Ottawa-Carleton Board of Trade





















UNITED STEELWORKERS OF AMERICA, LOCALS 4820, 4632, 6946, 7940, 8327, 8580, 8794, 8952, 9211


Thursday 29 August 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

Ottawa-Carleton Board of Trade

Mr Willy Bagnell

United Brotherhood of Carpenters and Joiners of America, Local 93

Mr Sean McKenny

Nepean Chamber of Commerce

Mr Robert Wilson

Mr Buck Arnold

Renfrew County Legal Clinic

Mr Richard Owen

Public Service Alliance of Canada

Mr Peter Cormier

Gloucester Chamber of Commerce

Mr Jim Anderson

Mr Gerd Rehbein

Ontario Public Service Employees Union, Local 439

Mr Jim Murray

Transportation-Communications International Union

Mr Don Bujold

Ms Maureen Prebinski

Hospitality and Service Trades Union, Local 261

Mr Jim McDonald

Ottawa and District Labour Council

Ms Naomi Gadbois

CCS Canada Ltd

Mr Kevin McGrath

Canadian Union of Public Employees, District Council -- Ottawa-Carleton

Mr Steve Sanderson

Emond Harnden

Mr Andrew Tremayne

Renfrew and District Labour Council

Mr Rick Simmons

McGrath Canada Ltd

Ms Janice Smith

Majean Investments Co Ltd

Mr Matt McGrath

Credit Management Service of Canada Ltd

Mr Kalifa Goita

Canadian Union of Postal Workers

Mr Jeff Bennie

International Association of Machinists and Aerospace Workers

Mr Sam Connor

United Steelworkers of America, Locals 4820, 4632, 6946, 7940, 8327, 8580, 8794, 8952, 9211

Mr Gerard Carthy


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 TobyBarrett (Norfolk PC) for Mr Ouellette

Mr JimBrown (Scarborough West / -Ouest PC) for Mr Carroll

Mr GaryFox (Prince Edward-Lennox-South Hastings / Prince Edward-Lennox-Hastings-Sud PC) for Mr Maves

Mr BernardGrandmaître (Ottawa East / -Est L) for Mr Duncan

Mr BillGrimmett (Muskoka-Georgian Bay / Muskoka-Baie-Georgienne PC)

for Mr Tascona

Mr GarryGuzzo (Ottawa-Rideau PC) for Mr Murdoch

Mr BertJohnson (Perth PC) for Mrs Fisher

Clerk / Greffièr: Mr Douglas Arnott

Staff / Personnel: Mr Avrum Fenson, research officer, Legislative Research Service

The committee met at 0903 in the Delta Hotel, Ottawa.


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.

The Chair (Mr Steve Gilchrist): If I can call the meeting to order on this our ninth day of hearings on Bill 49, An Act to improve the Employment Standards Act. We're pleased to be in Ottawa today. On behalf of the committee, I would say we look forward to all the presentations. We appreciate the interest these groups have shown on the bill.


The Chair: Our first group this morning is the Ottawa-Carleton Board of Trade. I wonder if they could come forward and join us here, please. Just a reminder, we have 15 minutes for you to divide as you see fit between presentation time or questions and answers.

Mr Willy Bagnell: Good morning. I'd like to remind you all that there are Rough Rider season tickets on sale, and if you'd like to buy some, I happen to have some in my wallet.

Mr Bernard Grandmaître (Ottawa East): Good luck.

Mr Bagnell: The Ottawa-Carleton Board of Trade is the oldest and largest business organization in Ottawa-Carleton, representing over 1,400 business people. As the metropolitan Ottawa chamber of commerce, we have long pursued the goal of improving our community and our governments. Like most businesses, we operate without any government funding for our operations, thus relying on our membership and our collective entrepreneurial skills to thrive.

Bill 49 represents a quantum step forward for Ontario employers and employees. With this in mind, the Ottawa-Carleton Board of Trade is generally supportive of the legislation.

The cleanup of the problems relevant to duplicate claims in multiple forums is just one concrete example of how this legislation pursues a more balanced approach. The tightening of the entitlement to recover money from an employer to six months from two years creates a more decisive approach for the employee, while allowing a reasonable time for the employer to wait. The approach prior to this was very one-sided for the employee and very costly for the government and the employer, particularly in terms of defending the employer's decision.

There are, however, some points within the legislation which in our opinion require further thought and, we believe, some revision.

As presently written, the bill has the potential to give arbitrators the same powers to investigate, demand documents for perusal and interview persons relevant to the inspection as the employment standards officers. It is inappropriate for the arbitrator to take on these roles. These tasks of arbitration should only occur after various steps of the grievance process. We also feel that there needs to be a clear delineation of an appeal process on an arbitration hearing enforcing the act. The proposed legislation leaves the door open for many interpretations but does not spell out clearly an appeal process for arbitration decisions.

Finally, we must determine whether Bill 75 or the respective collective agreement will prevail in terms of specific time lines. Almost every collective agreement in Ontario dictates specific time lines for grievances to be filed and processed. In some cases, these will differ substantially from the proposed legislation. The board of trade believes that the time lines within the collective agreement should prevail. This will provide consistency for all parties, including the government of Ontario.

The board of trade is very happy to see the progress of the government in re-establishing a more balanced approach to employment standards in our province and hopefully this will create the economic climate we wish to see in Ontario. Thank you very much.

The Chair: Thank you. That allows us about three and a half minutes per caucus for questioning. We'll commence as always with the official opposition, Mr Hoy.

Mr Pat Hoy (Essex-Kent): Good morning. We're pleased to be here in Ottawa this morning to hear your concerns and the concerns of everyone who will be here today.

Your comments around the arbitration are well noted. Both business and labour have requested more definition of what the government is proposing as far as the arbitrator's role is concerned, his powers of investigation and so on, so we do note that.

As you probably know, the minister is thinking of a further review of labour legislation, and quite frankly we believe this should have been done all at once rather than having us hearing from persons like yourself now and then going through another review as it pertains to labour legislation some time this fall. We really believe it would have been better to package all the amendments that the minister was considering and we would have had a better grasp of what the government was intending to do. But your concern about the role of arbitrators is well noted.

The other point that you make is the six-month recovery for employees and the reduction from two years. You state that it's one-sided for the employee. We've had a number of people state that they find it an uncomfortable position to open up a claim while in the employ of their current employer. Ninety per cent of the people open their claims after they've left their jobs because they're uncomfortable to do it while they're there. They're fearful of reprisals. I just wonder if you have any comment in that regard.

Mr Bagnell: No, and having worked for both small and large businesses in my time, a company that has 500 employees spread all across this province in the publishing industry to the chain of local video stores that I once was a partner in, and in the larger company having had complaints levied against us by employees who were presently in our employ, I have not found that to be an issue. I think a lot depends on the corporate culture that has existed, and if you deal in a fair and honest fashion, which I found that most of my colleagues in business do, then it shouldn't be an issue.

Mr Hoy: We recognize that most employers and their relationship with their employees are very good. However, we're concerned about those very few, and I emphasize the very few, who come into conflict with their employees. But we appreciate your comments.


Mr David Christopherson (Hamilton Centre): Thank you for your presentation. I wanted to ask if, in your opinion, you believe that any of the minimum standards that are now established under the Employment Standards Act are being diminished or reduced or watered down in any way in terms of the protection they provide to workers.

Mr Bagnell: Could you be a little more specific on what standards you're referring to? This is a very large piece of legislation.

Mr Christopherson: Actually it's not. It's a relatively small piece of legislation.

The Chair: Oh.

Mr John R. Baird (Nepean): Oh?

Mr Christopherson: In terms of the words and the length of the bill. We're going to play games, eh?

Mr Bagnell: No, no. I just --

Mr Christopherson: No, I didn't mean you. I meant them. Don't worry about it.

I'm referring to the fact that the minister has stated that the amendments contained in Bill 49 do not reduce any of the standards of protection that are provided in the current Employment Standards Act. I wondered if you agreed with that.

Mr Bagnell: To be quite honest with you, Mr Christopherson, it is not something that the Ottawa-Carleton Board of Trade has focused on. We are very pleased with the general thrust of the act. We think it brings more balance to the province. I can tell you in all honesty that with the surveys we have done of our 1,400 members, which do include some representatives of public institutions which are very unionized, they were strongly in support of a more balanced approach to employment standards. We haven't had any feedback about standards reduction.

Mr Christopherson: I guess that's why I'm raising the question, because there are two perspectives of course.

Mr Bagnell: Absolutely.

Mr Christopherson: The people who represent the workers will come in and offer one perspective; those who represent business will offer another.

Mr Bagnell: I would just caution you when you use the term "people who represent the workers." Remember that 80% of the workers in the province of Ontario are non-unionized and remember that there has to be someone to speak for them.

Mr Christopherson: That's the whole point of this, sir. The Employment Standards Act is the only piece of legislation that speaks for them, because you will acknowledge there are some bad bosses and the whole idea of this legislation is to provide a minimum level of standards and protection for workers, particularly the most vulnerable, who are those who don't have a collective agreement, who are just barely paid above minimum wage, with few or no benefits. We are contending that this bill, as much as you may claim that it rebalances in some way -- the fact of the matter is that after Bill 49 becomes law, there will be fewer rights and protections and enforcement ability of those rights in the Employment Standards Act than now exist.

Mr Bagnell: I think we must also remember in a democratic society, specifically in the province of Ontario, that legislation, on balance, for the last 40 years has been crafted to serve the needs of the vast majority of citizens of the province. I appreciate your position as a representative of the former government, but I can also appreciate the fact that the vast majority of Ontarians work for the private sector. There are claims, and that's why we have governments to adjudicate them, but on balance the philosophy of most boards of trade and chambers of commerce in our province has been to let the free market reign, have government create a broad infrastructure program, broad policies, and then get the hell out of the way so we can do business, create more jobs, more economic wealth and improve our province's communities.

Mr Baird: Thank you very much, Mr Bagnell, for your presentation this morning.

Mr Bagnell: That's Wally Bagnell, Mr Baird.

Mr Baird: Thank you. I want to get your thoughts on this. What do you think would be a disincentive for those who would accept Mr Hoy's notion that the vast majority of businesses accept their responsibilities under the act. What we're dealing with are a very problematic few that we want to hone in our attention to. Do you think that in the system right now with the Employment Standards Act -- a system where once an employee makes a complaint, once that complaint is investigated, once the order to pay is issued, only 25 cents on the dollar is are being paid. So you have a 75% chance of disregarding the law and not paying. Is that an incentive or a disincentive for those in immoral businesses to flout the law and flout workers' rights?

Mr Bagnell: I'll preface my response with this: I think the vast majority of businesses obey the law, and when you get an order from the government you obey it. I have some personal experience in this matter. When a local company -- and my wife lodged a complaint about it -- refused to pay, I had to go and have a little conversation with the owner and a talk about ethics and morals of business.

The fact is that perhaps the government of Ontario should look at those situations and be more stringent and perhaps privatize the collection process so that there could be more of those claims fully recovered and paid to the employees.

Mr Baird: And you think for those employers who don't accept their responsibilities under the act, would they more likely or less likely to pay if they saw that people were being forced to pay certainly a much better rate than 25%?

Mr Bagnell: Absolutely. No question about it. By example, if the business community, through their organizations, mostly chambers of commerce in the province, get the word out that the government is not fooling around and they're going to insist that these bills be paid, then they will be more than likely to comply in a far greater percentage than they are presently, which obviously is good for our communities and good for our province.

The Chair: Thank you, Mr Bagnell. I appreciate you taking the time to come before us here this morning.


The Chair: That now leads us to our second presentation, the United Brotherhood of Carpenters, Local 93. Good morning. Welcome to the committee.

Mr Sean McKenny: Good morning. My name is Sean McKenny. I'm the director of training and programs for the United Brotherhood of Carpenters and Joiners, Local 93 here in Ottawa. Our organization has been in Ottawa since December 1904. I'd like to thank the committee for the opportunity to appear this morning.

I've pored over a number of documents related to the issue and the reason that all of you are on tour of the province, that issue being the Employment Standards Act, an act that was to be, and perhaps still is, designed to provide a bare minimum to those individuals who, for one reason or another, are faced with accepting those standards. Women, men, teenagers, seniors, all working in settings with those minimum employment standards, that's all they have. And for some, those legally required minimum standards are not even applied.

At a time in our society when there is such a high level of uncertainty surrounding the future as it pertains to our very existence, the steps that are taken by those with decision-making powers become paramount to establishing a society, whether that be at an international, national, provincial or local level, that will truly be prosperous.

I'm not going to make reference to other countries and statistics that have been compiled as it relates to employment standards. Others appearing before you have done that. I'm not going to make reference to past history and point out injustices as they pertain to employment and unestablished standards that created havoc in our community at that time. Others before you have and will do that. I'm not going to make reference to papers, to articles, books or what have you that were written or compiled by schooled individuals whose knowledge on these issues is respected by all. Others have and will be doing that. But what I will do is make reference to real life and real goings-on.

Some of you may wonder why the United Brotherhood of Carpenters, a building trades union, is even involved with this process. After all, for all intents and purposes, the Employment Standards Act does not, to any substantial degree, have any direct impact on us. However, our general president noted, in a speech given at our last general convention, that the United Brotherhood of Carpenters and Joiners would not solely speak for its members, but that the United Brotherhood of Carpenters and Joiners, when speaking, would also be the voice of those women and men in our trade who are not members, who are not organized. They do not have the benefit of an agreed-upon collective agreement, but rely solely on employment standards.

As a carpenter myself, one who went through an apprenticeship program and one who, at certain times in the past, had to work in an unorganized environment and rely on the Employment Standards Act, I've seen first hand the weakness of the act. To report for work at 7:00 am and be told that material for the project was on its way and be told that you had to stick around and help unload the material from the truck -- even though there was no immediate work, you had to stick around. The truck arrives at 2 in the afternoon and your boss explains, when you go in to inquire about the missing six and half hours on your pay, that he's not about to pay you for hanging around doing nothing, you complain to who? Apply what legal recourse to the issue? Complain to anyone and you can be assured that you will not be employed by that company. Anyone here who thinks these situations do not occur is naïve at best. Anyone here who thinks the Employment Standards Act protects individuals in situations like this is naïve and then some.


I noticed on the provincial legislative page on the Internet that Bill 49 was referred to as the Employment Standards Improvement Act, 1996. I've got to say, excuse me? What does it improve upon? In all fairness, perhaps one of the very few improvements is the section of the bill pertaining to seniority and service during pregnancy and parental leave. The section on vacation and entitlement to vacation pay we also believe is somewhat of an improvement. However, the bill for the most part will do nothing to improve upon already existing standards. That the Employment Standards Act needs to be improved upon is a given. Bill 49 just don't cut it.

Some of the business community that you've heard and will hear will try to have you believe that they don't necessarily agree with the bill either. Oh, they love the terms "power" and "control," but they'll argue that it doesn't go far enough with respect to privatization and that more power or control be put in the hands of industry. But industry in our unorganized sector is the business community. They know full well that the unorganized are just that: unorganized; no voice; no complete and concise

understanding of their rights under any employment legislation. This bill is just what business was hoping for; just what labour expected.

I look at you all as committee members, and can't help but realize that in all probability these hearings on Bill 49 are no more than smoke and mirrors and that the government is only trying to appease us, in that what will be, will be; also the realization that the minister is caught in a bit of a quandary with respect to the bill. Her recent backing off on some of those areas that would have had a major negative impact on the unionized is puzzling.

I've been around the block more than once. Labour's position and feelings towards this government are certainly no secret. I think labour realized the government's feelings towards them. I would put to the committee this: I listened to someone give a speech in Vancouver a couple of weeks back. Actually, he's someone that everybody in this room knows. Some like him; some don't. Regardless, he said: "Before you judge, before you make decisions that may have an impact, whether that be a small impact or a larger one, try putting on the shoes of those whom that impact will affect. Wear them for a while. Try to get a feel. Then, and only then, make your decision."

So I ask each of you, take away your job, take away your education, take away your material possessions -- God forbid that any of that happen -- and wear the shoes of those who rely on the Employment Standards Act and who now may face changes vis-à-vis Bill 49. Envision your children in the same situation. Then and only then make your recommendations from these hearings.

At the onset of my presentation, my speech, what have you, I noted the power and decision of decision-makers; the importance of those decisions because they affect everyone: ourselves, our children, our children's children. The realization that a collective approach to any decision-making process is a must in having the correct decisions being made. That the business community, the labour community and governments work together towards establishing common goals for the good of the people is a must. That the business community continue to look after its own interests, with little or no regard for labour, has to become a thing of the past. That labour make attempts to understand certain positions of business must become a thing of the future, that governments realize the tremendous contribution that can be brought on by these initiatives must become a thing of the present.

I respectfully would request that this standing committee bring back to the minister as one of its recommendations the possibility of a subcommittee being struck comprising representatives from business, labour and government to deal with the Employment Standards Act changes that are to be made. That's all I have to say. I want to thank the committee and I have to apologize. I got a phone call yesterday from, I believe his name was Victor, asking me to switch the times from 3:15 today to 9:15. I did that. I have to go and I can't stick around for questions. I'd love to be able to entertain them, but I have to go, and I thank you all for allowing us here to make a presentation.

The Chair: Thank you very much, Mr McKenny.


The Chair: That then leads us to our third presentation today, the Nepean Chamber of Commerce. Good morning and welcome to the committee.

Mr Robert Wilson: Thank you for the opportunity to appear. My name is Bob Wilson and I represent the Nepean Chamber of Commerce as its chair, and with me is Buck Arnold, our president and CEO.

We represent the interests of over 400 businesses. We are the second most senior business organization in the region and we have representation of over 12,000 people. You have the brief that we have given to the clerk of the committee and I'm going to only highlight some of the points. It's sort of divided into two areas. It deals with our current concerns, as in Bill 49 that is there. Then there is a section on consideration for real reform in the act in phase 2, which I understand is yet to come and hopefully will.

We applaud the efforts of the government to streamline everything in this area. The less government there is in business, the much better things go. In the sections that deal with the claims, procedures and appeals under the act, the proposed changes make sense. The increase in time to file appeals permits meaningful negotiation to take place. It's just a commonsense change we think.

Minimum and maximum claims: The limits on an order for an employment standards officer is good. Currently, we don't see that there is any limit. The settlement procedures provided for prior to investigation may streamline procedures, but we believe however, and it's been said prior to our presentation, that similar restraint should be placed on arbitrators. They should not be permitted to determine all employment standards issues. That's the feeling of our business people.

Prohibition of parallel proceedings in court and under the act: Currently, a non-unionized employee can do both or either, but no employer should be subject to double jeopardy. Unions and their members still have the protection of their collective agreement to do other things, but we support this change.

We support the process of privatizing the collections. It's similar to a court action, the same sort of things.

The use of the grievance procedure to incorporate the act as part of the collective agreement for unionized employees: It's sensible. But a caution, and again it was said by someone previous to this: Collective agreements contain time lines so they're going to have to be melded; there's no question.

Pregnancy and parental leave: We're going to deal with that under our considerations for real reform, because ultimately the purpose of any reform is not to make Ontario an employer's paradise or an employee's hell, but to balance the rights of employees and employers. We're not putting these recommendations to set out definitive answers, but just to raise some concerns that we still have for some substantive changes to the act.

Anecdotal evidence, and we don't have any factual evidence, suggests that many employers minimize the number of employees by contracting out work, and it's not because of wages often; it's because of the number of rights they have to do under this. The following provision in particular are relevant to what we should say: pregnancy and parental leave. I want to emphasize that we support the concept; there's no question of that. But the Nepean Chamber of Commerce also believes that for a small business the provision for up to 35 weeks puts a small business employer west of the rock and east of the hard place; there's just no question. We don't know what the answer is, but currently the person doesn't have to say anything about whether they're coming back. That lets a small business not replace with a full-time person, because the other person has a right to get back. Combine that with the rights that that person, if they have -- you know, the entitlement time under the Employment Insurance Act. A woman can currently get up to 25 weeks of pay that way. We're not saying that's wrong, but something has to be done to ameliorate it. We recognize the political minefield it is, no question.


In termination of employment, the sliding scale that is given is in most circumstances substantially higher when governed by the courts than prescribed by the act, so we say there's so much uncertainty there that the act must be amended to improve the minimum level of benefits and exclude the jurisdiction of the court towards a higher level of benefits, except if it's covered under a collective agreement.

In severance pay, you all know the current provisions on that one. But there's little justification for penalizing large business employers when they are forced by economic circumstances to downsize. Indeed, provisions such as this adversely impact a decision by employers to increase their workforce on upswings in the economy, because they cannot reduce their workforce on downswings. There's a lot of manifestations. We say there that the government in the second phase of revisions to the act should examine the provisions of this act to ameliorate the impact of severance pay amounts. We're not saying do away with severance pay. There has to be a balance somewhere.

We thank the committee for the opportunity to present our views.

The Chair: Thank you very much. That leaves us two and a half minutes per caucus; this time we'll commence with the third party.

Mr Christopherson: A rather startling presentation. I don't think we've had quite as hard-line a position as this in terms of employer demands in any community we've been in across Ontario. I'm really quite thrown. I had a few other things I was going to talk to you about, but as I listened to some of your improvements you wanted to make, you really left me reeling.

You say, for instance, when you talk about severance pay, that there's an obligation imposed on an employer who has 50 or more employees and characterize that as "penalizing" them. It was always my understanding that the right was there for those employees and it was only an exemption for those of 50 or less because it possibly could be too onerous. Whether we agree or not, that would be the argument. You're flipping that over and suggesting that somehow the larger employers are being penalized and that we ought to race to the bottom in terms of that standard.

Mr Wilson: I'd like to make a couple of points. I don't think these are demands; they were suggestions and considerations to look at. We've never said to do away with the severance pay. The second point I'd like to make, Mr Christopherson, is that we're not saying do away with severance pay, but in fact it is a disincentive for workforce adjustments that have to take place. If people are going to have to give out this money -- and we're not saying there shouldn't be some form of severance pay; that's not what we're saying -- there has to be a balance such that they're going to increase their workforce again. If we're going to create jobs in this province, if we're going to increase the total employment pool, we can't negatively impact on business in any way.

Do there have to be minimum standards? Of course there do. Does there have to be severance pay? Of course there does. But maybe there's a way it can be balanced. We don't have the answer, but if you want to create more full-time jobs instead of the contracting out all the time, then you're going to have to make it easier for business to do things.

Mr Christopherson: I'm sorry, did you say that the severance -- you really are throwing me. This is an incredible presentation, it truly is.

Mr Wilson: Thank you.

Mr Christopherson: I'll be reflecting on the Hansard on this carefully. Did you actually say that the severance language that exists now is a disincentive to make adjustments? What does that mean exactly, "a disincentive to make adjustments"? They might not be so quick to lay people off?

Mr Wilson: No. I'm saying that if they have to pay the severance pay -- and we've all been through the economic downturn in this province; it's been brought to us by other governments. The point is, if you have to pay this off, they're not going hire these people back again. We're not saying they shouldn't pay them severance pay, but if I'm an employer of over 50 and I have to pay up to 26 weeks severance pay to 15 of my employees, then perhaps I'm not going to hire them back again. I'm going to contract work out if I can. I would like to be able to hire them back again, but if I have to pay out all that money in terms of that and in terms of economic downtimes, it's not easy.

Mr Christopherson: I'm just asking you at some point to give some thought to what it's like at the other end of that whole process, really give that some thought about what happens to those individuals and their lives -- not just a benefit, as you're seeing it, from those who already will still have a job after that layoff takes place.

Mr Baird: Thank you, Mr Arnold and Mr Wilson, for your presentation today. You're probably the only chair of a chamber of commerce in the province of Ontario who has done exactly what Mr Christopherson has suggested. I believe you were a former trade union president, which is before I first met you.

I wanted to get your thoughts. You've mentioned an issue that came up yesterday in Sudbury: the frequent lack of clarity in the Employment Standards Act, and sometimes outdated provisions, superfluous provisions, hard-to-understand provisions, leading to companies simply trying to contract out services. We saw a study released last week in Toronto that said one of five workers is a home-based worker, with a growing number of consultants in communities across the province. People are opting out with their feet and simply aren't hiring anyone; rather, they're contracting out the services they require in order to get around huge payroll taxes and huge regulations.

We talked to one businessperson in Hamilton who was from, I believe, the Niagara Peninsula, who said, "I don't care so much what you do to regulate me, but for God's sake, just tell me what you want me to do and I'll do it." Now, I suspect he does care how he's regulated, but he expressed a terrific amount of concern.

Can you tell me what sort of effect you think these regulations have had on people making the decision not to expand or hire that extra job, but rather simply to contract out?

Mr Wilson: Anecdotal? I have no hard facts. I contract out rather than hire, personally. I am a very small business, but I contract out rather than hire. I would love to expand, but the regulations will regulate you to death at this point in time, so I'll contract out. I know of other people who are contracting out, simply on their say-so; I don't have any hard evidence I can give you. They're contracting out because they won't commit to hiring. I think part of it is due to the economic times, but I think part of it is due also to regulations that govern these people.

Mr Baird: How much of a problem have you experienced in your members, either of you, with interpretation of the regulations? This act was originally written in 1974 and there hasn't been a comprehensive review. Our previous speaker suggested it would be a good idea to bring business, government and labour together, which is something we've obviously started for our comprehensive phase 2 review. What are your thoughts on that?

Mr Buck Arnold: As a general comment, I would say that over the years comments have not centred on a specific act. The general feeling out in the business community is very definitely that we are overgoverned, overlegislated, and whatever can be done to remove obstacles to doing business should be done. It's a broader picture than this act or any other specific act.

Mr Grandmaître: Let's address the pregnancy and the parental leave. You say it's detrimental to small business people, that the 35 weeks without pay does affect a small businessman, and you gave us a good example. You say you support the concept but that real reform is necessary. Now, I'm giving you a contract: You're going to rewrite that section. How will it read?

Mr Wilson: I said I don't have the answer to that. We are faced with a real conundrum. I firmly believe -- I fought too long to establish pregnancy and parental leave rights in contracts, but at the same time, now that I'm in a small business, if I hire someone -- I don't know what the answer is. Maybe there's a question of some kind of self-funded leave, this sort of thing. I did negotiate one of the first self-funded leave plans in the province for teachers. Maybe there is an answer, that business can contribute. Maybe it can be combined with some kind of RRSP provision, and you'd have to work with the feds on this, for income tax rebates, this sort of thing, or considerations.

It's the same thing with severance pay. I think there's a question of funding some kinds of economic downturns, both on the point of a company and an employee.

It's not an easy question, but if you want young people to have jobs and especially young women to be able to get ahead, which I think is very important, then you have to make it somehow easier for an employer to replace this person. Currently, that person doesn't have to give any notice of whether she or he is coming back -- a male is only entitled to up to 10 weeks of it.

But there has to be a solution looked at, and perhaps there are wiser heads than mine around. But it's there. I've talked to small business people, and they find it a very difficult piece of the act to work around.


Mr Grandmaître: You mentioned that the federal government plays a major role when they establish this kind of provision. Do you think the federal government would be willing and ready to negotiate that type of clause with other provinces at the present time?

Mr Wilson: I wouldn't dare speak on behalf of the federal government and its attitude to the provinces today. I think it is a situation that you people, the government of Ontario, are going to have to pursue with the federal government. If they won't negotiate it, then bring some kind of pressure to bear on them; throw the ball back to those people.

Mr Grandmaître: Have you pressured the federal government on this issue?

Mr Wilson: I have not, no.

The Chair: Thank you, gentlemen, for taking the time to appear before us today. We appreciate it.


The Chair: That leads us to the Renfrew County Legal Clinic. Good morning, and welcome to the committee. We have 15 minutes for you to divide as you see fit between either presentation time or question-and-answer period.

Mr Richard Owen: Thank you. My name is Richard Owen. I am here on behalf of the Renfrew County Legal Clinic. We are a legal-aid-plan-funded clinic, privately incorporated, as all the legal clinics are, and we provide services in what is commonly called "poverty law." Primarily, we help people with social assistance appeals, workers' compensation, Canada pension plan, unemployment insurance, as well as landlord and tenant. We find ourselves expanding our services to some extent to try to fill the gap which has been created by the lack of legal aid certificates.

In the process, we of course have many clients who are either unemployed or having various difficulties and we see a large number of people who are marginally employable, either because of disability or because of their income or because of the lack of opportunities in the county.

I am here not to speak about unionized employees at all. There are plenty of people here who will come to talk to you about those concerns. I am trying to address our reaction to the amendments which relate to the un-unionized employee. The Employment Standards Act is the sole line of defence for the non-unionized employee and it is that they depend on.

There are certainly many minor amendments which are improvements, as the act calls itself, and which can be characterized as housekeeping, but there are other provisions which, in our view, certainly can have a very negative effect on non-unionized employees.

It's important to think about enforcing employment standards in the real world. As the member mentioned, it's been found that 90%, I believe was the figure, of complaints are brought by employees after they have left their employment. This means there's a period of time in which the abuse, if there is one, continues. The primary concern here is with the limitations which are being enacted in this act. You cannot, in the economic situation which exists at this point, provincially and perhaps globally, take chances with your employment, even if it's substandard. We see this over and over again. People do not raise their complaint while they are working.

This has to be the basic thing we look at before we look at the act; this is the context in which the enforcement of the act or the laying of complaints has to be looked at.

It's all very well to say there are provisions that you mustn't fire someone for laying a complaint, but we all know that the process is lengthy, often ineffective, and it doesn't result in reinstatement. There are areas in Renfrew county where there's basically one employer in a region. You don't have a choice. You can either take a job there, keep it or move, and I'm not sure where you would go right now.

The idea of a minimum and a maximum basically is providing a gift to an abusive employer. If you have a maximum of $10,000 you can collect through employment standards and you have a $40,000 claim -- and we have to assume this is a valid claim because that's the point -- then there's a $30,000 gift to the employer. If you have a six-month limitation period and the abuse has continued over two years, you have an 18-month gift to the employer. If you have a minimum, you can have an employer who basically nickels and dimes his employees and may never be touched. These provisions end up being unfair to the employees, for whom these amounts of money are very important, and they benefit or encourage the employer who has decided to be abusive.

The choice between the employment standards branch and civil suit: I think it's unfair that you have two weeks to make a choice, if you've brought a complaint to the employment standards branch, to change your mind, and you have no time at all if you've decided to sue. But I don't think this is a central issue. For a great many employees in the situation they are in, which is usually without very much money, they're not really in a situation to bring a civil suit in any case. Legal aid is not available for civil suits; there simply are no certificates available under the legal aid plan to bring a civil suit. So the person who is poor is somehow going to have to finance a lawsuit.

In Ontario, lawyers are prohibited from taking lawsuits on a contingency basis. They are not allowed to say: "We'll get to the end. I'll take 15% or 20% if we win and I'll take nothing if we lose." That's not allowed. The reality is that even if it were allowed, lawyers always have to take into consideration whether they're going to go broke on the case or not.

So the lawsuit is not a practical means of enforcement for most employees, who often, when they've left the job, have left it out of desperation and may well be unemployed at the time they're making their complaint. This adds to the unfairness of a $10,000 limit, because the option, really, of going to court is rarely there.

The other aspect of the whole situation as it exists presently and as I believe is reinforced by the amendments is that the system is geared towards settlement. Settlement means compromise of a claim which presumably is a valid one. Now, you can say that at the employment standards complaint level, when you go to the employment standards officer, there may be a settlement because there is really an issue of liability: Is the employer really liable? Once you get to the collections stage, it's already been determined that the employer has abused the standard and owes money to the employee, yet we see a structure which encourages more settlement rather than less, more compromise rather than less. The plan is to give the collection process to a collector who is specifically authorized to settle, with consent, but to try to put together a collection settlement, and he's entitled right now to settle up to 75%; in other words, 25% less than the full amount.

It's important to note that the provision says that that amount, the 75%, for which you don't need the director's approval, can be changed by regulation. That means that some time down the line the government can change that provision from 75% to, say, 50% or 25% without any public hearings, without any fanfare. Basically, you've put the whole thing in the hands of the collector to make the deal and to put a certain amount of practical pressure, if none other, on the employee to settle for less than his full claim.

Add to that the provision that if the collector collects less than the full claim, there's an apportionment. In effect, that means the collector's fee is going to be paid, at least in part, out of the amount being collected for the employee, so the employee gets even less. If we look at the alternative of going to court, the only practical thing you do when you go to court is settle before you go to trial. Going to trial is too expensive for most of us, so the answer is to settle, settle for less than the full amount, whether your claim is valid or not.


If you have a pattern which encourages settling for less, you have a system that rewards the abusive employer. He says: "I'm not going to have to pay as much and I'm not going to have to pay for quite some time, and of course a great number of people are just not going to be able to get there. So I'm rewarded, in effect, for my abusive behaviour."

Add to that the current situation. You have provision in the act for prosecution and conviction for breach of standards, but this provision's not used. My information is that for the first instance of breach of the standards, as opposed to breach of an order, those charges are not being laid except in situations of the more-than-50-employees layoff, those kinds of large situations, and then the charges are dropped as part of a comprehensive settlement. So again there are no sanctions for breaching employment standards. In effect, there's a provision in the act but the enforcement isn't there. I can assume that this is because employment standards officers don't have the time or don't have the resources to carry through on these things.

So you have these two problems. First of all, practically, an employee will not make his complaint before he goes away from the job. Second, you have a system which puts off and reduces the amount which an employer has to pay.

I should note -- just as a footnote, really, because it's a minor point, but it is to me a problem with the act -- that there are provisions in the act as it's amended that if there is an order made by an employment standards officer and it turns out that there is fraud or lack of consent, there is a review process, there is an appeal process. While the act says that a collector's settlement is not binding if it is arrived at by fraud or lack of consent, there is no provision in the act, no remedy in the act, for an appeal process or a way of having that corrected. In that situation, if you are an employee and you enter into a settlement with an employer through a collector, except you didn't or there was fraud or there was lack of consent, you're going to have to go to court to sue, because there's no provision in the act, there's no parallel provision. That may have been an oversight but it's something that should be looked at. Subsection 65.1(2) is the remedy for the employee if there's an employment standards officer's order, and the review is in 67(2.1). In section 3 it states that the collector's agreement is binding unless there's fraud or lack of consent, but there's no carryover to deal with the problem of remedying the failure of the collector's consent.

While I understand that the provision allowing unions to negotiate out employment standards if there's supposedly a better overall deal has been dropped for now, I think it should be remembered that employment standards in general -- there may be some debate over some minor points -- are not really an undue burden on employers. They're a basic minimum which differentiates us, I think, from Third World countries and that we need to preserve. The way we preserve them will be by enforcing them.

The Harris government has made provision to improve enforcement of family law support orders. They're going after deadbeat dads. But they don't, it seems, have the same commitment towards deadbeat employers.

It is, it seems to me, a fundamental role of government that where there is a very important relationship in a society, whether it be husband-wife-child or whether it be employer-employee, if there's inequality of bargaining power it's important for the government to provide that basic even playing field, to try to even equality. It's also important to remember that there are many, many employers, as has been pointed out here this morning, who do fulfil employment standards and who, I am sure, want to have good relations with their employees, want to work with their employees in a kind of partnership, as opposed to ruling through fear. If you don't maintain standards that are supposed to be there, you're rewarding the deadbeat employers and you're punishing the ones who are perhaps spending a little more to do the job properly and to try to be fair. Thank you.

The Chair: Thank you very much. I didn't want to cut you off, but we've actually gone a few seconds over our 15 minutes.

Mr Owen: Oh, I'm sorry.

The Chair: No, that's fine. We appreciate your presentation and the time you took to prepare it. Thank you very much.


The Chair: The next group up will be the Public Service Alliance of Canada. Good morning, and welcome to the committee.

Mr Peter Cormier: Good morning. My name is Peter Cormier. I'm the national director for the national capital region. With me is Mike MacDonald, the assistant to the president of our union.

On behalf of the 60,000 members of the Public Service Alliance of Canada who live and work in Ontario, I should like to thank the committee for inviting my participation in your review of Bill 49, An Act to improve the Employment Standards Act.

When tabling the legislation and elsewhere, the Labour minister has claimed that the Bill 49 amendments to the Employment Standards Act are essentially housekeeping. We beg to differ. In our opinion the amendments are substantial, because in a great many cases they will reduce the entitlement of workers or the ability of individual workers to collect the amounts that are owing.

At the outset, I should like to say that while the majority of our members who live in work in Ontario are covered by the federal public service terms and conditions of employment regulations, we are deeply concerned about the direction the current Ontario government is taking.

First, the proposed Bill 49 amendments will directly affect our members who are certified in Ontario. Second, the federal government's recently proposed alternative service delivery program will inevitably result in a transfer of many federal workers from coverage under the public service terms and conditions of employment to the Ontario Employment Standards Act. Third, changes at one level of government tend to influence the future direction of legislation changes at another level.

Before canvassing the specific amendments to the Employment Standards Act that have been proposed by the government, I should like to say a few words about the importance of employment standards to the economy. It needs to be underscored at the outset that employment standards legislation in Ontario and elsewhere was introduced to ensure that all workers receive basic benefits related to overtime, vacation, severance and public holidays, and that hours of work are regulated. It is not just individual workers who benefit from employment standards legislation; society benefits because the minimum standards mandated by law reduce poverty and exploitation, and because minimum standards impose an obligation on all employers. As a result, while companies can and do provide greater benefits than those that are mandated under employment standards legislation, it should be impossible for a company to reduce its labour costs below the floor level. In our opinion, this minimum standards system helps to ensure an effective use of labour to the benefit of individual workers, companies and society.

It needs to be underscored as well that the existing employment standards in Ontario and in most other jurisdictions are exceedingly modest. That said, they are in a very real sense the only protection that most vulnerable workers in our society receive. In short, employment standards legislation ensures that workers, particularly those on the margins of the labour force, will receive a measure of fairness and the assurance that the state will help them collect unpaid wages, vacation and severance that may be owed by the employer.


The nature of the employment relationship has shown time and time again that the intervention of the state under the authority of the Employment Standards Act is essential if workers are to be treated fairly by their employer. By imposing limits on the amount that can be collected and the period of time an employee can receive back pay, as proposed in Bill 49, the government is effectively penalizing workers when they are most vulnerable.

During deliberations on Bill 49, members of the committee should consider the consequences of the new section 82.3 of the act, as proposed in section 32 of Bill 49. Under this section, " person is entitled to recover money that became due to the person more than six months before the date on which the facts upon which the prosecution or proceeding is based first come to the knowledge of the director." In short, this amendment will reduce a recoverable claim from the present two years to a mere six months.

Such action defies logic, particularly when one understands that many workers delay the filing of a claim until such time as they have terminated their employment. It needs to be understood that in many cases delays in the filing of claims are not the result of procrastination on the part of the worker but a logical and entirely appropriate response to an employment situation where the worker is being denied the minimum standards mandated by law. In our experience, many workers will delay filing a claim because they hope to remain employed while they attempt to secure alternate employment. Once they have secured alternate employment they are generally in a better position to recover moneys owed by the previous employer.

We find equally offensive the section 21 provision of Bill 49 that imposes a maximum $10,000 cap and an unspecified minimum on the amount of back wages and other moneys that a worker in Ontario will be able to recover. In the face of a $10,000 cap, a great many workers will be forced either to accept a settlement that is below the amount owing or pursue the action through the courts.

In our opinion there are a number of problems with the proposed cap that require the urgent attention of the committee.

Members of the committee should understand that the enactment of the cap will not simply adversely affect the well-heeled in our society, because workers in poorly paid sectors of the economy can easily be owed more than $10,000. Moreover, regardless of previous employment income, workers from all sectors will be hard pressed to retain a lawyer and pursue court action when they have been deprived wages and other benefits such as severance. Again it is not just the individual worker who will suffer as a result of the cap; society will also lose if, as likely, the cap results in increased action that clogs the courts and slows the system of justice.

The unspecified minimum amount of a claim under the act is equally offensive. If this provision of Bill 49 is proclaimed, employers will know that workers will be denied the opportunity to pursue a claim below a certain amount. This opens the door for unscrupulous employers to violate the act with impunity by ensuring that the violation is far below the minimum in any six-month period.

While the unspecified minimum may well ease the administrative costs of government, it is fundamentally the wrong approach. If the government proceeds with this provision, it will seriously undermine the employment relationship for those workers who are the most disadvantaged.

As originally drafted, Bill 49 included a section 3 that would have allowed the parties to a collective agreement to contract out the specific minimums under the Employment Standards Act when the terms of a collective agreement, when assessed together, are considered to provide greater benefits. Last week the minister backed off this provision. Unfortunately, however, she has made it clear that it is still the government's intention to legislate in this way during a subsequent and larger review of the Employment Standards Act.

The Public Service Alliance of Canada would like to go on record as protesting the provision in the strongest possible terms. While it may appear that flexibility would benefit both parties to a collective agreement, the reality is otherwise. First, if the government ultimately proceeds with this provision, employers will be able to address more issues at the bargaining table than they can now under the system, which includes a specific legislative floor. Moreover, given the government's intention in this regard, as originally proposed in Bill 49, it is possible for an employer to argue that unrelated benefits exceed the minimum standards.

Before concluding, I should like to address briefly the issues of enforcement and the use of private collectors that will result in the event the government proclaims Bill 49.

Under the employment standards system as currently constituted, unionized workers have access to the investigative and enforcement powers of the minister. By requiring unionized workers to use the grievance procedure to enforce their legal rights under the act, the government is effectively forcing unions, including the alliance, to bear the burden of investigation, enforcement and the cost of the procedure. While this is bad enough in its own right, it pales when one considers that the arbitration process generally lacks the investigative capacity of employment standards officers. Hence, we believe the proposed changes will adversely affect the quality of decisions that are rendered and the settlements received by unionized workers.

In addition to downloading the enforcement of the Employment Standards Act to unions and unionized workers, the government is intent on transferring its enforcement responsibilities to individual workers and non-union work sites. Under Bill 49, the minister is proposing to end any enforcement in situations where the government considers that violations may be resolved by other means. As well, it is proposing to prevent a claim under the act when the worker pursues court action. As a result, one way or another the individual worker will lose. If a worker pursues a claim for pay in lieu of notice, for example, she'll be denied the opportunity to sue the employer for wrongful dismissal. If the worker decides to pursue the claim through the courts, she will face the prohibitive expense of a court action and lengthy delays.

One of the major criticisms that has been levelled at the government with regard to employment standards is that the government has not done a particularly good job of ensuring that wages and other amounts assessed against employers are paid. The government's Bill 49 response to this criticism is to transfer the responsibility of collections to private collection agencies. In our opinion this is an entirely inappropriate response to the collection problem. In our opinion, what the workers of Ontario need is a renewed commitment to public enforcement and collection.

In addition to our general concern with regard to the privatization of the collection function, the Public Service Alliance of Canada finds that under the Bill 49 amendments to the act, the worker may well end up paying part of the cost of this collection. This will occur in circumstances where the amount of the collection falls short of the amount owing, including the collection fee. As the Ontario Federation of Labour said in its submission, having moneys owed them reduced by collection fees amounts to nothing less than legislated theft. In our opinion, the provision is unconscionable and should be withdrawn.

In closing I should like to acknowledge that while my comments have highlighted what we believe to be serious deficiencies in Bill 49, the bill does contain a few positive changes. In this regard the clarification with regard to vacation pay and the provision that ensures that length of employment and seniority continue during pregnancy and parental leave are the most important. While these amendments are supported by my union, we firmly believe that on balance the legislation does a considerable disservice to the working people of Ontario.

Thank you for allowing me to present this morning.

Mr Baird: Thank you very much for your presentation today. We appreciate it.

One issue that has come up with many presentations over the last two weeks is the enforcement of the act, the provisions calling upon trade unions in unionized environments to enforce the act through their collective agreements. We've heard from a number of unions, in the public and one in the private sector, who have said they have a collection rate of 100%. We heard that from a CUPE local up in Thunder Bay. We heard from an Algoma Steel worker in Sault Ste Marie who said his union was capable of taking care of its members. What is your experience now with the Employment Standards Act in Ontario with respect to your 60,000 members? What is the average collection rate? How many outstanding orders are there to pay?

Mr Cormier: Members of the Public Service Alliance of Canada work primarily for the federal public service, and we come under different terms and conditions. As our workers move out of the public service and into alternate service, whether it be with the provincial government or crown agencies or private industry, they will come under the provisions of the Ontario act. That is just beginning for us, so I can't really answer your question at this time. We just certified a large group of employees at the University of Western Ontario, 800 or 900 people there, and at this time I couldn't answer that for our union.

Mr Baird: Under the federal code with your employers, though, under the Canada labour code and the arrangements there, do you have a problem?

Mr Cormier: We come under the Public Service Staff Relations Act, and as far as collection, if we have a problem we go to the board, and the board will decide as the independent third party.

Mr Jean-Marc Lalonde (Prescott and Russell): Thank you for your presentation. I think, from what I've heard this morning, you're mainly concerned about the private sector, because within the PSAC the human resources personnel are well trained and they follow very closely anybody who would have a claim. That would be handled very fast over there. To your knowledge, how many claims that your group has received would be over $10,000?

Mr Cormier: As I said, we would deal with those situations through the board. I'll just give you a for instance from the local I belong to. There were 10 employees who, because of problems with interpretation of overtime pay -- the employer said no, there was no overtime, and the union said yes, there was overtime, and we went to the board. The overtime pay in this case, for these 15 employees, came to $8,500 per employee. That was just from my personal local over a one-year period. If it had taken any longer, they were looking at probably $16,000 over a two-year period for those employees. That was handled by the board and the board ruled in our favour. We easily would have gone over the cap. In fact, we would have gone over the cap if we had gone over the 12-month period, if we had gone into, let's say, 14 or 15 months.


Mr Christopherson: Thank you very much for your presentation. We appreciate it.

I'd like to ask you about your reference to the unspecified minimum amount necessary to file a complaint with the ministry. You characterized it as offensive. Could you just expand on that a bit, please? Why do you call it offensive?

Mr Cormier: I'm going to go back to when I was 19, when the Employment Standards Act helped me personally. I think it's probably best that I do that. At the age of 19 I was working as a security guard for Capital Guards here in town. I started working in April and I was working down at Mooneys Bay collecting tickets. After two months there they put me, over at the civic hospital, on a night shift taking care of prisoners who had burned themselves. I was guarding them in the burn unit at the civic. I really didn't like the job so I went back to Capital Guards, after having worked there a week, and said: "I'm sorry, I'm just not up to this. Put me anywhere you want, but don't put me back at the civic hospital."

The upshot was that they fired me. At 19 you really don't care; you get another job. I was going to university. Employment standards weren't going to pay me for the period I was there, because you only get paid every two weeks, so they got me my last week's pay -- I was only a security guard earning $1.10 an hour -- and they got me some pay for my vacation. That was a very small amount because I wasn't earning a lot of money, and that's what I'm talking about. There are people in our society who are earning the minimum amount of money and for whatever reason they get laid off or fired or the company doesn't need them any more. If there are unfair standards, these people just won't get their dollars, and if you have a minimum you're out of luck.

The Chair: We're well over our time now. Thank you, gentlemen, for appearing before us and making your presentation today. We appreciate it.


The Chair: This leads us now to the Gloucester Chamber of Commerce. Good morning. Welcome to the committee.

Mr Jim Anderson: Good morning, Mr Chairman, members of the committee, ladies and gentlemen. My name is Jim Anderson. I am the president and CEO of the Gloucester Chamber of Commerce. I am pleased to introduce to you Mr Gerd Rehbein, chairman of the board for the Gloucester Chamber of Commerce. With your approval, Mr Rehbein will join me in the presentation of this report.

The Gloucester Chamber of Commerce wishes to thank you for taking time from your busy schedules and for giving us the opportunity to share with you the views and concerns of our membership regarding Bill 49.

The Gloucester Chamber of Commerce, with its current membership of 760, has attained the distinction of being the largest chamber of commerce not only in the region but in all of eastern Ontario. Our population in Gloucester has surpassed the 105,000 mark, with approximately 4,000 businesses. We are the respected and recognized voice of business, and as such we represent approximately 7,000 employees. The vast majority of our members fall within the small business category of 100 employees or less. In fact, we represent considerably more small business owners and entrepreneurs than we do managers of large corporations.

The Gloucester Chamber of Commerce is an association of Gloucester-area businesses and is the strong, united voice of business, committed to initiating, developing, promoting, protecting and evaluating policies and programs which further economic progress, free enterprise, the quality of life and the social wellbeing of the community -- thus the reason for our being here today.

Gloucester is a city of dreams; we are a city of growth. Our business community is growing by leaps and bounds, and in order to support that growth we must continually look to expansion and the creative and entrepreneurial spirit required for a developing city.

Mr Gerd Rehbein: Mr Chairman, members of the committee, as Jim has stated, our city continues to grow and develop, and a very important part of that development is assuring that, among others, our rules and regulations as they pertain to employment standards keep abreast of both the development and the growth.

The Gloucester Chamber of Commerce not only applauds but fully supports the government's actions in undertaking a two-stage reform of the Employment Standards Act. Indeed the act itself has not only become outdated, it has become cumbersome and difficult to interpret at all levels, especially in light of the ever-changing nature of work and today's workforces. Over the years legislation has been added to the act without a complete inquiry into the underlying framework. There are now exemptions on exemptions, and this then becomes very difficult and almost impossible for the average reader to define or piece the various exemptions together. To this end, this chamber of commerce eagerly awaits the second phase of reform and supports the stated goals of promoting greater self-reliance and flexibility among the workplace parties.

The government has stated that Bill 49 has three goals: (1) to allow the Ministry of Labour to administer the Employment Standards Act more resource-efficiently; (2) to promote self-reliance and flexibility among the workplace parties; (3) to simplify and improve some of the act's language. Not only do we support these goals, we are of the belief that Bill 49 meets them. In so doing, the bill continues to protect minimum employment standards for workers.

The chamber is very supportive of those provisions of Bill 49 which eliminate duplication of claims, limit recovery of money to a six-month period and extend the appeal period.


Employers are increasingly faced with defending claims of the same disposition, or for the same redress, in multiple forums. This problem is not only restricted to employment standards complaints; it also spans a variety of employment-related statutes.

As an example, when dealing with the Employment Standards Act, non-unionized employees are able to have employment standards disputes dealt with by the courts in wrongful dismissal actions, as well as by the employment standards branch. Unionized employees are able to file grievances and arbitration processes and may also file complaints with the employment standards branch. Employers are often left vulnerable to defending the same dispute in multiple courts or hearings and must bear the associated costs. In the cases of multiple claims in the courts and to the employment standards branch, duplicate public resources are utilized and, often as not, the public purse is also unfairly burdened. Based on these facts, the chamber supports the provision of Bill 49 which would eliminate the ability to pursue duplicate claims in multiple forums.

Mr Chairman, we know and understand that you and your committee have a busy schedule and therefore you have placed time limits on the presentations. Accordingly, it will be our intention to remain within these restraints. In this respect, we will not go into great detail on each and every issue, but instead will try to present a short summary of our views on what we consider key issues.

In general, the amendments as presented in Bill 49 signal a significant reduction in the administration and enforcement of the act. We agree.

Where collective agreements exist, enforcement of the act must be through the grievance and arbitration procedure. This will lead to a reduced bureaucracy and reduced involvement of government-appointed adjudicators and, correspondingly, greater responsibility for arbitrators. We agree.

In cases of wrongful dismissal with termination and severance pay, the bill will require employees to choose whether to sue in court or seek enforcement through the act. This will reduce employer vulnerability to duplicate claims and associated expenses. We agree.

The bill provides greater opportunity for employers to obtain exemption from the act's requirements by providing superior contractual benefits when such benefits are assessed in the aggregate, rather than individually as at present. We agree.

Two weeks' vacation will now be required after each 12 months of employment, whether or not the employment was active. We agree.

New lower monetary limits for orders under the act and new time limits for claims are introduced. We agree.

Services, and not just seniority, will continue throughout pregnancy and parental leave for purposes of service-driven contractual entitlement. We also agree.

In conclusion, we are of the opinion that stage 1 of Bill 49, being the reform, with the purpose to simplify the employment standards process will be accomplished by passing this bill.

In addition, we look forward to stage 2 of the reform, where it is proposed to make enforcement of the Employment Standards Act more efficient and effective, and will improve the system. We are also aware of the need to modernize and update the framework of the Employment Standards Act to properly meet the needs of today's modern employer and the ever-changing workforce.

It is our understanding that the government is committed to protecting basic minimum standards for workers and in this respect will issue a discussion paper this fall for further consultation and discussions. We look forward to this commitment and will follow up its proposals on how best to improve the legislation.

Mr Chairman, members of the standing committee on resources development, the Gloucester Chamber of Commerce is of the opinion that the changes and proposals as presented in this bill should be legislated into the act. We further believe quite strongly that only entrepreneurship, innovation, freedom to trade and carry on business in the marketplace and the preservation of the free enterprise system can effectively and efficiently lead the way to create new jobs and prosperity in this province. Simply put, the freedom to develop and carry on business, job creation and economic growth should be our first business priority in Ontario. We believe that the proposed reform as presented in Bill 49 goes a long way to addressing the real issues facing business and economic prosperity in Ontario and, if implemented in the proposed form, will only serve to make the business and economic situation a lot better than it currently is.

Please let me state here our profound appreciation for your having given us this time and attention and for permitting us to make this presentation here today. Working together, we can reach for tomorrow. Thank you.

The Chair: Thank you both. We've got three minutes left, so one minute per caucus. Time for a quick question each.

Mr Grandmaître: Thank you for your presentation, Jim. I think it's a good one, except that I want to challenge you on something. You know, there's an old saying in business that time is valuable and time is money. How come you people are willing to accept what's before you in Bill 49, and this is only stage 1? I can't recall dealing with a piece of legislation that has two stages. You accept the fact that maybe stage 1 will improve the administration, but you don't know about the enforcement, and stage 2 is all about enforcement of this piece of legislation. How come you're accepting this kind of legislation blindly?

Mr Anderson: I'll answer your question, Mr Grandmaître, in this respect, in that business people are up to here with government in their pocket. They're crying: "Leave us alone. Let us do business. Give us something we can work with." They are accepting of this, as this is part of the change, and as I stated in the report, we are definitely looking forward to the second phase. As we understand, the government is committed to open discussions on it and you bet your life that we will be there and do a follow-up on those as well.

Mr Grandmaître: But we don't have this guarantee, Jim. We don't have this guarantee on stage 2. Hopefully we will have our say.

Mr Christopherson: Gentlemen, thank you for your presentation. We appreciate it. Let me just say that in terms of your "profound appreciation" for being given the time to make this presentation, on behalf of the party that made sure we had public hearings, I accept your thanks for that opportunity.

I also want to draw attention and underscore your statement on page 5 where you state: "In general, the amendments as presented in Bill 49 signal a significant reduction in the administration and enforcement of the act. We agree." I agree too, and I appreciate your support in recognizing that that's exactly what the government is doing.

Lastly, on page 4 you make the statement: "In doing so" -- presenting Bill 49, that is -- "the bill continues to protect minimum employment standards for workers." We've heard submissions in every community across Ontario, the overwhelming number of which make the case that the cap on the amount that you can claim for -- from virtually being unlimited, now to $10,000 -- the unspecified minimum threshold that you have to cross and the reduction in the time frame that you can seek back pay that you're owed are indeed taking away rights that workers now have, and I would ask you how you reconcile those two positions.

Mr Rehbein: The standards are there and are working very well. I don't think that anything, hopefully, that the government is doing will jeopardize that.

Mr Christopherson: But you're saying "hopefully." We've heard presentations where people have said very clearly they are and I submit to you they are also. You're making the case not hopefully; in writing you've said -- and in the beginning you said you've taken a lot of time to prepare this so I'm assuming this wasn't done lightly. You say that it continues to protect minimum employment standards for workers, and I'm saying to you that we've heard overwhelming evidence to the contrary. How do you say that the inability to claim for up to two years' wages that you're owed, that you cannot claim for any more without paying money out of your own pocket, is not a right denied?


Mr Anderson: We've looked at this as best we could with the information we've had available, and we are basically in agreement that Bill 49 as presented is good. We see the problems from what you're stating are and can be a problem, but in changing the act, you can't have everything perfect. It's not a perfect world.

Mr Christopherson: We're not seeking anything perfect. Right now, those rights are in place. This bill is taking away those rights, and you're saying it isn't.

Mr Toby Barrett (Norfolk): Mr Anderson and Mr Rehbein, perhaps in contrast I want to thank you for presenting and for this brief on behalf of the Gloucester Chamber of Commerce and the up to 7,000 employees in the organizations you represent. The brief makes a compelling argument for the need for your people to have the freedom to carry on business, to create jobs and boost our economy. The existing legislation is out of date, as you've indicated. It's unwieldy. It's been around for decades and is a creation of a patchwork approach.

You also talk about the inflexibility, and the world of work is changing, as many of your organizations have told you. Time is money, as was represented earlier. Your time is money. We're asking you to continue to put some time on this. There is a second phase and your input would be valued. Your people are partly represented by MPP Garry Guzzo, my colleague in this area, and we hope to hear more from you.

The Chair: Thank you, gentlemen, for taking the time to appear before us today. We appreciate it.


The Chair: That leads us now to the Ontario Public Service Employees Union, Local 439. Good morning and welcome to the committee.

Mr Jim Murray: Thank you very much, Mr Chairman. My name is Jim Murray, and I live in Brockville, Ontario. I work in the psychology department at the Brockville Psychiatric Hospital. I'm a member of OPSEU Local 439 and a representative on the Brockville and District Labour Council. I'd like to thank you very much for the opportunity to attend this morning.

I'd like to begin by taking a look at some of the terminology this government is using, and what I mean by that is that the language is very important. If you buy into the company speak, the language of the day, sometimes you're buying into more than just a language, but actually a justification of what's going on.

I'd like to begin with what this government calls its "business plan." I certainly have no disagreement with that. It definitely is a business plan. It is for and about business, not about government, not about workers. It is for and about business, and I think this government has completely abdicated its role in terms of being the custodian of what we used to call the public good. It may be out of fashion now, but they don't want that role any more. They see any sort of regulation or any sort of adjudication as something that has to be done away with, something to get out of the way and let business go on with their laissez-faire, David Frum attitude that they'll look after things for us.

Secondly, I'd like to look at what we call "downsizing" or, even better, "rightsizing." Really what it means is that people get laid off. A lot of people and their families are put out of work. Rather than look at that and the seriousness of that, this government and many of their business colleagues like to look at it and congratulate themselves and celebrate their new competitiveness. They're doing better. I guess other people are doing better for less. I guess that would be the people who are out of work.

"Outsourcing," contracting out, is something that's very interesting. Really what it means is that businesses and companies are able to hire people through what I see as the 1990s version of the slave trade market. You have these employment agencies, the Drakes and the Kellys, that are agents for workers, I guess, and they hire people on with very low wages and no benefits whatsoever, let them work until the time where they would possibly have to be hired on, let them go and bring in another batch. This seems to be a great idea, according to our government.

I know it's coming from other places. I heard a television ad just the other day from Merrill Lynch. It's running in the US, and Merrill Lynch is putting together a nice little commercial that says they are now in the business of doing many of the businesses and looking after the business that government used to do. They didn't say anything about the workers. What they really were concerned about and the bottom line was that they were doing such a great job for the shareholders. To me, that's making money on the backs of workers, citizens, governments. Really what they're doing is making workers into the human equivalent of the Post-it note. You use it up; you throw it out.

The "rich": Mike Harris doesn't like anybody to be called rich. The rich are now called "job creators," so I apologize to anybody in the room here who might be rich, but you're now a job creator if you are. Apparently, when you're given money from the government, probably a lot of money from the tax cut, probably most of the money from the tax cut, your money somehow is a positive thing. You're going to create all these jobs and do wonderful things. But it's a funny thing: Money given to working people just seems to vanish or disappear. We don't know where it goes, so it's really not a good thing to give workers money, I guess.

I think that when we look at Bill 49, we should look at where it fits in. First of all, Elizabeth Witmer said that it was a "housekeeping" issue, really wasn't much to worry about. It's a funny thing. This government said the omnibus bill, Bill 26, was a housekeeping issue, and Maclean's magazine didn't seem to think so. It's Ontario's bully bill, one of the biggest undertakings by government to grab power ever to see the Legislature. Actually, there weren't any public hearings scheduled on that one as well, and it took a Liberal member to sort of barricade himself to get public hearings on that. But this is clearly not a housekeeping measure.

If you look at Bill 49 within the context of what's happened so far, it fits in rather well. You had Bill 7, which slashed employees' rights as far as the labour law goes, the Labour Relations Act. You had a repeal of Bill 40, which now allows "replacement workers," which is the polite word, to come in -- I prefer "scabs" myself -- to really help things out in a strike situation. That would really go a long way.

Now you've got Bill 26, as I mentioned, which among other things grabs at workers' pension rights, and Bill 49 really wants to hit the basic standards that all employees across the province work under. It's not housekeeping at all. I think it's very clear to people when they look at it what the hidden agenda is there. When you look at things like severance, overtime, public holidays, I don't think two weeks' holidays is too much. I don't think anything over 48 hours called "overtime" is too much. I don't think a week's severance pay for every year, if you've worked 20 or 30 years for a company, is too much. But apparently some people do think it's too much and they want to take that away. Otherwise, why change it?

Specifically, Bill 49 deals with what they call flexible standards. "Flexible," I guess, means to change these standards so they can be overruled. In fact, they can override the legal standards if the collective agreement "confers greater rights...when those matters are assessed together," and apparently it says not only a collective agreement but any sort of agreement or working agreement. So an employer possibly would be able to say: "This is a working agreement to work here. Do you want to work here? Sign this paper, and these are the standards that you work under."

From a personal viewpoint, in my home town, we just had a plant, Phillips Cables, that had been in operation since 1922 close its doors, and the company moved it to its American-based operation. Those workers last year were asked to give major concessions to that company in their collective agreement, which they did. This was to avoid closure. Their backs were to the wall. Quite incidentally, they closed the plant after the passage of Bill 26, and those senior workers who might have had a chance to join in the pension program and bridge to a pension were shut out. In fact, there is no way for those workers to get any pension money other than what they've contributed so far. The company has said, "We will not allow people to continue." We have a pension plan. They could have allowed paid-up members to remain in the plan. Even though the company is out of business, it's doing rather well, but it's doing it in the USA. These people are not allowed and they will get no pension.

Under Bill 49, what might have happened a year ago is they would say: "Look, we don't want to close the plant. Give us a break here. We will give you a little more overtime, we'll give you a little more vacation credit, but could you help us out on the severance?" A year later these people could be faced with the situation of: "See you later. Remember? No severance. That's it." The workers walk away with nothing; the company walks away.


Also from my home town, there was a clipping in an editorial that read, "The Ministry Must Defend Rights of Employees." You might have read about this -- I'm sure you have -- about a restaurateur in Belleville and Port Hope, I think it is, who decided he didn't want to pay his workers at all, that they could work for tips; that was fine. I think there's some action being taken, but the message that's related by the editor here is that we should get on this; this is the start of something we haven't seen in Ontario. People like this owner are testing the waters to see how far Mike Harris is going to let him go.

Interestingly, in Bill 49 as well, someone who collects moneys owed to him, an employee who legally wins his case through arbitration and wins salary that he has coming to him, cannot collect that. The government will not collect that; the Ministry of Labour is getting rid of its collectors, apparently. We're seeing the first look at privatization. Private collectors will collect the moneys owed, and the bill for that collection will come out of that employee's money. To me that's unethical, to say the least, if not illegal. It's legalized theft, in my opinion. But what makes that different from the restaurateur who makes his workers work for tips? These collectors, these bounty hunters, are working for tips. They're forced tips from the employee's money. The employer's not paying him to do the job that the employer wants done. This is crazy.

I think Mike Harris is saying that Bill 49 fits in as well as other pieces of legislation because he wants to say that Ontario is open for business. We hear that all the time. I think a better term, a better expression, would be that Ontario is now open for exploitation.

What have we seen so far from this government? We've seen exploitation of the poor, single mothers leaving retraining programs to stay at home because they can't afford it; they have to stay on welfare. People are now being forced apparently to go through some made-up workfare schemes rather than get a real job. They're the sort of undeserving poor that we read about 100 years ago in social literature of this country. We've seen exploitation of seniors who now must decide, some of them, whether to buy groceries or get the pills and the prescriptions they need, and wondering whether they'll be able to stay in the seniors' housing once they're privatized, if they will have enough money. We're seeing exploitation of sick and disabled people who wonder if the supports that are in place for them to keep them there will be there, whether or not they'll be able to afford health care, or will it be just for the rich -- excuse me, the job creators.

Now we're seeing exploitation, and we will, of the environment because this government wants to lower standards all over, not just employment standards, but environmental standards. One of the versions that's been put out recently is that standards are so low that they're going to be on a par with the worst US states. This is Ontario?

And we're seeing exploitation of workers on all fronts, from Bill 7 to Bill 40 to Bill 26 and now Bill 49. Workers are being hit on all fronts.

I think logically, to wonder where this is going, are child labour laws next? We could get into that Oriental carpet market, you know, get those little hands and little fingers working. Let's stay competitive with the rest of the world, no matter what it takes.

I'd like to say that none of you people here at this table will have to face the minimal standards, as outlined, that Bill 49 will change: nobody, including myself, hopefully. We like to think that we have some sort of supports, some sort of benefits in our jobs, but apparently other people are not deserving of those. It would be nice if people, and particularly the members of government when you stand in your place and you vote yes as you're trained to do, to support this bill, think about not only yourselves but your children, because when your children enter the workplace, they will be facing those standards. So it's not just a one-dimensional thing.

I'd like to think that some of the people who represent us in government came from working-class families, and when you vote for that bill I'd like you to think about your parents and your grandparents who worked their careers, their entire lives, trying to build something in Ontario so that we would have something that we're proud of; that people would not feel that they're going to be thrown out the door the next day. When things come bounding down around you, you can make a statement as to what role you played in all of that. Did you help build something up or did you just take this thing down?

Speaking of families, my father recently turned 82 years old. He was in business in Ontario for over 30 years and always considered himself a very conservative man, as many people did from my part of the country over the years. But recently he has told me that he is absolutely shocked and very fearful for what's happening in this province. He's seen a lot in his time and he said to me: "This isn't the type of government of a Leslie Frost or a John Robarts or a Bill Davis. No, this is a return to the mean-spirited have/have-not times of the Mitch Hepburn years." That's where Mike Harris is taking us: to an Ontario that has greed on one hand and despair on the other.

The Chair: Thank you. You've ended within five seconds of the appointed time. Perfect timing. Thank you very much for appearing before us and making your presentation here today.

Mr Murray: Thank you.


The Chair: That leads us now to the Transportation-Communications International Union.

Mr Grandmaître: What about the Provincial Council of Women?

The Chair: They did not show up. They cancelled. The Provincial Council of Women cancelled, hence the change in the agenda and hence the fact we're running ahead of schedule. So thank you for accommodating us in that regard and welcome to the committee this morning.

Mr Don Bujold: Thank you, and good morning. My name is Don Bujold. I'm the national president of the Transportation-Communications union. My assistant is Maureen Prebinski, education information director.

The Transportation-Communications International Union (TCU) represents over 10,000 workers in Canada who are involved in the transportation of goods, people and information. The majority of our members work in industries that lie within federal jurisdiction. On behalf of our members who are regulated by Ontario provincial law, we are compelled to respond to the proposed amendments to the Employment Standards Act.

Before I begin, I must note we are aware of one of the most controversial components of Bill 49 -- namely, those sections allowing employers and unions to opt out of minimum standards, has been withdrawn by the minister. However, in light of the minister's comments that she intends to reintroduce the amendment later in the fall, we still intend to devote some time during this submission to the subject.

I'd like to take the committee back to the remarks of the minister to the Legislature when she introduced Bill 49 in May: "In keeping with our government's desire to encourage greater self-reliance in the workplace, employers and employees will be required to settle more disputes on their own rather than appealing to the ministry in each and every case. This will allow ministry staff to focus attention on helping the most vulnerable workers."

This statement alludes to what I feel are three major flaws in Bill 49 that will erode the rights of workers in this province. Enforcement of minimum employment standards, the historic floor of rights that has existed in Ontario for decades, would be contracted out and the financial burden will fall on workers. A two-tiered system of enforcement of employment standards will inevitably lead to an erosion of standards for workers. The most vulnerable workers in Ontario -- those without union protection -- have much to lose under Bill 49.

What was originally presented as minor technical amendments actually contained a major policy shift in regard to the basic workplace rights of organized and unorganized workers that have existed in this province for years. They indicate that this government intends to surrender its responsibility to enforce its own laws.

I will now briefly outline the major sections of Bill 49 that cause the deepest concern.


Section 3, flexible standards: As I stated earlier, we are aware that this has been withdrawn by the minister for the time being. However, I feel it deserves some comment. Historically, employment standards are overall minimum standards of workplace rights that cannot be opted out of by employers and unions. Section 3 of the bill would have allowed the parties in a unionized workplace to opt out of important minimum standards. Section 3 would have allowed a collective agreement to override legal minimum standards on severance pay, public holidays, hours of work and vacation pay. It would have removed the historical floor of rights for unionized workers and put them in the realm of collective bargaining. Theoretically, unions could be faced with trading off such things as improvements to pension plans just to protect their members from increased hours of work.

Section 3 of the bill introduced the concept of negotiating below standard provisions for unionized workers. It is the first step towards the erosion of standards for all workers. If unionized workplaces can opt out of minimum standards, then non-unionized employers will demand the same right. They will demand the right to opt out of their agreement with government: the Employment Standards Act.

From another perspective, this amendment would have led to more conflict in the workplace. Peaceful contract settlement is one of the basic objectives of industrial relations and is the public policy concept behind labour relations legislation. Section 3 would erode industrial peace. Minimum standards that were supposed to be protected by law would have become subject to bargaining and labour disputes.

Section 20, enforcement: Bill 49 would amend section 64.5 of the act and deny unionized workers access to the investigative enforcement powers of the Minister of Labour. In the event the employer violates the act, union members would now have to use the grievance and arbitration procedure to enforce their legal rights. Essentially, unionized workers through their union dues will have to pay to enforce the standards employers are legally obligated to apply.

Section 20 contracts out enforcement of legal standards, standards the government is obligated to uphold and enforce. This two-tiered system of enforcement means that unionized workers will bear the cost of fighting infractions of the law by their employer. Through their union dues, workers will have to absorb the cost of investigation, enforcement and their related costs. Employers will take advantage of their new-found freedom to violate the law.

Where employment standards officers had the power to conduct investigations and make rulings, there was a consistency to the application of the law. Under private enforcement, an arbitrator will have the jurisdiction to interpret the law and make rulings. This would be new, uncharted territory and we fear arbitrators may not be able to match consistency of rulings under public enforcement. By privatizing enforcement, Bill 49 will create a two-tiered system of standards, even for unionized workers. Larger unions will have the financial resources to bear the additional costs. Smaller unions will struggle and employers will use every avenue possible to try to break the union financially.

Sections 19, 21 and 32, enforcement for non-unionized workers: We are already seeing the fruits of the new open business environment in Ontario. Recently, in Belleville and Port Hope, the owner of a restaurant chain publicly admitted he does not pay his servers any wages. He considered them volunteers and they worked for whatever tips they could get. At first, the Minister of Labour stated it would take two months to investigate this open and public violation of the law.

How would these workers fare under the proposed amendments to the Employment Standards Act? Under section 19 of the bill, they would be denied access to the courts for remedy if they simultaneously filed a complaint under the act. Under section 21, they could not recover more than $10,000, regardless of whether the employer owed more. Finally, under section 32, these workers would be limited to receiving a maximum of six months' back pay from the date a complaint was filed, regardless of whether they are owed more by their employer.

So the non-union worker is faced with a choice. He or she cannot file a lawsuit for wrongful dismissal and file a claim with the Ministry of Labour for severance and termination pay. The worker cannot file a claim for back wages if a civil action has been taken. The worker would have to choose between filing a complaint or filing a lawsuit. Regardless of how much is owed, the most the worker could receive is $10,000, and back-pay claims cannot exceed six months of wages owed. The employer is rewarded for breaking the law when maximum claims limit their liability.

In contrast, the Ministry of Labour still would have up to two years from the date of complaint being filed to conduct an investigation, and a further two years to enforce an order for money owed. An employee could theoretically have to wait up to four years before receiving what is owed.

In light of the minister's comments that these amendments would allow ministry staff to focus their attention on the most vulnerable workers in Ontario, we fail to see how the most vulnerable of Ontario's workers will benefit. In fact, more roadblocks have been put up for these workers by these amendments.

Bill 49 puts in place the process for privatizing the collection function of the Ministry of Labour's employment practices branch. Private collectors will have the power to collect from employers any amounts owing under the act.

Once again, instead of enforcing the act and forcing employers to pay when they violate the act, the government has taken the privatization route and will farm out the problem to a collection agency.

Will private collectors be concerned with what a worker is legally entitled to receive under law? This is an ethical problem that must be looked at. It would be more likely that private agencies will be more concerned with collecting their fees quickly rather than collecting what is truly owed to the worker whose rights were violated. The TCU is gravely concerned that workers will be pressured to agree to settlements of less than the full amount owed. Collectors may argue, if only for reasons of expediency, that less is better than nothing.

Of almost equal concern is the ability for the employment standards director to authorize the private collector to charge a fee from persons who owe money. If the amount of money that is ultimately collected is less than the amount owing to the employee, regulations will enable the apportioning of the amount among the collector, the employee and the government. In other words, a worker who is owed money could actually be required to pay fees to the collector. This is not and cannot be morally justified. We urge this committee to reject this proposal and maintain and improve the system of public enforcement.

Positive amendments: The TCU applauds amendments relating to vacation entitlement and seniority and service during pregnancy and parental leave.

Section 8 of the bill clearly establishes that two-week annual vacation entitlements would accrue, whether or not the employee actively worked all of the year or was absent due to illness.

Section 12 of the bill would amend subsection 42(4) of the act ensuring that employees are credited with benefits and seniority while on pregnancy and parental leave.

In summary, the TCU must go on record as opposing Bill 49. As Bill 49 was introduced only a few months before a planned comprehensive review of the Employment Standards Act, a more appropriate procedure would have been to include these changes as part of the review. Even so, we feel there are fundamental flaws with the amendments that are much more than just minor technical amendments:

(1) Enforcement of minimum employment standards, the historic floor of rights that has existed in Ontario for decades, will be contracted out and the financial burden will fall on workers.

(2) A two-tiered system of enforcement of employment standards will inevitably lead to an erosion of standards for workers.

(3) The most vulnerable workers in Ontario, those without union protection, have much to lose under Bill 49.

Basic employment rights cannot be made more difficult to obtain and enforcement of these rights should not be contracted out to third parties and privatized. Given the minister's comments that she intends to reintroduce provisions allowing a collective agreement to override legal minimum standards on severance pay, public holidays, hours of work and vacation pay during the comprehensive review of the act, an erosion of standards is inevitable coupled with the amendments contained in Bill 49.

I thank you very much for the opportunity to come here and make this presentation to the committee.

The Chair: Thank you very much. There's two and a half minutes left, but if you promise to keep it within a minute we'll stretch it a little bit. The questioning this time commences with the New Democrats.

Mr Christopherson: Thank you for your presentation. It's an excellent document. Somebody's obviously spent a lot of time getting it nice and clear.

We heard from Mr Anderson of the Gloucester Chamber of Commerce this morning in his document that "the bill continues to protect minimum employment standards for workers." That's their submission. I must say, the Hansard will reflect that I don't think he defended that position very well.


When you talk about, for instance -- and I'm just picking one -- the fact that an employee can no longer claim for more than six months when right now they're entitled to claim for two years, would you say that that's a clear indication of a right that's been denied a worker in Bill 49, a right that exists now and that's absolutely being lost, and could you explain, in as clear a language as possible, why you would believe that if that's so?

Ms Maureen Prebinski: As you said, currently a worker has a right to claim back wages in the amounts owed up to two years. By eroding that right to six months, it allows the employer to continue violations of the act, and by putting them in periods of less than six months and paying what's owed, continue doing it in a continual fashion like that. We see that the Bill 49 amendment erodes the fundamental right of workers to their two years of back pay, if it's entitled.

Mr Baird: Thank you very much for your presentation. Given that we only have a minute, I just have a few comments. You mentioned in your presentation the situation involving the Screaming Tale in Belleville and Port Hope, and that the Minister of Labour said it would take two months to look into it. The last three or four Ministers of Labour, I think I can safely say this, don't get involved in individual cases. We do that because it would be inappropriate for the political actor to receive a call from a constituent or from a friend or voter saying, "Listen, I'm having some problems with an employment standards officer; could you just call them off?" I know I've received, as a member of Parliament, a number of calls requesting that. What I say is: "No, I don't get involved in those issues. If an employment standards officer is investigating you, they'll investigate you independently." So that's a very important principle that we adopt. The professionals within the ministry who provide that investigative function did go in and issue orders, and I believe the place is out of business. Actually, one of the first contacts our ministry got on that issue came from the member for Scarborough East, sitting to my right.

The second issue was the privatization of collection. I guess I can indicate to you that we're just simply not satisfied with collecting 25 cents on the dollar. That's what the last three governments, including this one, are collecting. We're only collecting 25 cents on the dollar. I'm just abhorred by that. I think we can do a much better job than that. The minister believes we can. That's what we're seeking to do. I guess if there were any easy solutions to getting that up to 100% in one day, certainly we would have done it. I know the previous government would have done it, and so would the Liberal government.

So I guess in terms of the ongoing review, if you have any specific suggestions on how we can get that up to 100% we'd love to hear them. If you could get back to us, because I think we're very keen. It's the biggest disincentive to people paying. If people know that there's only 25 cents on the dollar being paid they don't pay, so we want to get that up there. We'd welcome any suggestions you folks would have in terms of the broad amount of experience you bring to the table.

Mr Hoy: Good morning, and thank you for your presentation. We agree with you that this part of Bill 49 should have been tied in with the comprehensive review that will follow this year and into perhaps next year. It seems that it would have been better to discuss the whole issue of labour relations and so on all at once. Any amendments that might flow should have been discussed all as one package so that we could really get a true grasp of what the government's thinking about here, rather than this piecemeal breaking up of the discussion.

On page 3 you say, "If unionized workplaces can opt out of the minimum standards, then non-union employers will demand the same right." Do you see anything in Bill 49 that would prevent those employers from demanding that right, and does the bill provide protection, in your mind, for those non-unionized persons?

Ms Prebinski: The bill currently, as written, doesn't amend the Employment Standards Act that would allow non-union workplaces to demand that right, but we see that as part of the whole philosophy that exists out there today. If the two-tiered system of standards came to be, employers in unionized environments can come to the table and demand that we opt out of the minimum employment standards. We see inevitably that non-union employers will approach the government requesting amendments to the Employment Standards Act so that it gives them the same right to opt out.

The Chair: Thank you both for taking the time to appear before us this morning. We appreciate it.


The Chair: Next up is the Hospitality and Service Trades Union, Local 261. Good morning. Welcome to the committee. Just as a reminder, we have 15 minutes for you to divide as you see fit between presentation time and question-and-answer period.

Mr Jim McDonald: We come before the committee today representing approximately 1,600 members of the local here in Ottawa and approximately 10,000 to 12,000 members through affiliated unions across the province who are predominantly employed in the hospitality industry, which is also known and regarded as the second-largest industry in the province.

As you know, the original Employment Standards Act evolved from a need in the 19th century to place controls on the employer's ability to exploit workers through the freedom of contract. The Employment Standards Act has evolved through the years and has now come to protect such standards as minimum wages, hours of work, overtime, public holidays, vacation leave, pregnancy leave, parental leave, equal pay for equal work, termination notice, severance pay and provisions to help laid-off workers.

Never through the course of the history of the Employment Standards Act have provisions been extremely generous in the form of dictating to employers large quantities of money or large entitlements to benefits, but they have served the purpose in setting a minimum floor and they have established the purpose of stopping exploitation of workers.

With the introduction of Bill 49 the labour minister, Elizabeth Witmer, has publicly stated that the amendments being proposed are of a housekeeping nature. Clearly, after we had a chance to read through the amendments, we see that they're much more substantive than that of a housekeeping nature. In reality the proposed amendments really only go to support another initiative of an anti-labour government. The changes are substantive to everybody: They have major impacts on both union and non-union workers and they help employers by making it easier and cheaper to violate the Employment Standards Act than it is to comply with it.

For the purpose of presentation here today we have subcategorized the particular parts of the act.

I'll start with flexible standards. The provisions of Bill 49 to include flexible standards and allow for basic minimum standards to be negotiated into a collective agreement put things right back at the mercy of the ever-powerful employer once again. This, combined with Bill 7 which was passed in November 1995, further complicates the unions' role and their ability to productively, efficiently and effectively negotiate proper terms of employment, conditions of employment, for employees in the province. Without minimum standards there will be no minimum guidelines for employees to follow up at the negotiating table. It puts everything up for grabs, loses decades of progress made in labour in Ontario and goes back to the take-it-or-leave-it scenario of the employer.

When you combine this take-it-or-leave-it potential with the changes in the Labour Relations Act last November, strikes are going to be much more difficult and negotiations are going to be much more difficult. We can foresee much longer, harder negotiations, longer strikes, more violent strikes, and there doesn't seem to be an end to it.


For non-unionized workers Bill 49 effectively erodes decades of progress made to allow non-unionized workers to continue to make an acceptable living standard.

It's common knowledge that non-union workers also benefit from the abilities and negotiations of union workers. Where a union has been successful in negotiating collective agreements, rates of pay and conditions of employment in a particular industry, generally speaking non-unionized employees of similar businesses usually benefit from those types of gains. Historically the union has always been able to negotiate higher wage increases than non-union employees, but employers came along and also gave non-unionized workers better working conditions and wages of pay. If we're now going to allow employers to negotiate lower standards and lower wages, then it follows that non-unionized employees will be affected proportionately.

Giving the employer the discretion to increase the number of hours of work will do nothing but eliminate jobs. If an employer is allowed to have somebody work 60 hours a week instead of the 44 currently and is able to offset that by giving an extra week's holidays, one out of every three employees could risk losing their job. Once they've lost their job, where do they go? They're going to go right back to the government social assistance programs, welfare, UI, job retraining etc. The perceived benefit of Bill 49 will not reduce costs to the government at all but will only transfer them on to another government department.

The money an employer saves through these initiatives -- or the higher profits that a company could realize because of these initiatives -- will most likely not find its way back into the economy. If it's not given to the employees, they have nowhere to spend it. They will not be able to support local Ontario businesses by buying their goods and products because they won't have the money to do it.

If it's the minister's objective to try to close the gap between conditions of work of unionized employees and non-unionized employees, this itself won't achieve the goal either. Historically the philosophy of unionism, and in organizing a particular workplace, has been to level the playing field between employer and employees to permit them to negotiate fair wages and fair working conditions through collective bargaining. The same philosophy works in reverse for non-union employees. History also says that where an employer treats his employees well, pays them equitably and gives them proper working conditions, they resist having the union organize their activities.

With respect to enforcement of the act, we can see the switch-over of Bill 49 as just being a way to cover the government's current ineffectiveness in enforcing the act.

The proposed amendments will serve two purposes: They will increase revenues for businesses through lower wages and deteriorating working conditions, and they will minimize the financial liability to all businesses which are guilty of violations under the Employment Standards Act. Given the government track record currently, they will also cover up the ineffectiveness of the government to enforce the act as it stands now.

In 1994-95, out of approximately $64.3 million assessed against employers in favour of employees, only 26% was actually collected and turned over to employees, and 35% of the reason for that was because employers simply refused to pay, not that they didn't have the money. They just said, "No, I'm not paying it."

With respect to going to civil courts versus Employment Standards Act, for non-unionized workers this is going to create an unfair and unnecessary burden both financially and psychologically. The claim limit of a maximum of $10,000 and a maximum period of six months to make a claim will in effect stop employees from getting what they're entitled to.

Employees historically do not submit claims under the Employment Standards Act while they're currently employed by the violating employer. I guess the biggest reason is fear of reprisal, and a very legitimate fear of reprisal. Forcing them now to put in a claim at a limit of $10,000 within a period of six months is either going to force them to tolerate the violation for longer periods of time and then take less or accept less when they finally do come to issue a complaint, or it's going to force them to want to leave their employment out of fear of reprisal in order to go after what is justifiably theirs.

As a matter of interest, the cost associated with civil court action as opposed to employment standards probably will not produce any cost or expenditure reductions to the government either because the government is subsidizing the court system as much as it would subsidize the less expensive Employment Standards Act enforcement.

The bottom line for non-unionized employees is that they're going to be left with a decision: either to take the easy, least expensive way out and apply under the Employment Standards Act provisions of Bill 49 and settle for less than they're entitled to; or to go to court, incur a great deal of expense, a prolonged period of time for court scheduling -- you can wait up to two or three years now to even get your case heard -- to get what they're entitled to.

For unionized employees, the other means referred to in Bill 49 aim directly at the grievance and arbitration process contained in collective agreements. This would also mean that unions and the membership would have to bear the costs of getting resolutions to problems or infractions of the Employment Standards Act. Currently the Labour Relations Act doesn't provide for the awarding of damages where someone is found to be guilty of a violation. Now the unions and members are going to bear the cost of getting justice through the system.

For labour relations purposes the Employment Standards Act, for all intents, now will be considered to be part of a collective agreement. This puts the ability to decide on it in the hands of arbitrators and Ministry of Labour and increases the union's duty of fair representation to its members with respect to any complaints going through the Employment Standards Act.

Arbitrators and the Ministry of Labour will now have to interpret collective agreements without having the benefit of existing minimum standards to rely on. They'll have to interpret the intent and negotiating history of every individual collective agreement, which will fall under scrutiny, to find out whether or not rights contained in a collective agreement confer greater rights when assessed together. That in itself will be difficult when the term "confers greater rights...when...assessed together" has not even been defined in the act.

In the investigative nature of resolution through arbitration, do arbitrators actually have the required investigative power that is currently enjoyed by employment standards officers and adjudicators in order to properly investigate? If they don't, and if they don't have access to the same powers to investigate, their jurisdiction could be rendered useless, leaving unionized employees with absolutely no recourse at all for violations under the Employment Standards Act. This situation could even be more prevalent in cases where a business is involved in a related employer situation or a successorship provision because the parties of the related employer or the successor may not have been party to the arbitration itself and therefore may not be bound by any decisions made by the arbitrator.

With respect to maximum claims of $10,000 and/or a period of six months, this places a very tight limit on employees. Even the most poorly paid workers are frequently owed more than $10,000 in claims through employment standards procedures. Workers in the lower wage scales cannot afford the cost of lawyers, they cannot afford to wait prolonged periods of time to get what they're entitled to and often they are afraid of reprisal and therefore do not pursue a claim until their employment with the violating employer has been discontinued. It is estimated that almost 90% of claims going through employment standards are made by employees who have already terminated their employment with the employer.

The implementation of these maximums and minimums will undoubtedly encourage employers to violate the act. It's going to be cheaper for them to violate it and pay after than it will be to actually follow the terms of the act.

With respect to privatization of collections, we're opposed to the notion that it be privatized. Giving collectors the discretion to negotiate terms of settlement will drastically affect the amounts of money paid to employees by employers and could end up in a horse-trading kind of scenario where employees again will be forced to accept less than what they are entitled to and employers will be invited and encouraged to violate the act. It will be cheaper for them in the long run to violate it and negotiate a settlement at 75% or less instead of paying 100% of what is entitled.

The Chair: Mr McDonald, we've gone over the time, but if you'd like to make some concluding remarks I'll allow another minute or so.

Mr McDonald: Okay. I didn't know I was rattling on like that.

In conclusion, it's very apparent that our union and affiliated unions across the province are in opposition to Bill 49. We recognize that there need to be changes to the Employment Standards Act. We recognize that things have to be brought up to date and that the economy and recession have a place in making those changes, but the changes being presented today serve no purpose whatsoever and, if anything, will have a detrimental impact on employees in Ontario. Thank you.

The Chair: Thank you very much. We appreciate the time you took to make the presentation before us here this morning.

The clerk advises me that the United Steelworkers of America, Local 5297, have cancelled their presentation. The committee will stand in recess until 1:15.

The committee recessed from 1123 to 1317.


The Chair: I call the meeting back to order. Our first group this afternoon is the Ottawa and District Labour Council. Good afternoon, and welcome to the committee. Just as a reminder, we have 15 minutes for each group to divide as they see fit between a presentation or question and answer period.

Ms Naomi Gadbois: Thank you. Ladies and gentlemen, my name is Naomi Gadbois. I am the vice-president of the Ottawa and District Labour Council. The Ottawa and District Labour Council has 71 affiliated local unions representing approximately 44,000 members in Ottawa-Carleton region. These 44,000 members live, work, spend and vote in this community, as do our respective families.

The ODLC welcomes the opportunity to make a submission on the proposed "housekeeping" amendments to the Employment Standards Act contained in Bill 49. Our brief is longer than the time allotted to speak. We have submitted it and we encourage the committee to read it. We will restrict comments to three points perhaps not covered by other presenters this afternoon.

Our first issue is the red tape committee and the notion of public versus private interests. We understand that the so-called housekeeping amendments, which are in fact significant and substantive changes, grew out of the deliberations of the red tape committee. It is our further understanding that the overall labour/employment strategy of the red tape committee is to overhaul all labour/employment-related legislation with a view to altering current and historical views of what is appropriately considered a public interest and to transform these public interests into private concerns.

The public-versus-private split is evidenced in Bill 49 in myriad ways. Minimum standards are a public issue, yet the original Bill 49 relegated their negotiation to private parties. While this position is being dropped for the time being, there is no commitment to drop it altogether. Labour harmony is a public issue and the resolution of labour disputes should not be left only to private parties to work out.

The enforcement of minimum standards is a public issue, yet it will be placed in the hands of private collectors, with the government's control over the standard of collection limited and without public benefit of the collections that are successful.

Deterring employers from breaching minimum standards is in the public interest, and Bill 49 does nothing to deter delinquent employers. From our perspective, Bill 49 provides an incentive to employers to break the law.

In short, the costs and consequences of employers failing to abide by minimum standards is a public cost and not a private matter. We oppose the recharacterization of these as private in nature.

Our second point concerns the impact on unionized employees. We are encouraged that the government has decided to drop subsection 4(3) from Bill 49 for the time being, but we are dismayed, however, that it has not been dropped altogether. Please refer to our paper for our view on what its devastating impact would be.

Bill 49 still requires unionized workers to enforce their minimum standard protections through the grievance and arbitration process. This foists the responsibility and costs of enforcing what ought to be considered a public right on to the union and the employer. While we assume that the Harris government is quite gleeful about increasing costs to unions, the Harris constituency -- small business -- will not be gleeful about these new costs. In addition, different arbitrators will deal with standards differently. Different results will have as much negative impact for competitive employers as they will have for unions and the workers they represent. Bill 49 will cost employers a lot more time and money.

Third, the impact on non-unionized employees: The cumulative impact of the changes regarding the new limitation periods, election on forum, caps on claims and privatization of enforcement have the impact of discouraging employers from complying with the act.

Consider the following typical example: We have an employee who is a salesperson with over 20 years of service. As a salesperson, her remuneration was structured as a low base salary of $25,000 per year, plus bonuses paid quarterly. The bonuses are based on a percentage of sales. For the past five years, her bonuses have ranged between $25,000 and $30,000 per year, for a total annual income of $50,000 to $55,000. She has also worked a huge amount of overtime because she covers the office when the manager is away and spends a lot of time on the road. The overtime has been banked and she has over 100 hours of banked overtime for the last quarter, valued at $2,000. Her travel expenses are to be reimbursed, which include the car lease, gas, mileage, hotels and meals, all valued at $2,500 for the last quarter.

Her employer approaches her in January and tells her that it is having a bit of a cash crunch and therefore cannot make the $6,000 bonus payment payable for the quarter ending last December, but thinks it will be in a position to do so in March. The employee is dismayed, but she says she will continue working. By the end of March, she calculates that her January to March bonus is $5,500. Together with the $6,000 arrears for October to December bonus, the banked overtime of $2,000 and the outstanding travel expense of $2,500, she is owed $16,000 in arrears alone. She goes to the employer and makes a request that the outstanding $16,000 be paid to her within a reasonable time. The employer gets angry and fires her, claiming that she is guilty of insubordination and that he has therefore lost his trust in her. The employer does not pay her the $16,000 in arrears, nor does he pay her the amount he owes under the termination and severance provisions of the act.

She has no savings because the employer had been in arrears and her income for the last three months had gone down as a result. The Ontario legal aid plan no longer funds any wrongful dismissal cases and she has been told by two lawyers that they will not meet with her unless she pays a $5,000 retainer up front. She is denied UIC because the employer has alleged that it fired her for cause. She has been told by social services that there will be a three-month waiting period for social assistance because the employer has alleged cause. She talks to a friend who is a law student, who tells her to file a complaint under the Employment Standards Act. No one draws her attention to section 64.3, so she does not know that by filing a complaint she has just given up her common law civil claim for damages in lieu of notice in excess of those prescribed in the act.

Her claim for arrears in wages and overtime is $16,000. In addition to the arrears, she has a claim for damages in lieu of proper notice, which at common law would be in the $75,000 range and which, under the combined termination and severance provisions of the Employment Standards Act, total $25,000. Her job search has been hampered by her employer, who tells prospective employers that she was fired because she cannot be trusted and is litigious. The employment standards officer investigates the complaint and ultimately makes an order that the employer pay $10,000 for the arrears. She loses the $6,000 because of the cap on arrears in subsection 65(1.3) and the employer is also ordered to pay the termination and severance payment of $25,000.

The employer refuses to pay, so two years later the director appoints a private collector. The employer tells the collector that the most it can pay will be $20,000, including the administrative and collection fees. Otherwise, it will declare bankruptcy and will not be liable to offences or any other penalties thanks to the amendments in Bill 7. The collector tells the employee that the maximum she can get is $20,000. She is now completely desperate and says she will take it. Pursuant to subsections 73.0.2(2) and (7), the private collector and the director take $4,500 for administration and collection fees and remit the remaining $15,500, minus income tax, UIC and CPP, to the employee.

The employer has saved $71,000, plus the costs of legal representation and a potential award of costs against it by a court. The collection agency made a profit after expenses of $3,000, because it took only three phone calls to resolve the matter, but the ministry didn't have the time or resources to monitor or audit the private collector. Unfortunately, the employee has lost $73,000. She may have lost her house or apartment in the time it took to resolve the matter. She may have lost her relationship. She has definitely lost sleep and self-esteem and may or may not have had the ability to get back into the active workforce. The taxpayers have lost tax revenue from her in the range of $20,000 and the defraying of costs of about $4,000 that went to the private collector. Small businesses in the employee's community have lost her buying power.

A similarly situated employee who was able to retain a lawyer may have recovered the whole amount. A similarly situated employee who had a different collection agency assigned to the case may have recovered the whole amount claimed under the act. A similarly situated unionized employee would have pursued the matter by way of grievance and could have recovered the whole amount, albeit at the employer's and the union's expense.

But in 1993-94 over 20,000 employment standards complains were made but only 27 prosecutions of employers were initiated, so the employer in this example can probably feel fairly secure that he will not be prosecuted and there will be no consequence for breaking the law. In the intervening years he has had the full use of the 20,000 bucks he ultimately had to pay out.

Bill 49 does not benefit employees or the public in general and it does nothing to assist the provincial debt or the provincial economy. Quite the contrary.

I'm sorry, gentlemen, but I took the time to come and I would appreciate your attention.

Bill 49, and Bill 7, have been useful in unifying the labour movement. Bill 49 should make it easier for unions to organize unrepresented employees, as they are largely unaware that their rights to minimum standards are being stripped away by the Harris government. Bill 49 enhances the union's appeal to both represented and unrepresented workers. But Bill 49 does not help employees or the public, and is this what you intended? We are the voice of 44,000 voters and their families and we thank you.

The Chair: Thank you. That allows us three minutes, one minute per caucus, and the questioning this time will commence with the official opposition.


Mr Hoy: Thank you very much for your presentation. It's a graphic example of how things could go wrong under Bill 49 as it pertains to this particular employee.

It was suggested earlier this morning, and I think many of us would have to agree with this statement, that a lot of employers have open lines of communication and discuss things with their employees, such as it started out at the beginning of this example where the employer said, "I'm a little bit behind." The employee says, "All right. I'll wait a little bit and hopefully things will work out." That's an open line of communication. But things went on to be delayed and payments were delayed. I think your concern mostly, through this example, is the enforcement.

Ms Gadbois: Absolutely, yes.

Mr Hoy: The government is saying they can't collect very many of these moneys, less than 25%. Now they're saying that in certain situations under the private collector 75% would be better. How do you react to that prescription for remedy?

Ms Gadbois: It seems to me, gentlemen, that the government has absolutely no problem collecting its taxes. If you don't pay your taxes, there are all kinds of penalties that devolve upon you. If collecting money from employers that is owed to workers were an issue of concern to the government, they would simply write legislation that would make it possible to do so. They do it in other areas.

Mr Christopherson: Naomi, thank your for your presentation. That's probably the best illustration we've had of taking a pretty commonplace situation and walking through the various doors of the new legislation and showing where people will arrive at. I think it's fair to say that there are much scarier examples of people who are a lot more vulnerable who don't even start out with some of the benefits that this worker might in terms of facing those kinds of problems. I'd be interested to hear from the government. If they want to challenge that this isn't a real possibility, I'd be interested to hear them make that challenge.

Assuming that they can't or certainly won't be able to do it effectively, I would also draw to your attention that the Nepean Chamber of Commerce came in this morning and said: "The reduction in time to file a complaint, from two years to six months, allows disagreements to be dealt with in a timely manner. This benefits both workplace parties." Further, the Gloucester Chamber of Commerce came in and said the bill "continues to protect minimum employment standards for workers."

I should say that neither have the government members yet admitted that this bill takes away the rights of workers. They still maintain in the face of all the evidence that you and others have brought forward all across Ontario -- and I can tell you your thinking is consistent with representatives of working people, organized and unorganized, all across this province. They still will not admit to the fact that bottom-line rights of workers are being taken away. Any further thoughts you would have on the fact that they're continuing to defend, and you will this afternoon hear the government defend, that this is not taking away minimum standards?

The Chair: Thank you, Mr Christopherson. Mr Baird.

Mr Christopherson: Normally you offer a chance for a brief response.

The Chair: Well, you were already at two and a half minutes for your one minute.

Mr Garry J. Guzzo (Ottawa-Rideau): You've got to learn to cut those questions.

Ms Gadbois: I'll simply agree with Mr Christopherson as my response.

The Chair: Super. Mr Barrett?

Mr Barrett: Ms Gadbois, thank you for your presentation on behalf of the Ottawa and District Labour Council. You mentioned the deliberations of the red tape committee and some strategy behind this. Very simply, the strategy is no more than to eliminate red tape completely. There's really no secondary policy initiative. We're not going to leave in any silly rules or regulations to try and achieve some other goal. That's not the reason.

Our reason for eliminating red tape is to eliminate as many barriers to economic activity or barriers to industrial relations or creating jobs in this province as possible. Red tape itself is really an indirect tax on activity and on people's resources, so anything that's unwieldy or doesn't fit or is there for no good reason will be history.

Ms Gadbois: I understand what you're saying and --

Mr Barrett: We're looking for good reasons to leave things in or take them out. That's why we're --

Ms Gadbois: Sure. The thing is in the definition of what red tape and silly regulations do, and for the most part what they do is protect people who have absolutely no power in the workplace against their employers, sir. To remove those barriers, as you call them, basically means to have open season on workers in this country in their workplaces, as we had 100 years ago. I guess it depends on your definition of what those things do, sir.

The Chair: Thank you for taking the time to make a presentation before us here today. We appreciate it.


The Chair: That leads us to CCS Canada Ltd. Good afternoon. Welcome to the committee. We have 15 minutes for you to use and divide as you see fit.

Mr Kevin McGrath: Thank you, committee members. My name is Kevin McGrath and I'm appearing in two capacities: (1) as an independent businessperson and (2) as a spokesman for CCS Canada Ltd.

CCS Canada Ltd is a collection agency for international insurance companies in Canada. I am an agent in Small Claims Court and on a daily basis I deal with businesses, employers and persons who owe money, and I know them all very well. These are the people who are also involved at one end or the other of the Employment Standards Act. The figures have since been adjusted, I understand, but the last information I had was that two thirds of the orders made by the department were not paid, and there's a tremendous cost there. It does not send a very punitive message to the employers who flout the law and cheat their employees.

There are two reasons for this high ratio of unpaid claims: First, there is too much time given to the type of employer who may be a cheat by the complaint presented; second, up to now the department has not employed professional collectors from the start.

Let us look at the first cause. The employer who is the subject of the complaint by an employee is either a cheat or because of necessity is cutting every cost possible in order to survive. In either case, time is working against the creditor, either the victim-employee or the department of labour and whoever may be associated with them. Under Bill 49, the time within which complaints must be filed has improved to six months, but even this is too long. It should be shortened to a period of 60 days from the time of the offence or the discovery of the offence.

If the employer has not corrected the problem with the employee within 60 days, it is not going to be corrected. The sooner the employee recognizes this fact, the better off he or she is. The shorter time creates an urgency in seeing that the claim is filed early. Filing early gives the standards officer a better chance to stop this offence happening to others and to effect recovery. It is not hard for a slick talker to persuade the victim to wait a little longer until the matter is fixed up. It does not get fixed up; it only gets worse. The cheats are buying time.

Whether the employer is honest or a cheat, they continue to cultivate the ill-gotten gains at a price to the victim. Everyone must understand the urgency of filing the claim promptly, and putting an early deadline on it is the way to create this urgency. The employer knows immediate settlement cannot be delayed. The employee, who cannot afford to forfeit the money, knows it is now or never to get things done quickly. The standards officer has a better opportunity to solve the problem. It also reduces the amount payable from the employee wage protection fund.

To give two years for an order or a refusal to issue an order is unfair to the employer and it's unfair to the employee. It is an unnecessary delay. I think Mr Guzzo would agree with me that justice delayed is justice denied.

Mr Grandmaître: He won't agree.

Mr McGrath: Well, I'll ask him after.

If an offence against the act is a crime, then crime prevention should commence as soon as possible. It only gets worse if no decision needs to be made for two years. Human nature is such that decisions are made, at most times, only against a deadline and not before. It is not fair to the employee to wait up to two years, if the money is coming from the employee wage protection fund, or for an order to be made. Certainly the payment will not be made while the investigation is going on. It is not fair to the employer to have an investigation hanging over his head for two years. Get it finalized as soon as possible.


While an investigation is being carried on and the order may be pending, the employer is tied up for finance or is forced to settle an unjust claim. The tension suffered by an innocent employer will drain attention from more productive endeavours and planning. The only person these delays help are the people who are trying to avoid the law.

Ninety days, not two years, should be sufficient time to investigate and make a decision as to the issuing or withholding of an order. This would not interfere with the other provisions of the act where there is mention of a two-year period. Everyone, particularly those who would not have occasion to use it regularly, must constantly be reminded of the time frames. The collection of debts is a highly specialized profession. Collecting debts is an exacting job requiring focus and determination. The psychology of debtor motivation to pay is a serious study. Everyone does not have this talent. The staff who administer the Employment Standards Act do not have the time to effect the collections, unless they have taken the many courses offered to collectors by trade associations involved in the collection of debts, and they would not have the expertise to collect against the many other professional collectors who are attempting to collect from the same debtor.

An independent collection agency will return more money faster. They have the ability and the technical knowhow to do the job better at a predetermined, fixed price, thereby effecting a saving for the client. Remember, two thirds of the orders are uncollected, and that is a tremendous cost.

There are other points I would be pleased to discuss; however, I want to allow time for questions in this brief time allowed to me for this presentation.

The Chair: Thank you very much. That's six minutes, so we have three minutes per caucus for questioning. The questioning will commence with the third party.

Mr Christopherson: Do you consider yourself an expert in your field?

Mr McGrath: Yes.

Mr Christopherson: Do you consider yourself a professional?

Mr McGrath: Yes.

Mr Christopherson: Would you stop being either one of those if you worked for the government instead of your own corporation?

Mr McGrath: I might not have the same motivation.

Mr Christopherson: But you said you were a professional. A professional does things for reasons other than monetary remuneration.

I would like to ask you another question. You've talked about the fact that you thought six months was too long, that you'd like to move it to 60 days. Are you aware -- and I'm suggesting you may not be; that's why I'm raising this -- that it's not unusual for a very vulnerable employee working for a bad boss -- not that they all are -- who's being ripped off but who for a long period of time may not know they're being ripped off -- then they become aware of it through one means or another but they're afraid to file a complaint because they'll be fired and they know it, and it takes them time to secure another job. Ninety percent of all claims are placed after someone has left the employment of a bad boss. The current law allows them to go back at least two years and collect back pay they're owed. Your suggestion would further deny them money they're owed.

Mr McGrath: I don't think it would. And I say that because in my brief I said, "or as soon as it comes to their attention"; "60 days, from the time of the offence or from the time it comes to the attention of the offended."

Mr Christopherson: So are you saying they should be able to go back two years and collect the money they're owed, as the law now provides?

Mr McGrath: I think they should perhaps be able to even go back further. For example, if someone was denied money for an extended period of time and it just dawned on them or they just had the benefit of counsel, or the government took out newspaper ads and radio ads to let them know what their rights are, if it comes to their attention at that time, they should be able to go back any period of time.

Mr Christopherson: Very good answer, and I appreciate that very much. I suggest that's exactly the kind of professional expertise, motivated by the right reasons, which is to help vulnerable people who are being ripped off, that the government has an obligation to provide. I'd sure like to see the government hire someone like you, with those kinds of qualifications and moral standards, out there going after these bad bosses.

Mr McGrath: Thank you. I'll give you my card.

Mr Guzzo: Consider it done.

Mr Christopherson: Hansard got that, I hope.

Mr Baird: Thank you very much for your presentation. My colleague from Hamilton Centre mentioned that the laws now allow workers to go back two years and collect back pay that they're owed. It becomes an issue of the principle of rights, which I think we all share, but it becomes separated from reality. The current law does not really allow people to go back two years and collect what they're owed. With the administration of the current law, people are only seeing 25 cents on the dollar being collected, so that is a falsehood. We are not seeing workers go back two years and collect what they're owed, because they're not collecting it. The current process isn't working. That's one of the reasons we want to go to private collection agencies, because we in government obviously don't do a very good job about that. The previous speaker said, "Just strengthen the legislation." I say, tell us how to strengthen it. Give me specific examples, I've said to previous speakers, because obviously we can't find them.

The previous government made a valiant attempt for five years and they couldn't find them. The Liberals haven't been able to find them. We simply have been proven, all parties, ineffective at collecting more than 25%. I think at some point in this debate we've got to say that the principle of rights is so paramount --

Mr Christopherson: Why not take away the whole protection, John? Then you'll have 100% success.

Mr Baird: -- the principle of rights has become so separated from reality that we'd rather keep the principle of rights. It doesn't matter if people ever collect them, but in principle it's great. That's why we want to see these go to private collection agencies, because I can't possibly see how you folks could do a worse job than all three parties have done for workers in this province.

Mr McGrath: That's a very nice vote of confidence. Thank you.

Mr Baird: You've got two out of two so far. That's the first thing this guy and I have agreed on since the hearings.

Mr McGrath: What I want to bring up again is the amount of time. The guys who are out there who are going to cheat -- let's pick a real easy victim. Would you say telemarketers fall into a higher chance of offending rights? They're not even covered in the act, believe it or not.

Mr Baird: Maybe they should be.

Mr McGrath: They should be; I agree. In any event, whoever the offender is, generally they're running on a shoestring or they're running with the intention of perhaps taking advantage of someone who doesn't know their rights. If we get the order in 60 days, the guy is hopefully still in business. Hopefully we'll know whom he is working for, we'll know where he is banking, we'll seize that bank account and we'll seize his contract if he's being subcontracted to raise things for other people.

Mr Baird: I just have one quick last question. Do you have an easier time obtaining results for your clients if the debt is less than six months old, or if it's more than two years?

Mr McGrath: Every day when an account is unpaid is another excuse not to pay it.

Mr Grandmaître: We all agree, I think, that the present government and previous governments have done a very poor job as far as collecting these dollars is concerned. Without having seen the enforcement legislation, you say you can do a better job than the previous government. My question to you is, what is your cost on collecting $1,000, for instance, or per $1,000? What would be your cost or the cost to the employee trying to recover?

Mr McGrath: Those are two separate questions.

Mr Grandmaître: Okay, answer (a) and then (b).

Mr McGrath: Well, I'm not necessarily prepared to answer (a), because I didn't come prepared to answer (a), but the generally agreed-upon commission rate is in the neighbourhood -- well, the government just did a bidding process and I bid on that, for the $300 million in accounts. I would think that for these types of accounts, for the orders that would be given in 60 days, if the collection agency were to retain as its share 25% or 30%, you would find that most of the orders would be collected.

I would also submit that price is not always the criterion. If the government is going to start selecting the collection agencies, I wouldn't do it on price, because you get exactly what you pay for.

Mr Grandmaître: I realize this.

Mr McGrath: If I may add to that, there are agencies out there that will do it for a nickel, or for 5%, but they're not going to effect recovery, because they're just going to be creamed. If you want the accounts collected, you give them to people who are trained collectors and who have a high recovery ratio.

Mr Grandmaître: Answer me this question: How about a new case? We're talking about what's being owed right now. Let's say that on your desk tomorrow morning you get a new claim. What will be that charge or that fee or that commission or whatever?

Mr McGrath: First of all, I wouldn't charge anybody anything unless I collected the money.

Mr Grandmaître: Yes, I realize this. We all know this. A collection agency is a collection agency. They get a fee on what they collect. I'm asking you, what is your fee on whatever dollars you collect?

Mr McGrath: It would average about 32% for my clients at present.

The Chair: Thank you, Mr McGrath. We appreciate your taking the time to make a presentation before us.

Mr McGrath: Thank you for listening.



The Chair: That leads us now to the Canadian Union of Public Employees, District Council -- Ottawa-Carleton. Good afternoon and welcome to the committee.

Mr Steve Sanderson: My name is Steve Sanderson. I'm the president of the Ottawa-Carleton CUPE district council, representing 5,000 members in the Ottawa-Carleton area.

I want to just tell you a couple of things before I start. These types of sessions always let me think about a number of things that I think are important to me as an individual in this province, and also as an individual standing before this committee to attempt to help it find a way through these dilemmas.

Today, I thought back to the time when I was 14 years of age and I was working in a store called Zellers. I worked 54 hours a week without overtime and I was lucky to get Wednesday afternoons off for a couple of hours. I made $1.25 an hour. If I got out of line with anybody, if I spoke up, if I said anything -- in those days, I was in charge of all the shipping and receiving; I was in charge of making sure everything was in the kitchen; I had to take care of all the animals in the store; I had to make up all the signs; I had to open the store; I had to go to the manager, to the bank, and bring in the deposits for the week. The list went on and on. I made $1.25 an hour, and I wasn't able to say a word about it. Nobody in that store talked to anybody else about anything because they were absolutely freaked out about saying things for fear that they would lose their jobs.

That was just something that came to me, because I remember that experience of working. As I grew up, I remember the changes that came under employment standards and how people were able to benefit from that and be treated with dignity and respect.

The other thing I'd like to say to you is that in my position as a person who is working in this province, as an employee of an organization -- I work with an organization called the Ottawa-Carleton Association for Persons with Developmental Disabilities. I help and assist people with developmental disabilities become employed in gainful jobs in this community and I've been doing that for the last six years. I think it's important to note that some of the things that are being said in Ms Witmer's last statements were about helping those people who need help the most. I guess what I could say to you -- and that's my experience, not yours -- is that a number of the things that will, I think, come forward in this bill will make it much more difficult for those people who are developmentally disabled to be able to get gainful employment in our community. It will restrict them and it will put them at the back of the line. So that's another thing I think you should take into consideration when looking at what is going to be coming out of this bill.

I want to also make my presentation a bit different from the other presentations that I've heard and that I've been able to glean from other groups that have presented. I know the major issues before us are the claims: the period of time for claims investigations, the limits on the claims, the role of enforcement of the government with respect to that issue and the use of private collection agencies, which was just brought to our attention by the previous speaker. I think you're going to hear an awful lot about that stuff over the next couple of weeks -- obviously not this particular group, but the group that is travelling throughout the province -- but I feel that in some way I don't specifically want to address those issues. What I want to address is what I feel is at the root of the changes and what I believe the role of the government should be in this type of endeavour with respect to ESA, or the death of ESA.

One of the comments I do want to make, though, at this particular point is that although there will be changes coming in the fall that will be even more extreme, the Honourable Ms Witmer indicated that this is a housekeeping bill, and I would just like to suggest to you that the only real things I see as housekeeping are issues around vacation leave and maternity leave. Those seem to be the only ones I really can find. I think the others are really in the direction of a major revamp and a radical swing in direction which is going to be in favour of employers.

I want to also start by talking about what I believe to be a law and what the importance of a law is. I suggest to you that I cannot find any laws on record in the province of Ontario for people to be caring, concerned employers. I did not find any laws on employers being too generous with employees. In neither case did I find those types of laws.

I start by saying that because I want to look at the idea of what a law is all about and why people create laws and what the purpose of laws is. I think if we look quite carefully, laws traditionally or initially were to preserve and protect those who had against those who had not. I think the second way that laws were created was because there were things that happened in societies around the world and people said they would not regulate themselves, and somebody had to take the responsibility of regulating so that there would be fairness and justice for all.

In light of that, and in this case if we're looking at employment standards, the law has been created as a result not of employees but as a result of what employers have done traditionally with employees. The cases are legend and the stories are legend about what has happened with not only males but women and children working in unacceptable, extraordinary environments for lengthy periods of the day without any recourse to health and safety, and the list of litany of those terrible things goes on. The rules allow people to stand up and say, "I have something that I can say is mine and I can stand for it and there is somebody who's going to help me with it."

I think it is also given that laws were created and laws are still in place because if the laws were not there, then we have that whole history of before the creation of employment standards as a mishmash of laws that required the creation of the Employment Standards Act because the employers would not regulate themselves. Thank goodness for that creation and thank goodness for the wisdom of the people who were in government at the time.

I believe too in the following statements, and this is something that I hold very close to my heart: that governments and democracies are elected by the people to take care of the welfare of all of the citizens, and not just some of those citizens. I also believe that government has an ethical and moral responsibility to be fair and just and principled with all of those citizens. When a government favours one class or group of citizens, it loses its moral authority, and when it gives up its responsibility about regulating and enforcing laws, it becomes the puppet of the agent that is controlling it. I don't have to name what I think that control agent is.

With the Employment Standards Act, the changes that we're looking at here, I believe the government is quickly moving in that direction. Just for the sake of analogy, I suggest to you that we have nomenclatures that are put in place. I know that PC stands for Progressive Conservative, but more and more I see it as progressive corporation. That scares me, because the government seems to be going in that direction, seeing government as business. It leaves people in this particular case, under Bill 49, as a result of the exclusions of the things that relate to organized labour, outside of it. It leaves the unorganized labour force defenceless.

I suggest to you also that if you look at who is in the unorganized labour force, a large percentage of them are women. I believe they have been downtrodden and taken advantage of, and it's just more recently that efforts have been made to give them an equal opportunity. That, again, I think is going to be under attack for women. Then, of course, there's the preparation for the attack on organized labour that will come in the fall.

I've heard through the minister's comments once again that there is talk about minimum standards, and I know, in looking at this and the things that we will be looking at in the fall with respect to a complete revamping of the bill, that the concept of standards will in effect disappear. You cannot have standards if everybody has a different set that they consider to be that. In the end, you'll have this hodgepodge of things which will make it even more difficult for anybody, let alone organized labour. If you look at unorganized labour, who will represent them? In effect, who will be speaking for them at these hearings? If there's no body that represents them, who will come forward?


I know that the comments I have made you'll say -- and you could easily say that, and so be it if that's the case -- "Who is this guy and what nerve does he have to say these things?" I want to suggest to you just a couple of things on that topic, if I could. I suppose if I could be so bold as to just go on with this particular part of my report. I've looked at a couple of things that I have said to you already. Some examples -- me, I'm nobody, I have nothing to say as far as some of you may be concerned, but I would like to look at some of the things that are being said about how economic development will help everybody in this report and it will better lifestyles.

There was an employment outlook report that was put together by the Organization for Economic Co-operation and Development and it says it ranks Canada near the top among western countries in terms of full-time workers in low-paid jobs. So more jobs doesn't necessarily mean a better standard of life for those people who live in our province. The 25% of Canadians who are full-time workers receive less than two thirds of its median earnings, and that again is something that does not help Canadians. Furthermore, Canada has one of the highest rates of child poverty in the industrialized world. There's a tremendous link between the chronically high unemployment that we have, the large-scale poverty that is presently among us and that is a disgrace for Ontario to have to say that and a grossly unequal distribution of income. That's not me, that's a fairly representative, important body.

The UN Human Development Report -- this is with respect to the balance of wealth and power -- has indicated that wealth in the world of the 358 billionaires is equal to a combined income of the poorest 45% of the world's population. That's 2.3 billion people in this world. By 1991 statistics, 81% of the world's population received only 15% of its income. So when you talk about distribution of wealth and people saying they're really having a hard time and they can't manage unless the rules are changed, then I suggest to you that there is a purpose behind all of this for them and that the key to growth is investment in education.

We see also again the complex situation now where people are having a harder time gaining access to education. One year more of education represents an increase in the gross domestic product of 9%, and better nutrition -- again, talking about poverty here, talking about people working -- the statistic in 1976, it took 41 hours of work by one individual in the family to be able to take care of that family. Now it takes something like 75 hours of work by the two individuals working, and obviously the standards and the costs and the minimum wages being what they are with respect to the cost of living, do not allow people to do anything but to survive.

Another report, not me speaking of this: In the prestigious US journal Foreign Affairs -- this is an article last year by Ethan Kapstein, who is the director of studies at the Council on Foreign Relations in New York. He was talking about the singleminded priority for deficit reduction matched with that tight monetary policy of governments. He indicated in this blue ribbon establishment publication that, "Just when working people need the nation state as a buffer from the world economy, it is abandoning them." A further quote: "The spread of this dogma of restructuring fiscal policy is undermining the bargain struck with workers in every industrial nation," and that's the bargain struck 50 years ago right across the board with people indicating that there had to be change and there had to be a working together of people, of government and of business, and finally, that these tight monetary and fiscal policies have favoured financial interests at the expense of workers and have created an international renter class. In other words, people are forced to live in that way. So not me, another body that has credibility, blue-ribbon publication in the United States.

I guess finally, an individual that maybe people should be listening to more than anybody else is Henry Mintzberg, who is a professor at McGill University and at a prestigious European business school, who was also published in this article in the Harvard Business Review -- I guess that could not be seen in any way as being a "left-wing propaganda leaflet" -- indicating that -- let me just say to you that this man is, if you don't know him, a world-renowned thinker and writer in management circles. There have been many things said about him. Basically, what he is arguing in this article, and it has been well publicized, is that government is not a company and cannot be managed as if it were a corporation.

Another interesting quote from Dr Mintzberg. It says: "All this knee-jerk stuff denies decades of working things out very carefully as to what government should do and business should do. They" -- government -- "throw it all to the wind because you have a bunch of" -- that's his quote -- "idiot economists who don't know anything practical."

He goes on to say other things here, that, for example, the Mike Harris Conservative government, for evidence that business-style management does not serve the citizens' government, becomes hardened. It has more concern with selling lottery tickets than it has concern for people who are standing on the streets. It's the whole business view of the toughest surviving. It's all the value system coming into government, and Mike Harris does it with a vengeance. Mintzberg goes on to say that this type of attitude plays into the hands of those who "have a very callous view of society."

The Chair: Excuse me, Mr Sanderson. You're already well over your time. If you can conclude in a sentence or two, I'd appreciate it.

Mr Sanderson: Yes, I can. If I could just conclude by saying that -- Franklin Delano Roosevelt -- to have a strong nation, you have to have a healthy nation, and we've forgotten those things that are very important to bring people together so that they can live a reasonable, decent life. I really believe there are problems with this bill, and it will affect many, many thousands, if not tens of thousands of people in this province.

I'm very sorry for going over my time limit.

The Chair: Thank you, Mr Sanderson. We appreciate your taking the time to make a presentation before us here today.


The Chair: That leads us now to our next presentation. I think the agenda is slightly incorrect. The actual title was Emond Harnden law firm, Mr Andrew Tremayne. Good afternoon. Welcome to the committee.

Mr Andrew Tremayne: Good afternoon, Mr Chairman.

The Chair: Again, we have 15 minutes for you to use as you see fit.

Mr Tremayne: My name is Andrew Tremayne, and I'm an associate with the law firm of Emond Harnden. Emond Harnden is a law firm which advises employers with respect to labour and employment issues. My associates and I restrict our practice to this area, and we are the largest firm of its kind of eastern Ontario.

Naturally, the changes which are contemplated to the Employment Standards Act by Bill 49 are of great interest to my associates and I, and also, more importantly I think, to our clients.

In general, we support the proposed changes and encourage this committee to recommend speedy passage of this bill, but we do have a few specific submissions for this committee with respect to a couple of particular areas. There are four areas I'd like to touch on: first of all, the amendments which would reduce parallel claims and forum shopping; secondly, the amendments which would ensure that complaints are made in a timely fashion and which would reduce retroactive recovery; thirdly, the increase in the time limit for requesting review of a decision; and fourth and finally, those aspects of the bill which clarify portions of the pregnancy and parental leave provisions.

First of all, we advise employers whose workforces are both unionized and non-unionized, and in both cases the employers at present face the possibility of having to litigate ESA-based claims in more than one forum, either before an employment standards officer and in the courts in the case of non-unionized employees, or before an employment standards officer and an arbitrator. In either case, our clients face the prospect of greatly increased and, in our view, unnecessary expense in defending themselves twice.

First, with respect to the civil claims -- as this committee is probably aware, courts have recently begun to apply a principle of issue estoppel to proceedings before them in situations where an employee has made a successful complaint pursuant to the Employment Standards Act. Many of our clients are alarmed to discover that a determination by an employment standards officer that an employee has been terminated without cause is entitled to termination and severance pay pursuant to the ESA, and can have that decision form the basis for a successful wrongful dismissal claim where the potential damages run up to 24 months of pay. In our view, the revisions to the act which are contemplated under section 19, which would eliminate that possibility, should be supported, and in our respectful submission, no one will be denied the right to make a claim. In fact, what is happening, in our view, is the claims are going to be channelled into the most appropriate forum, either the courts or the employment standards branch.


With respect to the companion piece, section 20, it's in that area where we see that the provisions of the ESA will be read into a collective agreement and an arbitrator will be able to enforce those provisions. In our respectful submission, that section does require some additional clarification. First of all, with respect to time limits: Would the time limits of a collective agreement for the filing of a grievance apply with respect to an ESA-based claim? We feel that should be clarified.

Secondly, would an arbitrator have the enhanced powers, particularly those investigatory powers which are contemplated under section 29 of the bill, in enforcing a deemed breach of the collective agreement? At the moment, arbitrators act more in a mediator/decision-making role rather than as an investigator. So in our view, some thought should be given to the specific provisions of the Employment Standards Act as amended by Bill 49 in terms of which specific provisions of the act will be enforced through the collective agreement.

Finally, the issue with respect to the administrative aspect, again in terms of limitation for recovery period, that should be clarified in terms of whether the collective agreement standard applies or whether the Employment Standards Act as amended by Bill 49 applies.

With respect to the provisions which would ensure that complaints are made in a more timely fashion, we heartily support those provisions. Many of our clients express a great deal of frustration with what seems to be claims being filed long after the ability to investigate them properly and, in effect, many instances to resolve them have passed, so we support heartily the amendments which would reduce that time period.

We also support the provisions of Bill 49 which would increase the time limit for the filing of an application for review of an officer's decision from 15 to 45 days. As the committee knows, employers are required to first comply with an order to pay before they are permitted to file for review. In our respectful submission, the committee should turn its mind to that provision of the act. A reasonable compromise might be the requirement to pay a portion of an order to pay, because for many employers, an order to pay can be prohibitively expensive, and in our view, the enforcement proceedings should be separate from the determination of the rights and whether or not there has been a breach. Nevertheless, the extension of time from 15 to 45 days will I think allow many employers, who in many situations have to seek legal advice and do seek legal advice for the first time when a decision is rendered against them, to more properly inform themselves and, if necessary, to secure the funds necessary to comply with the order to pay in order to initiate the review process.

The final area I'd like to touch on is those proposals which seek to amend the Employment Standards Act to state clearly that pregnancy or parental leave should be included in the calculation of service and seniority. In our respectful submission, that is a welcome clarification of a hitherto unclear portion of the act. We would, however, be concerned about the transition effects flowing from that if all provisions of the Employment Standards Act are to be enforceable pursuant to a collective agreement and to become, in a sense, deemed provisions of a collective agreement. Many employers have governed themselves in previous years based on decisions of employment standards officers and/or arbitrators with respect to the interpretation of that provision. We would urge the committee to consider reading those provisions into collective agreements when they come up for renewal.

We would, in addition, urge the committee to look carefully at what is presently section 44 of the Employment Standards Act. This provision provides that an employer cannot discriminate against an employee, can't intimidate, suspend, lay off, dismiss an employee because an employee is or will be taking parental or pregnancy leave. The word "because" there is important. As this committee may be aware, there are conflicting decisions among employment standards officers as to the significance of the word "because." Many officers have in effect read that word out of that provision, thus giving employees in effect an absolute protection or form of superseniority against any layoff or dismissal, discipline or suspension, whether or not it is motivated by that employee's expression of interest in or genuine taking of pregnancy or parental leave. In other words, some officers have interpreted that as meaning once an employee expresses an interest in taking leave or is taking leave, he or she is immune from layoff, dismissal or other matters.

We conclude the substance of our submission. I hope I've been able to be of some assistance to the committee. Again, I haven't touched on all the areas; we've touched only on those which we see as the most significant ones in terms of our clients and our clients' needs. I'd be pleased to respond to any questions.

The Acting Chair (Mr Ted Chudleigh): Thank you very much, Mr Tremayne. We have a little under two minutes for each caucus.

Mr Baird: Thank you very much for your presentation this afternoon. One of the issues that has come up -- I've mentioned this on a few occasions. We had a businessperson come before the committee in Hamilton and say, "Just tell me what you want me to do and I'll do it, and be clear about it." He expressed a significant amount of frustration in the ambiguity and lack of clarity in the act. That's why this process is a two-stage process, Bill 49 being the first stage, and then a comprehensive review over the next four to eight months on the overall act.

What other problems or issues could you tell the committee about where there's a lack of clarity, and how has that led to misunderstandings and in the end to violations, potentially, under the act?

Mr Tremayne: In our experience, it's very difficult to generalize in terms of employers. Obviously there are employers over a wide spectrum of sophistication. Many of them are very large and are very well informed about the act and know intimately all of its ins and outs and keep abreast of the interpretations of employment standards officers. But then there are the employers who are often smaller businesses whose awareness is extremely general.

A good example of that is the distinction that's made in the act between termination pay and severance pay. As you know, everyone with a minimum of qualifications is entitled to a notice period. In addition to that, for certain employees who have been employed for a longer period of time and for employers of a certain size, they are also entitled to severance pay. Many employers are unaware of that.


In addition, many employers are also unaware that there is a common-law entitlement to file a claim for unjust dismissal and seek damages in a far greater amount than that which can be claimed under the act.

How the branch might go about publicizing those issues, again, I wouldn't have any concrete suggestions. Suffice it to say that of all the other areas, that is an area which I think is not, at first blush in any event, if someone does take the time to read the act, immediately clear.

Generally, everyone seems to understand how vacation provisions work, how holiday entitlements are accrued, all of those sorts of things. Pregnancy and parental leave is a complicated one for one of the reasons which I've mentioned. I would also urge in future that if further amendments are contemplated, the successor employer provisions are troublesome for reasons which I won't go into. But those are other areas that the committee or the government at another time could certainly take a cold, hard look at both in terms of clarifying the substance and possibly also in terms of an education program and informing employers of their obligations.

Mr Hoy: Good afternoon and thank you for your presentation. We've had employers and employees request clarification of the arbitration procedure and the time lines, and as well whether a collective agreement or those provisions in the act take place. So it's good to actually have that brought up by someone in your profession as well to kind of reinforce their concerns, you being a lawyer.

I would like you to clarify something for me, because I'm not sure that I understood what you said. You were talking about the review process and the government's wish to go from 15 days to 45 days for an appeal process, as some might call it. Did you say the employer should put up a portion of the money during that time? I didn't understand what you were suggesting.

Mr Tremayne: At the moment, under our interpretation of the act, if there's an order to pay, an employer is in effect required to comply with that before he or she is permitted to apply for a review. In other words, you have to satisfy that order before you are permitted to take it to the second stage. Clearly there's a purpose there, and that is to prevent people from abusing an appeal process just for the sake of it grinding on, which is why I think I suggested that perhaps a portion of the order to pay might in certain circumstances be appropriate, or perhaps there might be a maximum which is required to be posted, as is contemplated under the maximum provisions now for an order.

Mr Christopherson: Under Bill 49, if the government introduced a minimum dollar threshold of $200 that you had to cross before you were eligible to have the ministry investigate a claim, and if an individual were working for a bad boss and they were ripped off for overtime pay in the amount of $50 and they couldn't make a claim at the Ministry of Labour because it was under the threshold, and it didn't make any practical sense to hire a lawyer, because saying hello to them would eat up the $50, and if you weren't comfortable presenting yourself in front of a court and, quite frankly, couldn't afford to take a day off work to do it, would Bill 49 not have had the effect of taking away a right that you currently have under the existing law? Because under the existing law, the ministry would indeed investigate and attempt to retrieve that money for you.

Mr Tremayne: I hesitate to pass judgement on that aspect of it.

Mr Christopherson: I just want to know what you think.

Mr Tremayne: In my opinion, what is being contemplated here is an allocation of scarce resources, and I'm sure the committee has heard that before.

Mr Christopherson: With respect, I appreciate that. I'm only pushing you a little because you are a lawyer and you perceive yourself as an expert in the field of Employment Standards Act matters. I'm asking you, in your honest opinion here, and it's on the record in Hansard for ever and ever, whether or not in your opinion that employee has lost a right that they currently have. Or are you prepared to go on the record and put your professional reputation on the line and say no, they have not?

Mr Tremayne: No, I would agree with you. I think if someone has a right pursuant to the act, and presumably that is the source of your suggested entitlement to $50 for overtime pay, and that has been withheld contrary to the act, a person has a right to it pursuant to the act. You're perfectly correct.

Mr Christopherson: Thank you for your honesty.

The Acting Chair: Thank you very much, Mr Tremayne, for coming and presenting to us today. We appreciate your participation.


The Acting Chair: We now move forward to the Renfrew and District Labour Council, Mr Rick Simmons. Welcome to the standing committee on resources development.

Mr Rick Simmons: I'd like to go at my presentation a little differently, if I may. I will probably give you what my conclusions are and then leave it open for discussion at the end. I do completely agree with the other labour representatives who have been ahead of me. I will make a couple of statements afterwards about minimum excellence and stuff like that.

I would like to start off by saying that in Renfrew county there are numerous employers who have over the years become well known for their numerous breaches of the Employment Standards Act, and we are concerned that this legislation, Bill 49, will cause more hardship for the workers of this county.

I have just recently retired from working for the federal government for the Unemployment Insurance Commission, and over the past 10 years or more there hasn't been one day that has gone by that I haven't referred clients to the Ministry of Labour employment standards officers for assistance.

In one case there were students working for a food chain and there was $5 being deducted off of their cheques. After a while they asked me what they should do about it and I referred them to an employment standards officer. They found out that the $5 that was being deducted was being deducted so that the spouse of the employer could buy a Hudson's Bay jacket for her husband for Christmas. The money was returned. This would fall in line with the minimums that you were speaking about earlier.

Wrongful dismissal: People seeking money over $10,000 is sort of a fallacy. In a lot of cases now -- I know of three in particular that have just happened within the last two or three months where the dollar figure has been over $16,000. None of this money was for wrongful dismissal; this was just through the employment standards officers.

Under the current legislation, a worker may still use the Ministry of Labour to help collect vacation pay, severance pay, overtime etc. This money would be paid to them from the wage protection fund and then the ministry would collect the amount of money from the employer. At the same time that this was taking place, the same worker could file through his or her lawyer a civil case for wrongful dismissal. Bill 49 is now removing the right for workers to use the ministry while at the same time going to court for a wrongful dismissal case, and they will be forced to decide which route they should go.

The wage protection program was put in place because many workers were being left high and dry by employers who for some reason did not fulfil their obligation to pay their workers. I think one thing this committee should remember is that the Employment Standards Act was put together because of the numerous complaints over the many years from workers because the employers were skipping out on them. The other thing is that it is an employer's responsibility to comply with the Employment Standards Act as is presently written. It is not up to the worker to force the employer to pay moneys owed; it is an employer's responsibility.

It is my understanding that if this change is being implemented to try and remove some of the workload for employment standards officers, then this would then help the Ministry of Labour make its cuts of some 46 employment standards officers over the next two years. This government has an obligation to the workers of this province who for reasons beyond their control are unable to collect moneys owed to them from their employers. The courts will decide on wrongful dismissal and the province should continue to use the wage protection program to the former limit of $5,000 and not just the $2,000 they had just recently reduced it to.

Renfrew and District Labour Council would also like to suggest that if this Tory government would provide proper direction to the Ministry of Labour in regard to collecting outstanding debt from employers of this province, the deficit would be reduced and these changes would not be required.


It is our understanding that the Ministry of Labour has directed its employment standards officers to use only fact-finding meetings. This is a drastic change for the worse. If a worker now has a complaint against his employer, he must first try to obtain retribution before the employment standards officer may act on his behalf.

This is somewhat of an ambiguous statement that some ESOs are having letters typed for clients and giving it to them to sign and mail. This letter states that they are requesting any moneys owed to them. If the employer does not comply, the ESO then writes a letter to the employer and the worker and requests a fact-finding meeting, usually at the end of a three-week period.

These fact-finding meetings are somewhat misleading, because if a worker does not receive the proper judgement that he is requesting, they are able to appeal the decision. Some workers are not appealing because they believe that the fact-finding meeting is actually the last step in the process, and some officers are not telling the workers any different.

The other problem with these fact-finding meetings is that employment standards officers are only able to deal with that one worker from the particular employer, when before they could write an order for all employees to have money paid to them. Now, because ESOs have been told they are not to visit employers' work sites, they are unable to help all the workers at once. Each worker must now file his own complaint.

It has also come to our attention that some of the statistics being kept by the Ministry of Labour are incorrect and are being kept this way to make the organization look like it's doing a tremendous job. It should be stated that the blame for this is not towards ESOs but towards the district managers as well as the minister's office. Some ESOs are having statistics put in for them each month by supervisors which show that they are on the road four days a week and in the office one day. This is not correct, as ESOs have been directed not to make any employer visits and to use the fact-finding meetings.

It is also common knowledge within the Ministry of Labour that up to 30% to 40% of workers with complaints do not use their services, and I wonder why.

Another major concern of ours is that 46 employment standards officers will be released over the next two years when they, the ministry, are considering, with Bill 49, to contract out and collect moneys owed by employers to reimburse moneys already paid out of the wage protection program as well as any balance still owing to the worker.

It is our understanding that the employment standards officers at this time are not collecting moneys owing to the ministry because they are too busy. There are ESOs sending out orders to pay within 15 days, and employers are not appealing the decision and are not sending in the money owed. The ESOs are not following up and collecting the money.

It is estimated that the money owed to the wage protection fund is in the millions of dollars, and if the ministry had collected this money the wage protection program would not have to be changed.

It should be noted that the ministry has been decentralized and that some areas of the province are not doing things on a collective basis. Because of this, workers within the ministry are finding things difficult, as well as the client workers who use their services.

If money is not being collected, then why are monthly statistical sheets showing time spent on this item? For example, in the year 1994-95 some 365 days were spent collecting money. For the fiscal year 1995-96 367.8 days were spent. This represents 1.1% of the total days available for the fiscal year. The total days available for 1995-96 were 34,421.55, which represents 138.39 ESOs, and all that was used to collect moneys owed was 1.1% of this budget, or 367.8 days. I find that rather amazing.

Workers have to wait for moneys owing to them above what has been paid out of the wage protection program and the ministry is not trying to collect any moneys owed. It is our opinion that ESOs should be directed to actively collect this money and that the government should not contract out their jobs.

Many employers are repeat employers and have been directed to make restitution when they have not even paid for a previous order. These employers should be given a priority status not only for collection but also for a complete audit.

Many workers are being threatened that if they complain again to the Ministry of Labour that their employer has not made direct restitution to them, they shall be fired. Audits in the past have substantiated this concern.

The Renfrew and District Labour Council would also like to recommend to this committee on resources development the following:

That "flexible standards," section 3 of Bill 49, subsection 4(2) of the act, be removed from this piece of legislation. It is my understanding that it has been for now.

If employers were forced to pay all moneys owed to workers that are still outstanding and federal-provincial taxes were deducted, the province would have more money to pay the workers of the Ministry of Labour and no layoffs would have to take place.

Employers have an imbalance of power at this present time, and with all of the inquiries and requests for assistance that have been directed to the Ministry of Labour, it should be easy for them to get their priorities straight.

Go after employers and help maintain workers' rights to the employment standards that are presently found within the act.

Mr Hoy: Thank you very much for your presentation. You spoke of the 46 officers who will be terminated in the future, and I believe you were in the room when we heard the discussion from the gentleman from the private collections.

Mr Simmons: Yes.

Mr Hoy: I expect that the government is going to tender out these opportunities for private collectors. I can't see any other way that they would do it. Coupling the fact that these enforcement officers are going to be gone and that there's going to be tendering for private collectors, and we heard that those who tender in a rather low fee scale may not do a very good job, what kind of confidence does it give you that all this is going to work out for the employee?

Mr Simmons: I have a major concern about contracting out any collecting. One of the first jobs I had with the federal government was working as a collection officer and collecting money that was owed to UI. In order to do that I had to fulfil certain obligations, and those obligations were found within the Unemployment Insurance Act. I also had to make sure I signed some documentation that ensured that I would adhere to privacy legislation.

One problem that employment standards officers have had in the past is that they haven't been given the proper tools to do the job. I have spoken to quite a few ESOs in the last two weeks in trying to get some research and statistics for this meeting. I think if they were given the proper direction they could do the job. If they got away from trying to keep false statistics they would do a better job.

I can understand to some extent why the government of today would try to make things look a little rosier than they actually are, but collection is a serious business. People get hurt by it, and it doesn't matter if it's an employer or if it's a client; somebody can get hurt. When you have orders to pay and writs being issued by some ESOs to the same employers on a daily basis, then the system isn't working, and you can't fault the ESOs; you have to fault somebody who is above them giving them direction, whether it's the minister, the deputy minister or somebody of that ilk.

Mr Christopherson: Thank you very much for your presentation. It's obvious and growing more so with almost every presentation, certainly with every day, that things like imposing a minimum amount that you have to have before you can file a claim, shortening the time frame that you can claim for wages and other money owed from two years down to six months, start to move the floor of employment standards lower and lower till they're almost non-existent. I think that is readily obvious to anyone who wants to be honest and objective about this bill.

I'm interested where you say on page 8, and I certainly agree with you and I'd like you to expand on it, "Further, if significant erosion in minimum entitlements becomes widespread in the many bargaining units where employees do not have sufficient bargaining strength to resist employer demands, it will indirectly impact on the standard of living and working conditions of all Ontarians." I agree with you wholeheartedly. Could you just expand a little bit on why you see that as a slippery slope?

Mr Simmons: If a group of employees working for the same organization negotiates different parts of the contract with the employer so that they're all working separately -- they might have a basic contract to work from but they have additional things to that -- it creates terrible chaos within the workplace, which in turn creates problems of people either using the grievance procedure or going through some kind of court process. It means that people are going to be further out of money and out of pocket. We don't have any money. People don't have any money today.

One thing that really surprised me about sitting here today, and I came in at 9 o'clock this morning, was that there was nobody here representing himself or herself. I didn't see one non-unionized worker and that's a fear, because maybe you people intimidate them. The second thing is that maybe they don't have the knowledge of what's going on.

In Renfrew county we suffer somewhere around a 35% to 45% illiteracy rate. These people can't read or write. How are they going to be expected to negotiate a contract with their employer when the employer has been lying to them all along? One gentleman just retired after working 42 years for one employer. He's got a pension of $129 a month. How, in God's name, can he live on that when the federal government is talking about maybe doing away with Canada pension? It's ludicrous.


Mr Baird: Thank you very much for your presentation. I appreciate the time you took to travel down from the valley to be with us today. I just want to respond to some concerns you have, and I'll certainly take your paper back to our discussions.

On page 2 you note as one of the sources for your presentation, "Notes on Ministry of Labour expenditure reduction strategy dated Friday 18 August 1995." That was a paper that had not become the policy of the Ministry of Labour. For example, on page 4 you listed workplace health and safety inspectors being cut by 20%. That was a recommendation the Minister of Labour rejected. We felt that the cut of 21 health and safety inspectors by the previous government was enough and that no more should be cut, so this government didn't cut health and safety inspectors. That's just something I know the minister feels particularly strongly on.

On page 16 with respect to private collections, I was interested to note that you worked as a collections officer in the federal government. We found that we lacked the expertise within the Ministry of Labour. We used to have a collections branch with 10 collections officers that was disbanded by the previous government in 1993, 10 employees were discharged, and three years later we're still collecting the same 25 cents on the dollar. It was less a question of resources and more a question of experience in terms of the processes.

To be fair to our employment standards officers, though, there was never any significant amount of training of any kind provided to them to undertake that task, so that's not something I blame on them whatsoever. Our idea is, while we're still responsible for collections, to retain the services of collection agencies and require deadbeat employers to pay for the recovery of those funds.

I say this very earnestly: If you have any specific solutions to how we can get the money out of employers, we'd welcome them. Obviously this has been a problem of all three parties, not a partisan issue. If there were easy solutions the Liberals, the NDP or we already would have adopted them, but if you've got any specific solutions we'd more than welcome them, because there's a growing frustration among all members of this committee that we've got to do a better job. It's ludicrous, 25 cents on the dollar. We've got to do a better job for workers.

Mr Simmons: If I could suggest maybe one thing: A lot of ESOs I've spoken to in the last two weeks have told me they are extremely overburdened with paper, and that is a shame in this modern age that we're in now. They can use computers and all kinds of stuff to help them out, e-mail and whatever to keep records, but they don't need all that paper.

The Acting Chair: Thank you very much, Mr Simmons. Again, our appreciation for your attendance here today.


The Acting Chair: That brings us to McGrath Canada Ltd, Janice Smith. Welcome to the standard committee on resources development. We have 15 minutes together, if you would like to make a presentation, and we can use up the remaining time with questions.

Ms Janice Smith: Very good. Welcome, gentlemen. My name is Janice Smith. I'm the director of personnel and training for McGrath Canada Ltd. This is a collection agency in Ottawa, privately owned, non-unionized, and we've been in business for over 40 years.

I've been with the company for a period of 34 years. When I first started with the collection agency, I didn't have a clue what a collection agency was, but obviously today I know something about a collection agency. It's my responsibility at the present time to select, to hire and to administer the training for all the staff, and this includes the collectors, the sales representatives and the support staff. Collectors are very, very different from either representatives in sales or the support staff. Therefore you look for different talents commencing with the initial interview.

It's a pleasure for me as a taxpayer and a professional businessperson to learn that the Minister of Labour introduced Bill 49, which is an act which hopefully will improve employment standards. One of the several excellent proposals is the contracting out of collections. I believe this step will save considerable money and also increase productivity. Now the employment standards officers can focus their attention on investigation and employment, and the collections can be done by the specialists who have been trained to do the same.

Should anyone be unfamiliar with the difference that will make in terms of results and savings, let me share my knowledge between the trained professional collector and the inexperienced.

A collector must start with a very keen mind and imagination. They've got to be very inquisitive, friendly and courteous to obtain the information that will enable them to reach their objective of payment in full -- not so much today, so much next week and so much the week after, but payment in full.

Now, our collectors get more information with honey than they do with the vinegar approach. The ability to listen to someone and to record important information accurately is a prerequisite. The information that is obtained must be analysed quickly and accurately, identifying true facts from fiction. While still carrying on their conversation, they must be able to reaffirm without repeating their question and to obtain the correct information when they had been intentionally misled earlier. Everyone does not possess this talent and few positions require it. In most circumstances a person has the time to leave, review and supply and look at information before returning with additional questions.

The training is now begun. It will cover debtor motivation, psychology. What is the debtor's hierarchy of needs? Is it prestige, possession, reputation, fairness, honour in the community, fear of losing what he has, or is it simply survival? What keys do you use to unlock these needs that result in payment in full?

The collector must be trained as to the rules and the regulations of the various acts that govern the court proceedings. Self-motivation and discipline are important ingredients when you are involved in all-day situations that are stressful to the other person and sometimes contentious. Other trade associations envy our education department with their hundreds of seminars on 28 subjects and our professional degree programs. This is why professional collectors are a major component in the economy.

Collection work requires considerable expertise and is very time-consuming. The government recognizes that workers will benefit greatly with a professional collector pursuing the money owed to them. The default employer will be responsible for the costs. That is a motivation to do what is right and to pay any orders immediately. This is a significant benefit to the worker who finds employment and then discovers the employer is unethical, unscrupulous and sometimes able to get away without penalty.


Fortunately, there's only a small minority of employers who ravage and abuse their employees in this manner. Unfortunately, it is done to the most desperate who are newly employed and most likely were without employment immediately preceding the current problem. Turnover is high in such a place and therefore the occurrences are numerous.

To prevent such problems, public awareness programs should stress the need to file the claims promptly. In this way, investigation would be easier. The practice would not be profitable to the few disreputable employers who would deliberately do such a thing. I feel it is a wise decision to limit the orders to a maximum of $10,000. Anyone with a claim of that magnitude would have had opportunities to make their claim earlier. Public funding must have a maximum. In matters of this nature, a claim in excess of $10,000 should be tried before the courts.

Pre-authorization of settlement, 75% with the written permission of the employee: This is what we call a compromise offer. This will save time and costs for the joint clients, the employee and the government. For years, all major clients pre-authorized the collection agency to make settlements within limits without a referral to them. In other words, they give us the authorization to make a settlement with their debtor at our own discretion. Usually it's a set amount, but we don't just do this off the top of our heads. We obviously have to obtain facts before we obtain a compromise offer. We must obtain all the facts about the people we're dealing with to realize the reason why a compromise offer is the best way to solve the problem.

Some authorize 80%, some 50%, but the most common compromise offer amount is 75%. You can see that the government is right on target by adopting this rule. Clients have confidence in the people chosen to collect the maximum amount of money. Our objective is payment in full. The more we collect, the more we are paid. Before accepting an offer to settle for anything less than the full amount, we examine the debtor's ability to pay. If we can collect the full amount, we don't accept a lesser amount. We also have a reputation to maintain with our clients, and if we accept a large proportion of 75% settlements, the client will soon identify the pattern and change to someone who collects all of their money for them. It would not take long for the debtor public to learn we will always accept less, and we would never collect any more than the 75% without a struggle and argument.

Sometimes it may be prudent to settle for less rather than to get nothing. We do not know which one in a hundred may justify the settlement. When we settle, it's the best that can be done. Our clients have never turned down an offer when we recommend it beyond the pre-authorized guideline. Their investigations are satisfied that the recommended offer was in their best interests. Referral back is not cost-justified.

I think that's all I have to say on this subject, gentlemen. I hope I've answered some of the questions with regard to a collection agency. Also, as you understand, being in the personnel field as I am, it's a matter of sitting on a fence. I've got to be able to deal with staff, I have to be able to deal with my employer and I have to be able to deal with the government in many situations.

It's been a pleasure speaking with you and an opportunity to discuss a bill that hopefully is going to be something that will improve situations on both sides. I hope it will. That's the end of the presentation. Thank you very much indeed.

The Acting Chair: Thank you very much, Ms Smith. We move to about a minute and a half of questions each.

Mr Christopherson: Thank you very much for your presentation. You say that you are responsible for the overall training of the employees who do the collecting?

Ms Smith: That's correct.

Mr Christopherson: And they're in the private sector and non-union, in your case.

Ms Smith: That's correct.

Mr Christopherson: Does that mean you couldn't train anybody who was in the public sector and belonged to a union?

Ms Smith: No, that's not correct.

Mr Christopherson: So you could train someone who was in the public sector and unionized?

Ms Smith: Certainly, yes. No problem.

Mr Christopherson: And they would be just as good as your employees.

Ms Smith: No reason why not. I wouldn't just train -- they would all get the same attention.

Mr Christopherson: Right. So they'd be at the same level of expertise as the people in your company.

Ms Smith: Exactly.

Mr Christopherson: Thank you. I don't have any problem, and I don't think anybody does, with the fact that a corporation exists to make profit. That's what they do. Having said that, is it not fair to say that more profit is made the more claims that are settled?

Ms Smith: Exactly.

Mr Christopherson: So the collection agency has, as a priority, vested interest in terms of its profit motivation in closing files as quickly as possible, having the parties satisfied and moving on the next one.

Ms Smith: Once the account is paid in full, that's the main responsibility.

Mr Christopherson: Thank you. I would just point out for the record that the problem we have as a party with this approach is not that it is inherently wrong, but that it is more important that the employee's needs and the retrieval of money they're owed be the priority, not necessarily the closing of files to maximize the profit of the collection agency. Thank you.

Mr Bill Grimmett (Muskoka-Georgian Bay): Ms Smith, I wonder if you could perhaps give us a little information on how you compensate your collectors. Are they on salary or are they on commission?

Ms Smith: Part salary and part commission.

Mr Grimmett: What is the reason for that?

Ms Smith: The reason for that is it gives them an incentive.

Mr Grimmett: An incentive to do what?

Ms Smith: They have a base salary and they have an incentive to collect as much money as possible.

Mr Grimmett: Have you found that is an effective means?

Ms Smith: We certainly do.

Mr Grimmett: Could you describe the compensation in more detail?

Ms Smith: It's a percentage on the collections that a collector makes. They're given a certain section to deal with. They're each given a player number that they have, and any collections they make, they make the commission on the amounts of money that are collected.

Mr Grimmett: What is the rate that you charge on a collection?

Ms Smith: It could vary. It can be anywhere from 25% to 50%, depending on the circumstances.

Mr Grimmett: What about the rate of success?

Ms Smith: We have an excellent rate of success. I believe at the present time it's around 47% or 48%.

Mr Grimmett: From the responses we've had, that seems about average in the industry.

Ms Smith: It's average, but I believe if we were to get right down to brass tacks, we are above the average.

Mr Hoy: A very interesting presentation. I would expect that your sales people go out and talk about this success rate that you have, correct?

Ms Smith: Yes, they do.

Mr Hoy: Then they would probably negotiate the fee.

Ms Smith: The actual fee? Oh, yes.

Mr Hoy: Does the collector, the person doing the collecting and the work to get the moneys or whatever you're looking for here -- property perhaps; I don't know. But are the collectors and the sales representatives two separate groups?

Ms Smith: Two separate entities, yes. Two separate groups.

Mr Hoy: Interesting. So you have someone who negotiates the fee.

Ms Smith: No, the actual fee usually is set. We can negotiate sometimes, depending on volume. It all depends on circumstances, as I say, so it could be negotiated. It could be a set fee, depending on volume and depending on what has to be done on the accounts. We don't believe in accepting a big volume of accounts and just creaming off the top. If we accept a volume of accounts, we have to work all those accounts to the best of our ability. We don't look at the ones that have the good address. We've got to do our best for our clients. That's the whole idea.


Mr Hoy: I'm trying to work the information that I've gleaned from you and others who are in the collection business. Just for example, 34% of the claims now the employer just refuses to pay. So here we have a situation where 34% of the people just refuse to pay. There is no known reason, and that's what you will try to find out.

Ms Smith: Exactly, yes.

Mr Hoy: If you are a private collector, your fee could be as much as 50% of the moneys in question, and the success rate might only be 50%. So I'm going to have to do a little thinking about that, but I appreciate the information you've been able to provide.

The Chair: Thank you, Ms Smith, for your presentation. We appreciate it very much.

That leads us now to Alfred Friedman. Is Mr Friedman here? Apparently not.


The Chair: We'll move to Majean Investments Co Ltd. Good afternoon and welcome to the committee. Just a reminder, we have 15 minutes for you to divide as you see fit between presentation time or questions and answers.

Mr Matt McGrath: My name is Matt McGrath. My background and expertise are in credit and collections. Communications with commercial enterprises, employers and persons owing money is part of daily business. I know the hardships and the vulnerability of people in need of money owed to them. I also know the games people play when their available credit is used and there is little cash.

I'm not going to repeat or expand on what the previous speaker just said, because I think she explained the matter of settlements very well. There may have been some misunderstanding by the members, and if they want to clarify that later on, I'd be pleased to answer any misunderstandings you might have.

Many people have come to the collection agency in order to get assistance in their attempt to collect money from their employers. In each case it was referred to the Ministry of Labour, and until now their reaction to that suggestion was not complimentary. The common denominator is that the time to effect payment is long and cumbersome.

There is no guarantee that you're going to collect a judgement. Consequently, many people with a legitimate claim, each relative in the overall picture but significant to the individual, were in effect denied the benefit. This is not supposition; this is simply a fact of life.

The unscrupulous employer who shortchanges employees knows the limitations of both the act and the departmental personnel who must work under the act. So the employer gets off with no tangible penalty except a note on his already tarnished file.

Anything that can be done to accelerate the time it takes to resolve the claim and recover the money is a big step in protecting the worker. It will increase confidence in the Ministry of Labour that the laws will protect the worker from the small, insignificant percentage of those exploiting employers. If you're a casual or a part-time employee, it is a major thing to you.

Therefore, with the introduction of Bill 49, which addresses many of these problems, it is worthy of your support.

The prompt enforcement of orders made under the ESA is extremely important as a deterrent to the unscrupulous. It is said that the law is feared only by the law-abiding, not by those who thumb their nose at it. Those who want to evade the payment unless they are forced to do so can delay, evade, elude, dodge, shun, sidestep, baffle, procrastinate and thwart the law until either they die or they move on to greener pastures.

The pursuit of people like this is not rewarding; it is discouraging. It certainly is put to the bottom of the pile when more pressing and interesting work is calling for attention. Consequently, recovery of the penalty becomes a low priority and it is reflected in the statistics that we've heard today.

The collection of debts is a highly specialized profession. People owing money recognize the professional debt collectors and pay them first, for they know the consequences if they don't. A debtor company said in a radio interview: "I know it's a thrill to pay a bill. I felt the wrath of McGrath."

They also recognize the non-professional or the amateur and know how easy it is to put the untrained collector on the defensive and how to delay payment. They class debts to the government in the category, "I'll pay them when I win the Lotto."

Debtors are not prejudiced. They will stick anyone they can, whether that is the bank, the supplier or the government. Since the government is the easiest one to evade, because they do not have the expertise on hand, that is the person who gets last paid.

When a debtor company is past due, on an average there are 18 other past due accounts he should be attending to. So it takes the expertise of people who know the companies, who have other knowledge, who have a multiple effect of files on them in order to collect the account.

The staff who administer the Employment Standards Act have many talents cultivated through study and practice, but debt collection is not a subject they are experts in. They have attention-imperative demands and respond to the most immediate, pressing items.

Most people answer to demand. The collection agent makes the demand. Most people respond to the call for help. Debtors don't call for help. They wait until you call, and that is the job of the person who is handling the collections.

It is the professional collector who is an important part of the economy, because everything they recover goes to the bottom line. If you're calculating the cost of collections, just remember that 66% to 75% of the orders not being paid is a mighty big cost. And that's not new. It apparently has been going on for at least 10 years.

So the cost of collecting is much less when you hire independent professional debt collectors. They know the money sources they can recommend to the debtor to get the account paid off. The professional collector is a negotiator. It is imperative that the process of collection is commenced immediately. Delay to allow others to take your money away is not reasonable.


The default employer should be liable for the cost of the collection. This ensures that: (a) the employee receives everything that is owing to him, (b) it is the violator and not the general public that pays for the offence committed by the employer, and (c) the default employer has the motivation to pay promptly.

The proposed Bill 49 appears to be excellent. It takes nothing away from the employee and gives protection and immediate results to the most vulnerable workers. It brings the current act up to date in many respects, encourages negotiation rather than confrontation. It speeds up the process and gives standards officers more time to do their important job and transfers the collection problem to the professionals who have the expertise.

There are a few suggestions and amendments that I would like to see included. These may have been considered, but they should be looked at again. My suggestions are:

(1) Every employer who does not deal with a bargaining unit must have a copy of the act available for employees within two working days of the request for loan and examination for three days.

An employer should have to have a poster prominently displayed in every workplace stating that these matters should be brought to the attention of the ministry within six months, and such notice should be displayed at least one working day in 10.

(2) Include the poster in media advertising in the department of labour twice yearly.

(3) Shorten the time for filing complaints to create more urgency when there is a violation and to more quickly deal with employers who intend to operate on the short term.

(4) Shorten the time within which orders can be made. There is no reason why this should be hanging over an employer's head for two years. While it is outstanding it stifles positive action and hinders financing. The employee would be better served knowing the end result quickly. If occasionally, for some reason, an extended time is needed, that can be negotiated with the employer.

Dollar amounts should have the suffix phrase of "in 1996 dollars" or "increased at the rate of 3% per year" or "increased at the rate of inflation." This would eliminate the eroding of the levels in current dollar value.

Thank you. Are there any questions?

The Chair: Thank you, Mr McGrath. We have just under one minute each per caucus. This time the questioning will commence with the government.

Mr Grimmett: Mr McGrath, how long have you been in the debt collection business?

Mr McGrath: For 43 years, and I was in -- excuse me, 43 years flying our own flag. I was in the debt collection business before that.

Mr Grimmett: Can you give me your opinion on whether or not an employee collecting debts is more likely to have a high percentage recovery if they're on salary or if they're on commission?

Mr McGrath: The motivation to collect and to do a good job has many factors. Number one is the empowering of being able to do it without the hindrance of a great bureaucracy. People think of bureaucracies just in governments, but no, they exist sometimes in firms as well. Incentives to show to the person that if they work hard and do a good job, then they are rewarded, as compared to the person sitting beside them who is lollygagging all the day long. So if they work hard and do a good job, they get more rewards than the person sitting beside them. Yes, a very important part is incentives.

Mr Grandmaître: Believe me, gentlemen, when you see the name McGrath in the Ottawa-Carleton area, it's synonymous with collection agency. He's been around. He's very modest when he says 43 years. I think it's been 83 years.

Anyway, Matt, you --

Mr McGrath: I started at a young age.


Mr Grandmaître: That's right. Once in a while.

Did you say that the recovery or the cost of the fees should be the responsibility of the default employer? Did you say "should be" the responsibility?

Mr McGrath: That is correct. I said it should be.

Mr Grandmaître: Can you qualify this?

Mr McGrath: In what way do you want it qualified? What do you mean?

Mr Grandmaître: You say it should be. In some cases it's not? It's not the employer's responsibility?

Mr McGrath: At the present time, it is the creditor that has to pay our fees. I'm suggesting that the employer who has violated the law should have to pay our fees.

Mr Grandmaître: I agree with you.

Mr McGrath: Except in cases if he pays it right away, of course, we give him benefit --

Mr Grandmaître: What does that mean?

The Chair: Thank you, Mr Grandmaître. Mr Christopherson.

Mr Christopherson: Thank you very much for your presentation. I'm just curious. Of the last six presenters, three of them happen to be McGraths or have an involvement with McGrath. I just wondered if there's any relation between you and M. McGrath, where Ms Smith was from, and Mr Kevin McGrath, who presented just a little while ago. Any relationship?

Mr McGrath: Mr Kevin McGrath is a well-trained expert in the field. He has been trained by myself.

Mr Christopherson: No relation?

Mr McGrath: Oh, yes, sure he is. I thought you could recognize that there is --

Mr Christopherson: I just didn't want to assume.

Mr McGrath: He is my son, or I am his father, whichever way you want to say it.

Mr Lalonde: Different companies.

Mr Baird: Just like the 42 CUPE locals that were here.

Mr Christopherson: I'm not making any accusation. I'm just curious. M. McGrath would be you, M. McGrath Canada?

Mr McGrath: M. McGrath is a company held by shareholders, yes.

Mr Christopherson: Right. Where Ms Smith was from. I was just curious.

I wanted to ask you --

Mr McGrath: Did you want to know the other companies that I happen to have some relationship to in Canada and the United States after my time?

Mr Christopherson: Sure, go ahead.

The Chair: Very briefly, Mr Christopherson.

Mr Christopherson: What I would like to ask, though, in a serious vein, is the ministry is suggesting that the law would say that anything under 75% would require ministry approval.

Mr McGrath: That is correct.

Mr Christopherson: I wondered if you would object to having that raised to 100% to encourage the collection of all the money that's owed.

Mr McGrath: That wouldn't encourage the collection one iota. All it would do is tie up the thing for a longer time at a great cost. Clients have confidence that we collect the maximum amount of money we can, and I can tell you from our point of view, if anybody can collect more money on a settlement that we recommend, I'll pay the commission on the difference.

Mr Christopherson: I don't know if that's a yes or a no.

The Chair: Thank you, Mr McGrath, for appearing before us and making a presentation today. We appreciate it.


The Chair: That leads us now to Credit Management Service of Canada Ltd. Good afternoon and welcome to the committee.

Mr Kalifa Goita: My name is Kalifa Goita, and I can tell you before I commence this speech that I am of African origin and I worked with the public service of my country before coming to Canada. When I started in the collection business here back in 1988, culturally I was not prepared to do that, because where I came from you don't ask from someone you had good dealings with before money they owe you. They know they owe you. They have to pay it. You just leave them with their conscience. Six months later, when I started, after training, I discovered it's a different picture, because the way people act here in this economy is not the same way maybe I grew up, with the same cultural background.

So I'll present here as Credit Management Service of Canada Ltd, and I'm pleased to point out some suggestions. There are several points proposed in this bill that I will address, the majority in a positive, supportive manner.

The changes appear to continue to protect basic standards for workers. At the same time, it updates the legislation in ways that reduce bureaucratic procedures and make it easier for the worker to understand. That is very important. Workers have to understand the field in which they work. If they don't understand it, no matter how excellent is the law, they can't benefit from it. It ensures that the worker will have better recourse should they find they need the protection of the act against an unprincipled employer.


The act now indicates the serious need to file a claim as soon as the offence has been committed if it cannot be resolved. The six-month limitation is an improvement. Maybe it can be shorter, if possible. Forty-five days is more than adequate for any correction to be made if the employer is sincerely trying to make a correction from the time the employee asked for a correction. I think if you do business and you want to expedite the things, you really want to correct the things, you don't wait one month or more to solve the problem. If not, the complaint should be filed. This is the same amount of time now extended to file an appeal after an order is issued.

It would be more fair to all concerned if the decision on an order had to be determined in a shorter period of time than two years. For the worker, it is a very long time to wait to have a grievance rectified. For an innocent employer, it should not continue to cause disruption in the workplace for that long. It quickly becomes public knowledge that the employer is under investigation, and until it is finalized, the employer is considered guilty. This leads to labour unrest, loss of financing and loss of client business.

The bill proposes that a standards officer can now, with the consent of the parties, settle a complaint before it is investigated. This is an excellent amendment which will save a great deal of time. Therefore, in the case that needs an order, the time should be shortened so as to encourage settlements. The suggested time would be 90 days after a complaint is filed.

The introduction of an employee having one choice of either the courts or the complaint procedure is excellent. No one should be in the position that if they try one and it doesn't give them satisfaction, they can harass the employer by doing the same thing in another forum. The reason for that is it's not likely that if they fail in one, they will get a different decision in the other. It would be a waste of time and an expense to the employer and public money.

The contracting out of the collection of moneys due is the most beneficial amendment introduced. This will save money and time and will produce better results. Collection work requires considerable expertise. The agent has the specialists to do the job quickly and efficiently using the latest technical advances in industry. If the orders are made as promptly as possible and turned over immediately, the result will be impressive compared to the current state of delinquency reported.

The amendment to clarify pregnancy leave is fair and apparently needed by some people. However, it is hard to understand for me why it was needed. If the person is not terminated, then he must be counted as being employed.

The amendment to use any means of verified delivery is in keeping with modern business and service of legal documents in many cases.

Those are the points I wanted to address. Thank you for the opportunity to have input in this.

The Chair: Thank you very much. You've left us two minutes per caucus for questioning.

Mr Lalonde: Thank you for your presentation. Would you say at the present time that the majority of employers are not fully aware of the Employment Standards Act and this is why very often their employees are not treated properly and they're not paying what is coming back to them?

Mr Goita: I'm talking about the employees. Even the employers, I'm saying that if the law exists, people should be aware of what is in it. The employees should be aware of their rights.

Mr Lalonde: Then probably what the government should look at, when you apply for your GST licence and everything, you have some criteria that you have to meet. Probably it would be part of the requirement that you should attend an ESA seminar or workshop to make them aware of what the Employment Standards Act is all about. Also it should be always posted in the workplace. Employees sometimes wait long -- six months, a year or two -- until they find out they were not well treated or never got the overtime when they were supposed to be allowed it. Would you agree with this, that probably the government should look at that side and make sure employees and employers are --

Mr Goita: The information program should be implemented, yes.

Mr Lalonde: Also, do you think it is fair to limit it to six months from the date of complaint that you could go back to claim? Is six months enough to you?

Mr Goita: My point here is that it should be in the interests of the person complaining and in the interests of the person who is accused. The matter has to be resolved the fastest way possible.

Mr Lalonde: I fully agree. Probably it's the best thing to go to the private sector collection agencies, but as long as the employee is not the loser at the end.

Mr Christopherson: Thank you for your presentation. You've stated that you agree with the change from two years to six months because, and I think probably from your point of view, the professional business of what you do, it makes sense to get the claim in as early as possible and therefore the trail is hot and all the other arguments that we've heard for that. That seems to make a great deal of sense to me.

But I want to suggest something to you and ask you if that causes you to at least think about what you're suggesting and its impact on people. By shortening the time, this is also having a major effect on the most vulnerable employees working for the worst bad bosses that we have. We know that 90% of all the claims made against employers are done after an employee leaves that place of employment. The main reason, we've heard from every community across the province, is because people are afraid to make a claim while they're still there because they fear they'll be fired, because they have no protection. So the vast majority of these people wait until they have secured another job and they no longer have any ties to that employer and then they make the complaint. The two years gives them enough time to find a new job and go back at least a reasonable length of time to make a claim for money that's been ripped off from them.

Earlier, Mr Kevin McGrath agreed with that and suggested he would support going back as far as possible to collect the money that's due. Does that scenario of that particular worker and their fear and their needs and what happens in you supporting that six-month change --

Mr Goita: My response to that would be to educate the employees or the person suffering that not to wait, to encourage them to point out the problem immediately to the employer, because --

Mr Christopherson: But they're worried about getting fired, sir. They're worried that if they do that, they'll be fired.

Mr Goita: The law has to forbid an employer from firing anybody making a legitimate request.

Mr Christopherson: But the law is already there and it doesn't work. That's not stopping bad bosses, and that's why people wait.

Mr Goita: So the law has to be changed so that you protect the employee from being fired because they ask for their legitimate right sooner.

Mr Christopherson: Would you agree, then, that you wouldn't want to make this change until you've secured that kind of security for those employees? Does that not make sense, that you would be sure to have that protection before you pulled the rug out from under them? Is that not fair?

Mr Goita: If the changes to the law are just a project, it is coming on --

Mr Christopherson: There are no changes in here about that.

Mr Goita: Okay. If the law is changed, one side is, if I have a problem at my workplace today, why should I wait long? I cannot project that my employer is bad --

Mr Christopherson: But people are, sir.


Mr Goita: Immediately I have to tell my employer, "This is what I want," and I will get an answer in the 45 days. If I don't have the answer in the 45 days, he is not answering my question. He doesn't want to solve it, so I can file a complaint immediately.

Mr Christopherson: The reality is they're getting fired. That's why the two years are needed.

Mr Baird: Thank you very much for your presentation. We appreciate it. I guess one of the reasons there was even a two-year period established and the fact that it's never been unlimited is that most of these folks, if you've got an employer who's paying $3 or $4 an hour to his employees -- he or she is obviously an extremely bad businessperson and is likely to be headed down in flames economically anyway. That's why most provinces have for the most part six months, with a few exceptions here and there, to make the claim.

"Justice delayed is justice denied," one worker said. One previous presenter said that every day that goes by it's harder and harder to collect. What sort of ratio could you give us from your professional experience to settle accounts that are maybe within six months overdue or accounts that are around two years overdue? Those rights are meaningless unless we can enforce them.

Mr Goita: It depends if the person is still there, because you cannot guarantee -- the collection of an account is dependent on many factors: the person does exist, is still there and has something to pay. If not, well, it is uncollectible, simply like that. If you send me accounts -- maybe the business is big, $1 million, but if those people disappeared, they are not in business, because we are talking about employer, I won't find them. I may find the owner, but the business is dead or bankrupt. That's uncollectible at the first place.

Mr Baird: So workers are more likely to get money in their pockets that they're owed, that they worked for, if they file earlier.

Mr Goita: Yes. That's why we have to act faster, while these people are earning money and they have assets to seize.

The Chair: Thank you, Mr Goita, for appearing before us and making a presentation today. We appreciate it.

Mr Goita: My pleasure.

The Chair: That leads us now to the Amalgamated Transit Union, Local 279. Is there a representative from the Amalgamated Transit Union? That is most regrettable, another no-show.


The Chair: That leads us now to the Canadian Union of Postal Workers. Good afternoon. Welcome to the committee.

Mr Jeff Bennie: Good afternoon.

The Chair: Just a reminder that we have 15 minutes and you can divide that as you see fit between either presentation time or questions-and-answer period.

Mr Bennie: I don't think I'll take that long. As I've indicated on my brief, which should have been passed out, my name is Jeff Bennie. I'm one of the national representatives from the Canadian Union of Postal Workers and the areas I work in for the union are health and safety, workers' compensation, pensions and benefits.

As I indicated in our brief, we're a national union and for the most part we represent postal workers involved in the processing and delivery of mail. These workers fall under federal jurisdiction, but we also represent some cleaners in post offices around the province of Ontario, so they are covered by provincial legislation.

As you're aware, last May the Honourable Elizabeth Witmer introduced changes to the Employment Standards Act that were described by the government as minor housekeeping amendments. Of course, nothing could have been further from the truth as the proposed amendments would negatively affect the basic working conditions of most Ontario workers and make it more difficult for workers to get basic justice when employers violate standards.

However, since that time of course we've seen the withdrawal by the labour minister of the section dealing with the flexible standards, which would have allowed workplace parties to negotiate under the basic standards, but the government is saying it's going to reintroduce this concept when it launches a more comprehensive review of the act.

It would be our position that we would recommend that all aspects of this bill be scrapped, considering the government is proposing a more comprehensive review of the act. But we don't think that's likely to happen, so we're going to address some of our concerns today that we have with Bill 49.

First of all, in regard to the enforcement provisions for organized workers, under the existing language of the present act, unionized workers have access to an efficient and relatively expeditious method of investigative procedures for violations of the act. Bill 49 would effectively deny unionized workplaces and unionized workers access to this process and transfer the costs of enforcement to the workplace parties through the grievance arbitration process. We believe this is nothing more than a case of the government abrogating their responsibility to enforce the legislation and pass the costs on to the workplace parties, both unions and employers. It's also going to lead to an increase in the backlog of arbitration cases which any trade union representative can tell you in most cases is already severe.

In regard to enforcement provisions for unorganized workers, these proposed changes shift the responsibility for enforcement of the standards away from the Ministry of Labour and its inspectors to the judicial system by way of the application of the other-means provisions. We would suggest, considering the state presently of the judicial system in Ontario where we constantly are bombarded with horror stories of backlogs in that system, to add to that burden doesn't make a lot of sense. What we need to be looking at is better methods of enforcement of the provisions. Justice delayed is justice denied.

With regard to the amount recoverable by a worker when owed back wages, there is now a proposed cap of $10,000 where presently there is no arbitrary limit set. Also, now the bill would say that if a worker decides to pursue a claim through the Ministry of Labour provisions, then the worker would be denied access to courts if they decided to launch a civil action for additional compensation. It is our position that these changes all amount to a denial of basic rights for workers with no accountability for employers who violate legislation.

The ceiling on claims: It seems that this maximum cap is going to apply to amounts owing in regard to back wages as well as other compensation such as vacation pay, severance pay and termination pay. In many cases, severance pay for long-term workers can add up to much more than the proposed cap. Arbitrary maximum and minimum caps will only result in employers attempting to try to avoid many of the payments due to workers.

Then we get into the area of private collectors. This bill recommends that the private sector be used to collect excessive amounts owed and enforce standards, rather than having the labour employment practices branch perform this function. This appears to be the thin edge of privatization of the regulatory process in Ontario and I would again say an abrogation of the government's role to legislate and enforce minimum workplace standards. As opposed to this approach, the Ontario government should be establishing penalties that would be levied against delinquent employers as a deterrent and enforcing those penalties.

In conclusion, CUPW says that taken together the proposed amendments will result in poorer working conditions and more injustice for both organized and unorganized workers in the province of Ontario. Therefore, we are opposed to those proposed changes and would ask the Ontario government to seriously consider these proposals. In our opinion, it is the role of government in our society to protect the most vulnerable members of our society, not to attack them.

Before I conclude, I just want to say that as a representative of a national union that mostly deals with the federal sector, I have gone through similar processes for federal legislation, most recently part III and part II of the Canada Labour Code, and I would like to suggest to the government representatives here that if they truly want to sit down with the workplace parties when they are dealing with their more comprehensive review of the act which they're talking about down the road, they hold true consultations. That is how we have done it in the federal sector, with both part II, which dealt with the health and safety legislation -- and we're now doing with part III, which deals with employment standards. We are having consultations between government and employers and the Canadian Labour Congress representatives where we come to consensus agreements. We don't get everything we want, employers don't get everything they want, but we all get something we can live with. After all, we don't have to like each other, but we have to live with each other.

The Chair: Thank you, and you've allowed us just over two minutes per caucus for questioning and this time it will commence with the third party, Mr Christopherson.

Mr Christopherson: Thank you for your presentation. You mentioned in your opening remarks that you would prefer that the government pull back this entire bill and refer it to a larger review. I would just underscore the point and remind everyone that the whole purpose of trying to ram this through as quickly as possible -- and you're right, they tried to ram it through by the end of June, without public hearings. The reason they want to do that, of course, is this bill allows them to offload a lot of responsibilities, as you've pointed out, to individuals, puts it in the court case, throws it back to unions and employers to take care of, in some cases just denies or narrows rights that workers have and therefore they can lay off 45 employment standards officers to save bucks. That's why they're rushing this through and why they're refusing to fold it into the broader review.


I want to ask you to comment on something. You make the statement in your conclusion, "Taken together, these proposed amendments will result in poorer working conditions and more injustice for both organized and unorganized workers in the province of Ontario." The Nepean Chamber of Commerce earlier today said that this law and others will, "ensure that the province of Ontario becomes the most attractive place in North America for business to invest and create wealth and employment." Why do you think there's such a divergence in opinion between business and labour about Bill 49?

Mr Bennie: I think both comments say the same thing, actually. I think with this legislation going through and with the proposed changes that will probably be coming down the road on this government's timetable and other legislation, of course this province will become an attractive place for investment. As the minimum standards are eroded for non-organized workers, the pressure will build in respect to organized workplaces to follow the trend and to negotiate consent contracts where we cut back on what we consider right now basic provisions and basic rights. So I don't think what the Nepean Chamber of Commerce said and what I said are diametrically opposed at all; I think we're saying the same thing, just from a different viewpoint.

Mr Christopherson: I agree with you entirely.

Mr Baird: Hoping this doesn't become a love-in, to add my comments to the love-in, your suggestion of consultation and the comprehensive review of the act going to be undertaken over the next four or eight months is a very valid one to work together with organized labour and management in the business community. I can indicate to you already there have been a good number of meetings with both groups, with the Ontario Federation of Labour, Sid Ryan, the president of CUPE, and the Ontario Chamber of Commerce. At the risk of trying to jump into this love-in, I'll certainly agree with your comments the comprehensive view is very valid.

The Chair: Any comments or questions from the official opposition?

Mr Hoy: Yes. I've got to find my page here. "This appears to be just the start of the privatization of the regulatory process." Of course, you'd know that the government has just named a minister of privatization, so you're quite right, there are things going to happen in the future as far as privatizing the role of government, which has traditionally been not private.

You're speaking on behalf of the postal cleaners, in the main here, at this particular time, and I appreciate that, plus you're concerned about issues that would pertain to the whole organized workforce, and I appreciate your comments in the presentation. I agree with you that this government up until now has not -- consultation has not been their hallmark, so they have been requested to meet with people more often and I hope that in the second phase they will.

Currently, we're seeing some change of heart. After all, we are here this afternoon talking about Bill 49, but in the past you would probably be aware that the government's record has not been one of great consultation. As a matter of fact, they made many changes between June and September when the House was called back for its first official opening. They have and had a very ambitious agenda, which doesn't always include discussion.

The Chair: Thank you very much, Mr Bennie, for taking the time to appear before us here today.


The Chair: That leads us to the International Association of Machinists and Aerospace Workers. Good afternoon. Welcome to the committee. Just as a reminder, we have 15 minutes, but it's up to you to divide that as you see fit between presentation and questions and answers.

Mr Sam Connor: My name is Sam Connor, a staff rep with the international association of machinists. On behalf of our union, we would like to thank the committee for the opportunity to put forward our views on Bill 49 on behalf of 20,000 members of the International Association of Machinists and Aerospace Workers in Ontario.

While we are pleased to appear before you, we are disturbed that the government has introduced this legislation without prior consultation with all workplace stakeholders. Bill 49 is not a minor piece of housekeeping legislation. It significantly shifts the balance of power in the workplace of this province -- already against the workers -- further in favour of employers. Even more important, it would radically change the nature and operation of employment standards legislation.

Employment standards legislation sets a basic minimum floor of fair treatment for all workers. It is particularly crucial for the most vulnerable workers -- low-paid, non-union -- for whom the employer-employee relationship is most unequal and for whom limited resources make alternative sources of redress virtually impossible.

Obviously, the value of employment standards is closely tied to the level of enforcement. Standards which are not enforced are meaningless, and enforcement in our current system leaves much to be desired. The ministry has insufficient resources; there are long delays; there are too many risks for the most vulnerable workers to safely claim their rights. We will discuss later some of the positive improvements that should be made to make our employment standards more effective. Unfortunately, rather than offering improvements to the system, Bill 49 would seriously weaken current standards and particularly enforcement of those standards.

Section 3 of Bill 49 allows a collective agreement to provide for subminimum standards as long as the sum of hours of work, overtime pay, public holidays, vacation pay and severance pay confers greater rights than the minimum standards for these items taken separately.

The Minister of Labour has apparently promised to withdraw this section of the bill, leaving the issue of flexible minimum standards to further review. While we welcome this modest display of good sense, we can only ask why the government concocted this scheme in the first place without public input.

While we hope that the oxymoronic concept of flexible minimum standards is dead, we want to make very clear the problems which will arise if this idea is resurrected.

First, it is practically impossible to assess together the disparate elements of the minimum standards. How do you value relatively, for example, hours of work versus severance pay? Do the summed standards have to be met for each individual or can some workers receive below the minimum on everything as long as a group of employees seem to exceed the minimum standards when assessed together?

If you exempt workers covered by collective agreements from the clear standards of the Employment Standards Act, you add another layer of complexity to collective bargaining. Issues which should or could previously be left out of the bargaining process because they are covered by the act will now have to be explicitly dealt with. This will be disruptive, costly, and will ultimately make Ontario a less competitive place to do business, which is presumably contrary to the aims of the current Ontario government.


While we feel that having to bargain minimum standards will be an inconvenience for legitimate, established unions, we are particularly concerned that flexible minimum standards would open the door to phoney unions -- employer-dominated employee associations -- to make deals that strip workers of their minimum rights in the workplace, with no effective recourse for the workers affected.

While flexible minimum standards were a particularly egregious attack on workers, the rest of Bill 49 is little better.

Bill 49 takes away the option of a worker covered by a collective agreement, including those covered by a Rand formula, to make a claim under the act. A worker who believes he has been denied his legal rights is forced to proceed under the grievance procedure. If a settlement cannot be reached and the union involved decides not to proceed to arbitration, the worker's only recourse is an unfair representation claim to the Ontario Labour Relations Board.

This makes what is a relatively cheap and simple, if still too slow, process into a much more lengthy and expensive one. It is hard to see how anyone gains from these changes except employers intent on breaking the law.

Bill 49 offers unscrupulous employers the means to undermine the rights of workers and their unions by consistently refusing to meet minimum standards. The need to continually resort to costly arbitration simply to enforce legislated minimums may place a union, particularly a small and poorly financed union, in an untenable position, having to choose between being bankrupted by continual arbitrations or facing unfair labour practice charges before the OLRB.

The situation is no better under Bill 49 for workers not covered by a collective agreement. They will have to make an almost immediate and irrevocable choice, usually without reliable independent advice, about whether to proceed with a complaint under the act -- with limits on the size of the claim -- or to sue in civil court, which may provide fuller compensation but is usually slow, expensive and an unrealistic option for most workers looking only for the minimum standards provided under the law.

Small Claims Court is sometimes a quick and cheap option, but the amounts covered are limited. Under Bill 49, once a worker opts for one route of redress, the other options are closed.

Bill 49 sets a new $10,000 limit on the size of an individual claim and the minister may also prescribe a minimum. There is absolutely no justification for such limits, which simply provide further incentives for employers who cheat.

Bill 49 provides for the subcontracting of collections and "compromise" settlements, which will usually be made with a gun to the head of the employee. These two provisions allow the cheated employee not only to be forced to accept less than the statutory minimum, but also to end up being forced to pay for the collection of what he or she is owed under the law.

Bill 49 would deal all the cards to unscrupulous and cheating employers at the expense of the most vulnerable workers.

Bill 49 also reduces filing limits for ESA claims from two years to six months, making it easier for a stalling employer to slip out from under the coverage of the law. On the other hand, the period for an employer to appeal has been extended from 15 to 45 days.

The bill does contain a couple of positive changes: clarification that vacation accrual is based on all service, and the inclusion of periods of pregnancy and parental leave for the calculation of length of service.

Overall, however, Bill 49 would bring about a serious weakening in the enforcement of minimum labour standards in Ontario. We ask this committee to recommend that Bill 49 be withdrawn and a full consultation process be undertaken to bring forward changes that will truly improve the conditions of workers in this province.

We need better education and stronger enforcement, with mandatory posting of the provisions of the act in all workplaces.

To protect the most vulnerable, we need to allow for investigations based on anonymous and third-party complaints and strong penalties for employer reprisals against workers attempting to obtain enforcement of the act.

There must be heavy penalties and active public prosecutions of employers who break the law, particularly repeat offenders and those who refuse to quickly pay out orders.

The ministry must have the mandate and the resources to investigate and resolve complaints quickly and the resources to perform thorough audits at workplaces where individual abuses have been found.

The ministry now has up to two years to investigate a claim and it can take another two years before a delinquent employer can be made to pay. These time limits must be shortened and the ministry provided with the resources to bring about orders and settlements in a timely manner. The current system is far from perfect, but Bill 49 is moving in the wrong direction. We urge this committee to take this message to the government of Ontario.

Respectfully submitted, Sam Connor, on behalf of the IAMAW.

The Chair: Thank you. That leaves us just over one minute per caucus for questioning. This time it will start with the government members.

Mr Barrett: Thank you, Mr Connor, for your brief on behalf of the International Association of Machinists and Aerospace Workers. You've mentioned the issue of enforcement of the Employment Standards Act. Through these hearings, our goal is to design a system that results in not only more effective enforcement but more efficient enforcement, to allow us to be able to allocate scarce resources to those people who are most vulnerable to the abuses in the system.

This present system, and you've indicated some criticisms of the present system, has had critics over the years since the act first became law in 1974. There have been myriad amendments in a patchwork approach and many authors of reforms over the years. Our goal is to try to pull this together into a system that's understandable, more efficient, more effective, and to try to streamline the process and enable both sides to get on with business and job creation and ultimately provide a much better climate for work in this province.

As you mentioned you feel there hasn't been enough consultation, there is a second phase. This committee has been travelling extensively and we certainly welcome further input in phase 2.

Mr Grandmaître: You must agree with us that it would have been much better if not only the administrative legislation was before us but the enforcement procedures had been included in the present legislation so you'd have a better understanding of what's coming at stage 2.

My question is directed to the parliamentary assistant. This is not the first time that people have addressed their concern about section 3 of this bill, and again we hear that the Minister of Labour has apparently promised to withdraw this section of the bill. How sure are we that the minister will withdraw section 3 of the bill?

Mr Baird: With respect to the section dealing with negotiating a package higher than the average, the minister's comments are quite clear and on the record with respect to her opening statement, the first person this committee heard from. I think her good reputation stands by her remarks as recorded in Hansard, a copy of which I'm happy to give you if you have a concern.

Mr Grandmaître: But it is guaranteed by the minister?

Mr Baird: The minister was very clear in her statement what her intention was, and certainly she stands by that.

Mr Christopherson: Thank you for the presentation. You've been more specific than many others on the real concern about negotiating standards below and how that might happen in non-union establishments. I've raised this before, but you're the first one to articulate it in this way. I was very impressed when you talked about the fact that "flexible minimum standards would open the door for phoney unions -- employer-dominated employee associations -- to make deals that strip workers of their minimum rights." Anyone who's had experience in the labour movement understands that many of these phoney unions, the employer-dominated associations, are just another way of corralling the workers into conditions that no proper union would ever accept on behalf of the people they purport to represent.


I want to draw to your attention, so you know you're not just blindly shooting in the dark, that the minister said in a scrum on the day she introduced this bill, in answer to a question from Thomas Walkom of the Toronto Star -- this is the reporter asking the minister in a scrum:

"Reporter: Is it possible in a non-union shop to bargain away Christmas or overtime or whatever? Is it possible to change the minimum standards?

"Minister: I guess there would be that opportunity to make those changes.

"Reporter: In a non-union shop? How would you go about doing that?

"Minister: Obviously that's something we would need to...look at. Obviously there is the opportunity to make some changes."

I suggest that you might want to take a moment to expand on your concern, should this government even think about trying to go around certified unions as being the bona fide representatives of working people in this province.

Mr Connor: The only thorough way we could actually do this -- it's been mentioned here that a consultation process will be done in the next couple of months or the short duration it may take for these further consultations. I know the IAM, together with the different federations, will be monitoring moves by the province of Ontario to introduce or provide through the media ways of circumventing proper union activities and proper collective agreements and proper negotiations. We'll do our damnedest to monitor that.

The Chair: Thank you, gentlemen, for taking the time to appear before us today. We appreciate it very much.

UNITED STEELWORKERS OF AMERICA, LOCALS 4820, 4632, 6946, 7940, 8327, 8580, 8794, 8952, 9211

The Chair: That leads us now to the United Steelworkers of America. Good afternoon and welcome to the committee. Just as a reminder, the 15 minutes are yours to divide as you see fit between presentation or questions and answers.

Mr Gerard Carthy: Good afternoon. The Steelworkers listed on the previous page are made up of more than 4,000 members in the workplace from Ottawa east to Hawkesbury, and Ottawa west to Deep River. This membership includes people from hospitals, nursing homes, textile, steel mill, manufacturing of plastics, roofing, paper mills, credit unions, explosives manufacturing, laundry, drug trading, warehouse and distribution centres, open-pit mining and refining, nuclear power, atomic energy, technical workers, foundry aerospace industries, as well as car parts for GM, all of which cover approximately 40 different employers.

Creating conflicts between the employer and the employees: Until now, the labour relations system has helped in obtaining settlements between the employer and the labour force. The proposed amendments will put a stop to this. The collective bargaining process will become more difficult, especially in workplaces where unemployment standard minimums are presently in place, like with security guards. We will vigorously oppose and fight any attempt by employers to obtain reduction from the present minimum standards.

Measuring rights: The proposed amendments will force the parties involved into an accounting nightmare. For example, an employer might suggest that workers work an extra shift, say, on Saturday or Sunday and get double-time pay in exchange. The employees may not agree that this extra money will make up for a lesser quality of life; therefore, there is no greater overall benefit for them. This would no doubt lead to bitter disputes between the parties. In short, it appears to us that the amendments are being proposed to allow employers to simply waive the minimum standards.

Privatizing enforcement: passing the costs on to unions, section 20 of the bill, subsection 64.5 of the act. Bill 49 is forcing the unions to pick and choose what complaints would proceed because of the high cost involved. Tremendous hardships will be put on the unions when forced to use the grievance procedure. Therefore, due to the cost to pick and choose complaints, members would most likely feel they are not being properly represented by their unions.

Bill 49 will require unions to become familiar with the pre-existing complex jurisdiction under the act, because unions, and not individual complaints, will be responsible for determining whether to proceed with a complaint. Therefore, the union's finances would be mainly spent on these complaints, and cutbacks to other important areas being protected by the union would be effected. For example, can any union afford to cut back on enforcing health and safety for their members?

With all the red tape and the investigation involved, the delay in filing the complaint may result in employees being unable to recover money due to the proposed six-month limitation period for filing complaints and the one-year limitation period for recovering back pay. In short, the litigation will be difficult and expensive and there will be enormous opportunities for employer counsels to obstruct access to information and evidence. This will make it difficult for unions to enforce and prove claims. This Bill 49 is trying to force smaller locals into receivership.

We feel that pre-hearing production is essential. Mostly, the information necessary to succeed on such claims is often solely within the knowledge of the employer. Therefore, unions would be forced to file, to proceed with complaints to an arbitrator in order to compel productions and disclosure. If there had been an investigation by an employment standards officer, some of these complaints could have been resolved before the arbitration stage, thus saving time and funds.

Bill 49 would be forcing employees to decide whether to spend their wages on food for their families or for lawyers to go ahead with the complaint. Why is the law allowing employers who violate Ontario's most basic employment standards to benefit in this unconscionable manner?

Bill 49 limits an employee's options by putting a cap of $10,000, forcing an employee to decide in two weeks whether to proceed or withdraw their complaint to pursue a civil remedy.

Although employers are prohibited under the act from retaliating against employees who lodge a complaint, most employees would find it hard to proceed, because they do not understand their rights under the act and some fail to complain about the violations within the limit of six months. Therefore, the reduced limitation period will reduce liability for offending employers at the expense of working people, or the employees will simply have to forgo wages owed to them. This will result in legitimate claims being abandoned.

Because private collection agencies are going to assume powers of collection available to the employment standards branch, employees will not receive 100% of what is owed to them; the collector is permitted to take a portion of the minimum wages and benefits owing. Workers are going to be the only people affected by this change, as money will be coming from their pockets.

This new system will encourage employers to negotiate fiercely with collection agencies to reduce their liability under a compromise or settlement. It makes it quite clear that only the workers stand to lose from this amendment.

We feel the changes to Bill 49 would have adverse effects on the workers as it undermines many of the basic principles on which minimum standards legislation has been based. We believe that both organized and unorganized workers will bear the burden and their lifestyles will have to change, as cutbacks will have to be made in other areas. Think of the members of these people's families, who will also be affected. This may not seem like much of a problem to higher-paid executive people, but to the approximately 70% of the lower-paid workers in the province it means a lot. And remember, we all vote come election time. Respectfully submitted.


The Chair: Thank you very much. That affords us just over two minutes per caucus for questioning. This time the questioning will commence with the official opposition.

Mr Hoy: Thank you for your comments on behalf of the nine locals of which you are a representative. The $10,000 cap is quite bothersome to me, particularly when the government says that only 4% of the people claim over and above $10,000. It would be very interesting to know how many dollars that 4% represents in comparison to the other 96%. It would be most interesting to find out. They say, "Four per cent is not that much, so let's cap it at 10%," but what percentage of total dollars being claimed does that 4% represent?

You mentioned the "measuring of rights," and the presentation prior mentioned "confers greater rights." If the government pursues section 3 at some later date, it is going to be very, very difficult. The definitions that flow from those words are going to be onerous, I believe. I appreciate all your comments. I didn't have an opportunity to mention this to the people who were up just before you, but they said: "Do the summed standards have to be met for each individual, or can some workers receive below the minimum on everything as long as a group of employees seem to exceed the minimum standards when assessed together?" This is the type of thing the government is going to have a nightmare with, I believe, if they pursue the other part of the act later. But I appreciate your comments, in particular on the $10,000 limit.

Mr Christopherson: Thank you very much for your presentation on behalf of all the locals. I think it's important for the committee to hear from someone like you. I just counted: The locals you're representing are involved, in one degree or another, in almost 20 different areas of economic activity, different businesses, different parts of our economy. You say, quite to the contrary of many business representatives and government members who say this bill and other things the government's done are going to make for more harmonious relations and things are going to be hearts and flowers and everybody will sit around the table and sing Kumbaya and the world will be wonderful, "The collective bargaining process will become more difficult, especially in workplaces where employment standard minimums are presently in place, like with security guards." You state you will "vigorously oppose and fight any attempt by employers to obtain reductions."

This is consistent with presentations we've had from other unions across Ontario. It suggests to me that the climate this government's going to create is one of a great deal of increased acrimony, more strikes, and with scabs we have the potential for violence. This is the opposite of what the government says they're going to do, just like their bill says it's going to "improve" the employment standards and the opposite's true. In all those businesses you're in, do you see that in the Ottawa area and the people you represent? Do you see this creating more and more trouble in terms of the relationship between employers and employees?

Mr Carthy: Oh, yes, we certainly do. We see that quite a bit in our area throughout the Ottawa Valley. Especially for the people who are not in any unions, they're paranoid right now, as it is, to make a complaint. The way the cap is right now there would be less of a complaint, and then after you go past the six months or whatever, when the person's back is up against the wall, they're going to retaliate. Once again, the working person is going to get ripped off.

Mr Barrett: We appreciate this presentation from the United Steelworkers, those several locals listed on the brief. You made mention of one example of an employer asking for Saturday or Sunday shiftwork, offering double time, which may or may not be accepted, depending on how people feel it would affect their quality of life. That's a fairly standard deviation in hours of work, but incredible, dramatic changes in our labour market are occurring, and as a government we must be flexible. We have to accommodate these changes.

My riding is home to steel industry and steelworkers; it's a growing industry in my riding, but so much of manufacturing and heavy industry is in decline. We're seeing the rise in the service sector, home workers, part- time workers. We have to come up with a bill and a rewrite of this that accommodates myriad situations beyond traditional patterns of work. I think our ultimate responsibility is providing the best value for taxpayers. Most taxpayers are workers. By coming up with as streamlined a set of regulations as possible that ensure enforcement -- we need to provide the enforcement and protection for workers in as efficient a way as possible. We would appreciate any further input from you now or in the second phase of these hearings.

The Chair: Thank you very much for appearing before us here today and making a presentation.

That concludes our hearings here in Ottawa this afternoon. We'd like to thank everyone who took the time to make a presentation and those who are in the audience who have listened earnestly in a dignified fashion. We appreciate the attention that was paid to this bill, and I thank my colleagues. This committee stands in recess until September 9 in Belleville.

The committee adjourned at 1616.