Commission Research

Control Over Working Time and Work-Life Balance: A Detailed Analysis of the Canada Labour Code, Part III

Prepared by Judy Fudge

Executive Summary

Through a blend of collective bargaining and legislation, a standard working day of eight hours and working week of forty hours (with companion entitlements to overtime, time-off work, and paid vacations) took root in Canada during the 1950s and 1960s. These norms balanced protection for employees against flexibility for employers, and they were based upon a male breadwinner/female housewife division of paid and unpaid labour. Since the 1980s, these working-time norms have been under increasing pressure, and there is a growing disjuncture between the legal standards and working-time practices. On the demand side, the process of globalization, the intensification of competition, the spread of digital technologies, and the rise of just-time production and the 24-hour service economy have led to the proliferation of flexible forms of working time that diverge from the standard. Standard reference points in working-time regulation, such as daily and weekly working time or the boundary between standard working time and overtime, are increasingly blurred. On the supply side, demographic changes such as the feminization of the labour force, the increasing labour force participation of women with young children, the shift to dual-earner households, and the aging of the population have led to a variety of working-time arrangements that do not conform to the norm. Part-time work has increased, as have the range of family-related leaves to which workers are entitled.

This report examines the legislation regulating working time in the federal jurisdiction in Canada and uses the available empirical evidence to assess the legislation's ability to promote flexibility and work-life balance. The report also compares the federal legislation with how other jurisdictions in Canada regulate working time. It identifies the distributive implications of working-time regimes and the policy trade-offs involved with different types of regimes.

The legislation regulating working-time can be divided into three distinct components. The first, and by far the most complex, is the regulation of hours of work that employees can be permitted or required to work. Hours of work rules establish standard hours of work, overtime premiums, maximum hours of work, and minimum daily and weekly rest periods. They also provide various mechanisms for injecting flexibility into the general legal norms or standards. The second component is concerned with general entitlements to paid-time off work, either in the form of general (or statutory) holidays and paid vacations. The third component addresses leaves of absences from work for specific types of reasons, typically, although not exclusively, related to health and family responsibilities (such as illness, pregnancy, parenting, and caring).

In Canada, there has been a growing diversification, decentralization, and individualization of working time. Patterns of working time have polarized and the prevalence of the standard working week has declined. By the mid-1960s, the standard working week levelled off and stabilized at thirty-seven to forty hours of work over five days. However, since the mid-1970s the proportion of employees working thirty-five to forty hours declined from sixty-five per cent of all workers to just over a majority, while the proportion of employees working more or fewer hours increased. Women are more likely than men to work short paid work weeks and men are over-represented amongst employees who put in long hours of paid work.

Both employers and employees want more flexibility in scheduling of work. However, flexibility in working-time arrangements tends to mean different things to employers and to employees. Employers want to be able to organize working time in accordance with variations in the volume of an undertaking's activities over a certain period and to calculate overtime entitlements over that period. They also want to reduce the legal restrictions on the scheduling of work. By contrast, employees want to be able to control their work schedules, and they want the flexibility to design working-time arrangements that accommodate their other responsibilities and their lifestyles.

There is now a large body of reliable data of different kinds (detailed surveys, shorter questionnaires, and qualitative studies) that demonstrate the costs of the conflict between work and life. Research on the health implications of working long hours has revealed that an increase in working hours is associated with increased cigarette and alcohol consumption, weight gain, and depression. Work-life conflict, especially role overload and work to family interference, results in a decline in physical and mental health, lower job satisfaction and commitment, and an increase in absenteeism and employee turnover. The evidence is that this conflict not only detrimentally affects the quality of life of workers and their families, but that employers and society are also bearing the costs of this conflict. There is also increasing concern that work-life conflict is contributing to the declining fertility rate in Canada, which has long-term implications for the country's ability to sustain economic growth and prosperity.

Hours of work laws influence the supply and demand for labour in two ways - by imposing obligations on employers to pay an overtime premium once employees work beyond specified thresholds and by establishing limits on maximum hours of work and requirements for minimum rest periods for employees. Standard work days and work weeks function as triggers or thresholds for overtime pay. Limits on maximum hours of work and requirements for minimum rest periods prohibit employees from working hours in excess of the limits or during rest periods. However, laws that impose restrictions or requirements on hours of work also provide mechanisms to provide employers with flexibility to deviate from these restrictions or requirements. The more requirements and restrictions that are imposed on hours of work, the greater the number of mechanisms for providing flexibility.

The Canada Labour Code, Part III imposes both a standard (forty hours) and maximum (forty-eight hours) work week, as well as a standard (eight hours) work day. It provides various mechanisms for injecting flexibility into these requirements and restrictions. These mechanisms are: 1) exemptions; 2) averaging agreements (for overtime and for maximum hours of work); 3) modified work schedules (for overtime); 4) permits for excess hours; 5) regulations for specific sectors or occupations; and 6) emergencies. In most situations, the Code allows employers to vary the hours of work provisions established in the legislation if the employer obtains the consent of the union that represents the employees. However, if the affected employees are not represented by a trade union, in most cases the Code requires the employer either to obtain the consent of a majority of the affected employees or the permission of a designated official. The number of restrictions combined with the variety of mechanisms for injecting flexibility into the working-time rules makes the hours of work rules in the Code very complex.

The flexibility for employers to vary the hours of work rules is not matched by an individual right to refuse overtime and long hours of work in the federal jurisdiction. Nor does the Code provide employees with much flexibility to determine their schedules or to vary their regular work hours to accommodate family obligations or education. There is nothing in the Code that limits the use of split shifts or unsocial hours. Its provisions regarding paid-time off work (nine statutory holidays and two weeks of paid vacation) are comparable to the standards across Canada.

The federal Code provides for a number of unpaid leaves that give employees job security in the event of personal illness and pregnancy, and enables them to accommodate family responsibilities. The leaves are designed to dovetail with the income-replacement system provided in the Employment Insurance Act. An employee's willingness to take unpaid leave depends upon her or his access to income replacement and the amount of income that is replaced. The federal jurisdiction imposes a lengthy service requirement for eligibility for maternity and parental leaves, and requires parents to share the parental leave. There is no provision that entitles employees to time off without discipline or reprisal in order to attend to an urgent family matter.

The evidence indicates that there is a widespread failure to comply with hours of work rules in the federal jurisdiction, that overtime hours are increasing, and that work-family conflict is also on the increase. There is a great deal of evidence that the direct costs to individuals, their families, employers, and the health-care system are immense. However, there is little evidence that either large or federally-regulated employers are putting work-life arrangements in place. The research reveals that employers prefer to retain control over the scheduling of working time, and they want increased flexibility to use overtime. It is also clear that enterprises in the federal sector are relying on a large proportion of employees to work chronic overtime. The evidence also is that employees want to have greater control over their work schedules, and that employee control over working time reduces work-life conflict.

According to the research, part-time employment continues to be less likely to provide employment-related benefits than full-time work, and it continues to be disproportionately performed by women. The evidence also is that employees with lower-status jobs are less likely to have either family-friendly work environments or access to employee benefits plans that cover some of the costs of needed services. Moreover, the design of the maternity and parental leaves and the benefit structure (the low income replacement rate and low income ceilings combined with the requirement to share the benefits between parents) means not only that mothers are more likely to take leaves than fathers, but also that women with low income are more likely than women with higher income to return to work soon after the birth of a child.

The hours of work rules for Canada's national infrastructure were established in the late 1960s, and much has changed in the labour market over the past forty years. The legal regime has adapted to the changing demographics of the workforce by providing workers with job-protected leaves to accommodate family responsibilities. However, these provisions were simply grafted on to the old working-time norms, and they have tended to reinforce the traditional division of labour between men and women over unpaid caring responsibilities. The drift towards a market model of (de)regulating working-time has exacerbated work-life conflict and has contributed to a polarization in the distribution of paid working time. The report concludes that it is time to revise the working-time regime in the federal jurisdiction and to institutionalize a form of regulated flexibility that better addresses the needs and preferences of the workforce and the operational requirements of employers. It offers a number of recommendations for legal rules that are designed to promote working-time arrangements that are healthy, family-friendly, foster gender equality, advance productivity, and facilitate worker choice and influence over their hours of work.