Note this article was first published in Business in Vancouver
Following through on their commitment to modernize the Employment Standards Act (the “ESA”), the NDP Government passed several further important changes to the ESA effective May 30, 2019. While not covered in this article, the NDP also passed major amendments to the Labour Relations Code governing unionized workplaces the same day. This article will cover key changes to the ESA.
Two New Types of Statutory Leaves: Employees will be able to take “critical illness or injury leave” of up to 36 weeks a year to provide care or support to an ill or injured family member under 19 and up to 16 weeks to provide care or support to family members over 19. This significantly expands existing leave rights to care for family members. Previously existing ESA compassionate care leave rights to care for a terminally ill family member will remain available, despite the clear potential overlap with the new leave which is not addressed in the amendments.
Employees who are victims of domestic or sexual violence will be entitled to 10 non-consecutive days of leave to deal with common issues victims face such as finding new accommodation. In addition, they may take a continuous leave of up to 15 weeks leave to deal with the consequences of that violence. This leave can also be taken in multiple periods with the employer’s consent.
These new leaves come on top of new and expanded maternity and parental leaves introduced last year and continue a Canada-wide trend of requiring employers to give employees more and more time off for longer periods for personal reasons with a guarantee of reinstatement. Employers already recognize and generally informally grant leaves for these circumstances and understand that employees need time to deal with such traumas. Unfortunately, the proliferation and extension of leaves does impose real costs on the employer and often on co-workers and managers who have to cover the leave-taker’s workload. That burden is most onerous with leaves of a few months duration like the new ones, as it is almost impossible to recruit and train a replacement for that short a time.
Expanded Liability: The amendments significantly increase potential employer liability for failing to pay wages such as overtime pay. The time period for wage recovery under the ESA has been extended from 6 months to 12 months with the possibility of 24 months in special circumstances to be prescribed by regulation. For employees claiming unpaid wages such as overtime or vacation pay which build up over time, this significantly increases the potential cost of a claim. The new 12 month timeframe for liability applies even to wages earned under the old 6 month limit.
The amendments also empower the Employment Standards Branch to, among other things:
- adjudicate a complaint past the 6 month limitation period from termination of employment to file a claim where unjust; and
- waive the previously mandatory penalties for contraventions of the Act where an employer complies with requirement to pay wages after the complaint is filed or it is determined that there was a legitimate reason for the contravention.
N.B. These two amendments will come into force at a later date set by the government.
Company directors’ and officers’ personal liability for unpaid wages will no longer be eliminated altogether if the company goes into bankruptcy. Instead, only liability for ESA termination pay is eliminated.
Resignation rules: The Act now also confirms employees who give notice of their resignation and then are terminated without cause during the resignation notice period are only entitled to receive the lesser of:
- their pay over the balance of the resignation notice period; or
- the amount the employer must pay if terminating without cause.
It is unclear if the second amount is limited to ESA minimum termination pay or may include greater contractual severance if applicable but the latter view would be more consistent with the ESA. This amendment confirms existing practise and contract law on the same point.
Tighter regulation on hiring children: Responding to concerns raised about children working in onerous or unsafe jobs or businesses, the amendments raise the age a child may work from 12 to 16 years old and places tighter restrictions on hazardous work 16 to 18 year olds’ may perform, while providing exemptions that allow 14 to 15 year olds to perform light work. Notably, the legislation maintains existing regulations allowing children to work in recorded and live entertainment with parental consent. These amendments will come into force at a later date not yet set. Owners of family businesses will need to review their practises with their children.
Tips and gratuity regulation: In order to better protect tips, the amendments bring in a new legal framework for regulating gratuities (tips) and tip pooling, defining them as “wages” protected by and collectible under the ESA and protecting those tips from employer encroachment. In particular, owners and managers are prohibited from taking any tips, although managers who also do the same work as the tipped workers can participate. Those hospitality employers who had been taking some of the tips or gratuities will have to change their practises and potentially their wages and prices as a result.
The right of Unions and Employers to agree to lesser standards: Until now, unions and employers could agree to different and potentially lesser standards for certain ESA standards such as hours of work and overtime in a collective agreement. The amendments reinstate the prior rule that collective agreements must “meet or exceed” ESA standards on all topics. However, this will only take effect with the next collective agreement giving the employers a chance to negotiate offsetting arrangements with the union. Unionized employers with lower than ESA terms in their agreements need to be aware of this change when bargaining.
Practical tips: These are only the main highlights of the reforms. Employers need to become familiar with the new leave rights and incorporate them into their leave policies. In particular, employers who hire children or are in the hospitality industry should make sure they understand and comply with the new laws that are already or will soon be governing their businesses. They should also stay tuned for more possible amendments to come.