Social Policy in Ontario

The evolution of the labour market is leaving government regulation in the dust

Posted on August 16, 2016 in Policy Context

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NationalPost.com – Full Comment
August 15, 2016.   Lauren Heuser, National Post

Speaking from recent experience, being precariously employed is no walk in the park. To try my hand at writing, I forfeited income security, benefits and a good workplace, and — quite literally — shouldered a level of stress I have never previously known. I would have a masseuse work on my neck and shoulders, but I no longer have health benefits.

My reality is one shared by an increasing number of Canadians. According to a recent Ontario Ministry of Labour report, non-standard employment (which includes part-time, temporary, casual, seasonal and on-call work) is rising, growing at an average annual rate of 2.3 per cent from 1997 to 2015, or nearly double the growth rate of standard employment. More than a quarter of Ontario’s workforce now holds non-standard work positions, a trend seen across the country.

The rise of precarious employment poses enormous challenges for workers and the laws that exist to protect them. Non-standard workers have lower wages, benefits and tenure than full-time employees, and suffer adverse health and social effects as a consequence. If Canada’s employment laws are to remain relevant, they will need to be reshaped to protect this population.

This is easier said than done. The factors driving non-standard employment creation — like improvements in information and communications technology, changes in business organization, globalization, and Canada’s shift towards a service-oriented economy — are largely irreversible. Non-standard employment also takes many different forms, some of which suit the needs of employers and employees alike.

So we should not hold our breath in wait of easy solutions. But a few things do seem clear. With the decline in private-sector union coverage, and the challenges to non-standard workers achieving union representation, effective employment standards will become more important than ever. Employment standards guarantee workers minimum protections, like job-protected leave; limits on work; and vacation, severance and termination pay. When these standards fail to apply to many work relationships (as they currently do), employers offload the full costs of their production onto society as a whole, which must assume the costs of higher poverty rates, health-care demands and accidents.

As Ontario’s report establishes, there are ways to improve employment law’s reach and effectiveness. We could broaden the definition of “employee” to capture a greater range of workers. Labour ministries could also do more to prevent employers from misclassifying workers as independent contractors when they bear the markers of employees.

The law could also ensure that part-time employees receive proportionally equal wages and benefits as full-time employees when they perform the same work. Currently, most provinces mandate “equal pay for equal work” for male and female employees, but only two provinces prohibit wage and benefit discrimination between full- and part-time workers. This creates an incentive for employers to hire part-time workers over full-time ones, and may help to explain why Ontario’s part-time growth rate has exceeded full-time work growth by a full seven per cent in the past 15 years.

Employment laws could also weaken companies’ incentive to contract out employment responsibilities to smaller companies, a business strategy that has become commonplace in recent decades. The smaller companies directly responsible for employing workers often lack the human resource teams to ensure employment standards compliance. As Ontario’s report notes: “Assigning liability to the higher level entities (in a supply chain) could well cause them to change their strategies with the effect of improving the compliance rates by subordinate employers.”

Of course, as employers are fond of obliquely threatening, er, reminding us, there is a risk to expanding the law’s reach in these ways. If it becomes increasingly costly for companies to carry on business here, employers have added incentive to replace labour with capital, or to relocate to lower-cost jurisdictions. The government cannot stop a company from installing a machine in lieu of hiring someone, or not opening a company in Canada at all.

While true, these arguments do not negate the case for better regulation. For one, companies’ reasons for operating in Canada do not boil down to one factor. Labour costs matter, but so do workforce education levels, tax rates and legal institutions. There are also many jobs that companies can only replace with machines at their own peril. I cannot be alone in preferring to deal with humans in stores, on telephones or at restaurants, or finding that a 20-minute, blood-boiling call with an automated voice rapidly engenders something close to hatred for a company’s brand.

And that is ultimately the point. The reason we value human interaction in consumer transactions is the same reason we must act to protect people as workers. It gives meaning to our lives to engage with others in ways that recognize and respect their dignity, be it in relationships, transactions or work. Thus, the stakes in this matter are great. As French scholar Alain Supiot put it: “There is no wealth other than human beings, and an economy which ill-treats them has no future.”

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Tags: economy, featured, globalization, ideology, participation, rights, standard of living

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