How Bill 18 will Expand the Employment Standards Act
When an employee has been terminated without cause and their former employer has failed to provide them with their minimum statutory entitlements, including notice of their termination or pay in lieu thereof and severance pay, these entitlements, which fall within the definition of “wages” as defined in section 1(1) of the Employment Standards Act (“ESA”), are left owing to the terminated employee. This employee can either file a complaint with the Ministry of Labour pursuant to the ESA to recover such wages, or start a civil court proceeding to achieve the same outcome, but not both.
Many terminated employees choose the complaint route, as this is more cost-effective and a much speedier approach. Unfortunately, two major disincentives for filing a complaint are that: (a) pursuant to subsection 103(4) of the ESA, an employee can never recover more than $10,000.00 for wages owed and (b) pursuant to subsection 111(1) of the ESA, an employee can only receive payment for wages that became due no more than six months before the complaint was filed. Both of these deterrents have often led to individuals avoiding the administrative complaint route. However, this may soon change.
Bill 18, the Stronger Workplaces for a Stronger Economy Act, 2014, was re-introduced in July of this year. This proposed Act, which amends various employment-related statutes, was formerly known as Bill 146, a Bill of the same name that died on the order paper when the provincial parliament was dissolved. Bill 18 passed its third reading on November 6, 2014.
Schedule 2 of this proposed Act relates to the ESA. Among other proposed changes, section 7(1) of the proposed Act would effectively eliminate the $10,000.00 maximum cap for any wages owed to an employee, whereas section 8(1) of the proposed Act would amend section 111 of the ESA and extend the time frame for retroactive wage recovery from six months to two years. Even though both of these changes were initially set to come into force six months after the day Bill 18 receives Royal Assent, following amendments by the Standing Committee on General Government prior to passing third reading, these changes are now set to come into force only three months after the day Bill 18 receives Royal Assent. There is strong push to have this bill not only passed as soon as possible but also to have its provisions implemented as soon as possible.
As it seems almost inevitable that this Bill will pass, an employer’s liability will increase, as will an employee’s entitlements. This is one step in the right direction for the protection of employees who generally suffer from unequal bargaining power in the employment relationship, especially at its conclusion.