Soumission

Introduction

FETCO (Federally Regulated Employers - Transportation and Communications), is an organization consisting of a number of major employers and employer associations in the transportation and communications sectors coming under federal labour jurisdiction.

FETCO's interests relate to public policy issues at the federal level affecting employer-employee relations. These include collective bargaining, safety and health, labour standards, pension legislation, human rights, pay equity, employment equity and privacy.

FETCO is the major employer organization in Canada at the federal level dealing with human resource/human rights/employee relations matters.

The FETCO member organizations are:

Air Canada
Archer Daniels Midland
BC Maritime Employers Association
Bell Canada
Canada Post Corporation
Canadian Airports Council
Canadian Association of Broadcasters
Canadian Broadcasting Corporation
Canadian National Railways
Canadian Pacific Railway
Canadian Trucking Alliance
Iron Ore Company of Canada
Maritime Employers Association
NAV Canada
SaskTel
Telus
VIA Rail Canada
Western Grain Elevators Association

FETCO employers have a total of 367,000 employees, 204,000 of whom are unionized. This constitutes the majority of all employees and about two-thirds of all unionized employees covered by Part III of the Canada Labour Code.

History of Part III

What is now Part III of the Canada Labour Code was enacted in 1965. It was originally a basic labour standards document covering only such issues as hours of work, minimum wages, vacations and general holidays.

Part III has undergone extensive changes and review over the past forty years. For example, in 1978 Bill C-8 was passed which modified Part III by adding an additional general holiday, applying most provisions to management employees, by providing for a modified work week rule, three weeks vacation entitlement and bereavement leave.

In the 1980s, the Labour Standards Client Consultation Committee (LSCCC) was formed. In addition to senior government officials, the committee consists of representatives of the business community and various labour organizations. Over a period spanning two decades, the LSCCC has been very active, reviewing virtually all proposed legislation prior to its introduction into the House of Commons. Included in the issues reviewed by the LSCCC and later enacted into law are: employment protection for injured workers, maternity-related reassignment, parental leave, sexual harassment, unjust dismissal, individual and group termination of employment and severance pay.

The 1990s was a very active time for examination of labour standards. In 1994, the Federal Advisory Group on Working Time and the Distribution of Work, headed by Arthur Donner, issued a report suggesting that under some circumstances a reduction in the hours of work could result in a "redistribution" of jobs, and therefore, an increase in employment.

In late 1996 then Labour Minster Alphonso Gagliano chaired an advisory committee to look at the "changing workplace". The report, entitled, "Collective Reflections on the Changing Workplace" was released in mid-1997.

In 1998 the Labour Program initiated a review, basically a follow up to "Collective Reflections", entitled "Changing World of Work". This consisted of engaging a consultant to hold meetings with stakeholders and conduct surveys. This too resulted in a report making recommendations in a number of labour standards areas.

In late 1999 Labour Minster Claudette Bradshaw convened a meeting of the LSCCC to review some areas she was contemplating adding to Part III. Due to the tight time constraints given the Committee, the work was never completed but the parties did reach agreement on issues such as expanding the sexual harassment provision and developing a family leave provision.

Since its original enactment in 1965 the following provisions have been added to Part III:

• Maternity leave and reassignment
• Parental leave
• Compassionate care leave
• Multi-employer employment
• Bereavement leave
• Group termination
• Individual termination
• Severance pay
• Garnishment
• Work related illness and injury
• Unjust dismissal
• Payment of wages
• Sexual harassment

In conclusion, to suggest that the Arthurs task force is the first formal review of Part III since 1965 requires clarification -- as we have done. Part III has undergone extensive examination and review, and amendments have been made as required. Part III of the Canada Labour Code is not a 1965 document. In reality it is a labour standards statute that has been adapted and amended as circumstances warranted.

Business Context

FETCO is a business association, committed to looking after the interests of employers. It is our belief that the complexities of contemporary society have resulted in government involvement in areas that a few decades ago would not have been contemplated. As a result, Part III has evolved from a program setting out basic minimum working conditions to one covering broader social issues such as harassment, termination of employment and maternity-related matters.

But such changes come at a price. They increase the cost of doing business. FETCO employers work in highly competitive industries in what is perhaps the country most dependent in the world on international trade. Improvement in legislated labour standards will be hollow if the price that must be paid is lost business and/or lost jobs. Therefore, in preparing its report, the task force must put the whole issue of government labour policy into an economic context, recognizing the following:

• The intensification of competitive pressures from lower cost, knowledge-intensive countries such as China, Brazil, India, and South Korea;
• The competitive pressures faced by Canadian industry (aggravated in Canada's case by the appreciation of the Canadian dollar) and rapidly rising business costs, including labour, materials, and energy costs, as well as the cost of mandatory overheads in the form of taxes and regulatory compliance costs;
• The continuing globalization of enterprise as companies relocate operations or source products, services, technologies, skills and knowledge from around the world;
• The strategy of the Canadian government to enter into bilateral trade deals adding competitive pressures to Canadian industry;
• Tax structures are very important in this respect. In spite of commitments to tax reduction on the part of both federal and provincial governments in this country, the effective tax rate paid by Canadian business and by Canadian manufacturers (28.8% in 2004) remains well above that in the United States.

It is to be noted that the only Western industrialized country to have had sustained productivity growth over the past decade is the United States which has by far the longest weekly hours worked and has the least intrusive labour legislation.

Any laws that reduce an employer's flexibility to run the business are going to have a negative impact on productivity. At a minimum what is required is a reduction or elimination of laws and regulations that are prescriptive in scope.

We ask the task force to seriously look at the overall economic consequences of its recommendations when drafting its report.

Setting the Bar for Federal Labour Standards

In developing labour standards legislation, FETCO believes the following principles need to be adhered to:

• This legislation is intended to set minimum standards for federally regulated employers so it must only include provisions that are generally found in this sector;
• Since these are intended to be minimum standards for the whole jurisdiction it would not be appropriate to have different standards based on industry or employer size;
• The Code should not be used as a conduit to create new social policy;
• In accordance with the government's Smart Regulations strategy, provisions should be performance directed; allowing employers to meet the requirements of the law without undue bureaucratic or regulatory interference;
• In developing recommendations, as we have noted above, the task force should take into consideration that Part III of the Canada Labour Code has been under constant review for 40 years and that major amendments have been continually made to the Code since it was first introduced in 1965;
• As well as Part III according rights, it should also clearly establish the obligation of employees to provide their services to the employer.

The purpose of labour standards legislation is to set minimum standards to govern employers and set minimum working conditions for employees. These standards should be developed following a review of the benefits and working conditions within the jurisdiction involved. The purpose of such law is not to introduce untested social policy or to implement international agreements out of line with Canadian practices.

The biggest problem with Part III of the Canada Labour Code is the lack of flexibility in applying the law. It's a cookie-cutter approach. No matter how much better the employers' benefit provision is in relation to the law, the minutiae of the law have to be observed. It is imperative that a more flexible system be developed.

Employers believe that alternatives to the traditional punitive enforcement mechanisms need to be examined.

Since these are intended to be minimum standards for the whole jurisdiction, it would not be appropriate to have different standards based on industry or employer size.

Balance between flexibility and fairness can be achieved by developing performance based legislation - where the employer is required to meet the overall objectives of the law but at the same time not burdened by a gridlock of regulations.

When Part III was first established in 1966, most employers had negotiated a forty-hour work week in their collective agreements. However, because of the highly bureaucratized nature of the hours of service provisions, great difficulty - with attendant frustration, cost and delay - was encountered in meeting these requirements of the Code. At one point, we counted twenty-five special regulations and Ministerial permits modifying hours of work requirements in various transportation and communications industries. These were required in order for the law to conform to the realities of the workplace and the nature of the industries falling under federal jurisdiction.

This type of situation must be avoided in the future.

Employers are sometimes accused of having tunnel vision and only looking south to seek public policy prescriptions, presumably on the basis that the US is a more business-friendly society. Similarly, others often look solely at European practices. However, we urge the task force to reject any recommendations cherry-picked from other countries simply because they happen to meet the political philosophy of the person or organization making the recommendation.

We also urge the task force to reject simplistic solutions to complex problems. Donner suggested that a reduction in the work week could result in an increase in employment. This has been tried - in Europe. The 35-hour work week has not resulted in increased employment. France and Germany are in the middle of economic stagnation and they both have double-digit unemployment. They are both attempting to reduce costly social legislation and both have suffered from work stoppages and other signs of social unrest. When recently asked about introducing the 35-hour work week, Prime Minister Tony Blair rejected it, pointing out that the UK has the only growing economy in Europe and that he has no intention of introducing polices that could cause an economic slowdown.

Let's not look to other countries for solutions that are either unworkable or for which there might not even be a problem in Canada. Solutions must be developed in Canada within our own political, social and economic framework. That has been the way we have evolved labour standards heretofore and that is the way we must proceed in the future.

Employment Relationships and Non-Standard Forms of Work

We are not in favor of the self-employed being covered by Part III. The law is intended to cover labour standards in employer-employee relationships. Self-employed individuals are not employees. For tax and other legal purposes the Canada Revenue Agency (CRA) determines who is self-employed. Individuals falling into that category should not be covered by Part III.

We see no need to define "employee" in the Code. The term would end up so general in scope as to be of no help in enforcement and would result in continuing litigation. Employees are those who clearly have a recognized employer-employee relationship. As a result of other statutes having to determine the employer-employee relationship (the Canada Pension Plan and the Employment Insurance Act, as examples) a significant body of jurisprudence has developed to determine whether an employer-employee relationship exists.

Current provisions used to exempt certain employees from hours of work requirements - especially overtime - are defined narrowly and only apply to those who are managers or have management functions. These criteria do not reflect current types of jobs in which the employees are highly paid, manage their own hours, and work independently, but do not exercise traditional management functions, but which are far more intellectually complex compared with the jobs in existence when Part III was first enacted. While some occupations have been exempted, the process to obtain such exemption is arduous and time consuming. It is our belief that Section 167(2) needs reviewing.

The provisions of the legislation should be broadened to exclude highly paid groups of employees such as those in information technology, finance operations, corporate functions and those paid on a commission or a combination of salary or commission. An expedited process to exempt other professions when the situation arises should be introduced into Part III.

We do not support a "threshold income" beyond which one cannot qualify for overtime. Within federal jurisdiction there is a wide range of wage levels. You can find managers paid $50,000/year and unionized employees entitled to overtime pay pursuant to their collective agreements making $80,000/year and in some instances over $100,000/year. A single "threshold income" for the entire jurisdiction would impact the various industries differently and should be avoided.

People supplied by employment agencies are not employees since they do not have an employment relationship with the employer. The relationship in fact is a contractual one between the employer and the provider of such services. Employment agencies come under provincial jurisdiction and the laws in the provinces will determine any minimum standards that such agencies must meet. That is the way that it is now and we see no justification for federal intrusion in an area that would clearly be subject to legal challenge. Individuals supplied by employment agencies are not employees of the employer and efforts to have federal law apply would be constitutionally questionable.

The nature of much of federal jurisdiction is not adaptable to what might be called non-standard forms of work, e.g. home-work. Of course transportation and communications have many work relationships that do not fit into the traditional concept of a fixed workplace where employees report to work on a regularly defined basis. Adaptations have been made to hours of service, work rules and working conditions to accommodate this, often resulting in problems with compliance with Part III due to the rigidities of the law.

If Part III were ever to be expanded to cover non-traditional forms of work it could not be by using the current bureaucratic, non-flexible, punitive model that now exists. A flexible, performance-based, non-prescriptive, approach would need to be developed where the principles of Part III would be adhered to but the application would be adapted to fit the specific work situation.

Vulnerable Workers

Vulnerable workers tend to be defined in terms of their characteristics: low skills, limited economic opportunities, more prone to lay-off, less likely to be represented by a union.

The issue has been the subject of recent research. Saunders and Dutil (July 2005) in their paper, "New Approaches in Achieving Compliance with Statutory Employment Standards" have a section on vulnerable workers. Their conclusion is very general:

"Governments need to ensure that compliance measures are sufficient to ensure that vulnerable workers draw the tangible benefits of the rights which employment standards legislation provides them". (p 7)

Chaykowski ("Non-standard Work and Economic Vulnerability", March, 2005) provides a statistical analysis and, like Saunders and Dutil, he is general in his conclusions but does put forth the idea of some form of "collective representation" for vulnerable workers while at the same time recognizing the difficulties in that approach.

Vallée ("Towards Enhancing the Employment Conditions of Vulnerable Workers: A Public Policy Perspective", March, 2005) looks on vulnerable workers as being an issue that requires broad policy prescriptions. She sees the need for changes in collective bargaining and human rights legislation, social programs designed to cover all the vulnerable, not just those in paid employment, and she makes recommendations to labour standards law that would not likely be politically acceptable at the federal level.

In summary, these researchers' conclusions range from the general to the impractical, and into areas that go beyond the scope of the Part III task force.

Of course it is the vulnerable, those at the bottom rung of the economic ladder, who benefit the most from legislation such as Part III. Parliament never designed this legislation with senior mangers or the unionized sector in mind. It was those who were receiving minimal pay and little if any benefits that were to be the most advantaged by the law.

But there is only so much that labour standards legislation can do to help the vulnerable worker. Their vulnerability is not caused due to limitations in Part III. They are vulnerable because, in whole or in part, they have minimal education, little in the way of vocational skills, perhaps communications and linguistic deficiencies and/or financial restraints on their ability to relocate to places where there might be greater job opportunities.

Perhaps society should be doing more - e.g., creating better educational and training opportunities; however, the vulnerable worker issue covers far more than labour standards considerations and we believe cannot be addressed in any meaningful way by simply amending Part III of the Code.

Balancing Work with Personal/Family Responsibilities

Anyone who had looked at the US Family and Medical Leave Act and its regulations or who was involved in the LSCCC process in early 2000 where a family leave provision was discussed knows how bureaucratized this issue can become. How much notice should the employee give? Is a medical certificate required? What relationship must the employee have with the individual involved in order for the leave to be allowed? What is the shortest leave period permitted? And, above all, what happens after family leave entitlement runs out?

Any manager knows the need for flexibility in balancing subordinates' work and family obligations. Often this could mean allowing employees a couple of hours off for family reasons on the understanding that the time will be made up later. This could conflict with Part III but only because the law is not now flexible enough to deal with such matters.

As we all know Part III does not currently provide for personal or family responsibility leave. It does however provide for maternity leave, parental leave, bereavement leave, compassionate care leave, sick leave, general holidays and employee vacation time. That potentially is a lot of time off work. Leave entitlements increase costs for employers and decrease productivity. This is especially true in the federally regulated sector with its large number of businesses that operate 24/7 and for whom operational necessity requires that such employees be replaced when absent.

From this follows a workplace reality that must also be addressed here - and that is the obligation of the employee to his/her employer and that continued absence from work can be grounds for terminating the employment relationship, even where the absenteeism is innocent. This has been established by arbitral jurisprudence. Fortunately these cases are not very frequent; however, in addressing the issue of work/family balance we cannot lose sight of the obligation of the employee to be available for work and to perform it in an acceptable fashion.

The fact of the matter is that the rigidities of Part III, with its heavy prescriptive approach, are at variance with what is required to develop a workable work/family balance program. This method will not work here. The current maximum hours provision is an example of where the law acts against the interests of work/life balance. Employers can be forced not to permit an employee to work overtime even if he wishes to because he has already worked forty-eight hours in the week; however, they can be required to force someone to work overtime who would rather be at home.

A one-size-fits-all approach would fail miserably. The task force however is charged with looking at non-legislative solutions in addition to possible amendments to the Code and this is one instance where a non-legislative solution is certainly required.

Each employer would do an employment systems review and determine how family responsibilities could be accommodated. As suggested by our comments above, in many instances individual accommodations would be required. Not only would this be at variance with what is currently permitted in Part III but it may also require special arrangements with the union, if present.

Statute law is too blunt an instrument to deal with family/work balance. A more refined approach is required.

Diversity and Changing Demographics in the Workplace

At least three recent legislative reviews have examined diversity, and we do not see how the Part III review can add anything to what has already been looked at. These were the La Forest review of the Canadian Human Rights Act, the Parliamentary review of the Employment Equity Act; and the Bilson review of pay equity. By its very nature the review of Employment Equity got right to the heart of diversity in the workplace and was more comprehensive than anything a review of Part III can accomplish.

The Employment Equity Act is essentially enabling legislation. In conforming to the Act, employers now undertake an employment systems review, followed by the development of an employment equity compliance plan. Such plan has to be tailor made for each individual employer and in effect already examines the possible kinds of accommodations and special arrangements referred to in section VI of the Consultation Paper.

Furthermore, the Canadian Human Rights Act is another existing statute directed towards diversity. The CHRA prohibits discrimination on the basis of race, national or ethnic origin, colour, religion, age, sex, sexual orientation, marital status, family status, disability and conviction for which a pardon has been granted.

It is difficult to see how Part III can help assist employers to achieve more diverse workplace equity other than to ensure that the provisions in the Code do not in any way interfere with the establishment of an employment equity plan. Given that we already have other statutes and other agencies of government involved in this issue, we recommend against giving HRSDC any more of a role than the limited one it has now.

Training

All employers train. When you look at the unique industries covered by the federal sector (rail, air and marine transportation, telecommunications, broadcasting) not only do these employers hire broadly skilled occupations but they also require employee skills unique to their own industries - airline pilots, flight attendants, locomotive engineers, longshoremen, radio announcers etc. True, vocational schools now do training for some of these occupations (often, mind you, at the specific employers' expense) but the reality is that training is a core function of the federally regulated sector.

Employers train for business purposes; they engage in retraining where necessary; they might retrain redundant employees to provide them with other skills. However, they should not be required to take on the role of the educational system and train simply because of an arbitrary provision in the law.

What is training? Is holding a meeting with employees to explain changes in the pension plan or to instruct them about the obligation to prevent sexual harassment in the workplace training? Of course it is. It's instructional and therefore it is training. But we doubt that it is the type of training envisioned by those who support making training mandatory.

Productivity improvements are not created simply because the law says employers must undertake some training. They are developed as a result of an overall review of business operations, marketing potential and analysis of all possible strategic options. Labour standards law would appear to have no relevance. To the extent that creative labour-management solutions are required, existing resources for any needed facilitation can be used.

Training and learning issues are not issues suited for minimum labour standards legislation. Skills development and employment training needs cannot be satisfactorily addressed through generalized obligations put in labour law. There is already a large program of skills development being undertaken by HRSDC. That is where government should direct its efforts, not by adding another legislative onus on the employer.

Modernizing and Clarifying Enforcement and Administrative Provisions

It would appear that there is widespread compliance with the Code. Resources for enforcement obviously should be directed to those few transgressors.

We would question the value in making the process even more punitive. This would just create more litigation and would be a misuse of HRSDC's resources. Of more value would be to ensure that the whole enforcement process is performance oriented with compliance resources not used to track down minor infractions.

Opting out of collective agreements would clearly reduce the enforcement requirements.

We have also run across instances of HRSDC giving different interpretations of the law to different employers. This needs to be corrected.

FETCO believes it would be useful to review alternative enforcement procedures to the current punitive approach with other stakeholders and HRSDC.

Part III and Industrial Relations

Constructive labour-management relations, the encouragement of free collective bargaining, and a meaningful consultation process in the development of labour law and regulations have long been a cornerstone of industrial relations policy in Canada.

This has manifested itself in many ways:

Consultation processes between government, employers and labour that have allowed smooth administration of the law and a vehicle for the resolution of difficulties that arise.

Statutory review procedures have accorded a special role to the stakeholders. This has permitted a relatively seamless transition from completion of the review of legislation to the passage of amendments - witness the recent reviews of Parts I and II of the Code. That there has been no instance of Parliament being required to enact back-to-work legislation since the passage of the Part I amendments in 1999 is directly attributable to the consultation process that developed the changes.

The recognition of the collective bargaining relationship and collective agreement is found right in the law itself:

• Collective agreements can be exempted from the technological change provisions of Part I of the Code.
• Collective agreements can be exempted from the workplace health and safety committee provisions of Part II of the Code
• According to HRSDC there are over 25 provisions in Part III of the Code which establish different rules for employees covered by a collective agreement or for partial or total exemption for collective agreements.

The time has come now to have broader exemptions for collective agreements from Part III of the Code.

The original Code was developed in another era. There was no consultation with the stakeholders. The legislative provisions were developed by government officials and the first we knew about them was when the Bill was introduced in the House of Commons. In spite of the fact that virtually every collective agreement under federal jurisdiction was superior to the provisions of the Code it took many years for the hours of service division to become effective in many industries. During this period, many regulations were developed to exempt groups of employees, to create special rules for some employees and the efforts of what is now HRSDC to implement Part III disrupted collective bargaining and almost resulted in work stoppages. Much, perhaps all of this, could have been avoided if the stakeholders had been consulted during the development of the legislation.

The reality is that the current Code fails to reflect the reality of many federal undertakings such as telecommunications, airlines and interprovincial transportation. These employers have had problems in adapting their operations to meet the requirements of the Code, some forty years ago and some - including enterprises just recently covered by federal jurisdiction - are having these difficulties in the here-and-now.

"Standard hours" are worked only by a minority of employees in transportation and communications. Under the current law federal employers are faced with unjustified regulations including the holding of votes, or obtaining permits in order to develop work schedules to run their businesses. In short, the hours of work provisions are founded on principles at total variance with the reality of contemporary federally-regulated workplaces.

It is obvious that it is not government but the workplace parties who are the ones best suited to agree upon hours of work provisions appropriate to that workplace, including whether averaging periods are desirable, and who should work overtime. In dealing with this, let us use both private and public sector resources in the most efficient fashion.

We are currently in an era where law should be performance based, not prescriptive. One of the more telling manifestations of this - as well as the commitment to constructive industrial relations - would be to allow the parties to collective bargaining to determine the rules around hours of work, as well as annual vacations, general holidays and other labour standards provisions.

This would allow employers and employees to directly involve themselves in negotiating workplace agreements. Agreements could be tailored according to business and staff needs and circumstances. This would allow companies and employees to develop working relationships that are not only mutually beneficial, but which will cut down on disputes, reduce the need for HRSDC to spend resources in compliance activities and which would lead to more productive employees and workplaces.

There is no new principle involved here. The practice of exempting collective agreements is well established in the Canada Labour Code. We believe that the time has come that other provisions of Part III be exempted too. When we look at the painful processes involved in obtaining permits to exceed maximum hours or to establish averaging periods or to have a modified work week or the byzantine gymnastics required to apply the general holiday provisions we are satisfied that the parties to collective bargaining are in a far better position than the government to determine how these provisions should work in their own workplace.

Psychological Harassment

Harassment on any of the specified grounds is a discriminatory practice under the Canadian Human Rights Act. However, only sexual harassment is included in Part III of the Code as a form of behavior that employers must take positive action to prevent. The rationale for having it there is subject to debate, but it is FETCO's belief that it was included at a time when sexual harassment in the workplace (as compared to other forms of harassment) was getting much public debate and it was added to the Code to raise public awareness of it. There are those that believe that this provision is merely duplicative of what is in the CHRA and should be removed. FETCO concurs with this view.

The concept of "psychological harassment" is found in only one jurisdiction in Canada and it has been there only since June 01/2004. That by itself should raise the question as to whether a provision so uncommon and untested should be included in federal labour standards.

There is no one definition for psychological harassment and in fact it is more described than defined. And the descriptions differ as to the nature of the behavior that falls under this concept. It also comes in an assortment of names as any reader on this subject will know - psychological harassment, moral harassment, personal harassment, general harassment, mobbing and bullying. In fact these different terms do have (perhaps albeit subtle) different meanings.

FETCO has considerable concerns about adding this concept to Part III.

Different terms, different descriptions, different meanings in an area that is imprecise to start with lend a high degree of subjectivity to psychological harassment. In the labour area, employers are accustomed to frivolous and vexations complaints and accept it as part of the job of doing business. However, this could well open a veritable pandora's box of such complaints, especially among employees wishing to take actions against their supervisor.

Our comfort level with this concept was not increased during the 2000 review of Part III of the Code when a supporter of a general harassment provision opined that a layoff of any employee is harassment because of the traumatic effect on the individual. It's easy to slough off a comment like this but it does illustrate the level of frivolity to be expected with this issue.

A major concern is the use of this provision by employees to complain about managers and supervisors who are exercising their management responsibilities in an appropriate fashion. The reality is that managing employees is still more art than science and that not all employees can be treated equally. Some require more coaching, some need disciplinary responses, some can work independently, and others need to be more closely monitored. However, under conventional descriptions of psychological harassment, a supervisor could be charged by one employee for spending too much time with him and by another for spending too little. This is one of the biggest potential problems with this concept and we note that the Quebec "Act respecting labour standards" does not include the normal exercise of management rights to supervise employees as a defence to a psychological harassment charge. While management rights have long been accepted, in an imprecise concept such as this they need to be reinforced.

It is to be noted that the La Forest task force on human rights recommended against defining "harassment" and specifically recommended against adding "personal harassment" to the Canadian Human Rights Act.

We recognize that adding psychological harassment to the law would be an effort to overcome behavior that poisons the workplace. But such behavior is far more subtle than the numerically driven enforcement process in Part III of the Code - hours in a week, minimum wage, number of week's vacation, calculating general holiday pay, etc. We believe that this concept is far better suited for one of the non-legislative approaches that the task force has been asked to examine. Descriptions of psychological harassment, a recognition of the employers' right to manage the employees, examples of best practices, guidelines for proper behavior could all be included in this approach. In the long run this will serve the community better than vague definitions in the law and regulations guaranteeing litigation, confrontation and a plethora of disputes.

Maximum Hours of Work

There is an issue with respect to the application of the maximum hours provision that not only illustrates how Part III acts to impede the operation of business but at the same time demonstrates the need for more flexibility in the law. It is an example of why collective agreements should be exempt from the Hours of Work provisions of the Code.

The situation involved is occurring in telecommunications but the principle applies to the entire federal jurisdiction sector.

HRSDC takes the position that the machinery, equipment and plant referred to in section 177(1) are those of the employer and do not extend to those of another party. The specific incident at hand concerns the use of section 177 in connection with work on customer owned voice/data transmission equipment. After discussions with HRSDC to review the impact of such an interpretation on the firm's business customers and customers involved in public safety (i.e. police, 911, RCMP hospital etc.) HRSDC agreed to exempt customers in the public safety sector, but not, however, business customers.

First of all, there is nothing whatsoever in Section 177 to indicates that it only applies to emergency work performed on the customer's equipment and, secondly, HRSDC's interpretation has reduced the section to the ridiculous because even less can the clause be interpreted that certain customer's equipment is covered by 177(1) to the exclusion of other customers'.

Secondly, the nature of business in a technologically sophisticated age is such that very often sales involve service arrangements which, of course, include emergency maintenance on the customer's equipment. In this respect, HRSDC's interpretation makes no legal or technical sense.

A major business customer has a number of options when considering equipment providers and service/maintenance providers for that equipment. That customer can purchase the equipment directly from an equipment supplier whose employees would be covered by provincial legislation and thus, in some cases, eligible for exemption under the high tech sector exemptions or, alternatively, rely on less restrictive hours of work legislation. In addition the customer can again buy on-premises equipment and contract with a local maintenance/installation company that is provincially regulated for the purposes of labour relations. Again, given the difference in the regulation of hours of work in the provincial and federal schemes, the provincially regulated entity has less statutory constraints to respond to customer emergencies.

Lastly, the customer could hire its own internal telecom/information technology staff to maintain their own network and equipment. In this situation, if the customer were federally regulated for the purposes of labour relations, it could exceed the 48 hours to work on its own equipment whereas, according to HRSDC, a company in the federal jurisdiction for the purposes of labour relations could not exceed the 48 hours to restore the customer's network/equipment. Clearly, it is a requirement for the customer to have the required level of service and required level of expertise to meet the required service levels fro that equipment. The customer would therefore seek out a provider that can meet those requirements.

This creates an incentive for the customer to seek alternate providers who can work the excess hours unconstrained by HRSDC's interpretation of the existing legislation.

The employees who perform this work voluntarily bid to these occupations through the negotiated job posting provisions in collective agreements based on seniority and qualifications. Employees are well aware of the overtime/hours of work requirements for these jobs and in fact, in some cases, bid to these jobs to work the additional hours of work at overtime premiums to increase their personal income. This reflects the employees' decision with respect to Work-Personal/Family life balance. These employees have opted to trade away time from the latter in exchange for the former and the corresponding premium earnings. This individual's preference for more work hours and earnings should not be constrained by employment standards since, if this preference is not fulfilled through additional hours with their current employer, it could easily be done with another employer facing less onerous regulatory requirements.

The employees who perform this type of work require a significant amount of training. More often than not, the training is sponsored by the equipment/software vendor. Employees receive this training on Company time and at Company expense. Arbitrary limits on hours of work reduce the return on investment in training for both the employee and the employer.

In order to overcome this situation two things are required: - HRSDC needs to interpret 177(1) in line with commercial realities or, if necessary, Part III should be amended to reflect this. Secondly, collective agreements need to be exempted in order to allow the workplace parties to enter into the scheduling arrangements most suitable for them.

Recovery of Inadvertent Overpayments

The Code unduly restricts employers' right to unilaterally recover overpayments of monies to employees.

Section 254.1 prohibits the deduction from wages or other amounts due to an employee, subject to limited exceptions:

254.1(1) No employer shall make deductions from wages or other amounts due to an employee, except as permitted by or under this section.

(2) The permitted deductions are

(a) those required by a federal or provincial Act or regulations made thereunder;
(b) those authorized by a court order or a collective agreement or other document signed by a trade union on behalf of the employee;
(c) amounts authorized in writing by the employee;
(d) overpayments of wages by the employer; and
(e) other amounts prescribed by regulation.

No regulations prescribe other amounts that may be deducted. "Wages" is defined in s. 166 as including "every form of remuneration for work performed but does not include tips and other gratuities."

In limiting the unilateral deduction of overpayments to "wages" alone, s. 254.1 imposes an undue burden on employers who have paid other monies in error. The jurisprudence has restrictively interpreted "wages" so as to exclude, for example, advances for expenses from unilateral recovery¹. When employees who benefit from an inadvertent overpayment refuse to authorize the deduction in accordance with s. 254.1 (2) (c), the employer is obliged to seek recovery in court or through arbitration.

Employers should be permitted to unilaterally recover any money paid in error to employees, regardless of whether it qualifies as "wages" under the Code. Accordingly, we recommend the permitted deduction at s. 254.1 (2) (d) should be amended to read "overpayments of wages or any amount paid in error by the employer."

Unjust Dismissal

The unjust dismissal provisions have been subject to much criticism over the years: -that jurisprudence discourages voluntary settlement; that it should not apply to terminations due to business reorganizations; that the twelve month service requirement is too short, and that there is no justification to introduce this statutory variation to the common law when civil litigation remedies are available.

We believe therefore that the unjust dismissal provisions need a thorough examination and request that the Task Force undertake this as part of its mandate.

One area that we believe especially needs to be corrected is to discourage frivolous complaints. Therefore we recommend the following amendments:

Section 242 (1) - empower the Minister with true discretion to not refer a complaint to an adjudicator, e.g. where complaint is frivolous and vexatious, or where a reasonable settlement has been offered by the employer.

Section 242(2) - Empower adjudicator to award costs against a complainant.

Non-Legislative Approaches

In the course of our brief we have talked about the need for "non-legislative" approaches where the rigidities of statute law would not be feasible - an example of that is with respect to work/life balance. What are examples of these non-legislative approaches?

The internet is the greatest informational, educational and communications tool since the invention of the printing press over 500 years ago. It can be used, and is used, to assist people in many ways. HRSDC already does that, for example at www.hrsdc.gc.ca/en/gateways/topics/wnc-gxr.shtml where it provides considerable information on approaches to work/life balance programs. Thus the web can be used to provide "best practices" and other information for those involved in non-legislative initiatives.

Guidelines and other informational bulletins can be issued by government with respect to the law.

Seminars and roundtables could be held with the workplace parties.

At present HRSDC is the process of developing an anti-racism initiative, which to FETCO looks like a program designed to supplement Employment Equity. We have had some discussions with HRSDC officials about it. This program will be implemented using a variety of techniques including printed material, audio-visual presentations and visits to workplace to talk about how employers can develop racism-free workplaces. This approach can work for Part III too.

One of HRSDC's on-going programs is its review of pay equity. It has been in place 20 years or more and is a non-adversarial way of ensuring that employers are aware of their obligation under Section 11 of the Canadian Human Rights Act. This approach is adaptable to other initiatives.

Efforts to legislate the non-legislatable will result in frustration, litigation and the misuse of resources. FETCO has attempted here to illustrate that government has the option to initiate policy alternatives that are more flexible and adaptable while at that same ensuring that such initiatives are actually abided by in the workplace.

Summary and Conclusions

Part III of the Canada Labour Code was enacted in a totally different era from what we live in today. There was far more trust that the government would "do the right thing for the people" (a view that scarcely exists today); there was a belief that Keynesian tinkering could sustain indefinite economic growth and, as such, that there would always be money available to finance costly programs. It was an era that saw the introduction of the Canada Pension Plan, the Canada Assistance Plan, taxpayer supported health care and massive benefit improvements to what is now called Employment Insurance.

In reality however, the ever expanding business boom was a pipe dream and many of the social programs of the 1960s, by financial necessity, have been drastically cut back in scope.

A labour standards program was definitely in keeping with the free-spending government philosophy of the times. However, there was no consultation with the stakeholders beforehand and it was drafted in a prescriptive "Father knows Best" fashion, which did not appropriately reflect the nature and needs of the industries governed. Railways, airlines, longshoring, trucking, radio and TV broadcasting, telecommunications, etc. are operationally complex industries operating twenty-four hours a day having the most sophisticated collective agreements in Canada. But Part III was drafted in a one-size fits all format without any apparent recognition of the complications it would cause in implementation.

Hopefully, by now, we have learned our lesson. That's why we need to measure performance by the output achieved and not by adherence to arbitrarily developed regulations.

It goes without saying that government does not create wealth. It merely redistributes wealth created by others. Some government measures of course are designed to stimulate economic growth; other government policies retard it. Business has learned to live in a regulated society; however, what is the crucial factor is the nature of those regulations. Regulations that do little more than add unjustified cost to the operation will result in those costs being passed on to the consumer or even a possible reduction in jobs. It is productivity improvements that create the means to sustain increased legislative and regulatory obligations and government will do well to remember that.

Part III of the Code is there to set minimum standards for federal workers. Its rationale is not to introduce untested new social programs. Its thrust, as well as its enforcement objectives, need to be directed to those who have the weakest voice in the workplace. HRSDC, like any organization, does not have unlimited resources. They should be directed where they are the most needed.

Currently, HRSDC is conducting an audit of maximum hours of a number of heavily unionized businesses. It is coming up with results that show a need for a more flexible approach. The violations discovered have been minor in scope and demonstrate a need for the department to shift its resources into areas where there is possibility of real exploitation of employees. Our recommendations that collective agreements be exempted from provisions of Part III would release HRSDC resources areas where they will actually assist people that need help.

Not only are we hopefully moving away from the over-regulated approach in general but the task force is looking at areas (non-standard forms of work, work/life balance) that are too subtle to be regulated the way annual vacations and general holidays are now. Issues such as these need the flexibility that can only be achieved by a non-legislative approach. At best the law can provide general principles with the government providing information and guidelines that help organizations develop programs to meet overall policy objectives.

We question even why there was a diversity section in the terms of reference of the task force since this is well trodden ground. However, HRSDC does have a secondary role in a number of diversity type areas (harassment, employment equity, pay equity) with the Canadian Human Rights Commission being the principal regulator in each case. Previous legislative reviews have looked at aboriginal peoples, the older worker (including mandatory retirement) and workplace human rights committees in detail and it is our belief that the Part III task force will not add to what has already been said.

We would also ask the task force to ignore those who would like it to go beyond its terms of reference. One notable example relates to replacement workers in labour disputes. This again is an issue thoroughly examined in the Part I review and settled with amendments to the Code agreeable to both business and labour. Furthermore, it is not even relevant to a Part III review.

Recommendations

FETCO makes the following recommendations to the task force examining Part III of the Canada Labour Code.

• It must be recognized that although Part III was passed 40 years ago it has been continually updated since that time and is not the same legislation than the very basic law was that came into effect in 1966.
• Only productivity growth can pay for obligations thrust on employers and without it, additional costs will have to be absorbed by the consumer.
• The purpose of the law should be to set minimum standards that are generally found within the federal sector.
• The law should provide that employees have an obligation to provide service to their employers.
• The coverage of Part III should still be restricted to employees and not expanded to cover the self-employed or workers of employment agencies.
• The list of occupations excluded from the Hours-of-Service division should be expanded.
• Some issues, such, as work/life balance do not lend themselves to a legislative approach and alternative mechanisms must be sought to deal with them.
• FETCO does not support the establishment of a minimum requirement for employers to spend on training. There are other government programs that can deal with training far more effectively than labour standards legislation.
• There is nothing that the task force can add in the area of diversity that has not been already covered by other legislative reviews.
• Collective agreements should be exempted from certain provisions of Part III; this would free up enforcement resources that can be used more effectively elsewhere.
• A "psychological harassment" provision should not be added to Part III of the Code. At best it should be handled non-legislatively. We are not convinced, in any case, that HRSDC is the appropriate agency of government to have responsibility for it.
• The permitted deduction at s. 254.1 (2) (d) should be amended to read "overpayments of wages or any amount paid in error by the employer."
• The unjust dismissal provision should be reviewed and, at a minimum, should be amended in order to reduce frivolous complaints.

Endnotes

¹ See Arctic Wings Ltd. v. Edwards, [2002] C.L.A.D. No. 32 (D.C. Read) and Delvarani v. Sinicki, [2000] C.L.A.D. No. 489 (L.P. Thayer) wherein the referees hold that advances for expenses did not qualify as wages