Chapter 2: Guiding principles, values and objectives

Our Terms of Reference state that the objective of this Review is to improve security and opportunity for those made vulnerable by the structural economic pressures and changes being experienced by Ontarians. We are directed to:

… consider the broader issues affecting the workplace and assess how the current labour and employment law framework addresses these trends and issues with a focus on the LRA and the ESA. In particular, the Special Advisors will seek to determine what changes, if any, should be made to the legislation in light of the changing nature of the workforce, the workplace, and the economy itself, particularly in light of relevant trends and factors operating on our society, including, globalization, trade liberalization, technological change, the growth of the service sector, and changes in the prevalence and characteristics of standard employment relationships.^{footnote 9[9]}

An important focus is on vulnerable workers in precarious jobs in the context of employment standards and labour relations. It is trite to observe that effective protection of workers under both statutes depends on the education of employees and employers concerning:

• their respective legal rights and obligations;
• respect for the law;
• consistent enforcement; and
• effective compliance strategies.

This focus on vulnerable workers in precarious jobs requires us to address:

• minimum standards of work;
• the labour relations framework; and
• whether the current legal framework effectively protects the rights of such workers.

Our mandate is to make recommendations on how the Employment Standards Act, 2000 and the Labour Relations Act, 1995 might be reformed to betterprotect workers while supporting businesses in our changing economy. We must determine what changes, if any, should be made to the legislation in light of the changing nature of the workforce, the workplace, and the economy.

Before turning to principles, values and objectives, we would like to mention two contextual and overarching themes. The first is the importance of work to all Ontarians. In this regard, we can do no better than to quote the former Chief Justice of the Supreme Court of Canada Brian Dickson on the central importance of work:

Work is one of the most fundamental aspects in a person’s life, providing the individual with a means of financial support and, as importantly, a contributory role in society. A person’s employment is an essential component of his or her sense of identity, self-worth and emotional well-being. Accordingly the conditions in which a person works are highly significant in shaping the whole compendium of psychological, emotional and physical elements of a person’s dignity and self-respect.^{footnote 10[10]}

Recognition of the central importance of work is the context in which we articulate the principles guiding our recommendations.

A second important contextual factor is the inherent power imbalance and inequality of bargaining power between employer and employee, or what the Supreme Court has stated to be the presumptive imbalance between the employer’s economic power and the relative vulnerability of the individual worker.^{footnote 11[11]} This power imbalance manifests itself in almost every aspect of the employment relationship, particularly in a non-union environment. As the Supreme Court has observed: Individual employees typically lack the power to bargain and pursue workplace goals with their more powerful employers.^{footnote 12[12]} A recognition of this power imbalance has always informed the need for and the content of legislation of basic employee rights and employer obligations where the law acts as a countervailing force to the power imbalance in the employment relationship. Without legislation of basic employee rights and corresponding employer obligations, most employees would be powerless and vulnerable to the unilateral exercise of power by employers.

In the first phase of our consultations we asked for, and received, advice on the principles, values and objectives that should guide our work. These are the key principles, values and objectives that governed us in making our recommendations.

Decency at work

In Fairness at Work, Professor Harry Arthurs stated that labour standards should ensure that, no matter how limited his or her bargaining power, no worker… is offered, accepts or works under conditions that Canadians would not regard as ‘decent’.^{footnote 13[13]}

We believe that decency at work is a fundamental and principled commitment that Ontario should accept as a basis for enacting all of its laws governing the workplace.

Not only does the concept of decency at work relate to minimum acceptable workplace standards, but it also applies to the furtherance of decency through the expression of a collective voice and the facilitating of harmonious labour relations between employers and employees.

The International Labour Organization describes decent work as follows:

Decent work sums up the aspirations of people in their working lives. It involves opportunities for work that is productive and delivers a fair income, security in the workplace and social protection for families, better prospects for personal development and social integration, freedom for people to express their concerns, organize and participate in the decisions that affect their lives and equality of opportunity and treatment for all women and men.

It is beyond the scope of our mandate and of labour standards laws to legislate decent work. Creating the conditions for decent work necessarily involves numerous stakeholders – government, employers, employees and their representatives – working together to ensure working environments where the dignity of employees is respected, in conditions which do not keep employees or their families in poverty, in which the potential inherent in every employee can be realized, and which do not put at risk employee health and safety. Ideally, actions of government and of workplace stakeholders will focus on making changes that not only eliminate poor employment practices but also which seek to change the conditions that produce such practices.

This focus will of necessity involve:

• education;
• increased training and skills development;
• efforts to eliminate discrimination; and
• efforts to consistently enforce employee rights.

Some, but not all, of these objectives are within the scope of this Review.

We are committed to making recommendations for minimum terms and conditions of employment and for a labour relations system that are consistent with – and will help pave the way to – the ultimate objective of creating decent work Ontarians, particularly for those who have been made vulnerable by changes to our economy and workplaces. Furthermore, we are committed to do this within an overall framework that respects employer needs.

Respect for the law and a culture of compliance: meaningful enforcement

We regard as critically important that there be a respect by all Ontarians for the laws of the workplace, and that we as a society recognize the importance of compliance with the law. We need to foster a culture where compliance with minimum terms and conditions of employment – together with respect for the rights of employees to organize and to bargain collectively – is widespread. Rules that are easy to understand and administer, and that provide workplace parties with compliance tools, together with enforcement that is consistent, are key to achieving these objectives.

In the absence of respect and general compliance with the laws governing the workplace, together with a meaningful ability to enforce those laws and to gain access to justice, the passage of laws by itself is relatively meaningless. There is probably nothing that causes more long term disrespect for the law than laws which are widely disregarded, exist only on paper and have no meaningful impact on people’s lives. We agree that:

Ontarians also live in a society that strives to maximize access to justice for its citizens. Sophisticated and highly evolved rights and obligations are of little value if they cannot be asserted or enforced effectively and economically.^{footnote 14[14]}

Access to justice

The Chief Justice of Canada has spoken on the importance of access to justice stating that: In order to maintain confidence in our legal system, it must be, and must be seen to be accessible to Canadians.^{footnote 15[15]}

Access to justice has both procedural and substantive components. Especially in the employment arena, complaint procedures must afford ordinary Ontarians the opportunity for fair and just adjudication and enforcement of their rights. Such opportunity for dispute resolution should be efficient, proportionate and accessible to self-represented individuals.

Our recommendations should recognize and attempt to reduce barriers to access to justice. Procedural efficiency and timely adjudication, if achievable, are designed to minimize or eliminate an economic barrier. But as the Supreme Court has reminded us^{footnote 16[16]}an economic barrier to access to justice is not the only barrier that should concern legislators; this is particularly true when the barriers have such profound implications for many vulnerable working Ontarians.

We agree with the Court and with many commentators in this field that the barriers can be psychological or social (such as lack of knowledge of the availability of substantive rights) and may also include factors such as limited language skills, the elderly or young age of claimants, minority status of all kinds, gender, immigration status and fear of reprisals. While the availability of resources and the uniqueness of individual circumstances may – as a practical matter – impair the ability of government to respond in a meaningful way to every barrier a claimant might face, we must be sensitive to the barriers and consider recommendations that may ameliorate them.

Consistent enforcement and compliance and a level playing field

Consistency in the law is a value that in the labour and employment context means – among other things – consistent enforcement. Consistent enforcement means not only a level playing field for employers and business; it is also necessary for the law to be reputable. As Professor Arthurs observed:

Labour standards ultimately succeed or fail on the issue of compliance. Wide­ spread non-compliance destroys the rights of workers, destabilizes the labour market, creates disincentives for law-abiding employers who are undercut by law-breaking competitors, and weakens public respect for the law.^{footnote 17[17]}

Consistent enforcement and encouraging a culture of compliance will ensure a level playing field for all business. A level playing field ensures that all those who are similarly situated should be regulated according to the same rules, and that the law should guarantee equal protection for all its intended beneficiaries. A level playing field serves to protect not only workers but also the majority of fair-minded employers who wish to meet their legal obligations without the risk of being undercut by those who do not. Clear laws, effective oversight, consistent interpretation and certainty of enforcement are critical to ensuring observance of the level playing field principle.^{footnote 18[18]}

Policies designed to encourage compliance and remedies designed to sanction the illegal behaviour of non-compliant parties are necessary. To encourage compliance, viable enforcement proceedings and strategies must be available and fines and penalties sufficient to deter non-compliance must be an integral part of achieving a culture where the law is respected and compliance is normative.

Freedom of association and collective bargaining

In previous reviews of labour law in the province of Ontario, freedom of association for the purpose of collective bargaining and the right to strike had not yet been fully and forcefully established as a constitutional right. This is the first review of the Labour Relations Actwhere account must be taken by government that in Canadathe right to meaningful collective bargaining is a critically important constitutional right. The source of this right is The Canadian Charter of Rights and Freedoms that contains the guarantee of freedom of association in section 2(d).

The Supreme Court of Canada has provided significant jurisprudence relating to freedom of association under section 2(d) of the Charter that has, in the main, developed with respect to labour relations. The Court has given freedom of association a robust and purposive interpretation that is binding on all governments in Canada. In numerous cases, the Court has unambiguously set out the importance of the constitutional right that is protected. In the Mounted Police Association case,^{footnote 19[19]} the Court said:

Freedom of association … stands as an independent right with independent content, essential to the development and maintenance of the vibrant civil society upon which our democracy rests.

As in other labour cases, the Court, in Mounted Police, made it clear that in the employment context, freedom of association guarantees the right of employees to meaningfully associate in the pursuit of collective workplace goals and furthermore includes a right to collective bargaining.^{footnote 20[20]}

Without the right to pursue workplace goals collectively, workers may be left essentially powerless in dealing with their employer or influencing their employment conditions. This idea is not new. As the United States Supreme Court stated in National Labor Relations Board v. Jones & Laughlin Steel Corp., 301 U.S. 1 (1937), at page 33:

Long ago we stated the reason for labor organizations. We said that they were organized out of the necessities of the situation; that a single employee was helpless in dealing with an employer; that he was dependent ordinarily on his daily wage for the maintenance of himself and family; that if the employer refused to pay him the wages that he thought fair, he was nevertheless unable to leave the employ and resist arbitrary and unfair treatment … [Emphasis added.]

On numerous occasions the Court has recognized the importance of freedom of association in responding to the imbalance between the employer and its economic power and the relative vulnerability of individual workers:^{footnote 21[21]}

… section 2(d) functions to prevent individuals, who alone may be powerless, from being overwhelmed by more powerful entities, while also enhancing their strength through the exercise of collective power. Nowhere are these dual functions of section 2(d) more pertinent than in labour relations. Individual employees typically lack the power to bargain and pursue workplace goals with their more powerful employers. Only by banding together in collective bargaining associations, thus strengthening their bargaining power with their employer, can they meaningfully pursue their workplace goals.

In Mounted Police, the Court emphasized that collective bargaining is a fundamental aspect of Canadian society that enhances human dignity, liberty and the autonomy of workers:

Collective bargaining constitutes a fundamental aspect of Canadian society which enhances the human dignity, liberty and autonomy of workers by giving them the opportunity to influence the establishment of workplace rules and thereby gain some control over a major aspect of their lives, namely their work (Health Services, at para. 82). Put simply, its purpose is to preserve collective employee autonomy against the superior power of management and to maintain equilibrium between the parties. This equilibrium is embodied in the degree of choice and independence afforded to the employees in the labour relations process.^{footnote 22[22]}

The Court has emphasized that to be meaningful the process of collective bargaining must provide a process for employees to pursue their goals:

The right to a meaningful process of collective bargaining is therefore a necessary element of the right to collectively pursue workplace goals in a meaningful way (Health Services; Fraser). Yet a process of collective bargaining will not be meaningful if it denies employees the power to pursue their goals. As this Court stated in Health Services: One of the fundamental achievements of collective bargaining is to palliate the historical inequality between employers and employees … (para. 84). A process that substantially interferes with a meaningful process of collective bargaining by reducing employees’ negotiating power is therefore inconsistent with the guarantee of freedom of association enshrined in s. 2(d).^{footnote 23[23]}

Creating an environment supportive of business in our changing economy

As highlighted in the Guide to Consultations paper, current labour and employment standards legislation were introduced in the context of an expanding labour market anchored in the manufacturing and resource sectors. These often featured a relatively large, stable workforce consisting primarily of full-time workers whose jobs were protected by tariffs and limited international competition.

The shift away from manufacturing to service and retail industries has changed the nature of work for many. Some workplaces are now smaller, more flexible and leaner, requiring more highly skilled workers and flatter hierarchies. Ontario businesses face an increasingly competitive global environment where capital is mobile. As the Guide states:

Canada is one of the most open and globalized jurisdictions in the world. According to the federal government, trade is linked to one in five Canadian jobs. In Ontario, exports and imports of goods make up nearly two-thirds of gross domestic product (GDP). Over half of the province’s manufacturing output is exported. Therefore, fostering an innovative, globally competitive economy is a priority for Ontario.^{footnote 24[24]}

Technological change continues to alter the nature of work and the skills required by employers; it will continue to affect the competitiveness of employers. In some important manufacturing sectors, just-in-time manufacturing has had a significant impact not only on manufacturing processes and the high quality of goods manufactured but also on suppliers’ response time. The growth of the sharing economy continues to challenge business, lawmakers and regulators.

Ontario’s market economy must compete for business and investment. In addition to decent standards of work for employees, we must be sensitive to the legitimate concerns of business regarding its need for flexibility and reduced administrative burden to compete successfully. Every change regulated by government has some impact on employer flexibility. The day is long gone where employers could operate without regard for decency, safety, appropriate minimum terms and conditions of employment, and the rights of employees to associate and to bargain collectively. It is important to encourage a level playing field by helping employers to understand and meet their obligations.

We must recognize the diversity of the Ontario economy, its businesses, and the competition they face. A one-size-fits-all regulatory solution to a problem in a sector or an industry could have negative consequences if applied to all employers. The unique requirements of some businesses and/or of some employees may – in appropriate circumstances – support differentiation by sector or by industry rather than province-wide regulation.

Professor Gunderson has said that: … any policy initiatives must consider their effect on business costs and competitiveness especially given the increased competitive global pressures, the North-South re-orientation and the increased mobility of capital. We agree that there is a need for smart regulations that can foster equity and fairness and at the same time also foster conditions that support the needs of the employers for efficiency and competitiveness.

The regulation of labour and employment law must not be so burdensome as to impair unnecessarily the competitiveness of Ontario business. We must be aware of regulatory regimes in competing jurisdictions – particularly in other Canadian provinces, American states and other developed countries. This is not to suggest that Ontario should abandon the goal of decent standards or embrace any concept of a race to the bottom because some Ontario business is required to compete with jurisdictions where standards are unacceptable to us or where acceptable and decent standards are not enforced. With these important caveats, we recognize that the regulation of the workplace in other jurisdictions may provide useful information, experience and guidance.

Stability and balance

We recognize as two objectives of our Review, the need for balance in our recommendations and for stability in bringing change to the workplace.

In the last 20 years, Ontarians have seen significant alterations to the Labour Relations Act, accompanying changes in the governing political party.

Ideally, changing political ideology or the strength of a lobby should not drive fundamental change in legislation to enable employees to exercise their fundamental constitutional rights. These rights are entrenched and should remain relatively constant. Politicization of laws relating to the manner of exercise of an individual’s constitutional rights leads to unpredictability, uncertainty and, in all likelihood, to dissatisfaction and mistrust. While changes in the law may well be required to respond to changing conditions and circumstances, the law should not undergo rapid pendulum swings if it is to produce stable expectations of what is required for Ontarians – particularly when it comes to their exercise of fundamental Charter rights. In Seeking a Balance, the Sims Task Force (relating to Part 1 of the Canada Labour Code) made the point:

Our approach has been to seek balance…. We seek a stable structure within which free collective bargaining will work. We want legislation that is sound, enactable and lasting. We see the too frequent swinging of the political pendulum as being counterproductive to sound labour relations.We looked for reforms that would allow labour and management to adjust and thrive in the increasingly global workplace.^{footnote 25[25]}

We will endeavour to craft recommendations for change that are balanced and, if implemented, will have a reasonable likelihood of being sustained by subsequent governments differently composed.

On the other hand, we recognize that laws change to meet the evolving needs of society. They must. Indeed, it is the radically altered nature of the workplace over many years that has informed this Review and which will require a meaningful response. We will therefore consider ways to build in procedures to facilitate on-going review and change in the context of a changing workplace.

In making our recommendations we have tried our best to find the appropriate balance.