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The Vulnerable Worker

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Is Work Working? Work Laws that Do a Better Job

PART III — WORK LAWS THAT WORK BETTER

Chapter Eight — Modernizing Labour Law Concepts

Many of our labour concepts have not kept pace with developments in society. Our labour law concepts can be modernized by changing them altogether or ensuring they continue to fulfill their objectives.

The Living Wage

Many argue that the failure to increase the minimum wage prevents legislation from having its intended effect of ensuring workers have their basic needs met.

Canada has policies and programs that address the issue of work and poverty. All provinces have some form of minimum wage requirement. Several provinces have a lower minimum wage requirement for youth to encourage the hiring of youth. Financial support is provided to workers after job loss (including, in some cases, retraining) to assist them to re-enter the labour force as quickly as possible. These are but a few of the programs and regulations aimed at helping individuals achieve economic security. But, do these programs and policies achieve their objectives and if not, what improvements or alternatives should be considered?

There is considerable debate about the merits of increasing the minimum wage. Some argue that the minimum wage is an important policy tool for addressing wage inequalities and an essential element in addressing poverty. By this reasoning, the minimum wage should be set at a level where basic needs are adequately met. Others argue that minimum wage is a job killer, since a minimum wage that is too high can artificially increase the cost of labour to the detriment of the very people it is designed to help. Increases in the minimum wage would reduce the demand for workers (as firms find substitutes for the now more costly labour) and might also increase the supply of workers (as some would be encouraged to consider jobs they would not previously have found attractive).

Various policy instruments are available to raise the incomes of low-paid workers and to increase their self-sufficiency. They include:

· tax measures targeted at low-income workers (including child tax benefits);

· wage supplements to workers;

· better access for employed workers to training programs;

· universal day-care programs;

· increases in the minimum wage; and

· living wage programs.

Questions:

· What are the merits of using minimum wage as a tool for ensuring workers are able to meet their basic needs through work?

· Are tax measures efective in providing support to vulnerable workers?

· Are other instruments better suited to assisting low-wage workers?

It is worth noting one particular program that was part of an experiment to reduce welfare dependency and provide support to single mothers. The Canadian Self-Sufficiency Project compared a large group of lone-parent welfare recipients to whom in-work benefits were provided with another large group who continued to rely on welfare alone. Welfare recipients were offered the program rather than being compelled to participate in it. The short-term results have been very positive. Employment rates among those who took the in-work benefits are about double the rate of those who did not. Findings from this and other research suggest that the likelihood of benefit dependence can be reduced by suitably designed income transfer programs that provide employment incentives, though whether there are long-term positive effects on labour market outcomes for those targeted by the programs is not clear. 69

Expanding Labour Laws

As the preceding discussion has shown, a central problem in the new economy is that workers are deprived of many important employment rights, benefits and protections, because their work arrangements do not conform to the standard employment model. Many labour and employment experts suggest that access to labour and employment protections, benefits and rights should not be limited to employees. If improving the welfare of workers is accepted as a legitimate aspect of both economic development and social justice, then expanding the scope of labour protection may be necessary.

It has been recommended that labour protections, social insurance legislation and non-wage benefits be extended to a broader range of workers.⁷⁰ A number of proposals have been made to expand the scope of labour and employment laws. They include the following:

· Develop a new, more inclusive legislative test to determine whether a worker is an employee or adopt a new, more extensive definition that extends coverage to all workers in “employee-like” work arrangements.

· Develop a completely new concept to replace the term “employee” that would determine the personal scope of employment and labour legislation. It might leave only independent entrepreneurs without coverage (i.e., those with business assets and the opportunity to capture residual profits).

· Extend all dimensions of labour regulation to all workers defined as persons economically dependent on the sale of their capacity to work, unless there is a compelling reason for not doing so.

The latter approach involves the most radical break from the use of the employment contract as the primary vehicle for the delivery of labour protection. With this approach, the challenge would be to develop alternative mechanisms or platforms for the delivery and enforcement of these rights in ways that would not only make them accessible to all people who work for a living, but also cost effective.

Questions:

· What would be the obstacles to enlarging the scope of our labour laws?

· Would a new legal concept, such as “worker ”, help? Is it necessary to also provide help for workers in asserting their status and eligibility for protection?

· Are there ways in which the definitional battles can be minimized?

· Could standards or best practices be developed with diferent sectors?