Overview

Elect-to-work employees now have the same rights to public holidays as other employees. Previously, elect-to-work employees did not receive public holidays or public holiday pay, as they were exempt from public holidays under the ESA. With the passage of Ontario Regulation 443/08, elect-to-work employees are entitled to receive public holidays effective January 2, 2009. Elect-to-work employees are considered those employees that have an arrangement with their employer and have complete discretion in deciding whether or not to work when asked to do so. Provided that the employee will not be disciplined or lose their job over the refusal of a request to work, the parties will then have an elect-to-work arrangement.

Since these changes have taken effect, businesses will need to be aware of the changes for the upcoming Family Day public holiday. Family Day occurs on Monday February 16, 2009 for this year. The same qualifications apply in determining whether elect-to-work employees will qualify for public holiday pay.

The employer of the elect-to-work employee will be responsible for paying the public holiday pay. In many cases, this would be an agency that places elect-to-work employees in positions with its client on a temporary basis. However, any business that directly employs elect-to-work employees and does not rely on an agency will be responsible for the public holiday pay. For those businesses that rely on agencies, the question will be whether the agency would attempt to recover some of the costs associated with providing public holiday pay from its clients. This is a matter that businesses should discuss with the agencies used for providing elect-to-work employees.

Overview Bill 139: An Act to Amend the Employment Standards Act, 2000 in Relation to Temporary Help Agencies and Other Certain Matters

Public holiday pay for elect-to-work employees is the first of many changes that will take place. The government announced its intention to make a number of changes to the ESA relating to temporary help agencies with Bill 139. The term "elect-to-work" is not used in Bill 139. Instead, the term "assignment employee" is used and refers to an employee employed by a temporary help agency that performs work on a temporary basis for clients of the agency.

The proposed changes confirm that an assignment employee is an employee of the temporary help agency and that a work assignment to a client does not change this relationship. Bill 139 also places a number of obligations and prohibitions on temporary help agencies and provides assignment employees with termination and severance entitlements.

The proposed changes include:

Obligations

The temporary help agency must provide its assignment employees with the legal and contact information of the agency, in addition to detailed information for every assignment with a client. The information for an assignment includes the legal name of the client, the contact information for the client, the hourly or pay rate for the assignment, whether any benefits are to be provided, the hours of work, and a general description of the work to be performed.

Prohibitions

There are a number of prohibitions placed on a temporary help agency. The temporary help agency is prohibited from charging a fee to an assignment employee for:

1. becoming an assignment employee of the agency;
2. an assignment to work on a temporary basis for clients; or
3. assisting or instructing on the preparation of resumes or preparing for job interviews.

The temporary help agency is prohibited from restricting:

1. the assignment employee from entering into an employment relationship with a client;
2. a client from entering into an employment relationship with an assignment employee; or
3. the client from providing references regarding an assignment employee of the agency.

The temporary help agency is also prohibited from charging a fee to an assignment employee for entering into an employment relationship with a client. In addition, the temporary help agency may not charge a fee to a client for entering into an employment relationship with an employee unless it is within the first six months from the date when the employee first began to perform work for the client of the agency.

Termination and Severance

Currently, elect-to-work employees are exempt from the termination and severance pay provisions of the ESA. It is expected that these exemptions will be eliminated. If Bill 139 is passed, assignment employees will now have entitlements to termination and severance pay. The employment of an assigned employee will be deemed to have been terminated if that employee has not been assigned to perform work for a client of the agency for a period of thirty-five (35) consecutive weeks.

Bill 139 provides details as to how the termination and/or severance entitlements are to be calculated.

Impact on Businesses

For businesses that use the services of elect-to-work employees and/or temporary help agencies, it would be expected that the cost of hiring elect-to-work or temporary employees would increase. For now, there is the requirement for the employer of the elect-to-work employee to pay public holiday pay. The costs could increase further if Bill 139 is passed and these employees are also entitled to termination pay and severance pay.

Status of Bill 139

Bill 139 is currently in its first reading. If Bill 139 receives Royal Assent and becomes a law, then it will come into force six months after receiving Royal Assent.

Megan Burkett
Human Resources Workplace Law/ Labour Relations Group
Tel: 905.276.0420
E-mail: mburkett@kmblaw.com

The comments in this newsletter are of a general nature and are not designed to replace professional advice in specific situations. If you would like extra copies of this newsletter, or you know of anyone who would be interested in joining our mailing list, please contact Cheryl Woolcott at (905) 276-9111.