Soumission

Submission to the Federal Labour Standards Review Re: Part III of the Canada Labour Code

I - Issues

Campaign 2000 works to eliminate child and family poverty in Canada. We track the rate of child poverty on an annual basis using the Statistics Canada Low Income Cut-Off ( pre-tax LICO) measure. Our annual Report Card on Child Poverty has shown that for almost 30 years, Canada has maintained an average child poverty rate of about 15 per cent.

Employment is not a guaranteed pathway out of poverty. Children whose parents participate in the labour market represent a majority of all low-income children. For example, 44.7 per cent of all low income children in 2002 were living in families where the parent(s) worked all year and still could not rise above the poverty line (Campaign 2000, 2004 Report Card on Child Poverty in Canada). Labour market vulnerability is increasing primarily because of the high incidence of low-paid jobs, the erosion of labour standards, reduced access to collective bargaining, and the growth of jobs with little or no benefits.

As such Campaign 2000 is pleased to participate in the Federal Labour Standards Review of Part III of the Canada Labour Code. Part III has not been updated since 1965. The Canada Labour Code deals with labour standards in federal jurisdiction which covers about 1 million workers, about 10 per cent of all Canadian workers. Part III includes standards relating to minimum wages, hours of work, equal wages, vacations, leaves, termination, work-related illness, dismissal and harassment.

We maintain that federal labour standards should be modernized to reflect leading standards and "best practices" in other advanced economies. They need to be updated to reflect changes in the labour market and workforce over the past 40 years, with a particular emphasis on ensuring protection for vulnerable workers.

II - Background

(a) Campaign 2000
Campaign 2000 is a cross-Canada public education movement to build awareness and support for the 1989 all-party House of Commons resolution to end child poverty in Canada by the year 2000. Campaign 2000 began in 1991 out of concern about the lack of government progress in addressing child poverty - we now have 90 national, provincial and community partners across Canada. Our coalition is non-partisan in urging all Canadian elected officials to keep their promise to Canada's children.

Campaign 2000 tracks Canada's child and family poverty rate and produces an annual Report Card on Child Poverty, as well as policy papers which provide recommendations to government. Our paper "Pathways to Progress: Structural Solutions to Address Child Poverty" released in April 2004 highlighted the fact that the quality of a country's labour market is a key contributing factor to the level of child poverty. We urge policy makers concerned about the economic well-being of Canada's children to examine which features of labour markets best protect the living standards of children. For example, UNICEF's 2000 report "Child Poverty in Rich Nations" shows a striking association between child poverty and the percentage of workers who are low paid. The report concludes that increasing employment opportunities is unlikely to significantly address child poverty if wages at the bottom of the income scale are too low (UNICEF 2000, Child Poverty in Rich Nations).

(b) Canada as a low wage country
A persistently deficient labour market is the major structural source of child poverty in Canada. Until the mid-1990s, child poverty generally rose and fell with the unemployment rate. Starting in 1995, however, the child poverty rate continued to go up even after the unemployment rate went down. A full-time job stopped being a guaranteed escape from poverty.

Canada stands out as a low-wage country, second only to the U.S. among industrialized countries. Almost one in four workers, or 2 million adults, are in low wage employment in Canada. This compares to 1 in 20 in Sweden, or 1 in 8 in Germany. Low paid is defined as earning less than two-thirds of the national median hourly wage. In Canada, this is less than $10 an hour (Jackson 2003, "Regulating Precarious Employment"). Ten dollars an hour is roughly the amount needed to reach the poverty line for a single person working full-time in a large urban centre.

The incidence of low paid work is much higher among vulnerable groups such as women, recent immigrants, and workers of colour. For example, 31 per cent of recent immigrant visible minority full-time wage earners were low-paid, compared to 16 per cent of Canadian born full -time wage earners in 2000. About 22 per cent of women working full time were low paid compared to only 12 per cent of men (Saunders, 2005, "Low Paid Workers in Canada"). Vulnerable workers are also being trapped in low wage work for longer periods of time than previously.

Recommendation: Employers should be expected to pay at least enough to keep a single full-time worker out of poverty. Campaign 2000 recommends that the Canada Labour Code introduce a federal minimum wage of $10/hour, indexed to the growth of the average hourly wage.

(c) The growth of non-standard work
A recent study by the Law Commission of Canada found that over one-third of the workforce is engaged in non-standard work - work that differs from the standard full-time, permanent employment contract with one employer (Law Commission of Canada, 22004. "Is Work Working? Work Laws That Do A Better Job"). This reflects the growth in part-time work, self-employment, contract, sub-contracted and temporary work. Yet only 'standard employment' provides access to employment benefits and protections.

Major concerns for part-time workers include; low wages, lack of access to benefits, unstable shift schedules, and lack of access to full-time permanent jobs, training and advancement (CLC, 2005 "Labour Standards for the 21st Century"). The proportion of solo self-employed workers (i.e. they employ no others) has risen to 10 per cent, and about half of these earn less than $20,000/year. They are not covered by employment standards legislation. Temporary agencies and labour contractors have also grown to be a significant part of the labour market, especially for recent immigrants (Jackson, 2005). This third-party contracting has created triangular employment relationships which are not covered by the Canada Labour Code.

The Workers Action Centre in Toronto reports that there are about 500 temp agencies in Toronto and they charge a flat fee or mark up for placement. The workers are misclassified as "independent contractors". It is not clear who the employer is and therefore who is responsible for meeting employment standards regulations. When disputes arise regarding payment of wages it is not clear who the worker can appeal to - the temp agency or the sub-contractor for whom they are working. Approximately 115,000 Toronto workers are in these precarious, low wage jobs experiencing harassment, on-the-job injuries, overtime, and pay under $10/hour. The Workers Action Centre acts on behalf of a number of such contingent workers who have not been paid. The majority of these vulnerable workers are women, young people and new immigrants.

The growth of these types of precarious employment has clear implications for low income families. Low wages, unstable income, shift work, lack of benefits, and limited access to labour rights are not conducive to raising families and improving children's life chances.

Recommendation: The Code should specifically state that it applies to contract, permanent, full-time and part-time workers, and that all such workers have access to benefits and equal pay, comparable to those provided to full-time workers. The Code needs to recognize in law the employment relationships between temp agencies and workers so that these precarious workers have the same rights as employees.

(d) Changes in the Workforce
The Canada Labour Code needs to be updated to reflect gender changes in the workforce and the growth of women's participation in paid labour since 1965. The Codes currently assumes a model of one male breadwinner in the household unit (CLC, 2005 "Labour Standards for the 21st Century"). Employment participation rates for men and women are approximately equal, yet there remains a wage and opportunity gap between men and women. Women currently earn an average of 73% of the earnings of men. This gap is partly explained by the amount of time that women spend in providing unpaid care for children, the elderly, sick and disabled family members.

The Canada Labour Code needs to be updated in terms of leave allowances to better support families, and allow more equitable sharing of care responsibilities between men and women.

The Canadian workforce has also become more diverse since the Canada Labour Code was enacted. Approximately one in every seven workers belong to visible minority groups. Immigration accounts for almost all labour force growth, and more than three in every four immigrants belong to a visible minority group (CLC, 2005 "Labour Standards for the 21st Century).

Precarious work is highly racialized and gendered with visible minorities and recent immigrants much more likely to be found in low-paying, vulnerable work. Campaign 2000 is particularly concerned with the fact that a major result of highly racialized precarious work is that 49 percent - or about one out of every two children - in recent immigrant families (those who have come to Canada between 1996 and 2001) lives in poverty. (Statistics Canada's Census 2001 as cited in Campaign 2000 2004 Report Card on Child Poverty in Canada). Racial discrimination is one reason for the disproportionate number of visible minorities in precarious and low- paid work, even when education and skills are held constant (CLC, 2005, "Labour Standards for the 21st Century).

Recommendation: The Code provisions relating to working times and leaves need to be improved. The Code should reflect human rights provisions, including those which address racial harassment in the workplace

III - Recommendations

(a)The Canada Labour Code should introduce a federal minimum wage of $10/hour, indexed to growth in the average hourly wage.

The federal and provincial governments share responsibility to develop strategies to ensure good jobs at living wages. The availability of sustainable employment opportunities at living wages should be a matter of national priority. Federal action would set a precedent for other governments. The federal minimum wage should apply to all federal contractors. The federal government should encourage provinces to match this rate. This initiative would define a living wage standard that would enable adults without children with full-time earnings to earn wages that would lift them out of poverty. It would enable individuals or couples with children to avoid or escape poverty through a combination of full-time earnings and child benefits.

(b) The Canada Labour Code should be revised to raise the general level of employment rights and standards

The Code should specifically state that it applies to contract, permanent, full-time and part-time workers. Coverage of precarious workers needs to be greatly expanded. It should define "employee" in broad terms to include the self-employed who are economically dependent on one employer.

Part III Labour Standards should state that all such workers have access to benefits and equal pay, comparable to those provided to full-time workers. There should be full coverage of contract workers for leaves, vacations, severance, etc. It should address temporary agency workers and subcontractors by stating that such employers are responsible for meeting employment standards. The Code should end the restriction that temporary workers cannot take a job with the employer identified by the agency.

(c) The Canada Labour Code should address work/family conflicts by promoting more flexibility for workers during the work week and over their work life.

The provisions relating to working times and leaves need to be improved. For example, they should ensure full job protection for workers after maternity and parental leaves. The Code should allow all workers a maximum 10 day paid personal/family responsibility leave. It should provide for up to 12 weeks unpaid leave for significant care-giving responsibilities and expand compassionate leave.

(d) The Code should reflect human rights provisions

It should include provisions to address racial harassment in the workplace, and provide accommodation for people with mental and physical disabilities.

(e) Need to ensure the revised Canada Labour Code is effectively enforced

Once revised, Part III of the Canada Labour Code should be communicated to all employers under federal jurisdiction, and enforced through proactive audits. Employer and employees need to know what their responsibilities and rights are under the new Code. Sufficient resources to ensure effective enforcement and sanctions for non-compliance are required.

Sources:

Campaign 2000, 2004 Report Card on Child Poverty in Canada. Available at www.campaign2000.ca

UNICEF, Child Poverty in Rich Nations, 2005. Report Card No. 6, Innocenti Research Centre

Jackson, Andrew. Regulating precarious employment: What can we learn form new European models? 2003 Canadian Labour Congress

Saunders, Ron. Low Paid Workers in Canada: Does a Rising Tide Lift All Boats? 2005, CPRN

Law Commission of Canada, Is Work Working? Work Laws that do a better job. 2004

Canadian Labour Congress, Labour Standards for the 21st Century. April 2005