Federal Government Releases Expert Report on Modern Labour Standards

The Federal Government has released the long-anticipated Report of the Expert Panel on Modern Federal Labour Standards (the “Expert Panel Report”).

The Expert Panel was established in February 2019 to consider the development of a federal minimum wage; labour standards protections for non-standard workers; the “right to disconnect” outside of work hours; access and portability of benefits; and collective voice for non-unionized workers.

Earlier consultations, which informed wide-ranging labour and employment policy developments during the Government’s first term, identified these five issues “as meriting further study because they were less well-understood, produced divergent views on how the federal government should proceed and raised fundamental questions about the goals and principles of federal labour standards.”

The Expert Panel Report makes 39 recommendations. The Panel’s recommendations, synthesized below, are likely to serve as a blueprint for further reforms in the new Parliament.

Federal Minimum Wage

For more than twenty years, the federal minimum wage under the Canada Labour Code (the “Code”) has been pegged to the minimum wage rate in the province or territory in which the employee is usually employed. The Expert Panel recommends that a freestanding federal minimum wage be established instead, and adjusted annually.

Protections for Non-Standard Workers

Among other things, the Expert Panel recommends that Part III of the Code define the concepts of “employee,” “independent contractor” and “dependent contractor.” It proposes that there should be a presumption of employee status under the Code.

The Expert Panel recommends a new definition of “continuous employment” that would include periods of layoff or interrupted service of less than 12 months, in order to make it easier for employees to qualify for length-of-service-based entitlements.

The Expert Panel also recommends that a process be established to review provisions which exclude certain types of employees, sectors of work, and managers, from various statutory entitlements. It says this review “should be based on the principles that Part III of the Code should apply to as many employees as possible and that departures or derogations of a standard through an exemption, exception or special rule should be limited and justifiable.”

Further, the Expert Panel recommends that the Code be clarified to ensure that employers cannot group contractual provisions together “to see if, on average, or in total, they are equivalent to or greater than the standards in Part III,” such that the applicable statutory standards do not apply.

The Expert Panel also recommends that a joint and several liability provision be added to Part III of the Code, so that federally-regulated undertakings that enter into contracts with subcontractors or other intermediaries in the federally-regulated private sector can be held liable for wages owed to workers and other statutory entitlements.

Similarly, the Expert Panel proposes that federally-regulated undertakings that contract with provincially and territorially regulated entities should be subject to administrative monetary penalties for the labour violations of their subcontractors, where the subcontractor has not paid monies it has been ordered to pay, and where the federal entity has not exercised due diligence.

More broadly, the Expert Panel recommends that the Labour Program collaborate with its provincial and territorial counterparts to develop clear guidelines to assist in the correct determination of jurisdiction for labour standards.

The “Right to Disconnect”

The Expert Panel does not recommend that there be a statutory right to disconnect from work-related technology and e-communications during non-working hours – at least for now.

However, the Expert Panel recommends that Part III of the Code include a statutory definition of ‘deemed work’ encompassing time when an employee “is effectively at the behest of the employer at or outside the workplace or worksite(s).” The Expert Panel thus suggests that employees should be deemed to be at work “when providing services required or permitted by their employer,” regardless of where that work takes place. The effect of such a deemed work provision would be to significantly extend the application of labour standards related to the duration of work, such as overtime pay or time off in lieu, as well as breaks and rest periods.

In addition, the Expert Panel recommends that Part III of the Code provide for a right to compensation or time off in lieu for employees required to remain available for “potential demands” from their employer outside of working hours. Such “standby” periods are not currently addressed by the Code, except where the employee is actually called in and is required to report to the workplace, in which case the employee is entitled to a minimum of three hours of regular wages.

The Expert Panel recommends that further research be undertaken to evaluate the impacts of “increases in work intensification through e-communications and related productivity requirements.”

Access and Portability of Benefits

The Expert Panel recommends that the Federal Government explore the potential development of a “portable benefits model” for workers in the federal sector. In response to increasingly rapid and frequent shifts between employers and jobs, a portable benefits model “would sever the relationship between benefits and employer and create a new relationship between benefits and employee.”

The Expert Panel acknowledges the difficulties inherent in a portable model and employers’ strong opposition to this paradigm. It concludes that “the most efficient and rational approach…would be for the Government to extend the scope of existing public programs,” but concedes that “these are political decisions with significant cost (and benefit) implications.”

With respect to pension benefits, the Expert Panel recommends further efforts to ensure appropriate enrolment of part-time employees in employer-sponsored pension plans and a review of what can be done to address the issue of lost pensions in the federal sector and beyond.

Collective Voice for Non-Unionized Workers

The Expert Panel recommends further study of legal barriers in Part I of the Code to union representation in the federal sector, as well as the “advantages and disadvantages of introducing a legal framework to enable extensions of collective agreements in specific sectors in the [federally-regulated private sector] where unionization rates are very low.”

The Expert Panel also recommends that the Federal Government provide funding to community organizations that facilitate “participatory initiatives” outside of the workplace, that Part III of the Code be amended to include protections for “concerted activities,” and that further examination and analysis be carried out on “graduated models of legislated collective representation.”

Cross-Cutting Issues

In addition to the five issues explored in the Expert Panel Report, the Expert Panel makes recommendations on certain “cross-cutting issues” where further research, analysis, or policy development may be warranted. In this regard, the Expert Panel emphasizes the limitations of traditional compliance and enforcement approaches which are predominantly complaint-driven and reactive. The Expert Panel encourages more proactive approaches, and specific measures such as “related employer” liability for collection purposes, comprehensive interpretation guidelines for statutory provisions, financial support for third-party workers’ advocates, and bolstered education and information campaigns.

The Expert Panel also recommends various changes to data collection practices and methodologies, such as broadening the scope and frequency of Statistics Canada’s Labour Force and Federal Jurisdiction Workplace Surveys. Many of these proposed changes are intended to elicit additional information about self-employed and non-standard workers.

Should you have any questions or require more information about these updates, please do not hesitate to contact one of the members of our Labour & Employment Group.

An earlier version of this article appeared in The Lawyer’s Daily.



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