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Bill 66: How Politicians Exploit Power in Shaping Employment Standards

April 3 2019

This week the Ontario Conservative government passed Bill 66, with the typical silly name “Restoring Ontario’s Competitiveness Act, 2019″.  This is an omnibus bill that amends a bunch of legislation spanning a dozen different ministries, including the Ministry of Labour.   This post considers one small set of changes to the Employment Standards.  The changes are important for what they tell us about how politicians tinker with the power dynamic in employment relations in order to achieve their policy goals.

The goal of this Bill is clear from the title of the Bill itself.  When a Conservative talks about “competitiveness” in the labour market context they almost certainly mean eliminating protections for workers.  In the worldview of the Conservative Party, any law that imposes restrictions on an employer is a barrier to competitiveness.  Whenever you hear the words “competitiveness” or “flexibility” spoken by a Conservative politician, you know that changes are coming that are not intended to benefit working people.

And so it is with Bill 66, Schedule 9, which reforms sections of the Employment Standards Act and Labour Relations Act.   The LRA changes relate to how construction employers are designated, which is interesting, but I want to focus on the ESA changes in this post.

Bill 66 makes several changes to the ESA.  The first is that it removes the requirement for employers to post the government’s summary of key ESA rights in the workplace, but employers are still required to hand out the poster to employees.  However it is the next two changes that are most illuminating.

Firstly, the Bill repeals the requirement for the government to approve employees working greater than 48 hours in week.  Under the old Section 17(3), an employee could only work greater than 48 hours in a week if (1) the employee agreed to this and (2) the employer received an approval from the Director of employment standards.   Bill 66 removes the role of the government from the process.

Then, to ensure that an employer who assigns a worker to work greater than 48 hours in a week does not get hit with an overtime pay bill, Bill 66 also makes it easier for employers to use “averaging agreements” to avoid overtime pay.  Averaging agreements were originally introduced by the last Conservative government in Ontario in the 1990s as part of their push to promote “competitiveness”.  They permit the employer to average out hours worked over multiple weeks such that if the average hours work per week falls below 44, then no overtime pay is owing.  For example, this permits an employer to require an employee to work two 55 hour weeks followed by two 10 hours weeks.  Since the “average” hours worked is only 32.5 per week, the overtime threshold of 44 hours in a week is not met and so no overtime pay is required.

The Liberals kept averaging agreements, but introduced a government oversight role (old section 22(2) of the ESA) because of concerns that employers were forcing averaging agreements on employees.  The Ford government is returning us to the 1990s in Bill 66 by again removing state oversight.  The two changes work in tandem.  Longer hours for less pay with less government oversight of any of this. That is what “competitiveness” means.

Exploiting Power to Benefit Employers

The key to understanding what has happened here lies in understanding how power is deployed in the employment relationship.  For those who have my Law of Work text, “power” is depicted in the Law of Work system as an “Internal Input” that influences employment contract terms and employment practices.

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The relative power of the employer and employee will influence the terms and condition that ultimately end up in the employment contract, subject to the actor’s values and goals which can influence how a party chooses to exercise their power.  Not all employers will exploit their power to insist on longer hours for less pay because doing so may conflict with their goals or values, but some employers definitely will use their new found ability to work employees longer while avoiding overtime pay.

By removing the requirement for the state to approval of working hours beyond 48 hours in a week and for averaging agreements, Bill 66 creates a model in which an employee may “agree” to waive their statutory entitlements.  Under Bill 66, the employee must still “agree” to work 55 hours in a week and must still “agree” that the employer can average hours out over several weeks to ensure that no overtime pay is required.  However, very few if any vulnerable workers will say “no” when their employer presents them with an “agreement” to work 60 hours and to enter into an averaging agreement and says “sign here”.

The Liberals recognized this and so introduced a government oversight role to make sure that employers were using averaging agreements to deal with real unexpected spikes in work and not as a tool for working employees long hours and avoiding overtime.  The Conservatives are not concerned about this because their objective is not to protect workers but to promote employer interests in a “flexible”, cheaper work force.

The Bill 66 reforms therefore alters the default rule.  Usually ESA entitlements cannot be waived out of a recognition that an agreement by an employee to waive a statutory entitlement will often not be voluntary.  The Bill 66 rejects this premise, and instead makes the statutory entitlements optional.  There is now a rule about maximum hours of work (48 hours in a week) and overtime pay (time and half after 44 hours), but these are only fall back rules if the parties choose not to alter them by “agreement”.

Repealing hours of work legislation and overtime pay altogether would not be popular.  But allowing employees and employers to “agree” to waive statutory entitlements can achieve the same outcome because vulnerable workers lack the power to resist when their employer tells them they need to work more than 48 hours and they need to sign an averaging agreement.

In Bill 66, the Conservatives deploy a common tactic that involves pretending that power does not effect outcomes, or that power is equal between employer or employee when in fact employers almost always possess superior power.  The entire foundation upon which the ESA is constructed on the premise that vulnerable workers lack the power to bargain decent working conditions or to resist an employer’s demand to work long hours for low pay.  Once a government starts to make ESA entitlements optional and pretends that “agreements” to waive those entitlements are truly voluntary, we no longer have employment standards.

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One Response to Bill 66: How Politicians Exploit Power in Shaping Employment Standards

  1. Fernando Reis Reply

    April 5, 2019 at 4:19 pm

    Agreed, and even more problematic as we are talking about a floor of rights. Well, it is certainly one more tool for union organizers to use.

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