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3. Federal Labour Standards Review Commission

Archived - Discussion Paper on the Review of Labour Standards in the Canada Labour Code

III. Smart Compliance

4. Targeting Unfair Employment Practices

a) General Approach

The Commission recommended that contraventions of Part III be classified as either “infractions” (i.e., isolated acts of non-compliance, sometimes the result of an employer’s ignorance or misunderstanding of the requirements of Part III) or “unfair employment practices” (i.e., systemic violations involving deliberate, flagrant conduct that undermines the integrity of the labour standards system). Under the Commission’s proposal, infractions would be dealt with summarily, subject to protecting employers from frivolous or vexatious complaints and ensuring the procedural rights of employers and employees. Employers who commit infractions would be subject to a graduated series of conventional remedies and sanctions, such as administrative penalties. However, employers who commit unfair employment practices would be subject to more severe sanctions, including criminal penalties in extreme cases.

Under the Commission’s proposal, an administrative system would be created to deal with unfair employment practices such as the following:

• taking reprisals against employees for seeking enforcement of their rights under Part III, or using threats, coercion or undue influence to discourage employees from attempting to enforce their rights;
• attempting to manipulate the outcome of a vote on a modified work schedule, through coercion, threats, misrepresentation or other conduct;
• attempting to coerce or mislead employees in connection with their individual requests for changes in working time arrangements, or to create the false impression that such changes originate from the employee, when in fact they originate from the employer;
• attempting to manipulate the outcome of workplace-level consultations, or a ballot vote on a proposal, by manipulating the selection of WCC members[26] or by using coercion, undue influence or misrepresentation;
• repeatedly and deliberately violating Part III;
• failing to retain records, to cooperate with an inspector or to comply with an order of an inspector or other official; or
• having frequent complaints of unjust dismissal.

The Commission’s view of the system would be to have a Labour Program official determine whether cases should be triaged into an unfair employment practices stream which would go to a formal hearing. A formal hearing may be required for cases that require testimony and not merely documentary evidence (e.g., non-co-operation with an inspector, retaliation, or particularly egregious unjust dismissals). Hearings could take place before Hearing Officers, presuming that this position is created as part of the new adjudicative structure. In the alternative, the hearings could take place before the CIRB, or any other agency designated to hear such matters.

A formal hearing, however, would not be necessary for all types of unfair employment practices. For example, a formal hearing would not be required for wage or leave contraventions that cross the “unfair employment practice” threshold due to frequency and/or size and for which documentation is sufficient proof. Where no formal hearing is required, Labour Program officials could be granted wider discretionary remedial powers to ensure that wage and leave provisions of Part III are respected in the future. One possibility would be to have the Director[27] make such decisions upon an inspector’s recommendation. There could be a right to appeal as a de novo[28] hearing to the CIRB, or perhaps to another agency created for the purpose of hearing appeals of Labour Program decisions.

For the first category of cases, Labour Program officials could have powers to preliminarily screen them, to attempt to settle them and to investigate them. Upon the recommendation of an inspector, a Director or other person designated by the Minister could decide whether to refer the matter to a Hearing Officer, or the CIRB, or another agency created to hear such matters. The Director’s decision would include a recommendation regarding monetary penalties, if any, which could be appealed de novo to either the CIRB or to another agency designated for that purpose. For both categories of cases, the Labour Program would represent the public interest at the appeal hearing. The legislation would likely have to broaden the mandate of the CIRB to enable it to handle these cases, if it was designated as the appropriate body to do so. Both the CIRB and Labour Program officials would likely require expanded remedial powers.

The Commission also recommended that criminal prosecutions be used for the most serious cases of unfair employment practices, in order to deter or punish the most egregious offenders. In its view, prosecutions should not be used often, only in the worst cases. It also recommended that the current fines, which it described as “derisory”, be increased.[29] However, the Commission recognized that prosecutions may not be the most appropriate means to obtain creative remedies for employees or to prevent the recurrence of problems. Although Part III allows for criminal prosecutions, there has not been a prosecution since 1993. The current approach is to deal with violations administratively. It is important to consider whether criminal prosecutions should remain an option for dealing with unfair employment practices and, if so, whether the fines need to be increased.

b) Pre-Emptive Remedies

Criminal courts already have authority to issue pre-emptive orders, as part of the general power to attach conditions to administrative remedies. It may, however, be useful to follow the example of other regulatory statutes, such as the Canadian Environmental Protection Act, which sets out the authority of its officers to make such pre-emptive orders.

One issue raised by this recommendation is who would have the authority to order pre-emptive remedies. One suggestion is that the power would lie with the Director upon the recommendation of an inspector. A different official could, however, be vested with the authority.

The suggestion for broad governmental consequences (e.g., disqualification from contracts or licenses) is a new one. One of the repeated refrains in the Commission consultations was that all parties had an interest in serious “bad actors” facing serious consequences for their actions. The idea of hindering a serious and repeat “bad actor” from continuing its business in the normal manner may be a sufficiently serious deterrent to make an employer reconsider its actions. On the other hand, such measures are currently outside of the mandate of the Labour Program.

Some additional powers that could be useful include:

• to publish names (as available under the employment standards legislation of Ontario and British Columbia);
• to require the employment of a payroll service;
• to address policy/practice issues in cases of reprisal or unjust dismissal (e.g., posting of notices, training, change of policy).

c) Points System

The Commission suggests that a points system would be a useful manner to track the behaviour of individual employers. The evidence presented to the Commission was that “bad actors” were likely to re-offend. A “points” system may act as deterrent. It may also be useful in setting a threshold for how many repeat violations before a set of infractions would constitute an unfair employment practice.

The suggested points system could be addressed administratively. In the alternative, it could be codified under Part III or in regulations in order to ensure that there is no misunderstanding on how the “points” system of sanctions will function.

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[26] Workplace Consultation Committees (WCCs).

[27] The term "Director" refers to either the proposed Director of Adjudication Services or, in the alternative, Regional Directors.

[28] De novo means that there is a new hearing, with new evidence, rather than relying on the evidence presented to the initial decision-maker.

[29] Currently, a fine of up to $5,000 applies upon conviction for a violation of most provisions of Part III and the regulations, as well as for contravening an order made under Part III or taking reprisals against a person who testifies or cooperates in a proceeding under Part III. However, a fine of up to $100,000 applies to an employer who violates a provision relating to group termination. An employer who violates certain record-keeping provisions is subject to a fine of up to $100 for each day that the violation continues.

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Date Modified:

2012-02-17