Recommended changes to Ontario Labour law could open the door to more unionization in franchise sector

On May 23, 2017, the Ontario government released the final report prepared as part of its Changing Workplace Review. This report follows a two-year process aimed at modernizing Ontario’s employment and labour laws, to address developments in industry and workplaces over the last two decades.

The report consists of recommendations, which the government will consider, and then decide what changes it will make to workplace legislation.

The report’s recommendations, if implemented, will have significant impact on the franchising industry, most significantly by changing the rules regarding unionization. The report did not recommend that franchisors and franchisees be deemed to be “joint employers” for purposes of Employment Standards Act, 2000 (“ESA”) compliance or collective bargaining and union certification.  It did recommend that the law regarding union certification be amended to permit multiple franchises of the same franchisor, in the same geographic region, to be part of the same bargaining unit. The report further suggested that strong mechanisms be put in place to ensure that employers do not unfairly interfere with employees’ rights to unionize. The intention of these measures appear to be to make it easier and more viable for employees in the franchise industry to unionize.

The report also contains numerous recommendations that, if implemented, will substantially affect employers and employees in all industries in Ontario.  These include:

• Creation of a “Workplace Rights Act”, to aid creating a culture of compliance among employers. This would combine the ESA, the Labour Relations Act, 1995,and Occupational Health and Safety Act and be more expressly focused on workplace rights.
• Increased, and more active, enforcement of employment standards rights and obligations. The report specifically singled out the issue of “misclassification” of employees as “independent contractors” for priority enforcement and suggested that the term “dependent contractor” be added to the definition of “employee”.
• Increased penalties for non-compliance with the ESA.
• Providing part-time, casual, temporary, contract and seasonal employees with the same rights as comparable full- time employees.
• Extension of personal emergency leave and bereavement leave entitlement to all employees - not only to those employed in workplaces with 50 or more employees.
• Increasing minimum vacation entitlement to 3 weeks per year after 5 years of employment.

A summary of the report can be viewed here, and the full report can be viewed here.

We are studying the report and the recommendations and will provide further updates as it becomes clear which recommendations that the government is likely to adopt.