Soumission

Brief to the House of Commons Federal Labour Standards Review Commission

TABLE OF CONTENTS

Introduction

The Canada Labour Code and the Workplace

Workplaces – The Reality

Precarious Work and the Canada Code Part III

Union Coverage and Part III

Women in the Workforce

Diversity in the Workforce

Compliance and Enforcement

Minimum Wage

Part III Issues Related to Time

Overtime

Vacations

Dismissal, Severance and Job Security

Group Termination

Conclusion

Introduction

The Manitoba Federation of Labour represents nearly 100,000 working women and men in Manitoba who are members of unions that are affiliated to the Canadian Labour Congress.

Our mandate is to provide a forum for affiliates to discuss issues of mutual interest and to facilitate the development of consensus-based positions on these issues. We speak on behalf of our affiliates in relations with government, business and community-based organizations.

Research conducted by the Canadian Labour Congress, and shared with its affiliates and its chartered central labour bodies, gives rise to a number of needed amendments to the Canada Code Part III. Those amendments will be reiterated throughout this paper in bullet form.

The Canada Labour Code and the Workplace

About 10% of all Canadian workers, roughly one million, are directly covered by the Canada Labour Code. They are employed in about 40,000 separate work places providing services in inter-provincial and international transportation, pipeline work, banking, communications and broadcasting, ports and shipping, grain handling, uranium mining, the nuclear industry, the federal Crown corporations and some workers in First Nations communities.

This review of Part III of the Canada Code is timely in that many of its provisions are forty years old and the Canadian workforce and workplace has undergone a profound transformation in that period. International trade agreements have forced changes on our workers that have combined to seriously erode the quality of their work-life. This so-called globalization process has forced a substantial increase in instances of contracting-out, the privatization of key public services, and deregulation at the provincial government level that has undermined workers' ability to form trade unions in order to defend their rights.

Even employers who accept the democratic right of workers to organize unions in order to better defend their rights, feel the pressure of greater international competition from low-wage environments and have felt it necessary to demand wage-concessions, erode working conditions and adopt measures that create instability for their workers.

This has resulted in the emergence of a new class of workers – the contingent workforce. These workers have lives that are characterized by part-time work, specific contract projects, term employment; and limited or no access to benefits, pensions and job security. In this environment it is very difficult for workers to surmount their vulnerability and insist on the protections they should have access to in the Canada Code, for fear of dismissal and non-renewal of their contracts. Monitoring and enforcement of regulations by the Federal government that is not complaint driven is nearly non-existent.

These changes have flourished in an environment where having and enforcing regulations to control conditions in the workplace is viewed by many as being passé and part of an "out-dated economy" that doesn't actually exist any more. In fact, the opposite is true. These new realities underscore the need for and relevance of strong Canada Code provisions that are aggressively enforced. Failure to do that will reward employers who are not respectful of their workers and their rights and add impetus to the further erosion of quality and rewarding jobs in this country. This is the basis of a future failure to realize a modern, highly productive economy and workforce.

But what is it that we need to develop a high-skill, well-paid niche in the global economy? We need a legislative framework at both the federal and provincial levels that outlines employment standards that will create and sustain socially acceptable labour rights and standards for the workforce. While the federal government cannot direct the legislative agenda in provincial jurisdictions, it has the responsibility to set a clear example of sensible legislation and regulations for them to follow.

A sensible legislative environment is needed by workers to offset the real and substantial imbalance of power between employers and employees that exists in the Canadian workplace. This imbalance is directly responsible for the conditions that currently exist - conditions that include unacceptable levels of unemployment, involuntary part-time employment, no job security and poor rates of pay.

The imbalance also manifests itself in workers being vulnerable to other threats, such as unreasonable working conditions, psychological and physical harassment and discrimination based on sex, race or ability.

Unfortunately, employment standards legislation across Canada is currently not adequate to address these issues. This is especially troublesome for groups of workers who are particularly vulnerable – women, young people, first-time job holders, recent immigrants, workers of colour, aboriginal workers and employees of small companies. Unionized workers have a level of protection not enjoy by non-union workers, but even they are vulnerable to employer demands for working long hours, no or limited access to necessary leaves of absence and harassment.

Earlier we spoke of the responsibility of the federal government to set a progressive example for the provinces to follow in the future. But in order to do that, the federal government must get its own house in order first.

Our federal jurisdiction affiliates report that federal employment standards are exceeded in some provincial jurisdiction. In fact it is not uncommon for some federal jurisdiction employees to have a lower entitlement to rights and standards than workers living in the same province but who fall under provincial jurisdiction. Federal jurisdiction workers are not entitled to meal breaks under the Canada Code and, in several provinces, they slip below the entitlement of provincial jurisdiction workers to family responsibility leaves and paid vacations. The federal government should take the lead and set the standard for provincial governments to meet.

Workplaces – The Reality

As referenced earlier, the Canadian workplace is a far different place today than it was in 1965 – it is a much more insecure place for workers. More often than not, it is characterized by little or no job security, limited access to rights and protections and low wages. It includes an increased incidence of part-time employment, temporary employment, fixed terms of employment, self- employment; few, if any, benefits and reduced rights and protections.

The data paints a bleak picture. In 2004, almost 25% of the workforce earned $10/hour or less, about the poverty line for a single worker living in a large metropolitan centre.

In 2003, 57% of young people earned less than $10 per hour. 16.2% of women aged 25 to 54 and 11.2% of men aged 25 to 54 earned less than $10 per hour. The rate of low wages is much higher among recent immigrants to Canada and workers of colour.

This represents a slight increase over the number of workers in these straits in 1981 (22.4% to 23.6%), even though there has been an increase in real national income of about 3% per year in that period.

More than 10% of workers experience unemployment at one time or another during the course of a year. Many low-wage earners frequently move from one low-wage, short term job to another. This is not exclusive to young low-wage earners. One in seven adult full-time workers have been in their jobs for less than one year. More than 11% of all workers are in seasonal jobs or jobs with a specific end-date as compared to 7% of all workers in the late 1980s.

There has been a significant increase in self-employed workers since the 1980s – particularly self-employed workers who do not employ others (from about 7% to 10% of the workforce). About half of those workers earn less than $20,000 per year. These are very vulnerable workers, dependent upon and subject to direction by others for employment and should be viewed as "disguised" employees. They need to be eligible for statutory worker entitlements such as EI maternity benefits and coverage by employment standards.

All this points out the fact that there has been little improvement in the quality of jobs available to Canadian workers, when measured by hourly wages, over the past quarter century. Most workers are not sharing in the economic performance of their country.

Precarious Work and the Canada Code Part III

Currently, the Canada Code is does not address the differences in employment conditions between contract and permanent employees and between full-time and part-time workers. As well, there is no provision for the conversion of part-time or contract work to full-time or permanent jobs.

• The Code should require equal pay for part-time workers in comparable jobs and access to benefits comparable to those enjoyed by full-time workers. One model suggested by the Canadian Labour Congress is providing full benefits after 20 hours of work in a week. At a minimum, workers should receive pro-rated cash in lieu of benefits paid to full-time workers. This not only benefits part-time workers, but takes away the incentive for employers to convert full-time jobs to part-time jobs in order to avoid benefit costs.
• Employers should also be required to provide advance notice of shift-hours to part-time workers, as well as making work available to existing part-time employees before hiring new workers to perform similar duties. This would enable involuntary part-time workers to move to full-time employment over time, while allowing employers a certain amount of flexibility to address business conditions.
• Contract workers should enjoy equal pay compared to permanent workers performing similar duties and they should have access to the same benefits after the total duration of contracts has reached a reasonable threshold, even if they are non-consecutive contracts.
• Non-renewal of a contract after one-year's employment should be treated as grounds for unjust dismissal if there is no just-cause for non-renewal and the work is being performed by another contractor or newly hired worker.
• There should be a point in time when contract work is converted into a permanent job.
• The growth in contract work done by individuals or farmed out to temporary employment agencies has created workplace conditions not contemplated by the current Code. Employers and the agencies should have a joint responsibility to comply with all employment standards and there should be an end to the current practice of prohibiting a temporary agency worker from taking a full-time job with an employer with whom they have been placed.
• Employers should be required to maintain a registry of home-workers to facilitate audits of pay, hours of work, and access to benefits.
• The definition of an employee should be broad enough to include those workers who are told they are independent contractors and not entitled to various statutory and nonstatutory benefits when, in fact, they are dependent contractors (based on the control of the labour process, degree of financial risk, economic dependence and other factors) or even full fledged employees.
• Inspectors need the power to quickly determine who is an employee and who is a true independent contractor.
• Coverage of the Code should apply to all workers, except the most senior of managers who have the power to hire and fire workers.

Union Coverage and Part III

It has long been regarded that a unionized workforce does not need the shelter of Part III of the Canada Code to the same degree that non-union workers do.

Since the 1980s, collective bargaining coverage in the private sector has declined from over 25% to under 20% today and it can no longer be assumed that unionized workers enjoy wages and working condition far above legislated standards. Conditions in unionized workplaces have been subject to the same downward pressure and erosion as in non-union workplaces as a result of globalization and economic restructuring.

It is accurate to say that, generally speaking, collective agreement provisions still exceed many of the minimum employment standards, but improvements to them become increasingly difficult if the employment standards floor is too low. In fact, some unionized workforce employers try to undercut legislated standards if they believe the law will not be rigorously enforced.

• We are opposed to the suggestion that employment standards provisions should be waived or made more flexible in unionized workplaces. Provisions in the Code that collective agreements cannot undercut the Code need to be made more explicit.
• When collectively bargained clauses vary from the Code, it should only be allowed if the Code minimums are clearly exceeded.

Women in the Workforce

Another aspect of the profound changes in the workplace that have been noted since the mid 1960s is gender balance in the workforce. Then, the traditional view of a working family was that it is single-income based, usually the male earner. Today, the workforce is virtually evenly split between men and women and most families with two parents are two income families. Very few women with children leave the paid workforce for an extended period of time and the majority of women with children are workforce participants.

Adult women are much more likely than men to be low paid, much more likely to be in part-time jobs and much more likely to be self-employed (and in precarious forms of employment).

Pay and advancement gaps between men and women can be partially attributed to the fact that women pay a heavy price for being the primary care-givers to their children and aged parents, despite high levels of education and training.

As difficult as it is to believe, mothers are too often fired after returning from maternity leave, or they are reassigned to lower paid positions with fewer responsibilities.

• Currently, the Code provides for up to 52 weeks of combined maternity/parental leave. It should be amended to ensure that women taking maternity leave, and either parent taking paternal leave, should receive full job protection and receive notice of training and promotion opportunities while on leave. Technically, this is now the case, but practically speaking, it is not adequately enforced.
• Workers returning to employment following maternity/parental or care-giving leaves must have the real right to return to substantially the same position at the same rate of pay.
• Workers should have the right to take up to ten paid days leave per year to deal with personal and family responsibilities, including disruptions to child and elderly care arrangements, dealing with household illnesses, domestic emergencies and medical appointments.
• Workers should be able to take up to 12 weeks of unpaid leave to assume significant, temporary care-giving responsibilities such as caring for an ill child, another family member or any other person, with a right to return to the job with no reduction in pay rate.

Diversity in the Workforce

Canada's workplaces are far more socially diverse today compared to forty years ago. Immigration accounts for virtually all labour force growth in many urban centres with a significant portion attributable to the aboriginal workforce in Western Canada. Low-paid precarious jobs are highly racialized as well as highly gendered. Workers of colour, recent immigrants and aboriginal workers are much more likely to be in low-paid, insecure jobs. Promoting greater equality and inclusion; narrowing pay, job quality, employment security and opportunity gaps between these workers and other workers ought to be a major goal when amending the general level of employment rights and standards.

Racism must be confronted in our workplaces or these workers will fail to fairly share in the economic and social success in Canada.

• A major priority for amendments to the Code should be an examination of the relationship between human rights legislation and employment standards, with a view to ensuring human rights are reflected in employment standards. Key gaps in Canadian human rights legislation can be remedied by improving employment standards.
• Human Rights Workplace Committees, similar to health and safety committees, should be required in our workplaces. These committees would monitor compliance with human rights legislation and provide information to workers on how to bring forward complaints. They would also provide diversity training for workers, supervisors and managers.
• The Code should provide protections against harassment, violence, assault and abuse in the workplace. Remedies may include orders to an employer to take reasonable action to stop harassment, to reinstate the employee or to pay punitive and moral damages.
• The Code should provide duty to accommodate provisions for persons with disabilities, in addition to protections for workers who are injured on the job.

Compliance and Enforcement

The Law Commission of Canada has noted that there has been a deliberate weakening of active regulation of the labour market over the past two decades and a failure to adapt standards to the changing workplace. Government funded evaluation studies in 1997 and 1998 found massive non-compliance with Part III by employers. Only 25% were in full compliance; 25% were in widespread non-compliance and the remaining 50% were scattered between those positions. Non-compliance was found to be greatest when it came to maximum hours, no payment or provision for statutory holidays; no provision of severance pay, sick leave, maternity and parental leaves and lack of a sexual harassment policy.

Standards of any kind are of little use if they are not rigorously enforced by government.

In our experience, standards are widely ignored and violated by employers. Government inspectors are able to provide only limited education and pro-active enforcement, that is, enforcement that is not triggered by a complaint.

Too often, complaints themselves only arise after job termination, if ever, involving unpaid wages and unfair dismissal. The Law Commission of Canada noted last year that "Unrepresented workers have a very limited ability to take action against violations of labour standards" and there is "a real and perceived threat of reprisal against employees who complain about their employment while on the job."

Since 1986, "voluntary compliance" has been promoted by the federal government. Prosecution is a measure of last resort; in fact, no prosecutions have occurred since 1987.

• More resources must be devoted to hiring inspectors and proactive enforcement of standards.
• It should be mandatory to post employment standards in all federal sector workplaces, and employees should receive standards summaries and instructions on how to file a complaint on a regular basis, starting from the date of hiring.
• These materials should be available in languages commonly used in the workplace.
• Workplace education sessions should be required in workplaces controlled by employers shown to be in frequent violation of the Code.
• Comprehensive audits should occur in workplaces of employers based on patterns of complaints and on information available to inspectors.
• Detailed orders should be issued with a minimum of delay after an inspection.
• Inspectors should act on third-party complaints filed by organizations representing workers to protect workers from employer reprisals. Dismissal of an employee for filing a complaint should be prohibited and subject to substantial penalty.
• There should be a system of tickets or fines in place of the current policy of enforcement only through prosecution. The level of fines should be sufficient to cover the costs related to the investigation. Any third offence should result in substantial financial penalties. The identity of persistent offenders should be made public.
• Orders for the payment of wages, including unpaid overtime and vacation pay should be enforced by the government.

Minimum Wage

At one time, the federal government maintained a federal minimum wage that was separate from the minimum wage maintained in provincial jurisdictions and applied to workers in the federal sector and the Territories. In many instances, the federal minimum wage exceeded the provincial minimum wage.

This was important in that it set the standard that the provinces were encouraged to meet. But in the 1990's the federal government abandoned this practice, declaring that the federal minimum wage would be equal to the minimum wage as set by the provincial authority where the federal sector job was located.

Earlier in this paper we reviewed the plight of low wage earners in minimum and near-minimum wage jobs. An important part of a plan to offset the desperate straits that low income earners find themselves in is an effective minimum wage level.

The Manitoba Federation of Labour has considered this challenge for many years. Delegates to our conventions have passed many resolutions on the topic that can be expressed in the following points.

• The minimum wage should be set at 60% of the average weekly wage as reported by Statistics Canada. Today, that level would be $10.05 per hour in Manitoba.
• The minimum wage would be automatically adjusted on an annual basis to keep it at 60% of the average weekly wage.

The advantage to this approach is that both employers and employees know far in advance what the minimum wage will approximately amount to at any particular point in time. This allows both parties to carry out sensible financial planning and have plans in place to deal with wages and incomes. It takes adjustments to the minimum wage out of the political arena and makes it a function of the economy.

At $10 per hour, workers earn enough in a full-time job to escape the worst effects of poverty. Social benefits should deal with the issue of child poverty and EI benefits should provide adequate income assistance to deal with unemployment. But employers should be expected to pay at least enough to keep a single, full-time worker out of poverty.

Part III Issues Related to Time

Overtime

While many employers have converted some full-time jobs to jobs held by term or contract workers, they have also increased the pressure on the remaining full-time staff to work longer hours. But their willingness to pay for it is less determined. It is estimated that as much as half of overtime work in Canada is unpaid, particularly among salaried professional and managerial workers. This contradiction is rooted in the fact that it is often cheaper for the employer to assign long hours of work to these employees than to hire, train and provide non-wage benefits to additional workers.

In our view, overtime laws and regulations should apply to all workers, except senior managers who have the power to hire and fire. To ensure compliance, employers should be required to maintain a log of hours for salaried workers.

Currently, the Canada Code provides for overtime pay after eight hours of work in a day or forty hours in a week, but permits assigned work for up to 48 hours in a week. This provision puts the Canada Code out of step with Manitoba where overtime is voluntary and a worker cannot be compelled to work it. These standards can be varied through a permit from the Manitoba Labour Board or by collective agreement language. In addition, overtime work can be compensated with paid time off – one and a half hours of time per overtime hour worked.

Time off instead of overtime pay must be provided by the employer within 3 months of the end of the pay period in which the overtime occurs unless written approval for an extension is obtained from the Director of Employment Standards. If the time off is not taken within this period, outstanding overtime wages must be paid by the employer no later than 10 days after the time expires. In the case of termination of the employee, all outstanding overtime wages must be paid within 10 working days of termination.

We recommend that Part III of the Code be amended to make all overtime work voluntary.

Another major oversight exists in the current Code – there is no provision for meal breaks during the workday. At a minimum, the Code should be amended to reflect the standard that is on the books in many provinces, half an hour of unpaid time for a meal for every five hours worked.

Vacations

Paid vacations and holidays are essential for workers to escape the rigors of the workplace and to spend time with family and friends. Generally speaking, employment standard codes across Canada are relatively stingy compared to European jurisdictions. The Canada Code provides for two weeks of paid vacation per year for the first six years of working for the same employer. It rises to three weeks of paid vacation for each year after six years of employment for the same employer. It is marginally better in Manitoba where the entitlement to three weeks of paid vacation is attained after five years.

Contrast this with the European Union where the basic entitlement to paid vacation is four weeks per year and most workers get five or six weeks of paid vacation per year.

We recommend that the basic entitlement in the Canada Code be three weeks of paid vacation after one year of employment and four weeks after ten years of service with the same employer. Vacation and vacation pay payment should not be subject to being withheld for the first ten months of the year, as it currently is.

The number of paid general holiday days should be increased from the current nine per year to ten per year. When the tenth day is taken as a holiday should be determined at the workplace level. In addition, in the case of continuous operations, only that number of employees needed to run the operation should be denied the day off with another day off at a later time, not the entire staff complement as is currently possible.

Dismissal, Severance and Job Security

The provisions of the Code that address severance pay upon termination, while better than some provincial jurisdictions, need to be increased from two days pay per year of service (a minimum of five days pay) to a higher level, and paid in addition to any retirement benefits. This payment is a recognition of years of service and loyalty to the employer and it is also partial compensation for the inevitable uncompensated overtime that accumulates during the job tenure.

In terms of group terminations, we note that the CLC recommends that the current 50 worker minimum threshold for notice should apply to all operations of an employer. We would like to supply the following chart extracted from the Manitoba Code to illustrate how group terminations are addressed here:

Group Termination

Employers who intend to terminate the employment of 50 or more employees within a period of 4 weeks must provide written notice to the Minister of Labour, any applicable union, and to the affected employees as follows:

If the required notice is not provided, the employer must pay wages equivalent to the weeks of notice listed above.

We share the concern of the CLC regarding the sometimes lengthy processes that can delay the resolution of unjust dismissal complaints. Any measure that can be implemented to speed the process up would be of benefit to the worker. Inspectors should be empowered to make the determination as to whether there was a true employer-employee relationship and if the dismissal was unjust, at the outset of the proceedings.

Conclusion

As we stated at the outset of this presentation, the MFL has relied on research and analysis provided by the Canadian labour Congress to its affiliates and chartered central labour bodies to prepare this presentation. Any departures from the CLC presentation to this body does not reflect disagreement on our part. It is simply an attempt to keep our presentation as brief as possible.

We commend the federal government for undertaking this long overdue review of the employment standards provision of the Canada Code. Amendments are sorely needed to make this Act relevant to today's workers and workplaces. It is a far different world we live in today compared to 1965 and an instrument as vital as the Canada Labour Code must reflect the evolution that has occurred.