Social Policy in Ontario

Ontario employers get slap on wrist for mistreating employees

Posted on May 25, 2015 in Delivery System

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TheStar.com – News/GTA – Nine months of stress and anguish as the bills piled up, all to get the wages she was entitled to by law.  Scarborough resident Sylvia Buchanan’s assessment of the system meant to protect her? “It was horrible.” Last in a four-part series.
May 24 2015.   By: Sara Mojtehedzadeh, Work and Wealth reporter

Scarborough resident Sylvia Buchanan was owed thousands by her former employer, who fired her the day after she asked to be officially put on the books as an employee.  Instead, what she got was a nine-month runaround from the Ministry of Labour, the department supposedly meant to protect her against workplace violations.

Nine months of waiting for money she was legally owed. Nine months of stress and anguish as the bills piled up. All to get the wages she was entitled to by law.  Buchanan’s assessment of trying to navigate the system?  “It was horrible.  “If I had not pressured the ministers, if I had not constantly called my MPPs, I honestly don’t think this would be resolved,” she says. “I think it would still be in the system somewhere.”

When it comes to enforcing Ontario’s Employment Standards Act, critics say it is workers — not the government — doing the heavy lifting.

Complicating matters is the fact that, by law, workers are supposed to confront their employer about possible mistreatment before filing a complaint with the Ministry of Labour.

When a complaint is lodged, employers are immediately notified and are given the employee’s name, often leading to immediate dismissal.  The employment act offers no protection against such dismissal.

“The strongest condemnation of the model is the fact that virtually no employees file complaints, only former employees do,” says David Doorey, an employment law expert and professor at York University.

“People have to make a choice about paying the rent or making a complaint. So people will choose to pay the rent,” adds Deena Ladd of Toronto-based labour rights group the Workers’ Action Centre.  “I think that’s a real indication that the system is not working at all.”

Sylvia Buchanan, who has three degrees and more than a decade of teaching experience, began working with private college Oxford Education Group in April 2013, hired to create an English curriculum for the school.  But for more than a year, her boss refused to recognize her as an employee, she says, treating her instead as an independent contractor. Independent contractors have no rights under the Employment Standards Act.

Buchanan says she had no idea that she was hired as a contractor until she was first paid, receiving a mysterious cheque that bore little information instead of the official pay stub she was expecting.  She also says she was treated like any other employee: she worked predominantly from the college’s premises, used its equipment, had her hours set by her boss, and represented the college at conferences.

She says she was fired the day after she told her employer she was considering filing a formal complaint.  But because she was classified as a contractor, she did not receive termination or holiday pay.  In June 2014, Buchanan lodged a complaint with the Ministry of Labour, asking for those wages and claiming that she was the victim of reprisal for standing up for her workplace rights.

The process, she says, was riddled with frustrations.  By August 2014, Canada Revenue Agency had already ruled that Buchanan had rightfully been an employee of the college.  It took until October 23 for the Ministry of Labour to agree that she was owed holiday and termination pay.  It wasn’t until March 2015 that Buchanan finally received the $2,500 she was entitled to.

Mohammed Azharuddin, vice-president of Oxford College of Arts, Business and Technology, says his organization began Oxford Education Group as a “startup” and says he told Buchanan upfront that she would be hired as an independent contractor.  He told the Star that Buchanan’s termination had nothing to do with her complaint to the ministry, and that she was let go because “there was no progress happening” with her work.  He also says his organization paid the money owed to Buchanan on time, via the Ministry of Labour, and that the ministry was responsible for the delay.

“We definitely paid within the 30 days (required by law). There was a discrepancy at the Ministry of Labour end of it.”  The ministry refused to say whether Buchanan’s employer paid on time. In an email to the Star, it confirmed that it did receive the college’s cheque, but said the “the regional program office was not aware of this.”

That “clerical error,” as the ministry called it, added four months to Buchanan’s already agonizing wait time.  At 54, she is still living with her aunt and uncle in Scarborough because she can’t afford rent.  “I don’t feel like I have any protections,” says Buchanan. “They make it so difficult to get through these claims that I suspect that a lot of people just give up.”

The system designed to enforce the Employment Standards Act is increasingly under fire for being inaccessible, inefficient and — for workers such as Buchanan — infuriating.  Under the current model, employers have almost no incentive to obey the law in the first place.

The Ministry of Labour has a team of just 180 enforcement officers to look into employment standards violations across the entire province — less than half the number devoted to Occupational Health and Safety inspections.  Figures requested by the Star show that the 15,485 complaints made last year prompted just 2,768 workplace inspections. Only eight resulted in prosecutions with serious financial penalties.

A further 321 tickets of less than $360 were issued for violations from failure to give regular pay, to denying overtime pay and not paying minimum wage.
York University’s Doorey says those penalties do little to deter lawbreakers, who are unlikely to be caught unless workers risk their job to speak out.

“The model depends on vulnerable employees learning the law, and then starting a legal fight with their employer, and that model will never be effective,” he says. “Violations of the ESA are treated as minor monetary infractions not deserving of a heavy hand of justice.”

“If you just slap (employers) on the hand and give them a fine of $200 or something, how is that going to stop them from exploiting people again?” asks Buchanan, whose former employer faced no penalties for firing her without pay.

In 2009, the government did commit $10 million to employment standards enforcement, allowing the Ministry of Labour to significantly reduce its backlog of more than 17,000 claims.  The ministry also operates an employment standards call centre in 24 languages, which last year received more than 265,000 calls about possible violations. But the hotline doesn’t offer any assistance in filing complaints, which must be done online.

The action centre’s Ladd says the process can be challenging for vulnerable workers who may struggle to understand the Act’s confusing exemptions, and may not have ready access to a computer or speak English as a first language.

And while employers can afford lawyers, the majority of workers cannot.

Marta Jaramillo, 60, said her former boss at a Mississauga-based graphic design company used to taunt her for not being able to afford a lawyer to defend her after she complained about not receiving overtime pay, lunch breaks and holiday pay.  She says he fired her after she approached him about making a complaint to the ministry.

The province’s Open for Business Act, passed in 2010, includes a provision that can force complainants to first approach their employer about possible employment standards violations.  While the legislation says exceptions can be made in the case of vulnerable workers, experts say the measure still discourages employees from speaking out.

“I would say 99.9 per cent would not file a claim until they decided to leave employment or they have been fired or laid off,” says Avvy Go, director of the Metro Chinese and Southeast Asian Legal Clinic. “The employer will know who filed the claim and that person will lose their job.”

Figures requested by the Star show that in the year before that Act was passed, workers submitted 20,365 formal complaints. But since the Act’s implementation, the number of claims has fallen to an average of 15,500 a year.

As for Jaramillo, she’s still waiting for the $3,394 she’s owed — more than a year after filing her claim.

Recognizing that relying on vulnerable workers to enforce their own rights makes little sense, many jurisdictions have moved to a more proactive model of enforcement.

In California, the state can slap embargoes on goods made by companies who violate labour laws. In Wisconsin, the government can place a temporary hold on employers’ property until they pay workers what they’re owed. And under New York State’s wage theft law, guilty employers can be forced to pay up to triple the amount of wages owed.

In a move welcomed by campaigners, the Ministry of Labour has started conducting so-called proactive inspection blitzes aimed at high-risk sectors, where inspections are done even if no complaint has been made. Its current blitz focuses on vulnerable and precarious workers.  But of Ontario’s 442,000 workplaces, just 2,694 were inspected in such investigations last year. There are only 35 enforcement officers dedicated to this proactive enforcement, and employers are given notice that their workplace will be inspected.

“It kind of defeats the whole purpose of the audit,” argues Go.  “I understand you will never have enough resources to investigate every single complaint,” she adds. “That’s why you need to look at how to change the system to ensure there is enough incentive for the employers to obey the law.”
In the meantime, Buchanan says, it is workers who are suffering.  “You’re putting people’s lives on the line. If I didn’t have family support, I’d be living on the streets.”  “I think it takes a very strong-willed person to go through this process,” she adds. “I expected the government to work on my behalf.”

Proposed solutions

A recent report by the Workers’ Action Centre makes a number of recommendations to improve enforcement of the Employment Standards Act. The proposed reforms include:

– Develop an expanded, proactive system of enforcement to improve compliance
– Increase enforcement team staffing
– Enact a “hot cargo” provision that would enable inspectors to impose embargos on goods manufactured in violation of the Act
– Revoke the requirement that forces workers to approach employers before filing an ESA claim
– Authorize the Ministry of Labour to place holds on employers’ property when a complaint is filed for unpaid wages
– Increase fines to double or triple the amount of wages owed
– Establish set fines for all offences, even when employers voluntarily agree to pay worker wages owed

The series
Part-time. Temporary. Self-employed. This is the new norm for millions of Ontario workers, the so-called “precariously employed” struggling in the absence of regulations to protect them. As the province launches a review of its antiquated Employment Standards Act, the Star brings you their stories, and ways to fix it.

< http://www.thestar.com/news/gta/2015/05/24/ontario-employers-get-slap-on-wrist-for-mistreating-employees.html >

Tags: crime prevention, featured, ideology, participation, rights, standard of living

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