How far does the Employment Standards Act, 2000 extend and what are the gaps in coverage? An empirical analysis of archival and statistical data

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Résumé (anglais)

The Ontario Employment Standards Act (ESA) sets minimum terms and conditions in areas such as pay, working time, holidays and leaves, and termination and severance of employment. Together with the Occupational Health and Safety Act (OHSA), it provides the only floor of workplace standards for a growing proportion of non-unionized employees in the province. Yet the ESA entails numerous exemptions and special rules absent in other schemes, such as the OHSA, the Ontario Labour Relations Act and Employment Insurance, that limit the scope of its coverage, many of which seemingly lack principled rationales. Through original analysis of archival and Statistics Canada data, this study analyzes the scope and extent of exemptions, and special rules in the ESA. Above and beyond the wholesale exclusion of self-employed workers, and the exclusion of those in the federal jurisdiction as their conditions are governed by the Canada Labour Code, exemptions or special rules embedded in the ESA or its regulations take several distinct forms. One series of exemptions and special rules are defined primarily by industry or sector of work; for example, exemptions targeting professional/white-collar employees, agricultural employees, construction employees or liquor servers. A second category of exemptions are those related to the organization of working time in specific occupations, typically irregular working hour occupations, long working hour occupations, combined long and irregular working hour occupations, and continuous working hour operations. A third category of exemptions relates to employees’ status within their workplace, for example, those related to managerial/supervisory status, and job tenure, including short tenure and temporary agency employees. The final category of exemptions is associated with employer or employee characteristics, specifically firm size and student status. Through an empirical analysis drawing primarily upon data from Statistics Canada’s Labour Force Survey (LFS) (2014), supplemented by data from the Survey of Labour and Income Dynamics (SLID) (2011), the study reveals that the majority of Ontario employees are affected by exemptions or special rules; only about two out of five (39%) – or just over 2,000,000 – are estimated to be fully covered by the provisions of the ESA (this figure does not account for those excluded from severance pay). The legislation’s coverage also varies widely by standard. The standards that provide full coverage for the highest proportions of Ontario employees are those for termination notice/pay, and for minimum wage. Almost nine out often Ontario employees are fully covered by the minimum wage provisions of the ESA. But almost 400,000 employees (8%) are exempt from minimum wage provisions, and an additional 178,000 employees (3%) have special rules for minimum wage. About 80% of Ontario employees are fully covered by the overtime pay provisions of the ESA, whereas almost 794,000 (15%) are exempt from these provisions, and the remainder have special rules that modify their coverage. Only about seven in ten Ontario employees (72%) are fully covered by the public holiday provisions of the ESA, making it one of the least universal standards. About 1,000,000 employees (20%) are covered by special rules, primarily those which mean that they can be required to work on a public holiday and receive premium pay or another day off in lieu. Even fewer Ontario employees are covered for severance pay. Only about two out of five (39%) Ontario employees are covered fully by the ESA’s severance pay provisions, whereas just over 60% or 3,164,000 employees are exempt. The study also demonstrates that the ESA’s exemptions and special rules disproportionately affect some groups already disadvantaged in the labour market. Immigrants to Canada who have arrived within the past ten years are less likely to be fully covered by all of the ESA’s provisions, and more likely to be subject to special rules, than more settled immigrants, or those who are Canadian-born. Ontario employees aged 15 to 29 are also less likely to be fully covered by the ESA, and more likely to be subject to special rules than middle-aged and older employees. More than a quarter of young employees (27%) have special rules relating to public holiday pay, compared to only 20% of employees overall. Young employees’ relatively short job tenure also results in lower levels of access to vacation time as well as termination and severance pay. Reflecting well-documented labour market insecurities faced by many workers in Ontario without full-time permanent employment (Noack and Vosko, 2011; on forms of employment often associated with precariousness, see also contributions to Vosko ed., 2006 and Vosko, 2010a), compared to full-time employees, part-time employees are less likely to be fully covered by the ESA, and are more likely to have special rules. Temporary employees are much less likely to be fully covered by the ESA, and are much more likely to have both special rules and exemptions than permanent employees. Similarly, low-wage employees are much less likely to be fully-covered by all of the provisions of the ESA, and are more likely to have special rules, compared to higher-waged employees. Only 23% of employees earning minimum wage or less are fully covered by all of the provisions of the ESA (not including severance pay). After outlining a few principled concerns informed by scholarly literature and related to the importance of retaining universality as a foundational value of the ESA as well as to the problematic boundary between covered employees and excluded self-employedworkers and the need to prevent exemptions and special rules from taking workers below established social minima, and concomitantly to ensure that they mitigate the situation of the most precariously employed (e.g., temporary agency workers) and those belonging to disadvantaged social groups, the study concludes by setting out options for gradual reforms (and estimates their projected effects). These options, while not seeking to alter fundamentally the ESA, aim to consolidate and affirm the role of the Ministry of Labour (MOL) in maintaining a strong set of ES for employees in the province, and are directed, in particular, at the most precariously employed and those belonging to disadvantaged social groups. Addressing exemptions in the core areas of wages, working time, holidays and leaves, and termination and severance, the options identified are directed at returning to the core principles of social minima, universality, and fairness that, according to the historical record, motivated and framed the development of the ESA.