Newsletter by Michael J Weiler

MAILED TO SUBSCRIBERS OF THE NEWSLETTER OF
Michael Weiler Employment + Labour Law on May 21, 2019

Friends,

Bill 8: Employment Standards Act Amended Again – Some “Tips” For You – On April 30th, 2019, the NDP government introduced amendments to the Employment Standards Act (the “Act”) see: Employment Standards Act.  The amendments are proposed in Bill 8, the Employment Standards Amendment Act, 2019 (“Bill 8”), which has passed First Reading Bill 8.  These amendments follow on the heels of the amendments made last year under Bill 6 (the Employment Standards Amendment Act, 2018) that were covered in my blog on October 15, 2018 NDP Agenda – Update.  The 2018 Bill 6 amendments:

  1.   extended certain leaves; and
  2.   introduced graduated increases to the minimum wage by increasing the minimum wage by $1.30 effective June 1st, 2018 with the final increase to $15.20 to take effect June 1st, 2021.

The amendments in Bill 8 draw extensively on the recommendations and analysis found in the British Columbia Law Institute’s extensive Report on The Employment Standards Act December 2018 (the “Report”). This Report of over 300 pages was compiled by a blue-ribbon panel of experts and was chaired by my former colleague Tom Beasley.  It is a well-researched and comprehensive analysis of employment standards legislation (although it does not review the Regulations to the Act).  I believe that it will serve as an important resource for future amendments.

Bill 8 does not include all of the recommendations in the Report.  This suggests that further amendments might be forthcoming.  Further Bill 8 does not always follow the specific recommendations of the Panel even where the recommendation is unanimous—e.g. see section 22(4) of the Act dealing with wage assignments to meet credit obligations.  Finally, many of the matters covered by Bill 8 are left to be defined in the regulations (which are yet to be tabled).

Many of the changes in Bill 8 are fairly modest in scope but some will have a significant impact on employers especially the small and medium-size employers. Here is a non-exhaustive summary of some of the provisions that may have a significant effect and others that have become part of the “news cycle”:

  • Extension of Liability for Wages: The most concerning change for employers is the extension of liability for wages and claims under section 80 of the Act from 6 months to 12 months across the board (see section 29 of Bill 8). This amendment is coupled with the ability of the Director to extend that period for a further 12 months.  The possibility of extending employers’ liability to 24 months, coupled with the Director’s ability to broaden the scope of an inquiry (see below), could result in a significant monetary judgment against an employer who perhaps unwittingly failed to comply with the Act or, worse, where an employer relies on a bona fide agreement with his employees that is rendered void under section 4 of the Act.
  • Investigations by the Director: Bill 8 also amends section 76 of the Act that gives the Director power to conduct investigations following a complaint that an employer has breached a provision of the Act or certain Regulations to the Act.  In section 25(b) of Bill 8, where the Director decides that a complaint could affect employees other than the employee who made the complaint, the Director is given the power to “conduct a broader investigation that addresses the subject matter of the complaint”.  Although the Act remains essentially an individual complaint-driven procedure, this provision will now give the Director authority to ensure that all employees in the business are covered by any order.  That may mean that the wishes of some individuals, who do not support the complaint, are ignored.
  • When the Act Governs Unionized Employers:  Unionized employers usually don’t care too much about the Act.  There are some sections that still apply to unionized employers but generally, since 2002, unionized employers can simply rely on their collective agreement.  However, Bill 8 introduces one crucial change that will affect unionized employers.  Section 3 of Bill 8 amends section 3 of the Act to provide that the collective agreement will trump the Act only where the collective agreement provisions “meet or exceed” the provisions of the Act.  If this sounds familiar it is because this amendment takes us back to the previous provisions of the Act in 2002 – like some proposed changes to the Labour Relations Code, it is more “déjà vu all over again”.  Time to dust off those old decisions of arbitrators and/or the LRB.
  • New Provisions Relating to Gratuities: Many of the changes in Bill 8 are fairly narrow in scope in terms of the employers affected.  For example, in section 15 of Bill 8, new rules have been added to the Act regarding gratuities (these rules are required because gratuities are not “wages” and thus are currently outside the protections of the Act). Under Bill 8 employers will not be able to withhold gratuities or otherwise make unauthorized deductions or require that they be turned over to the employer.  Tip pools will be regulated such that employers cannot participate except in certain limited circumstances.  Specific narrow exceptions are made for sole proprietors, partners in a partnership, directors and shareholders.
  • New Provisions Relating to Hiring of Children:   Another example of amendments that are unlikely to apply to many employers are found in the amendments in Bill 8 that introduce a number of new protections for child workers.
  • Extension of Time Period for Record Retention, Etc.: Unlike the narrow changes regarding tips and child workers, there are changes that will affect most employers.  The period for which certain employment records must be retained is extended from 2 years to 4 years (see sections 13, 14, 16 and 17 of Bill 8). There are changes to section 22(4) of the Act that governs written wage assignments that allow an employer to deduct from wages funds to meet certain types of credit obligations (see section 12 of Bill 8).
  • New Statutory Leaves:  Bill 8 (see sections 18 and 19) creates new unpaid leave provisions for employees offering care and support of family members whose life is at risk as a result of a serious illness or injury as well as certain unpaid leaves where an employee or certain family members or persons close to them are victims of domestic violence.  While one can feel very sympathetic to employees in these situations, the proliferation of leaves, even where unpaid, can cause great disruption to employers, especially small and medium-size employers.
  • Provision to Inform Employees of their Rights: Section 5 of Bill 8 adds a new section 6 to the Act under which employers will be required to make available or provide each employee, in a form provided or approved by the Director, information about the rights of the employee under the Act.  This will likely lead to more complaints being filed as employees become more aware of their rights.
  • Waiver of Penalties for Directors and Officers in Some Circumstances: There is some good news for employers.  Currently, if a Determination is issued against an employer, the Act requires a mandatory imposition of penalties that can reach $10,000.  Bill 8 will give the Director discretion to waive the penalties.  This will include cases where the employer (or a director or officer of the employer, where applicable), provided an arguable interpretation of the Act or there was a valid dispute on the facts.

There are a number of procedural changes including abolishing the “self-help kit” that the employee was required to use before filing a complaint.  There are some changes to the successorship provisions of section 97 providing for successorship in the case of receivers or receiver/managers who continue to operate the business and certain extensions of the liability of directors and officers in section 96 of the Act. Bill 8 provides for transitional provisions that will need close scrutiny in considering how such changes might affect a particular business.

Given the changes in the Act (and the Labour Code under Bill 30), I understand the government will be hiring a number of additional Investigating Officers.

What is disappointing is that there are no substantial changes to the averaging provisions.  Employers and employees in today’s world need more flexibility in defining their work schedules and compensation structures but Bill 8 does not address this concern.

The above summary is not exhaustive.  As Bill 8 will likely undergo some changes before it is proclaimed, we will not, at this time, provide a detailed analysis.  As soon as we have the final version of the legislation, we will post a more detailed summary on our web site.

Warm regards,

Mike