wage, protection of part-time workers, vacation entitlements and pregnancy and parental leaves; (2) introducing standards for sick leave, leave for family-related responsibilities and protection against unjust dismissal; (3) including more workers under the protection of the act; and (4) improving enforcement of all standards by initiating employer audits and by providing explicit mechanisms for filing complaints, particularly third-party or anonymous complaints.
Mr Lalonde: One of the questions that struck me is on page 7, anyone whose claim is for more than six months or more than $10,000. We know that people, before they lodge a complaint, will be looking for a job, because otherwise they'd be fired most of the time. Because people who will lodge a claim of over $10,000 and over six months are out of work and are in real need of money, most of the time they will accept a claim of up to $10,000 and just forget the rest. Do you think this is going to be fair to those who have been really jeopardized, have lost money?
Ms Zavitz: I think that will happen in a lot of cases and I don't think it's fair.
Mr Lalonde: It certainly won't be fair. Really you would like to see the government removing that six months and allowing the two years like it was in the past, and not having a cap on the $10,000?
Ms Zavitz: That's right.
Mr Christopherson: Thank you very much for your presentation. I want you to know that the insult you feel over the government calling this improvements, knowing that indeed they are taking away rights as shared by hundreds and thousands of individuals and organizations across Ontario, is now on Hansard and there in the record to be seen. The government is fooling no one with its Orwellian doublespeak approach, by calling things improvements when indeed they're the opposite. It's time they got called on it.
I want to give you a little bit of bad news. The part they have withdrawn regarding flexible standards, as to whether or not it's coming back, I'll just quote to you from the minister's comments when we opened these hearings a few weeks ago: "We remain committed to providing more flexibility to the workplace parties." So that monster is coming back again.
Given everything that you've said here and given the fact that the government has been exposed in terms of the takeaways that are really contained in here, would you agree that at the very least, if the government won't kill Bill 49 -- which it ought to do, other than the one clause that we all agree is housekeeping but should be done -- they should at least fold it into the overall year-long review so that we can see it in the context of God knows whatever else they may be dreaming up to do to working people and their unions?
Ms Zavitz: I think seeing the whole picture would be of benefit to everybody, yes.
Mrs Barbara Fisher (Bruce): Maybe if we could make an assumption to start, the assumption might be that we're all here to help and to care for workers in the province of Ontario. I know personally speaking I am, and I'm trying my best to contribute to that.
We also face the reality that the collection officers -- and I'm now on the collection issue -- in the past were released from their employment, and that because of a $100-billion debt, we're now forced to do things that maybe aren't popular and are very difficult. I think we can all agree that throughout every city we've been in, most of the presentations have supported the next statement, that the collection process in the past was abysmal and workers aren't being cared for because of that.
In our first week experience right here in Toronto, we had a lady come forward who was a telemarketer, not represented by anybody, just representing herself, pleading with us to in essence get government out of her way so collection could be done, because government hasn't been able to, with the people in place today or over the past 18 months, correct the situation for herself as a single parent and her three children. There is no incentive right now to help that situation along. Today, deals are being made. People are only collecting 25 cents on the dollar. So we're no better off no matter which way any government -- taking all the politics out of it, we've failed. Everybody has failed.
Having made those points, why are we so afraid to let specialists help us out and do what they do best, and collect for these people who are in need?
Ms Gee: I think if you go into the broader society, the collection agency kind of thing is very threatening to any individual and it usually represents power on the part of the person who's collecting. I'm a little worried about what you said in terms of how we're all here for the good. We're talking about proposed legislation. Surely one of the functions of legislation is to be fair. I think what we're saying is it's not being fair to the most vulnerable of society. I'm still disturbed by the program I saw on TV quite recently on the garment industry and how much is charged for something that cost, in terms of labour, maybe a 20th or even higher percentage. The exploitation is there, whether we acknowledge it or not, and the legislation should be there to address that. If the legislation is making it harder for the most vulnerable in society, then there's something very wrong.
Mrs Fisher: I don't disagree with your comment --
The Chair: I'm sorry, Mrs Fisher, but we're well over our time already. I'd like to thank you both for taking the time to come and make a presentation before us this afternoon.
PROVINCIAL BUILDING AND CONSTRUCTION TRADES COUNCIL OF ONTARIO
The Chair: Which leads us to the Provincial Building and Construction Trades Council of Ontario. Good afternoon and welcome to the committee. Just a reminder that we have 15 minutes for you to divide as you see fit between either presentation or question and answer.
Mr Alex Lolua: We'll try to keep ours short, because we'd sure like to get some interaction with the committee. Beside me is Joseph Duffy. He's the business manager and secretary-treasurer for the Provincial Building and Construction Trades Council of Ontario. My name is Alex Lolua. I'm the government relations rep for the council.
Basically, we're an umbrella organization that represents 100,000 unionized construction workers in the province. Our members perform work in the building and construction industry, such as erection, repair, alteration, maintenance and demolition, as well as the manufacture, assembly, fabrication and handling of building and construction material.
Many of the concerns that we have with the bill are similar to some of the things you heard from other labour groups, but particularly the time limitation things and the effect that it has particularly unique to the construction industry. Much of what we have to say is related to what Mr Raso told you previously from the Sheet Metal Workers, and I hope you all had an opportunity to try to listen to some of the technical things that Jerry said, because they're very salient to the impact that it has on the construction worker.
Presently, legislation requires a construction worker to register a claim for lien if they are to have any rights. This requirement can be waived by the director of the employee wage protection program if the claim is only for vacation pay or for hourly wages. A lien claim must be registered if the worker has a benefit component to their claim.
The Construction Lien Act stipulates that any liens expire unless an action is commenced within 45 days of the last day to register them. The result is that a construction worker would have to decide in a very short period of time whether he or she has to act on a lien claim or proceed with an EWPP claim. The difficulty this presents is that the construction industry is a highly fluid and mobile sector with numerous small companies. It can be very difficult to get information on an employer, particularly a small one or one that has numerous interrelated companies. So an employee with possibly very little information will have to decide whether they are better off proceeding with the employee wage protection plan application, with a maximum recovery of $2,000, or a lien claim, which has a potentially higher recovery ceiling but which may have less potential for success.
The election an employee makes has an impact on government in that if employees choose to proceed with an EWPP application and not a lien claim, the government will foot the bill when it could have avoided doing so had a lien claim been successful.
Bill 49 also has further effects on the lien claim process. Previously, no grievance or arbitration process was required where an employer did not dispute the money owed to an employee under a collective agreement. Where it was simply a calculation such as number of hours times rate of pay, no grievance was required to enforce a construction lien claim. The EWPP had accepted this approach except in circumstances where the employer denied liability. This was particularly useful where the employer was bankrupt or willing to admit the amount was owing and simply did not have the money to pay. It now appears that employees will have to grieve and obtain an arbitrator's decision upholding their entitlement. Where this will probably benefit labour lawyers, it's hard to see who else would derive any advantage from this requirement.
In light of that major critique, it's obvious that we have serious concerns about these time limitations for filing an employment standards claim. The decreased time limitations can also have a significant impact on our industry, and I'd just like to walk through a bit of a scenario.
As was stated previously, the construction industry is characterized by temporary employment, many small employers where the average crew size is about five, and cyclical employment. Many construction workers work for several employees in a single year, so you can imagine the difficulties a person would have if he ran into two or three of these situations where money was owing and he's having to make an election of how to recover his claims. Plus, when you look at how highly competitive construction is, there's a decrease in public works and more and more companies are cutting their margins thinner and thinner, and the bankruptcy rate and company failures are increasing every year. Therefore it is not very unusual to see construction workers facing these dilemmas I explained previously.
By way of explanation for the committee, normally when contracts are negotiated in construction, a determination is made on how much of the settlement goes into hourly wages, how much goes into benefits and how much goes into things like training funds. In construction, a significant amount of a worker's wage package goes into these things. With the changes proposed in the legislation, union members could urge their negotiators to put more money into wages and less into the benefits side simply because it makes making a claim easier. Again, this type of action would not be beneficial to government, as it would cause increased demands on systems like the health care and welfare systems.
One thing we would like to commend the government on is this removal of the intent to allow people to negotiate employment standards in the workplace. The potential for abuse in our industry is huge, particularly in light of the fact that construction is very cyclical in nature. It is our very strong opinion that these measures should be left out of the government's plan as it prepares for the next round of amendments to the Employment Standards Act.
I guess the one last thing we'd like to leave you with briefly is the consideration of termination and severance pay issues for workers in the construction industry. There are certain individuals who do work for single companies for most of their working lives, and these people should not be excluded from this basic fundamental right that employees from other sectors of the economy have in terms of employment standards protection.
We welcome any questions that you may have.
The Vice-Chair: I thank you. We have about eight minutes left, so there's two and a half minutes per caucus.
Mr Christopherson: Thanks for your presentation, Alex. We've heard an awful lot about the construction industry and it really has been extremely varied, like in everything else that we've heard. If it's an association representing the business side of things, they think this is just mother's milk. If it's anyone who represents workers, unionized or in communities or the most vulnerable or non-unionized, they really see this as starting to deconstruct the fundamental rights and minimum rights that workers have.
One of the things I heard along the way, and I'd like your thoughts on it, is just how these changes might affect the underground economy in the construction industry, which I understand is a growing concern.
Mr Lolua: It can be. One of the ways we can see it being a problem with the underground economy is that if you start to look at some of the disincentives to be aboveboard, with fellows having their benefit plans taxed and the fact that there's less and less that they can recoup through an employee wage protection plan claim or other things like that, the guys are going to look at it and say, "Hey, if I'm working under the table, I can probably gross about $2,500 or $3,000 in a week, with cash on the dash." If you look at that with probably netting $1,200 or $1,300 in a week and not having very much protection, the guy's probably going to look at that and weigh it and say: "Hey, maybe it's worth the risk to go underground because I'm not going to be protected. So if I get stiffed for a week here, I'll make up for it because I'm going to make double or three times the money by being underground." I don't think it will be a main concern for pushing people underground, but it will be another contributing factor.
Mr Christopherson: Just to continue that thought, do you think it's also possible with this legislation that as much as business at first blush may think it's wonderful not to have to worry about minimum standards as they exist today, they haven't thought through the fact that if you make it easier for unscrupulous types to be bad bosses, then that's not good business for the people who want to be good bosses and want to be lawful players in the economy?
Mr Lolua: Sure. It'll probably make it a lot tougher to be competitive. Joe's probably seen people come and go.
Mr Joseph Duffy: Certainly what he calls the good employer is not going to get the work because they have to put in a minimum of the wage packet, but what he called the under -- the people who are not looking after their workers can cut off their vacation with pay, their benefits.
Mr Lolua: Plus with construction being so highly mobile and fluid, it's easy for someone to close up shop, start a new company and close up shop. So the exposure and the cost-benefit for somebody, using colloquial terms, stiffing a worker, there's probably a real upside to it for an unscrupulous employer.
Mr Baird: Thank you very much for your presentation. Your union is certainly very constructive and has provided a lot of constructive public policy advice to the government in the health and safety review, and I believe it's the president or chairman of your union who was recently appointed to the board of directors of the Workers' Compensation Board. So you've certainly represented your members very well.
You brought up in your presentation the issue with respect to unpaid wages, particularly with respect to the construction industry and liens and the employee wage protection program. I can indicate to you that it's true that an individual will have to elect whether to pursue a lien for unpaid wages or vacation pay or to apply to the employee wage protection program for compensation. However, the individual does not have to make the election until the issuance of a statement of claim, which I think you alluded to in your presentation paper.
In addition, a lien must be registered within 45 days of the last day of work, and there is a maximum of 45 days after the claim for liens is made before a statement of claim must be issued. Thus, an employee has up to 90 days after the last day of work to decide which route he or she wishes to pursue. I know that's only one of the issues. I don't think we have time to go through a number of them, but that's one concern I know you raised.
Mr Lolua: I'm sorry, is that a question or a comment?
Mr Baird: That's a comment. Do you have any comments in response?
Mr Lolua: In talking to some of the staff from the ministry, I understand that's one of the things they're going over, and certainly we urge them to look at that aspect. I think there's some great confusion over it. To go back to my answer that I gave to Mr Christopherson, in construction you don't get paid the first week, so there's that one week holdback. Potentially, someone could work two weeks before they're in this situation to find out they're owed wages. I think we need to simplify it as quickly as possible to make it a process that people can understand and get fair access to their owed earnings.
Mr Lalonde: Thank you, gentlemen, for coming over and explaining to us the concern that you people have. Knowing that construction is the heart of the industry, the construction industry at the present time is a tough trade, we know, especially with the competition of the Quebec construction industry.
I have a question that I would like you to elaborate on. You talk about the employee wage protection plan vis-à-vis the lien action. What's going to happen in there with the changes that are brought forward by the government in Bill 49?
Mr Lolua: I think we put it in our brief. What will probably happen is, first of all, union members are probably going to say to their unions, "Hey, don't start negotiating benefits in my package," because that's tougher to claim in a position where you're owed money. They're going to want more and more money put into their wage package because it's easier to get a claim on it. You can go right through the employee wage protection program.
Mr Lalonde: You can't go with both.
Mr Lolua: You can, but if you look at making a lien claim, Revenue Canada gets in line before you, usually the banks get in line before you, so the employee's wages are one of the last things that are down at the bottom of the list. So the guy's going to say to himself, "If I go through this construction lien claim, it's probably a long process" -- I think Mr Raso eloquently talked about the backlogs in the courts -- "so let's just go quickly to the employee wage protection plan because I know I can probably get the $2,000." Again, it was reiterated in our paper. I think that's the election, and Joe would probably agree, that most guys will make.
So instead of the government having an opportunity to help people get their rightful entitlement -- it's going to help them in a sense, but the government's going to be footing the bill, probably to the tune of $2,000. Most construction workers will make that in a few weeks, especially if you're working a shutdown, you're working 12-hour shifts or seven days in a row, with your benefits and your total package, you can earn that in a week or two at tops.
The Chair: We've reached our time. Thank you both for taking the time to make an appearance and make a presentation before us here today.
CANADIAN UNION OF PUBLIC EMPLOYEES, LOCAL 3903
The Chair: That leads us now to the Canadian Union of Public Employees, Local 3903. Good afternoon. Welcome to the committee.
Mr Michael Kanter: My name is Michael Kanter, and I'm the chief steward of grievances for Local 3903. My colleague Val Patrick is a business agent with our local, and he'll introduce the colleague to my right.
We represent about 1,800 contract faculty and teaching assistants at York University here in Toronto. I'm going to do what I tell my students not to do, which is basically to read a brief. I apologize in advance for that because we were parachuted into a spot which just recently became open. I'm going to just make some general remarks on the provisions that force unionized employees to pursue their Employment Standards Act rights under the grievance and arbitration procedures of their collective agreements, and my colleague will provide some details as to how that might impact on our local. I also want to strongly voice our objection to the principle of shifting the enforcement of rights, especially including the cost of doing so, from the government to the parties.
We believe there is a place for self-reliance and for the parties to work out their differences without a government presence, but in the area of enforcing basic rights, a government presence is vital. Unions are particularly vulnerable where new costs are imposed on them in a time of scarce resources. The arbitration process has many flaws, and closing off the option of having complaints dealt with by the ministry is simply unfair to organized employees. Of course, this change will hurt smaller bargaining units the most, where entitlements of the act, such as severance pay, are more likely to apply to workers.
Note that we are talking here about minimum standards only. It's one thing for an employee to have the option of having the union use the grievance procedure to pursue a claim, and it's quite something else to have the government say that it's not going to be a part of such a claim.
I also want to highlight the fact that the government is not offering to address problems with the arbitration process, such as the very high costs, as a tradeoff for forcing unions to use arbitration instead of the Employment Standards Act process. The government bears a major responsibility for ensuring an effective arbitration system, especially given that the parties are forced to use arbitration.
Furthermore, the changes expose unions to new claims against them by bargaining members who are dissatisfied with representation by the union in enforcing the act. In this regard, a member might file a complaint saying that the union has breached its duty of fair representation. So there's the added potential of pitting unionized employees against their union, whereas currently unionized employees at least have access to the enforcement powers under the act.
Finally, it's unclear whether arbitrators will be able to effectively exercise the powers which employment standards officers currently exercise.
We see a dangerous trend at work here. Instead of improving the legislation for all employees, the government takes the pressure off by privatizing part of it. It's then in the position where, not only does it save money by refusing to enforce the act but it can also blame the parties for flaws in the process. The basic result is that unions have to pay for the enforcement of public legislation.
We want to make clear that while we're focusing on several key issues under the act, we're also concerned about other areas of the bill, such as restrictions on the recovery of money. Other people have mentioned those things. I'm sure some of these themes are quite familiar. This is troubling in the sense that it's well known that workers find it difficult to make claims against their employers and often do it only once they've left employment.
We also want to voice our strong objection -- and this is something people have referred to too -- to the potential reintroduction of the notion that parties could go below the minimum standards in some areas as long as the overall package meets the standards. Our position is that this would ultimately force unions, again the smaller ones, to bargain on employment standards which should be a matter of statutory right. On the surface it's appealing to speak of flexibility for both parties, but the hard reality is many unions will be bargaining away employment standards. This is apart from the very serious problem of identifying equivalencies, which is another thing that people have spoken about previously.
I'll now ask my colleague Val Patrick to elaborate on a couple of specific ways it impacts on our local.
Mr Val Patrick: I'll try not to just simply read a brief here. I'm speaking on behalf of three unions I work for, and those are 3907, which is graduate assistants at OISE; 3908, the part-time faculty at Trent; and then 3903, which we're here speaking directly for, the contract faculty and TAs, at York University. These groups represent a cross-section of the real structure of unions in Ontario. Those first two are small units, one 130 members; the other 180. Annual budgets top out at less than $20,000. That pays for all manner of things: hiring lawyers, paying for arbitrators, bargaining agreements, paying staff and what not. So there's not a lot of money.
This is typical. Unions are not some big giant. We're not dealing with the banks, we're not dealing with Hydro or Inco or Stelco; we're talking about small groups with limited budgets. As noted, of course, we're required by legislation as well as through the collective agreements -- disputes are settled by way of arbitration. This is what you're proposing through this legislation, that unions should now have to pick up these costs. Well, what are these costs? I've got some examples noted here.
In the spring of 1995, Local 3907 at OISE, we took forward a grievance. It was a fairly straightforward, simple thing, a hiring dispute. The sort of thing reasonable people can disagree about. We saw it one way, they saw it the other. We were lucky; we got away with a one-day hearing. The cost to the union was $1,600. It was actually a little more than that. That's out of a budget that year of about $18,000, less money to the national organization. That was one dispute.
At Trent, at 3908 that same year, we had one. Actually, there were several cases; this was one that went. We also got into some dispute with the faculty union, so there was a tripartite aspect to this. The cost for one hearing, which we succeeded at but it was spread over two days: $4,000. Again, this is not a rich union.
The third case -- and I'm going to make a little bit of a highlight of this one, I'll tell you about it -- involves a dispute over the hiring of one of our members of contract faculty of 16 years, Mr Janczak sitting over here. We went to arbitration. We felt the employer should have hired this gentleman. We fought for -- I believe it was five days actually of hearings on this. The cost was over $10,000.
You'll see here there's a report from Lancaster House Publishing, which we have permission to use. Lancaster House Publishing actually picked up on this award. Lancaster House, for those who don't know, reviews cases across the country, publishes on lead awards and significant changes in legislation. They picked up on this because it was such a unique case and a leading case following current new trends that spoke to affirmative action and so on. We felt that this case went right to the heart of justice. They talked about it for four pages, and it goes on and on. In the event you're interested you can read this in detail. I'll not go into it, but they said this is a major trend. It cost our local union $10,000 just to get that far.
What Lancaster didn't know -- and you'll find it if you get to the second to last page. I will just read this: "After nearly six months, which was longer than the hiring process we disputed in the first place, we have been unable to get the employer to agree to a remedy" in this case. "They have dangled some meaningless review process into the wind for months now...." We're now back to having to call another arbitrator to come back and hear this case again. It's going to cost us thousands more dollars, and here we go. This gentleman is still sitting there out of work. This is the process.
Let me say this. I've been involved in arbitration for over 20 years and I've dealt with some pretty rotten employers. I come out of the steel industry and I know what a bad employer is. These are good employers. We're talking about a system that doesn't work to start with, that's completely unjust, overpriced, and by insisting that unions must go this way, you are removing justice in the workplace from organized workers. That's what's meant by this.
I will read you my conclusion here, and I've got a couple more remarks based on what I've heard.
What each of us does for our livelihood or what we're working at and towards in large measure defines to each of us who we are. And too, the community in which we live and work also defines our individual and collective character.
What makes a society is the commonality of shared beliefs, experience, ideals and standards. It is not something arrived at overnight and it's not always defined, either by borders or even geography. Our sense of society, of being a part of something, and knowing its character and dimensions and flavour, is also defined in us through the standards by which we live and conduct our lives.
We fear greatly that this proposed legislation would tear at the fabric and soul of Ontario. Our society, our sense of community and a provincial solidarity, is threatened by this dismantling of the rules by which all Ontarians are employed. If we have not common standards, then there soon will be no standards, there will be none, and something integral to what makes Ontario who and what she is will be gone.
The Ontario we believe in is a caring place that values the contributions of all its citizens. We cannot all be highly paid stockbrokers, bank vice-presidents or members of provincial Parliament. However, whatever our station in life and the workforce, we all want a decent home, time with our loved ones -- I'll just throw this in: not being forced to work steady 12-hour shifts to make a mortgage payment -- decent food to eat and to be able to savour the bounty of this most fortunate of places. Yet this is not possible where the government of the day will not insist upon and enforce key minimum conditions of employment. Sweatshops exist now and can only proliferate if you pass these changes.
Ontario should never be allowed to proclaim it is open for business to the likes of greedy, Third-World-styled capital interests, which is who this legislation is sending out a world-wide greeting card to.
I just want to make a couple of other comments. All work does not have dignity attached to it. There is no dignity on the women we see down the street selling their bodies. There's no dignity to people who are single parents being forced to work in doughnut shops, 12-hour shifts, while their kids are at home, and they're supposed to try to make do on wages that are just abominable.
The phraseology of some of this -- I think somebody must have studied Orwell when they were in school.
There's a whole other alternative to this thing about, "Well, what do we do about enforcement?" Everybody who comes to this House of Parliament, speaking on behalf of those with no voice, should be ashamed of themselves that there are people out there who cannot get their wages paid and so on. How do you do that? "Well, Jeez, should we hire more police, or should we hire more enforcement?" No. Put the people in jail who are refusing to pay these basic minimum standards. There's the solution. Of course, maybe that's going to be too close to home for some, I don't know, but that's the solution. You don't just try and farm out responsibility for the working conditions in this province. You're washing your hands of what you're supposed to be here to do on behalf of working people.
That's our submission. Thank you.
The Chair: Thank you very much. That takes us just a few seconds shy of 15 minutes, so we won't have time for questions, but thank you very much for taking the time to come and make a presentation before us today. We appreciate it.
UNIVERSITY SETTLEMENT RECREATION CENTRE
The Chair: That takes us now to the University Settlement Recreation Centre. Good afternoon. Welcome to the committee.
Ms Cassandra Wong: Good afternoon, members of the standing committee. I'm Cassandra Wong and I'm working at the University Settlement Recreation Centre. It's my pleasure today to have a chance to speak in front of the committee to express my concerns and also my views on Bill 49.
I have been working in the community for several years and I see both English-speaking and Chinese-speaking clients. Most of them are newcomers, immigrants and refugees, and most of them work in factories or in restaurants.
Over the years, I have seen many cases of my clients being exploited by employers. I can give you typical examples: the workers work for long hours and they are underpaid. Normally they are paid less than minimum wage, such as $4 or $5 an hour. I have also seen incidents of employers opening up a new factory, hiring a number of workers for a few months or a year and then filing bankruptcy or closing down the factory. In the meantime, these employers would also open up another factory which would be incorporated under another name.
Let me give you an example of this. A classic example would be the Lark case which was brought to court in 1990. The case happened in 1988 when more than 120 Chinese-speaking garment factory workers of Lark Manufacturing were laid off by the employer without proper notice. This employer owed the workers unpaid wages, vacation pay, severance pay and termination pay, in total about half a million dollars.
The community lobbied the Ministry of Labour to initiate prosecution proceedings against these directors. After years of battle, the Court of Appeal affirmed in 1995 that these directors are responsible for the half a million dollars in wages owed to these workers. But to date these workers have not even collected a penny because the directors have filed for bankruptcy.
I have worked with these workers for quite a few years. It's very sad to see that it took eight years to resolve a case. Also, ironically, a couple of these workers have already passed away. One thing I do believe is that this is the most significant case that has ever been prosecuted under the Employment Standards Act in the history of this province.
Besides this, recently I have seen more and more incidents of employers laying off their workers without just cause, or the workers are forced to quit their jobs because they never get any money.
An example I can give you is that most of my clients, when they come in to see me, tell me that normally employers owe them from a few hundred to thousands of dollars. This is typical for my clients, because the employers always tell them that they will have money to pay them one day. So my clients will stay there, and one of the reasons is that it is very difficult for them to look for another job. So they work there for about one or two more years and eventually they are forced to quit their jobs because they never receive any money.
In addition to this, I also have clients coming in to see me who tell me their experience of working in restaurants. There are workers who apply to Canada on a work permit through their employers. After they arrived in Canada and after they started working in the restaurants, they found out that they have to work long hours and they got very low pay, which is completely different from the agreement they signed with the employer.
Let me give you an example. I have a client who came in to tell me that originally the employer promised to pay him $500 a week, for 40 hours, but it turned out that he had to work 60 hours a week for only $300. These clients are afraid of filing a complaint because they're afraid of being kicked out of the country. Another example I can relate to the committee is that there are occasions, or it happens quite often to my clients, that employers never pay any tax for them.
Now that the committee has heard many examples I have given on behalf of my clients -- and many of them do not speak English -- I would like to urge the standing committee to really look at these real-life scenarios: the different kinds of exploitation and abuse being practised by these employers.
Also, I am a member of the Employment Standards Work Group. I know they made their presentation a day ago. I strongly support the recommendations proposed by the group.
Also, to make it short and very brief, I reiterate the proposed recommendations again: Firstly, that the two-year claim period for complaints be reinstated; secondly, no maximum or minimum amounts be set for a worker's claim; thirdly, that more enforcement be imposed upon employers' reprisals by means of implementing more operation spot checks and accepting anonymous complaints from workers; and lastly, that the use of private collection agencies not be approved or implemented.
The Chair: Thank you very much. That leaves us two minutes per caucus for any questions. This time the questioning will commence with the government members.
Mr Rollins: I want to express to you the concern that I have in the wrongdoing that those people have been dealt with. I don't feel this government or any government should condone anything to allow any employer to be in the position to exploit somebody's just dues as coming from them. I know some people say we are a heartless group and we're not going to do the thing that we wanted to do -- you can listen to what comes across the table and they all tell us that -- but I don't think there's anybody in this government who has any intent to put an employee in a position that they shouldn't be given their just dues.
Thank you very much for the presentation. It was well presented.
Ms Wong: I'm very happy to hear that. Actually, many of my clients know that I'm coming to speak today on behalf of them, and for sure I will tell them what you have already stated.
Mr Lalonde: Thank you for your presentation. I just wondered, the actual employment standards that are in place at the present time didn't even work for those 120 people who didn't get paid properly?
Ms Wong: No. I started working with the group in 1988 and then I changed my job in 1992. From what I know, when the ministry prosecuted the employers, the directors filed bankruptcy, and then the Ministry of Labour took the case to the Court of Appeal and eventually the workers won again, but this time, the directors filed bankruptcy again. But what we are aware of is that these directors, over these past years, have been opening different factories at various locations, like one across the street, and the factories were incorporated under different names, under their relatives' names or friends' names. That is the reason why still now the workers haven't even got a penny back.
Mr Lalonde: Is the case still in court, though?
Ms Wong: No, it's finished.
Mr Lalonde: It's finished and the employees didn't receive anything yet?
Ms Wong: No.
Mr Lalonde: I really feel we should make sure that if Bill 49 is going through -- the government has the majority on this case -- we will have a clause in there that would cover any anonymous complaint, that there should be somebody at the Ministry of Labour who would take over immediately, not to wait a number of years that we have to wait in such a case.
Ms Wong: Yes, thanks very much.
Mr Christopherson: Thank you very much for your presentation. I would just caution you when you're listening to the words of the government members that actions speak much louder than words, and at the end of the day, if they don't pull back Bill 49 or make massive amendments, all the nice words in the world aren't going to change the fact that the people you represent have lost rights and are going to be in a much more difficult position than they were before.
I want to ask you about the six months and the two years. You said there are a number of people you represent who are perhaps new Canadians, English isn't their first language, they're intimidated in the workplace, they don't know necessarily what their legal rights are and often have no choice but to stay in a bad-boss situation until they have another job and can move to that and then file a claim and go back at least the two years.
The government argues that it'll be better for the people you represent if they can only go back six months, because that will force them to claim within six months and therefore somehow the case is going to get resolved quicker. We have said that what it means is workers in this position will still stay in the workplace because they're still intimidated. The only thing that will change is they'll lose a year and a half of money that's owed them and there'll be no benefit. That's what we have said. That's what they have said. What do you say?
Ms Wong: I would say not to reduce the period to six months, because what happens frequently and is common among my clients is that employers normally owe them wages -- more than six months. I can tell you that among the cases I have seen, more than 50% of these clients, the employers owe them wages, more than two or three years. You know the reason why? Because a normal person would not stay with an employer for such a long time if the employer would not pay the workers money at all.
How the employers take advantage of the law is, they understand that the workers do not speak English -- this is number one. Number two, they understand that under these difficult economic times, it is very hard to look for a job. Number three, they will try to tell the workers all the time, "It's okay, I will pay you very soon." Then they will pay a couple of hundred, a month later. But it ends up that after two or three years it accumulates to an amount of $4,000 or $5,000.
The workers have nowhere to go. They know that a community centre would not represent them to run after these employers, but because the community centre has the language-speaking staff, that's why they come in to tell us and that's why they come in to seek our help.
The Chair: Thank you very much, Ms Wong. We appreciate your taking the time to come and make a presentation before us today.
Mr Baird: Mr Chair, on a point of order: I'd like to move a motion and then speak to it, if I could, which obviously changes the agreement and the report of the subcommittee that was adopted on August 19. My motion is as follows:
That the committee not sit on Friday, September 13, for clause-by-clause consideration of Bill 49; and
That the committee sit at the first available regular scheduled meeting time for the purpose of clause-by-clause consideration of Bill 49.
Could I speak to it?
The Chair: You may, Mr Baird.
Mr Lalonde: Do you have a date?
Mr Baird: The date would be the next regularly scheduled committee time, which is Mondays and Wednesdays at 3:30.
The Chair: The week that the House reconvenes.
Mr Baird: The House comes back Tuesday, the 24th, so that would be the 25th at 3:30. I'll speak to this.
As I mentioned at the preamble to making the resolution, obviously this clearly does differentiate from the agreement the subcommittee had and then adopted by the committee on August 19. I argue it's not a substantive deviation from the agreement, but it certainly is, unquestionably, from the letter of the agreement.
The government members would like to take a period of time to consider what amounts to about two or three feet of submissions that we've received in hearings in 10 communities across the province. By my count, we've heard from about 263 witnesses. I know each one of the government members has been listening and taking notes to consider in our discussions between days of the committee. We've certainly learned a lot. We have been listening and want to basically have the opportunity to consider what we've heard prior to moving to clause-by-clause. The government feels that it would like to consider a number of amendments to the bill -- to consider potential amendments, I should say.
I want to be honest, however. It will come as no surprise to my colleagues, particularly on the opposition side, that we're not likely to consider scrapping the bill. I think we remain convinced of the bill's merits. But it may come as a surprise to my colleagues in the opposition that we have been listening and want the opportunity to genuinely make consideration for potential amendments to the bill. If we can make the bill a better bill, I think the government members have no narrow view to precluding that. So that's basically our argument.
Mr Christopherson: You have to wonder what the thinking was in the beginning when you agreed to these hearings, when you set forward and agreed to this time frame, if you weren't planning to listen to people anyway. If you needed time to listen to that many submissions and you were serious about it, then it would seem to me that you would have built in a period of time to do just that, bearing in mind that we're only here because the government was forced into the public light. The only reason we've had all these submissions is because we forced you kicking and screaming out across the province to give people a chance to be heard.
Nice of you to drop by.
Mr Chris Stockwell (Etobicoke West): Excuse us. Are we interrupting?
Mr Christopherson: Yes.
The Chair: Order, gentlemen, please.
Mr Christopherson: It would seem to me that if you're suggesting that you've been listening in some way to the people who have been making presentations in terms of criticisms of this legislation, if that's true, then you cannot ignore the fact that they have said, almost every one of them, that at the very least you should pull back 49, if you're not going to kill it, and fold it into the year-long review.
I don't believe for a minute that you've listened. I think you have got serious problems with this legislation. You attempted to ram through something that is shoddy work. It's not thought through. You've probably got pages and pages of amendments to try to correct a poorly constructed, ill-thought-out piece of legislation, and to support this at this stage of the game, the evening before the final clause-by-clause, to me, just gives credibility to a process that you never bought into in the first place.
I would be prepared to accept that we would adjourn after today and make this a part of the year-long review. You would have my overwhelming support for that. But to give some credence to the fact that you're just out of control, you don't know where you're going with this legislation and you've obviously got major problems -- you're so confused that the only thing you can do is pull back the night before we were to make clause-by-clause analysis. Now you're scrambling, using the excuse of wanting to listen to people as a cover for the incompetence of this government's actions around Bill 49. Your incompetence is only exceeded by the mean-spiritedness contained in Bill 49 and the harm you're going to do to the most vulnerable people.
I reject your arguments completely. I find them shallow. I find them to be inconsistent with what we've heard. I think the only honourable thing for this government to do at this time, if you truly care about honour, is to refer all of this to the year-long review and at least put some credibility and honour into a process if you won't put it into law. I will vote against this.
Mr Baird: If I may just respond to my colleague from Hamilton Centre's remarks, I was struck by one of the presentations we heard today, the Communications, Energy and Paperworkers Union of Canada, one of the locals that spoke today. They said something to the effect that this committee's review is wasting people's energy and discrediting the government's phase 2 plan. That's certainly not the government's intention. We've had these hearings for three weeks. We have had over 260 groups appear. I think to say we're scrambling with respect to amendments is simply not the case.
Do we intend to present pages and pages and pages of amendments, hundreds of amendments? No. There are a number of issues that have been raised with respect to the bill. People, on a number of issues, have seen things in this bill that frankly I, as a committee member, don't see, and we want to have the opportunity to consider if there is validity in a number of their arguments.
Your request to pull back this legislation and fold it into the comprehensive review, phase 2 of the review that's already under way, is certainly your opinion. It's not one that I share. I think we've certainly heard probably the most representative sample of opinion across the province on this bill. We've spent a good three or four weeks when the House isn't sitting, when we could have been on a number of other very important committees, when we could be attending to constituency business. We have been listening.
I appreciate that there's a difference of opinion in your evaluation of the bill, and that's fair. That's obviously your right. You'll respect that we disagree with you on your statements with respect to your evaluation of the bill.
However, I have no inhibition whatsoever in saying that it's not somehow a bad thing to want to consider opinion. I look at the papers today. That's what we've received in one day alone, and that's a considerable amount of information. Many of them have been identical papers; however, many of them haven't been. I think the government members of the committee do want the opportunity to be able to consider any potential amendments that we may or may not want to present.
Should we have thought of that when we scheduled the committee hearings? Perhaps that's a valid reason. I know on Bill 15, when we considered Bill 15 in this committee, the government, for example, on that bill presented no amendments. That was the case.
I think that's something that's positive, that we are listening. The very thing we were accused of was that we weren't listening, that this was a sham, as one member -- not you -- of the opposition called it. We have been listening and want the opportunity to consider.
Will that involve bringing forward hundreds of amendments? I'll be very surprised if it does. I know there will be a number of amendments. The minister, on the first day of hearings, announced one that's obviously going to be proceeded with, and there are a number of others that we'd like to give consideration to. Some may or may not be necessary, but if we can clarify the bill to eliminate an ambiguity there, I think that's worth considering as members of the committee, and of course that opportunity is open to each member of the committee.
Mr Christopherson: Further to the discussion, you're in deep trouble and you've been in deep trouble from the beginning. Let's not lose sight of the fact that this bill was introduced by the minister and called just minor housekeeping. You had no plans for public consultation, and you stood that ground for a few days until you were forced and shamed into finally having public hearings. Your intent was that you were going to make it law by the end of June. So the piece that you've already pulled back would be the law of the land by now if we hadn't gone through this process. You pulled that out because you got into deep, deep trouble defending it. You're scrambling now at the last minute because you're in further deep trouble over the rest of this bill.
I just wish to hell you'd come clean, admit that you've made a major mistake, try to recoup some dignity and put this off into the process you've already announced. Let's keep in mind we heard all these people come forward and have all these concerns. This is a bill you did not consult on beforehand, or at least anybody who admitted to being a part of your consultation wasn't prepared to say so publicly. There was not one labour representative, not one community representative, not one individual who said, "Yes, I got a call from the minister" or, "I got a call from the ministry and they asked me about this before this bill was created and dropped on the floor of the Legislature."
The process is clear. You've been exposed. You've been exposed for exactly what you are: a government that doesn't believe in hearing input. You proved it with Bill 7. Look what we had to do with Bill 26 to get you to have at least some public hearings, some amount of public input. And on this one, we had to literally shame you into it, otherwise this would all be the law of the land. Now that you're knowing that so many people are paying attention as a result of the province-wide public hearings, you know you've got to go back and rework all of this and figure out how you're going to justify what you're doing. That's what this is all about.
That's why my position is, if you want to retain and regain any dignity whatsoever, pull the whole thing back, put it into the year-long review and let's do it properly, openly and democratically. Until you do that, I will oppose you on this and every other anti-democratic move that you come up with during the rest of your term.
The Chair: Any further comments? Seeing none, we'll put the question.
Interjection: A recorded vote.
The Chair: All those in favour of the motion, raise their hands.
Baird, Fisher, Galt, Kells, O'Toole, Ouellette, Rollins.
The Chair: I declare the motion carried.
Seeing no further business, the committee stands recessed until September 25 at 3:30.
The committee adjourned at 1729.