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Changing Workplace Review and Franchising Update
Canadian Franchise Association Law DaySeptember 22, 2016Larry Weinberg, Tim Lawson & Michael Sherrard
CFA Law Day: Changing Workplaces Reviews and Franchising Update –September 22, 2016
Agenda
nOverview of the Changing Workplaces Review Interim Report
nThe “Relevant Menu” of Potential ChangesqLabour Relations Act, 1995qEmployment Standards Act, 2000
nCFA Actions nWhere do we go from here?qNext Steps
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CFA Law Day: Changing Workplaces Reviews and Franchising Update –September 22, 2016
Overviewn Two Special Advisors appointed to lead public
consultations on the changing workplace: qC. Michael MitchellqHonorable John C. Murray
n Initial public engagement sessions gathered input from Ontarians
n Interim Report released July 27, 2016 which identified over 50 different issues and over 225 optionsq Further public submissions accepted until October 14,
2016qRecommendations in a Final Report to be released
February 2017
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CFA Law Day: Changing Workplaces Reviews and Franchising Update –September 22, 2016
Overviewn100’s of submissions made by: qTrade Unions & Employee AssociationsqWorkers’ Advocacy GroupsqLegal Aid ClinicsqEmployer AssociationsqIndividual Employers qChambers of CommerceqGovernment Agencies & Tribunals
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CFA Law Day: Changing Workplaces Reviews and Franchising Update –September 22, 2016
Mandate & Scope of Review
nThe Special Advisors have been asked to determine how the Employment Standards Act, 2000 and the Labour Relations Act, 1995 can be reformed to better protect workers while supporting business in our changing economy
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CFA Law Day: Changing Workplaces Reviews and Franchising Update –September 22, 2016
Context: Changing Workplaces nPublic consultations considered the following: qThe 21st Century Workforce qThe Global Economy qTechnological Change qRestructuring in the Service Economy qNon-Standard Employment n The ‘precarious worker’
qNew Forms of Work Organization qCollective Representation
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CFA Law Day: Changing Workplaces Reviews and Franchising Update –September 22, 2016
The “Relevant Menu” of Potential Changesn Labour Relations Act, 1995n Employment Standards Act, 2000
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CFA Law Day: Changing Workplaces Reviews and Franchising Update –September 22, 2016
LABOUR RELATIONS ACT, 1995
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CFA Law Day: Changing Workplaces Reviews and Franchising Update –September 22, 2016
Overview
“If we can increase trade union density in the province of Ontario we will surely improve the lives of the vulnerable workers who toil in precarious employment working below the poverty line.”
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CFA Law Day: Changing Workplaces Reviews and Franchising Update –September 22, 2016
The “Menu” of Potential Changes
nLabour Relations Act, 1995qScope and CoverageqUnion DensityqCertification ProcessqCollective BargainingqSectoral BargainingqSale of Business and/or Related EmployerqLabour Board
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CFA Law Day: Changing Workplaces Reviews and Franchising Update –September 22, 2016
Scope and Coverage
nExemptions or Misclassifications:qSupervisors and Jr. Managerial employeesqIndependent OperatorsqProfessionals
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CFA Law Day: Changing Workplaces Reviews and Franchising Update –September 22, 2016
Union Density
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CFA Law Day: Changing Workplaces Reviews and Franchising Update –September 22, 2016
Union Density – Process ???
nChange certification process to card basednP.E.I., N.B. & QUE. nConstruction Only - N.S. & ONT.nFederal – Bill C – 4 (C-377 & C-525)nU.S.nManufacturing sector declinenService sector growth
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CFA Law Day: Changing Workplaces Reviews and Franchising Update –September 22, 2016
The Certification Process
nTheme: if we increase unionization = improved working conditions
nCurrent process: cards + vote = certification nMost common suggestion in consultations is to
change to card based only (no vote)nInformed employee choice
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CFA Law Day: Changing Workplaces Reviews and Franchising Update –September 22, 2016
The Certification Process
nMaybe not quite card based certification but changes to make unionization more accessibleqEmployee lists at 20% supportqOff site or neutral site votingqElectronic membership
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CFA Law Day: Changing Workplaces Reviews and Franchising Update –September 22, 2016
Collective Bargaining
nMicro units v. broader based bargaining structures
nLabour Board power to amend bargaining unit structures:q‘93 combination of bargaining unitsqFederal power to amend the bargaining unit
nAutomatic access to interest arbitrationnBan of replacement workers
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CFA Law Day: Changing Workplaces Reviews and Franchising Update –September 22, 2016
“New Models” of Collective Bargaining nSectoral Bargaining qOntario’s construction sector
nServiceqQuick service restaurant qHotelqDomesticsqJanitorialqHome Care
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CFA Law Day: Changing Workplaces Reviews and Franchising Update –September 22, 2016
Sale of Business and/or Related Employer ExpansionnU.S. - the Fissured WorkplacenNLRB - BFI case & GC initiativesnCWR – Actually broaden the “common
employer” test in legislationqIndirect controlqPotential to automatically deem certain
employment relationships to be joint employersqHeld jointly responsible
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CFA Law Day: Changing Workplaces Reviews and Franchising Update –September 22, 2016
Related Employer Expansion – Joint EmployernSpecial Advisors treat the franchise
relationship the same as temporary agencies and subcontracting, and for “special treatment”
nCite David Weil book on how fissuring is a deliberate strategy to avoid employer liability, and franchising is a form of fissuring
nSection 4.2.2 – Franchisor as joint employer will facilitate growth in unionization
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CFA Law Day: Changing Workplaces Reviews and Franchising Update –September 22, 2016
Related Employer Expansion – Joint Employern Section 4.6 -Special Advisors table the idea of
sectoral bargaining, like in the construction industry. –many possible models tabled
n Example 1: A single “parent franchisor with accompanying franchisees” could be certified as a single bargaining unit
n Example 2: All hotels or fast food restaurants in a single city, perhaps regardless of brand or ownership
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CFA Law Day: Changing Workplaces Reviews and Franchising Update –September 22, 2016
Related Employer Expansion – Joint Employern Ramifications for the franchise business modelqLarge franchisors become liable for franchisees’
employment liabilities qForced to turn stores corporate or “quasi-
corporate”, and stop franchising- level of service may not matter
qNew businesses lose incentive to start franchisingqForeign franchisors (new or old, big and small)
become residents of Canada for tax purposes
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CFA Law Day: Changing Workplaces Reviews and Franchising Update –September 22, 2016
Successor Employer
nBroaden the NDP Building Services legislation (‘93 – ’95):qCleaningqSecurityqFoodqHome Care qWhat Else?
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CFA Law Day: Changing Workplaces Reviews and Franchising Update –September 22, 2016
Ontario Labour Relations Board PowersnJustice delayed is justice denied:qShorten dispositions timesqAffidavitsqDay to day proceedings
nRemedial authority:qInterim reinstatementqCompensatory v. deterrenceqTreble damages
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CFA Law Day: Changing Workplaces Reviews and Franchising Update –September 22, 2016
EMPLOYMENT STANDARDS ACT, 2000
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CFA Law Day: Changing Workplaces Reviews and Franchising Update –September 22, 2016
The “Menu” of Potential Changesn Sample of Key ESA Issues in Interim Report:
qDefinition of “employee”qExemption categories and exclusionsqWho is the “employee” and scope of liabilityqHours of work and overtimeq Schedulingq Paid sick daysq Part-time and temporary work-wages and benefitsqTemporary help agenciesq Just cause termination
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CFA Law Day: Changing Workplaces Reviews and Franchising Update –September 22, 2016
Who is the Employer?
nTwo main issues:qMisclassification of too many “self-employed”
personsqExpand definition to include “dependent
contractors”
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CFA Law Day: Changing Workplaces Reviews and Franchising Update –September 22, 2016
Exemption Categories and Exclusionsn Increase or narrow the Exemptions?
q IT professionalsq Managers and supervisorsq Pharmacistsq Residential care workersq Residential building supers, janitors, caretakersq Students under 18q Liquor servers
n Increase or decrease the Exclusions?q Two exclusions considered
1. Interns/trainees2. Crown employees
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CFA Law Day: Changing Workplaces Reviews and Franchising Update –September 22, 2016
Hours of Work and Overtime Hoursn Relaxing Hours of Work Rules:qEliminate Director’s approval for excess weekly
hours beyond 48 qEliminate individual agreements for excess hoursqEliminate excess daily hour agreement
n Changing Overtime Rules:qReduce overtime threshold from 44 to 40qCap on overtime averaging periods
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CFA Law Day: Changing Workplaces Reviews and Franchising Update –September 22, 2016
Schedulingn Scheduling changes are afoot:qReporting pay obligationsqJob protected right to request schedule changesqRequiring advance notice of schedule changesqPreference to PT employees for extra hoursqEliminate on-call employees (i.e. causal)
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CFA Law Day: Changing Workplaces Reviews and Franchising Update –September 22, 2016
VacationSpecial Advisors note that Ontario has least generous vacation entitlement in CanadanTwo weeks per year after first year of work nIt appears the question is not whether it
should be increased, but by how much?
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CFA Law Day: Changing Workplaces Reviews and Franchising Update –September 22, 2016
Sick Days
nOptions considered:qPaid sick days (3, 6, more …)qQualifying period for paid sick daysqRequiring employees to pay for doctor’s notes
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CFA Law Day: Changing Workplaces Reviews and Franchising Update –September 22, 2016
Part-time and Temporary Employees
The Report concludes this is a vulnerable low wage/few benefits, non-unionized group in need of protectionnSame pay as FT employeesnSame benefit as FT employees or pro rata
treatmentnLimit duration of number of successive fixed
term contracts
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CFA Law Day: Changing Workplaces Reviews and Franchising Update –September 22, 2016
Temporary Help Agenciesn A wide range of options tabled to correct perceived
flaws in the business model:qExpanding joint liability of clientsqMaking the client the ESA employer of recordqEqual pay for equal workqReduce or eliminate hiring feeqLimit percent of temporary agency employees in a
workplaceqDeeming permanent employment after a period of
time
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CFA Law Day: Changing Workplaces Reviews and Franchising Update –September 22, 2016
Termination and Just Cause
nSeverance pay targeted: Decrease or eliminate 5 year and/or $2.5 million payroll threshold
nJust cause: Introduce just cause protection for non-union employees
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CFA Law Day: Changing Workplaces Reviews and Franchising Update –September 22, 2016
Who is the Employer and Scope of Liability n Special Advisors take specific aim at franchisingn Special Advisors seem to adopt premise that
franchising:qIs designed to avoid ESA liability by insulating
franchisorqMakes ESA compliance less likely
n Currently a franchisor is only liable as a related employer if the structure has the intent or effect of defeating the ESA
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CFA Law Day: Changing Workplaces Reviews and Franchising Update –September 22, 2016
nOptions tabled fall along a spectrum:
Who is the Employer and Scope of Liability
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Automatic ESAliability for franchisors/ Require contract clauses on compliance
Status quo: requiring “intent or effect” to defeat the ESA
Liability of franchisor only when a degree of control exist
CFA Law Day: Changing Workplaces Reviews and Franchising Update –September 22, 2016
Who is the Employer and Scope of LiabilitynOther options:qAbsolute liability for franchisors in only certain
industries where vulnerable/precarious workers are more prevalent
qProvide stronger remedies to enforce non-compliance against insolvent or non-paying franchisees
qLiens against goods produced in violation of ESA
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CFA Law Day: Changing Workplaces Reviews and Franchising Update –September 22, 2016
Ramifications of Joint Employern The idea of joint employer ESA liability, regardless of
extent of control, could very well:qIncrease franchisor liability towards franchisee ESA
violations or non-paymentqIncrease franchisor need to control franchisee
policies and practices (e.g. working conditions)qDecrease franchisee autonomy as employerqIncrease lawsuits/complaints naming franchisor as a
partyqRequire franchisor to take active role in defending
legal claims of franchisee employees38
CFA Law Day: Changing Workplaces Reviews and Franchising Update –September 22, 2016
NEXT STEPS
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CFA Law Day: Changing Workplaces Reviews and Franchising Update –September 22, 2016
Next StepsnFurther public consultations – until October
14th
nEmployer AssociationsnMPPsnRecommendations to be released in Feb ‘17nPotential legislation:qPEL Sept/Oct ‘16 = “quick wins”qSpring 2017 and beyond?
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CFA Law Day: Changing Workplaces Reviews and Franchising Update –September 22, 2016
Next Steps
nYou still have a say!qGet involvedqSubmissions in response to “Menu of Potential
Changes”qContact your local MPqContact a member of the CFA team
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CFA Law Day: Changing Workplaces Reviews and Franchising Update –September 22, 2016
n The information contained in this presentation is provided for general information purposes only and does not constitute legal or other professional advice.
n Reading this presentation does not create a lawyer-client relationship .
n Readers are advised to seek specific legal advice from members of your legal team or the CFA in relation to any decision or course of action contemplated.
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