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If your business relies on the services of employees from temporary help agencies or directly employs elect-to-work employees, then there is an important change to the Employment Standards Act that you should be aware of.

Here is an update on Bill 139:

Bill 139: An Act to Amend the Employment Standards Act, 2000 in Relation to Temporary Help Agencies and Other Certain Matters received Royal Assent on May 6, 2009 and will come into force on November 6, 2009.

Bill 139 will incorporate a number of changes in the Employment Standards Act (the “ESA”) relating to any employee who works for a temporary help agency. This type of employee is referred to as an “assignment employee” in the ESA and is defined as an employee employed by a temporary help agency that performs work on a temporary basis for clients of the agency.

While the current changes to the ESA will only affect those employees working for temporary help agencies, the Ministry of Labour has confirmed that a regulation will be introduced so that employees who work on an “elect-to-work” basis directly for a company will be provided with the same rights as assignment employees. As such, any business that directly employs employees to work under an arrangement where the employee can elect to work will also be subject to the changes.

One of the most notable changes of Bill 139 is that assignment employees will now have an entitlement to statutory notice of termination or pay in lieu and/or severance pay.

Impact on Businesses

Once Bill 139 comes into force, temporary help agencies must be prepared to:

• provide assignment employees with additional information on any placements;
• change company practices where fees are charged; and
• provide notice of termination or pay in lieu and/or severance pay to assignment employees in the event the employment relationship is terminated.

Temporary help agencies may want to implement practices to monitor when the employment relationship begins, when an assignment employee receives offers for work, and when the employment of an assignment employee may be deemed terminated.

For businesses that use the services of assignment employees through temporary help agencies, it would be expected that the cost of hiring these employees will increase. When a regulation is passed so that Bill 139 will also cover elect-to-work employees, then businesses that directly employ elect-to-work employees will also be affected by the changes. These businesses will then have to be prepared to provide notice of termination or pay in lieu and/or severance pay.

With these changes, many temporary help agencies and businesses will need to revise employee handbooks, company policies, and company procedures relating to assignment employees and elect-to-work employees.

The following is a summary of the contents of Bill 139:

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.

Employment Relationship

For the purposes of the ESA, an employment relationship begins when a temporary help agency and a person agree that the agency will assign or attempt to assign the person to perform work on a temporary basis. Agreement is all that is necessary to begin the employment relationship and from that point onward the assignment employee would be eligible to receive notice of termination or pay in lieu and/or severance if and when their employment is terminated. No written agreement is required and there may be an employment relationship even where the assignment employee has never been assigned to perform work for a client.

Termination and Severance

Assignment employees will now have entitlements to notice of termination or pay in lieu and/or severance pay. The employment of an assignment 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 not more than:

• i) 13 weeks in a period of 20 consecutive weeks; or
• ii) 35 weeks in a period of 52 consecutive weeks where the temporary agency has continued to provide benefits or payments to the assignment employee when that employee has not been assigned to perform work.

Any week where the assignment employee is not available to work or where the assignment employee refuses an offer of work is considered an "excluded week" and will not count towards the 13 week or 35 week periods outlined above.

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:

• i) becoming an assignment employee of the agency;
• ii) an assignment to work on a temporary basis for clients; or
• iii) assisting or instructing on the preparation of resumes or preparing for job interviews.

The temporary help agency is prohibited from restricting:

• i) the assignment employee from entering into an employment relationship with a client;
• ii) a client from entering into an employment relationship with an assignment employee; or
• iii) 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.

Reprisal

Assignment employees can file a reprisal complaint with the Ministry of Labour for a violation of their rights under the ESA against the temporary help agency and against the client that the assignment employee performed work for.

If you have any questions relating to any of the above or if you would like to discuss the changes your business may need to implement, please do not hesitate to contact Megan Burkett.

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.