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The Ontario Government Mandate That Will Affect Independent Contractors across Canada

As you may already know, I currently sit as the President of the Ottawa Chapter of the National Association of Computer Consulting Businesses (NACCB). The industry association represents over 70 IT Services firms in Canada , encompassing over 22,000 contractors, 2000 employees and more than $2.5 billion in revenues. One of the NACCB’s fundamental objectives is to represent the industry in public policy formulation.

We have recently been very involved in Ontario’s latest foray in to regulation in the contingent labour industry. The Ontario Government is headed towards more regulation and, unfortunately, it would very much appear this has the making of “good politics over good policy “.

The spotlight shone on the staffing industry in a bad way originally several years ago when the Toronto Star featured stories of individuals exploited by unethical and shady agencies. These companies deserved to be exposed for the bad organizations they were and suffer the consequences. No doubt, that kind of media exposure is deservedly detrimental to a company and contributes to it either correcting its practices or it will go out of business. Staffing Agencies are licensed in Ontario so there is a mechanism to correct or ultimately shut down such companies.

This was the same time the Ontario Government passed Bill 139 to regulate temporary employees and independent contractors in Ontario. Bill 18 followed in 2014 and largely established joint and several liability for both the agency and  client  for wages, overtime pay , public holiday pay, etc. Ultimately, this represented new risk for clients.

This leads us to today where last Winter, the Wynne Government of Ontario appointed two Special Advisors, lawyers with deep backgrounds in Labour Law, to lead a study in The Changing Workplace and Employment Review. The mandate, among many other things, will include reviewing the current and future world of temporary labour, including independent contractors.

To date there have been multiple presentations which need to be considered before the Advisers will release their preliminary Report. The vast majority of which have been from Trade Unions and employee groups, union-related organizations like the Workers Action Centre (WAC)

Here are some of the recommendations being discussed among others:

  • 6 month limit on use of a variable temp or contractor before they would automatically become an employee;

  • Contingent labour to make up no more that 20% of workforce as well as the  total number of hours worked by assignment employees not to exceed 20% of all hours worked by employees;

  • Temporary workers must receive all benefits of employees;

  • Clients of agencies to be jointly liable for all rights under ESA;

  • Establish a reverse onus on employee status. In other words, all workers are presumed to be employees unless able to demonstrate otherwise, virtually ending or at least jeopardizing independent contractor status.

There are several other issues and proposals, many of which would substantially alter the temporary labour market. There are  a number of measures that add new risk to customers in joint liability to the extent that many of the measures, given experience in Europe and other countries, will see any organization that uses a contingent labour force as part of their workforce strategy to consider other options most notably offshoring.

Although this is an Ontario initiative it is easy to assume other provinces are looking very closely at what transpires in Canada’s most populous province. It is critical that employers and industry get engaged with this Review to offer the valid and compelling reasons that will allow business to survive and thrive in the ever changing 21st century work environment.