May 19, 2017
Here’s a wrap up of a few issues to ponder that came up this week in the Law of Work. Have a great long weekend!
Can My Daughter’s Employer Make Her Work for Free During a “Training Period”?
A friend told me that her daughter got a new job at a cafe in Toronto and she was told new employees must work for 10 hours of training without pay. This isn’t the first time I have heard this. My sense is that it is a fairly common practice, especially in hospitality and service. I don’t know if employers think the law permits this, or whether they are knowingly breaking the law.
In the Common Law Regime, based on freedom of contract, an employer and employee could agree to an arrangement whereby the employee would agree to work some hours without compensation in exchange for future paid employment.
However, the Employment Standards Act (Regulatory Regime) prohibits such an arrangement by requiring that every employment contract provide payment of “at lease the minimum wage” for hours worked by the employee in the service of the employer. A narrow exception exists for training done as part of an educational co-op or experiential learning program, or similar arrangement in which the employer provides an educational service to a worker by letting them perform work of little or no benefit to the employer. But a worker doing the exact work they will be doing after “training” would never fit into this exception.
Of course the problem my friend’s daughter faces is that if she complains, the employer won’t be pleased. If she is fired for demanding her ESA entitlements, she would have a strong anti-reprisal claim. However, this will hardly be a great situation if she actually wants a job through the summer. My advice is always to keep track of all the hours worked in writing so that a complaint can be filed later if the employee wishes.
Pot Sales Staff Unionize: Is a Contract to Sell Illegal Drugs an Enforceable Employment Contract?
This week, workers at the east end marijuana dispensary Canna Clinic shop joined Unifor. I received a call from a reporter asking me if employees working for a company involved in an illegal business can unionize. Selling pot is still illegal in Canada and so on any given day the police can arrive at these stores, arrest everyone, and confiscate the illegal drugs. So the employees are actually selling illegal drugs. They are also very vulnerable, to robberies (no surprise that robbers see an illegal operation with loads of cash and illegal drugs as a prime target), to arrest, and to job loss, since their employer could be shut down any day. Vulnerable employees often look to unions.
Here is the story, with my short quotation. See if you agree with me.
My sense is that the short answer to the question is that regulatory bodies that govern employment will treat Canna Clinic workers as employees and apply employment-related statutes. If I work for an employer that decides to break the law, I don’t cease to be its employee. I just become an employee of a law-breaking employer. If Wal-Mart sells illegal products, its employees don’t forfeit their legal rights. Thus, the OLRB treated Canna Clinic as an employer of the workers and neither side argued that the nature of the business mattered to the application of the Labour Relations Act.
Still, some interesting issues arise, especially in the Common Law Regime. For example, technically speaking, every time the employer instructs the employee to sell illegal drugs, they are ordering the employee to break the law. It is a standard implied term in employment contracts that employers will not order employees to engage in illegal conduct. If an employer insists on such an order, they are breaching the contract and the employee could quit and sue for constructive dismissal. More fundamentally, a contract that is an agreement to commit a crime is unenforceable in Canada.
So far, both the employer and employee have incentive to treat their arrangement as an enforceable employment contract. Canna Clinic is unlikely to argue in a legal proceeding that it cannot be an employer because it is in fact engaged in criminal activity, along with its workers. However, if an employee were to sue Canna Clinic for wrongful/constructive dismissal and seek common law damages, would a court enforce the contract? Would it rule that the contract between Canna Clinic and the person hired to sell the illegal drugs is in fact an unenforceable contract, contrary to public policy? If so, that would leave the worker with no remedy.
What do you think about that little problem?
Bargaining Collective Agreements Outside of the Labour Relations Act
I have followed developments involving an attempt by Legal Aid Lawyers to unionize and engage in collective bargaining with their employer, Legal Aid Ontario (LAO). The interesting twist in this case is that the LAO lawyers are excluded from the Labour Relations Act which creates rights to unionize and engage in collective bargaining.
The lawyers joined a union and approached the employer to request it engage in collective bargaining. To my surprise, the employer basically told the lawyers to go to hell, that since they are excluded from the Labour Relations Act the employer has no obligation to recognize the union let alone bargain with it. That position seemed to fly in the face of developing Charter jurisprudence, which requires that public sector employers engage in good faith bargaining with associations that represent their employees.
By taking the position that LAO had not obligation to bargain with the union, the employer was inviting a Charter challenge, which did come. That Charter challenge caused LAO to reconsider, and provoked a discussion that ultimately led to a privately conducted “certification vote” which demonstrated majority support for the union. LAO then agreed to bargain a Framework Agreement with the union–like a collective agreement–but all of this being done outside of the Labour Relations Act.
The parties apparently reached agreement on a number of issues, but four matters remained outstanding, including whether bargaining disputes would be handled through a “right to strike” (the industrial warfare route) or interest arbitration, and also the manner for collecting union dues. Those matters were referred to interest arbitrator William Kaplan to resolve. His decision is here.
Interestingly, the employer argued that disputes should be resolved through the usual strike/lockout method, while the union argued that interest arbitration should be ordered. Take a look at the decision to see what the arbitrator decided. If the arbitrator ruled in favour of the industrial warfare route (strikes/lockouts), how do you think that would work, given that the normal rules regulating strikes and lockouts in the Labour Relations Act do not directly apply here (since the lawyers are excluded from the LRA)?
On union dues, the arbitrator ruled that the “Rand Formula” would apply subject to the union promising to indemnify the employer in the event that the deduction of union dues from paycheques was found to be a violation of the ESA. We discuss the Rand Formula at length in Chapter 37 of The Law of Work.
The Changing Workplaces Review is Finally Coming!
And finally, after a very long wait, apparently this holiday Monday the Ontario government will release its report on the Changing Workplaces Review. This report will no doubt spawn considerable discussion and debate over the coming months and maybe years. I have some suspicions on what might be coming based on my discussions with the Special Advisors Michael Mitchell and Justice John Murray and many others in the labour law community, but I really don’t know what the Liberals will do beyond the hints they’ve given on ESA reform in the past week.
But here’s what I do know:
The government will say that its changes are intended to “modernize” the law and to restore “balance” to labour relations. I know this because every government of every political stripe any where in the Western world says this whenever work law reforms are announced.
Business, and in particular its mouth-pieces such as the Chamber of Commerce, Fraser Institute and the like, will pull out all the hyperbole and argue that the changes will destroy the economy and lead to massive unemployment. I know this because they have said the same thing virtually every time that reforms favour labour rights in any way since the 1800s. Here is a early glimpse from the COC.
Labour groups will welcome the reforms but bemoan that they do not go far enough in addressing worker precarity and the challenges workers face in today’s economy. I know this because these groups will believe this, it is likely to be true given that the Liberals are not deaf to the complaints of the business community, the challenges are huge and systemic, and no one is ever completely satisfied with legal reforms, regardless of which side of the fence you sit on legal intervention in labour markets.
Have a great long weekend!