Guide to Bill 148 | ESA: General Amendments

26 October 2017

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All Ontario employers subject to the ESA will be obliged to change practices with respect to a series of general provisions, affecting most employees in non-unionized workplaces.

These changes generally impose new substantive and procedural duties on employers, which in turn will result in additional record-keeping obligations.

Equal Pay for Equal Work

An employer is obligated to pay the same "rate of pay" to employees who perform "substantially the same kind of work", requiring the same skill, ability and responsibility, in the same establishment under the same working conditions.

The permitted exceptions to this rule are systems of seniority, merit production quantity, production quality or "any other factor other than sex or employment status."

"Employment status" means (a) a difference in the number of hours regularly worked by the employees; or (b) a difference in the term of their employment, including a difference in permanent, temporary, seasonal or casual status."

The new section 42.1 of the ESA imposes a significant amount of work upon employers, while materially restricting their degrees of freedom in awarding compensation for work. In a very real way, it mandates that employers operate under a "collective-agreement like" pay regulation system, albeit without the trade union's presence.

The concepts of "kinds" of work, being "substantially the same" and requiring similar skills, abilities and levels of responsibility, will all require definition. Employers would be wise to find or develop policies which can defensibly define these issues and govern their decision-making in the Bill 148 world. So too, a "merit system" and the requisite measures of merit will challenge employers' capacity to develop rules and to fairly apply them.

The overall impact of complex rules is to induce the employer to adopt simpler alternatives: relative uniformity in pay grades paid to persons in similar jobs. Simply put, it is easier to pay everyone $20 an hour than to construct and operate an elaborate merit system permitting variations in pay rate.

It should be noted that while the provision says "any other factor" can justify pay differences, it is not likely that the grounds protected by the Human Rights Code would be legally available reasons to vary peoples' pay.

Vacation Entitlement

Employees with less than 5 years' service are entitled to 2 weeks' vacation and 4 percent vacation pay, under new sections 33 and 35 of the ESA. Employees with 5 years' service or more receive 3 weeks and 6 percent vacation pay.

Greater vacation entitlement for persons with more service is quite customary in many non-unionized workplaces and under collective agreements. This change reflects that norm.

Scheduling

Three Hour Rule: section 21.3(1) requires an employer to pay 3 hours' wages to anyone who regularly works more than 3 hours, attends work but is sent home before 3 hours have elapsed. This does not apply where power failures or weather events stop the work.

On Call Pay: section 21.4(1) requires an employer to pay 3 hours' wages to anyone on call, who either does not work or who works less than 3 hours.

Right to Refuse: section 21.5(1) permits an employee to refuse to be "on call" with less than 96 hours' notice, except in emergencies or work required to remedy or reduce a threat to public safety.

Cancellation Pay: section 21.6(1) requires an employer to pay 3 hours' pay if the employer cancels a scheduled work shift with less than 48 hours' notice. Again, where the work interruption is due to circumstances outside an employer's control (weather, power outages), the cancellation pay is not owed.

In each of these situations, collective agreements still in effect January 1, 2018, which conflict with the ESA apply until no later than January 1, 2020.

These provisions afford protection to employees against arbitrary last-minute schedule changes, by requiring their employers to pay for the inconvenience of abridging shifts or making last minute scheduling demands. Again, they reflect norms from unionized environments.

Substitute Holiday: section 27 now states that an employer is obligated to issue a written statement documenting the agreement whereby an employee agrees to work on a public holiday and be provided a "substitute holiday" instead. All other public holiday changes mooted in the original draft of Bill 148 have been dropped.


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