LABOUR AND EMPLOYMENT (1998 – Revised 2007)
The vast majority of jobs and economic development in BC is generated from the small- and medium-sized business sector (SME). SME’s currently account for 80% of job creation in Canada and their employees represent nearly 50% of all workers in the province.
A disincentive to investment and killer of jobs is over regulation by government of SME’s. Labour and employment regulations underwent significant changes under the previous government. In most cases, the changes made it more difficult for SME’s to operate and have significantly hindered job creation in BC during that period.
The current provincial government has taken significant steps to address the concerns of business and has indicated that further measures will be introduced. While The Chamber supports the majority of changes introduced to date, further reform is necessary in 2004 if SME’s are expected to cope with the economic realities of the 21st century in BC.
Although there are many government regulations in this field, the key labour and employment regulations addressed by The Chamber’s Policy and Positions Manual at the provincial level are:
• Labour Relations Code;
• Employment Standards Act;
• Workers' Compensation; and
• Human Rights Code
The Chamber is not the only organization that advocates further reform. The Coalition of BC Business (The Coalition) continues to monitor and speak to labour and employment law reform.
Labour Relations Code
In 2001, the Government amended the “Labour Relations Code” (the Code) to restore the mandatory secret ballot vote in all certification applications, to provide that educational programs to students and eligible children under the “School Act” be designated as essential services, to eliminate sectoral bargaining in the construction industry, and to clarify the basis upon which votes, including strike vote, must be conducted by secret ballot.
In 2002, the government introduced further amendments to the Code that were intended to “provide a framework for labour and management to build healthy workplace environments and enterprises that compete in a modern world economy”, and that would “send an important message to the labour relations community and to investors that BC is open for business and that we are prepared to make sure labour relations in BC are balanced, fair minded and support growth and prosperity”.
Changes included amending the Purposes Section 2 of the Code to rename it “Duties” and to emphasize their overall importance. The list of such duties was expanded to recognize the rights and obligations of employees, employers and trade unions under the Code and foster the employment of workers in economically viable businesses. The government also introduced significant amendments to employer free speech by expanding the right to communicate under Section 8 of the Code.
In December 2003, the Minister of Skills Development and Labour announced the formation of a Section 3 Committee to provide advice on 14 policy issues related to the Labour Relations Code. The changes were aimed at returning balance, flexibility and individual accountability to the Code – for both employers and employees. A number of the issues assigned to the Section 3 Committee addressed aspects of certification, decertification and fair representation. Others include: Definition of Picketing, Definition of Employee – as it pertains to exclusion from a bargaining unit – and Successor Rights and Obligations – as they pertain to “contracting out”. The Chamber actively participated in the development of a submission from The Coalition which, since 1992, has spoken for small- and medium-sized business employers with respect to regulation of employment matters in the province, including labour relations, employment standards, human rights and Workers’ Compensation Board (WCB) issues. The Committee filed its report in April 2003. The Committee analyzed the issues before it “to assist the Minister in making decisions about how to proceed”. However, the government has yet to act on the Committee’s report.
Other items not mentioned in the report that were not subject to review include the following:
1. Section 5(2)(a)
This Section requires the Labour Relations Board (LRB) to schedule a hearing into certain unfair labour practice complaints within three days of its filing. This creates significant problems for employers preparing its response to the complaint. It also creates a problem for the LRB in arranging hearings in such a short time period.
2. Elimination of Employment Due to Loss of Membership in a Trade Union
Under Section 5.1 of the former Industrial Relations Act, unions were prohibited expelling or suspending membership unless the employee failed to pay the periodic dues, assessments and initiation fees uniformly required to be paid by all members of the union, or having engaged in activity against the union contrary to the statute. This Section limited the circumstances under which unions could require employers to terminate employees under collective agreements that required union membership as a condition of employment. The Chamber submits that this protection should be restored.
3. Replacement Workers – Section 68
The Chamber was most disappointed to see that the government has not decided to deal with Section 68. The Chamber maintains its position that Section 68 must be repealed in all its forms.
Section 68 restricts the right of an employer to carry on operations during a lawful strike or lockout. The Chamber has consistently maintained that Section 68 is manifestly unfair, especially insofar as it affects small-and medium-sized businesses in BC. Where such an employer is involved in a labour dispute, it typically finds that the balance of power is tilted significantly in favour of the trade union because of the impact of Section 68. While often an employer is unable to continue its operations in any form due to the labour dispute, the striking employees on the other hand are able to obtain alternate work during the labour dispute which greatly reduces the employer's ability to counteract the union's economic pressure. Moreover Section 68 discourages investment as it is a provision that does not appear in the labour legislation in most other Canadian jurisdictions. Eliminating Section 68 would send a strong message to the global business community that BC has finally balanced the playing field in a way that opens up the many business opportunities that are available in this province.
4. Elimination of Remedial Certification – Section 14(4)(f)
It is The Chamber’s position that the remedial certification power in Section 14(4)(f) should be repealed.
The amendment to the Code which re-introduced mandatory secret ballot votes in certification applications was designed to ensure that trade unions are not forced on groups of employees who do not want them. Remedial certification is inconsistent with this principle, and can result in significant damage to a workplace. Moreover, Section 14(4)(f) is unnecessary, as the LRB has sufficient powers elsewhere to fashion appropriate orders to remedy violations of the Code.
The Chamber believes it is important for BC to take this step, consistent with other jurisdictions, which would ensure that workers' democratic rights are preserved.
5. Essential Services
There is a perception that when the government designates a service as essential, the service will continue to be delivered as is. This is not the case, however, and service levels in essential undertakings are often set by the LRB at relatively low-levels. The recent BC Ferries dispute demonstrated the harm caused to innocent third parties by setting relatively low-levels of service and the government was soon required to step in. The Chamber recommends that essential service levels be set high enough to prevent loss to SME’s.
Issues discussed by the Committee which The Chamber believes require attention include the following:
a) Partial Decertification
The Chamber joins The Coalition in recommending that the Code be amended so that rules governing decertification are the same as for certification. A group of employees must have the right to decertify if they no longer want union representation and they should not be confronted with difficult rules or unnecessary roadblocks in doing so.
b) Successorship and Bankruptcy
The Chamber recommends that the Code be amended so that employees have a choice about union representation when a bankrupt business is restarted. The new owners should not be required to inherit the previous union certification and collective agreement.
c) Picketing
The Chamber recommends that a new definition of picketing be introduced to provide clarity in terms of what constitutes picketing and what type of labour activities will be included and exempted from the LRB's regulations. A recent decision of the BC LRB traditionally has provided clarity by providing a bright line test between picketing consumer leafleting which would remain exempted from regulation by the LRB pursuant to the Supreme Court of Canada decision in K-Mart. However, the government could still consider enacting a new definition in light of the K-Mart decision to ensure a clear and pragmatic approach balancing the right of people to express themselves versus right of businesses to operate without illegal picketing.
THE CHAMBER RECOMMENDS
That the provincial government act on the recommendations included in The Chamber submission of April 10th, 2002, and furthermore:
1. consider legislation emanating from the report of the Labour Relations Code Section 3 Committee;
2. that Section 5(2)(a) be eliminated, leaving it in the LRB's discretion to schedule expedited unfair labour practice hearings as it deems appropriate, considering the interests of the parties and the Board's available resources;
3. the limitations of Section 5.1 of the former Industrial Relations Act be restored such that trade unions be prohibited from forcing employers to dismiss employees who have been expelled or suspended from membership in a trade union or who have been denied membership in a trade union;
4. that Section 68 be eliminated;
5. that Section 14(4)(f) on remedial certification be repealed; and
6. the Labour Relations Board be directed to set essential services at higher levels to minimize disruption to the public.
Bill C-257 and Bill C-414 – An Act to Amend the Canada Labour Code (“Code”) (Replacement Workers)
In the spring of 2007, a Private Member’s Bill to amend the Canada Labour Code (“Code”) was put to a vote at third reading in the House of Commons. Bill C-257 would have greatly restricted the use of replacement workers during a labour dispute. If enacted, the legislation would have had profound negative effects on the national economy and upset the balance presently found in the Code. The Chamber, along with other provincial and national employer associations, opposed the legislation in the same way as it has done since the ban on the use of replacement workers was introduced by the NDP government in the early 1990s in British Columbia. The Code was amended substantially in the mid-1990s following the report of leading labour expert, Andrew Sims. The Sims Task Force recommended a compromise in this area and the Liberal Government of the day accepted that compromise and enshrined it in the present Code. While the business community was not necessarily happy with the compromise, both the employer and labour communities accepted it as a fair trade off. However, since that time a Bloc Quebecois member has introduced a private member’s bill which would ban the use of replacement workers in a very restrictive fashion. Such legislation would dramatically alter the balance under the Code. Accordingly, the legislation was opposed. Fortunately, the legislation was defeated at third reading.
Unfortunately, very similar legislation was introduced on March 22nd, 2007, under Bill C-415, an Act to Amend the Canada Labour Code (Replacement Workers). Although minor amendments were made to Bill C-257, the essential elements of the restrictive replacement worker prohibitions continued in this legislation.
THE CHAMBER RECOMMENDS
That the federal government defeat Bill C-415 or any similar such restrictive legislation and that it maintain the current balance under the Canada Labour Code.
Human Rights
a) General Policy Recommendations
On March 31st, 2003, amendments to the “Human Rights Code” came into effect. Most of those changes were to the process. The Human Rights Commission, with its cumbersome investigation and complaint vetting model and its advocacy component, was eliminated. A direct access complaint model was put in place with complaints being filed directly with the BC Human Rights’ Tribunal. In addition, the limitation for filing complaints was reduced from 12 months to 6 months.
At the same time, the Ministry of the Attorney General created a new complainant representation system. Prior to the demise of the Commission, all complainants whose complaints had been referred to the Tribunal by the Commission for hearing were entitled to free legal aid representation through a lawyer appointed by the Legal Services Society, without a means or merits test. Now, a Human Rights Clinic represents all complainants before the Tribunal, without a means or merits test. The Clinic is made up of two entities, the BC Human Rights Coalition, a human rights’ advocacy organization, and the Community Legal Assistance Society, which provides legal aid services especially on poverty and human rights issues. The Coalition represents human rights complainants up until a hearing. CLAS represents complainants at the hearing.
The Ministry of the Attorney General contracted with the Law Centre in Victoria, a legal-aid clinic operated by the University of Victoria, to provide advice to respondents before the tribunal. There is, however, no system of free legal representation for respondents, even on a means test basis. Many of the respondents before the tribunal are small businesses, who have little, if any, financial resources to defend human rights complaints. The Law Centre acts on behalf of very few respondents. It is only based in Victoria. There is no system for legal aid representation for respondents throughout the province.
While there were problems with the Commission in the speed of their process, and with their apparent lack of neutrality, only about 10% of the complaints filed with the Commission were referred to the Tribunal for hearing.
The current adjudication system before the Tribunal is a very paper intensive and litigation-focused system. The Tribunal vets very few complaints, being only those complaints clearly out of time or not within the Tribunal's jurisdiction, prior to sending them out to the respondent for a written response.
The Tribunal has very limited power to award costs. Under “s. 37(4)(a) of the Human Rights Code”, the Tribunal can award costs only if a complainant “has engaged in improper conduct during the course of the complaint”. The Tribunal has awarded costs only five or six times.
Respondents must make applications to dismiss the complaint prior to hearing within seventy days of the date of the Tribunal’s notice that it accepted a complaint within thirty days of the date on which information or circumstances which formed the basis of the application came to the respondent’s attention. Additionally, the respondent must file the dismissal application at the same time that they file the Response to Complaint Form, where the Tribunal has added a respondent or, if the Tribunal has extended the time for filing a Response to Complaint Form.
As a result, respondents must make considerable effort to dismiss marginal complaints. Given the formality of the Tribunal's system, and as the complainants are represented by a free advocacy and legal services, the respondents must usually hire a lawyer.
While the Tribunal encourages early mediation, and also mediation prior to the hearing, many respondents feel that mediation of a marginal complaint amounts to blackmail; i.e., pay me X or you will go through a lengthy and costly hearing. The Tribunal hearings average between three to five days.
The bottomline is that the playing field is not level for respondents.
THE CHAMBER RECOMMENDS
That the provincial government:
1. amend its contract with the Human Rights Clinic so that complainants must meet a means and merits test in order to receive free legal aid;
2. create a legal aid clinic or system for human rights respondents;
3. amend the Human Rights Code to give the Tribunal more vetting power for marginal complaints on their own, prior to sending the complaint to the respondent;
4. move the Tribunal to a less formal system, which results in shorter hearings and less paper; and
5. give the Tribunal power to award costs to the successful party.
b) Abolition of Mandatory Retirement and Age Discrimination
The current BC Human Rights Code prohibits discrimination in employment based on age. Age, however, is defined in a restrictive way, meaning those age of 19 years or more and less than 65 years. As a result, mandatory retirement at age 65, although not required in British Columbia, was not prohibited as contrary to the Human Rights Code.
The trend across Canada has been to eliminate mandatory retirement and age discrimination at age 65.
The Premier appointed Dr. Patricia Baird to chair a council on ageing and senior issues. The council held hearings throughout 2006 and issued a report with recommendations to the Premier on November 30, 2006. The report recommended, inter alia, that the province immediately change the Human Rights Code to extend human rights protection to those over age 65, thereby eliminating mandatory retirement in BC. The council also recommended that exemption clauses that allow bargained and employer-imposed retirement ages should be removed and further, the ground of age be extended to Section 8 of the Code which deals with discrimination with respect to accommodations, services and facilities.
The Premier was quick to announce that the Government would introduce legislation eliminating mandatory retirement in British Columbia. The BC Chamber, along with other business groups such as the Coalition of BC Businesses, have participated in discussions with government in respect of the form of the legislation. The Chamber recommends that mandatory retirement legislation ensures that it accommodates the needs of small- and medium-sized employers. The BC Chamber supported the recommendations of the Coalition of BC Businesses issued March 2007. Those initiatives and recommendations include:
• Urging the BC Government to proceed cautiously towards eliminating mandatory retirement taking into account the implications of such legislation on small- and medium-sized businesses;
• The legislation should not be retroactive;
• There should be a minimum of a one-year grace period before the introduction of the legislation. This would be consistent with Ontario’s recent approach of providing one-year’s lead time before the elimination of mandatory retirement;
• Elimination of mandatory retirement should not increase the cost of employment to the employer;
• Employers should be exempted from continuing group benefits after age 65 and, in particular, as it applies to long-term and short-term disability plans and life insurance plans. This would include exempting unionized employers;
• The status quo with respect to WorkSafeBC benefits should be maintained;
• Bona fide occupational requirements allowed the Human Rights Code should be replaced with criteria that are reasonably related to the requirements of the position or occupation. In this regard, common sense, not legal arguments, should prevail; and
• The duty to accommodate requirements under the Human Rights Code should be modified such that the duty of providing reasonable accommodation balances the needs of the employee with the financial and infrastructure resources available to the small-and medium-sized employer.
THE CHAMBER RECOMMENDS
That the provincial government consider and follow the principles noted above when enacting legislation abolishing age discrimination and mandatory retirement at age 65.
Employment Standards
The “Employment Standards Act” (the Act) affects all business in BC but notably small businesses are the most affected, as they do not have collective agreements. The Act has been amended several times in the last couple of years. Several of those amendments are of concern, notably:
a) Averaging Agreements: An employer and employee can now agree to average the schedule work hours over a period of 1, 2, 3 or 4 weeks. Averaging agreements must be in writing and have a start and an end date. While large employers have the capacity to create written averaging agreements in advance, small businesses often do not. They are generally scrambling, as the ultimate multitask employer. A written average agreement adds another dimension which is often confusing and difficult to create.
b) Penalties: Effective November 30, 2002, the Director of Employment Standards can add a $500 monetary penalty for each violation of the Act, a $2,500 penalty for the violation of the same section of the Act or regulation at the same location within three years of the first violation, and a $10,000 penalty for the violation of that same section at the same location within three years of the second violation. Typically, the Director will add penalties for each section of the Code that is alleged to have been violated. For example, where a business closes due to financial circumstances, penalties can be added for every section of the Act that has not been met; i.e., unpaid statutory holidays, unpaid vacation pay, failure to pay wages within the time limits of the Act, etc. Furthermore, if there were two employees who were owed wages, the Director could issue a penalty for $2,500 for that second employee and then $10,000 for the third employee.
The Director has no discretion under the Act about issuing penalties. There is no due diligence test to the issuance of penalties. A penalty is often issued where an employee has been fired for what the employer feels is just cause. Ultimately, just cause is a judgement call which may or may not be held up on review. Yet there is at least a $500 penalty for that determination.
c) Investigation and Adjudication: The Director rarely investigates complaints of unpaid wages. Instead, the Director has created a Self-Help Kit and an adjudication process which is conducted before one of the Director's officers. While, in some circumstances, that adjudication process may be helpful, in other cases it is not. An investigation can be simpler, less costly and time-consuming for the employer. Often the hearings are long and formal. They are conducted before an officer who often has little experience or training in adjudication. The Director has founded its adjudication process on very little statutory power to do so, s. 76(2).
d) Director's Role: The Director has a statutory neutral role, “BWI Business World Inc. BCEST #D050/96 and Mitchell v. Director of Employment Standards, Dec 28, 1993” decision of Justice Vickers. The exact nature of that role is often very uncertain; i.e., neither the Director nor the BC Employment Standards Tribunal (the BCEST) has a policy statement or pamphlet on the Director’s role before the BCEST. Sometimes the Director does not appear on Appeals. Other times, the Director appears but takes a neutral role and other times the Director is aggressive in its role. That lack of clarity and consistency is problematic for appellants. The Director’s neutral role also dovetails with their statutory obligation under s. 112(5) to disclose the full record to the Tribunal. This is not consistently done; i.e., “JC Creations Ltd BCEST #RD317/03”.
e) Failure to Follow BCEST Decisions: There have also been several instances recently where the BCEST has upheld appeals on the basis that the Director has failed to follow previous decisions of the BCEST. This has notably occurred in decisions involving commission sales. For example, in “Parklane Ventures Ltd., BCEST # D211/03”, the Director argued that it may ignore BCEST decisions. The BCEST Tribunal member said that that view "smacks of an abuse of the decision-making and appeal processes established by the legislature".
The business community is caught in this tension between the Director and the Tribunal. The Tribunal has set law and the Director is failing to follow it, either in its decisions or in providing the record to the Tribunal, or in its role before the Tribunal.
THE CHAMBER RECOMMENDS
That the provincial government amend the Employment Standards Act by:
1. removing the penalty provision entirely, or placing a broad due diligence style defence, and clarity around the circumstances when a penalty may be issued;
2. providing clear statutory direction on the role of the Director in investigating and determining complaints, and in its role and obligation before the BCEST;
3. giving clarity and simplicity to the Averaging Agreements;
4. binding the Director to decisions made by the Tribunal; and
5. awarding costs against the Director for failing to provide a record to the Tribunal and in failing to follow directions and decisions of the Tribunal.
WorkSafeBC – Introduction
In late 2001 and early 2002, the then Workers’ Compensation Board underwent a pair of Core Reviews conducted by Alan Hunt and Alan Winter. Government has taken some initial steps to address concerns raised but more needs to be done as WorkSafeBC with its costly administration and weighty regulatory burden continues to represent a challenge to conducting business in BC today.
The Chamber recognizes the work the provincial government has done to date but advocates further measures to reform WorkSafeBC.
WorkSafeBC – Occupational Health and Safety
For nearly a decade The Chamber has consistently advocated a regulatory regime better suited to the needs of small business. Although progress has been made in many areas of the WCB there are still some basic challenges presented by Occupational Health and Safety regulations as they currently stand. These include:
• Complexity – Neither SME operators nor many of their employees have the expertise to understand a host of complex regulations, all formulated by experts in a variety of fields. Large organisations and government have the resources to keep such experts on staff but this is not an option for SME’s. This leaves small businesspeople with two options. They can run the risk of being unknowingly in violation of the regulations, or they can hire a series of experts to ensure their workplace is not in violation, a near prohibitive expense for an average SME;
• Cost of compliance – One of the largest expense concerns of SME’s is directly related to the complexity of the regulations. In order to comply with the regulations as written, SME’s would have to hire a battery of consultants. They would need toxins experts, engineers and architects just to determine if they are in violation. This expense alone precludes compliance. There are also regulations that create unnecessary direct costs both by arbitrarily assigning to employers responsibility for issues that are not legitimately their concern, and by being so vague they can be interpreted as all-encompassing. Furthermore, there is no evidence that these regulations will actually decrease the number of workplace injuries. Until a cost/benefit risk analysis can be conducted there is no way to justify such expense.
• Prescription and inflexibility – The problems described above are all caused by the approach taken within the regulations. The regulations are prescriptive in nature and attempt to regulate every single activity that may or may not occur in a workplace. The regulations are aimed at the lowest common denominator, those few employers who do not follow regulations. These few employers, however, will not follow regulations, regardless of how restrictive or all encompassing the WCB attempts to make them. The Chamber believes that this approach is ineffective and, indeed, unrealistic. Compliance instead must be encouraged through positive means.
WorkSafeBC should set clear and consistent health and safety standards and leave businesses with the flexibility to determine how best to meet those standards. This approach would allow the employers to spend time and resources addressing potential problems rather than spend that time and those resources following needless and complex regulations. This approach would also put pressure on employers to produce results; they would be unable to hide behind the loopholes and red tape inherent to any attempt to create such comprehensive regulations.
Through the Industry Services Branch WorkSafeBC has attempted to address some of these issues. Initiatives they have undertaken include the production of sector specific guides that would help employers in certain sectors to better understand what regulations apply to them and how best to comply.
Although this incremental approach has not had the revolutionary impact the business community has consistently advocated for, we wish to continue working with the ISB to further implement business-friendly amendments to the current regime.
Despite the further work required within this report, there are several recommendations supported by employers including the recommendations to fine workers who knowingly breach safety rules and the recommendation that regulatory review be continuous and completed every three years.
THE CHAMBER RECOMMENDS
That the provincial government:
1. revise the current Occupational Health and Safety regulations to introduce a goal-based model that will allow the employer the flexibility to achieve the required safety targets and to emphasize a preventative and proactive approach that encourages education for employers and workers about their rights and responsibilities;
2. continue to rescind the provisions that create unnecessary bureaucracy such as requiring health and safety committees, and the appointment of safety representatives for small, low risk workplaces;
3. continue to implement the Commission recommendation to fine workers who knowingly breach safety rules to recognize that both employers and employees are responsible for workplace health and safety;
4. implement the Commission recommendation to complete a regulatory review every three years to reflect the constant pace of change in the workplace; and
5. ensuresthat WorkSafeBC do a better job of educating employers about their rights and responsibilities by ensuring that communications are in plain, easy-to-understand language.
WorkSafeBC – Rehabilitation Costs
One of the major objectives of the workers’ compensation system is to assist injured workers in a timely return to productive employment. The Chamber strongly supports this goal and believes that more must be done to help make it a reality.
Early intervention by WorkSafeBC is the key to achieving successful rehabilitation results. Unfortunately, the experience of many employers is that WorkSafeBC’s administrative processes in adjudicating and monitoring claims may result in lengthy delays before any vocational rehabilitation services are considered. In too many cases, the disabled worker has been away from work for such a lengthy period of time before vocational rehabilitation services become involved, that there is little chance of successfully returning the employee to any form of productive employment. This is evidenced by the massive increase in the number of days to return an employee to work over the past two years and the corresponding increase in costs.
THE CHAMBER RECOMMENDS
That WorkSafeBC encourage timely return to work for injured employees by improving the practices of the compensation division and the delivery of vocational rehabilitation services.
The vast majority of jobs and economic development in BC is generated from the small- and medium-sized business sector (SME). SME’s currently account for 80% of job creation in Canada and their employees represent nearly 50% of all workers in the province.
A disincentive to investment and killer of jobs is over regulation by government of SME’s. Labour and employment regulations underwent significant changes under the previous government. In most cases, the changes made it more difficult for SME’s to operate and have significantly hindered job creation in BC during that period.
The current provincial government has taken significant steps to address the concerns of business and has indicated that further measures will be introduced. While The Chamber supports the majority of changes introduced to date, further reform is necessary in 2004 if SME’s are expected to cope with the economic realities of the 21st century in BC.
Although there are many government regulations in this field, the key labour and employment regulations addressed by The Chamber’s Policy and Positions Manual at the provincial level are:
• Labour Relations Code;
• Employment Standards Act;
• Workers' Compensation; and
• Human Rights Code
The Chamber is not the only organization that advocates further reform. The Coalition of BC Business (The Coalition) continues to monitor and speak to labour and employment law reform.
Labour Relations Code
In 2001, the Government amended the “Labour Relations Code” (the Code) to restore the mandatory secret ballot vote in all certification applications, to provide that educational programs to students and eligible children under the “School Act” be designated as essential services, to eliminate sectoral bargaining in the construction industry, and to clarify the basis upon which votes, including strike vote, must be conducted by secret ballot.
In 2002, the government introduced further amendments to the Code that were intended to “provide a framework for labour and management to build healthy workplace environments and enterprises that compete in a modern world economy”, and that would “send an important message to the labour relations community and to investors that BC is open for business and that we are prepared to make sure labour relations in BC are balanced, fair minded and support growth and prosperity”.
Changes included amending the Purposes Section 2 of the Code to rename it “Duties” and to emphasize their overall importance. The list of such duties was expanded to recognize the rights and obligations of employees, employers and trade unions under the Code and foster the employment of workers in economically viable businesses. The government also introduced significant amendments to employer free speech by expanding the right to communicate under Section 8 of the Code.
In December 2003, the Minister of Skills Development and Labour announced the formation of a Section 3 Committee to provide advice on 14 policy issues related to the Labour Relations Code. The changes were aimed at returning balance, flexibility and individual accountability to the Code – for both employers and employees. A number of the issues assigned to the Section 3 Committee addressed aspects of certification, decertification and fair representation. Others include: Definition of Picketing, Definition of Employee – as it pertains to exclusion from a bargaining unit – and Successor Rights and Obligations – as they pertain to “contracting out”. The Chamber actively participated in the development of a submission from The Coalition which, since 1992, has spoken for small- and medium-sized business employers with respect to regulation of employment matters in the province, including labour relations, employment standards, human rights and Workers’ Compensation Board (WCB) issues. The Committee filed its report in April 2003. The Committee analyzed the issues before it “to assist the Minister in making decisions about how to proceed”. However, the government has yet to act on the Committee’s report.
Other items not mentioned in the report that were not subject to review include the following:
1. Section 5(2)(a)
This Section requires the Labour Relations Board (LRB) to schedule a hearing into certain unfair labour practice complaints within three days of its filing. This creates significant problems for employers preparing its response to the complaint. It also creates a problem for the LRB in arranging hearings in such a short time period.
2. Elimination of Employment Due to Loss of Membership in a Trade Union
Under Section 5.1 of the former Industrial Relations Act, unions were prohibited expelling or suspending membership unless the employee failed to pay the periodic dues, assessments and initiation fees uniformly required to be paid by all members of the union, or having engaged in activity against the union contrary to the statute. This Section limited the circumstances under which unions could require employers to terminate employees under collective agreements that required union membership as a condition of employment. The Chamber submits that this protection should be restored.
3. Replacement Workers – Section 68
The Chamber was most disappointed to see that the government has not decided to deal with Section 68. The Chamber maintains its position that Section 68 must be repealed in all its forms.
Section 68 restricts the right of an employer to carry on operations during a lawful strike or lockout. The Chamber has consistently maintained that Section 68 is manifestly unfair, especially insofar as it affects small-and medium-sized businesses in BC. Where such an employer is involved in a labour dispute, it typically finds that the balance of power is tilted significantly in favour of the trade union because of the impact of Section 68. While often an employer is unable to continue its operations in any form due to the labour dispute, the striking employees on the other hand are able to obtain alternate work during the labour dispute which greatly reduces the employer's ability to counteract the union's economic pressure. Moreover Section 68 discourages investment as it is a provision that does not appear in the labour legislation in most other Canadian jurisdictions. Eliminating Section 68 would send a strong message to the global business community that BC has finally balanced the playing field in a way that opens up the many business opportunities that are available in this province.
4. Elimination of Remedial Certification – Section 14(4)(f)
It is The Chamber’s position that the remedial certification power in Section 14(4)(f) should be repealed.
The amendment to the Code which re-introduced mandatory secret ballot votes in certification applications was designed to ensure that trade unions are not forced on groups of employees who do not want them. Remedial certification is inconsistent with this principle, and can result in significant damage to a workplace. Moreover, Section 14(4)(f) is unnecessary, as the LRB has sufficient powers elsewhere to fashion appropriate orders to remedy violations of the Code.
The Chamber believes it is important for BC to take this step, consistent with other jurisdictions, which would ensure that workers' democratic rights are preserved.
5. Essential Services
There is a perception that when the government designates a service as essential, the service will continue to be delivered as is. This is not the case, however, and service levels in essential undertakings are often set by the LRB at relatively low-levels. The recent BC Ferries dispute demonstrated the harm caused to innocent third parties by setting relatively low-levels of service and the government was soon required to step in. The Chamber recommends that essential service levels be set high enough to prevent loss to SME’s.
Issues discussed by the Committee which The Chamber believes require attention include the following:
a) Partial Decertification
The Chamber joins The Coalition in recommending that the Code be amended so that rules governing decertification are the same as for certification. A group of employees must have the right to decertify if they no longer want union representation and they should not be confronted with difficult rules or unnecessary roadblocks in doing so.
b) Successorship and Bankruptcy
The Chamber recommends that the Code be amended so that employees have a choice about union representation when a bankrupt business is restarted. The new owners should not be required to inherit the previous union certification and collective agreement.
c) Picketing
The Chamber recommends that a new definition of picketing be introduced to provide clarity in terms of what constitutes picketing and what type of labour activities will be included and exempted from the LRB's regulations. A recent decision of the BC LRB traditionally has provided clarity by providing a bright line test between picketing consumer leafleting which would remain exempted from regulation by the LRB pursuant to the Supreme Court of Canada decision in K-Mart. However, the government could still consider enacting a new definition in light of the K-Mart decision to ensure a clear and pragmatic approach balancing the right of people to express themselves versus right of businesses to operate without illegal picketing.
THE CHAMBER RECOMMENDS
That the provincial government act on the recommendations included in The Chamber submission of April 10th, 2002, and furthermore:
1. consider legislation emanating from the report of the Labour Relations Code Section 3 Committee;
2. that Section 5(2)(a) be eliminated, leaving it in the LRB's discretion to schedule expedited unfair labour practice hearings as it deems appropriate, considering the interests of the parties and the Board's available resources;
3. the limitations of Section 5.1 of the former Industrial Relations Act be restored such that trade unions be prohibited from forcing employers to dismiss employees who have been expelled or suspended from membership in a trade union or who have been denied membership in a trade union;
4. that Section 68 be eliminated;
5. that Section 14(4)(f) on remedial certification be repealed; and
6. the Labour Relations Board be directed to set essential services at higher levels to minimize disruption to the public.
Bill C-257 and Bill C-414 – An Act to Amend the Canada Labour Code (“Code”) (Replacement Workers)
In the spring of 2007, a Private Member’s Bill to amend the Canada Labour Code (“Code”) was put to a vote at third reading in the House of Commons. Bill C-257 would have greatly restricted the use of replacement workers during a labour dispute. If enacted, the legislation would have had profound negative effects on the national economy and upset the balance presently found in the Code. The Chamber, along with other provincial and national employer associations, opposed the legislation in the same way as it has done since the ban on the use of replacement workers was introduced by the NDP government in the early 1990s in British Columbia. The Code was amended substantially in the mid-1990s following the report of leading labour expert, Andrew Sims. The Sims Task Force recommended a compromise in this area and the Liberal Government of the day accepted that compromise and enshrined it in the present Code. While the business community was not necessarily happy with the compromise, both the employer and labour communities accepted it as a fair trade off. However, since that time a Bloc Quebecois member has introduced a private member’s bill which would ban the use of replacement workers in a very restrictive fashion. Such legislation would dramatically alter the balance under the Code. Accordingly, the legislation was opposed. Fortunately, the legislation was defeated at third reading.
Unfortunately, very similar legislation was introduced on March 22nd, 2007, under Bill C-415, an Act to Amend the Canada Labour Code (Replacement Workers). Although minor amendments were made to Bill C-257, the essential elements of the restrictive replacement worker prohibitions continued in this legislation.
THE CHAMBER RECOMMENDS
That the federal government defeat Bill C-415 or any similar such restrictive legislation and that it maintain the current balance under the Canada Labour Code.
Human Rights
a) General Policy Recommendations
On March 31st, 2003, amendments to the “Human Rights Code” came into effect. Most of those changes were to the process. The Human Rights Commission, with its cumbersome investigation and complaint vetting model and its advocacy component, was eliminated. A direct access complaint model was put in place with complaints being filed directly with the BC Human Rights’ Tribunal. In addition, the limitation for filing complaints was reduced from 12 months to 6 months.
At the same time, the Ministry of the Attorney General created a new complainant representation system. Prior to the demise of the Commission, all complainants whose complaints had been referred to the Tribunal by the Commission for hearing were entitled to free legal aid representation through a lawyer appointed by the Legal Services Society, without a means or merits test. Now, a Human Rights Clinic represents all complainants before the Tribunal, without a means or merits test. The Clinic is made up of two entities, the BC Human Rights Coalition, a human rights’ advocacy organization, and the Community Legal Assistance Society, which provides legal aid services especially on poverty and human rights issues. The Coalition represents human rights complainants up until a hearing. CLAS represents complainants at the hearing.
The Ministry of the Attorney General contracted with the Law Centre in Victoria, a legal-aid clinic operated by the University of Victoria, to provide advice to respondents before the tribunal. There is, however, no system of free legal representation for respondents, even on a means test basis. Many of the respondents before the tribunal are small businesses, who have little, if any, financial resources to defend human rights complaints. The Law Centre acts on behalf of very few respondents. It is only based in Victoria. There is no system for legal aid representation for respondents throughout the province.
While there were problems with the Commission in the speed of their process, and with their apparent lack of neutrality, only about 10% of the complaints filed with the Commission were referred to the Tribunal for hearing.
The current adjudication system before the Tribunal is a very paper intensive and litigation-focused system. The Tribunal vets very few complaints, being only those complaints clearly out of time or not within the Tribunal's jurisdiction, prior to sending them out to the respondent for a written response.
The Tribunal has very limited power to award costs. Under “s. 37(4)(a) of the Human Rights Code”, the Tribunal can award costs only if a complainant “has engaged in improper conduct during the course of the complaint”. The Tribunal has awarded costs only five or six times.
Respondents must make applications to dismiss the complaint prior to hearing within seventy days of the date of the Tribunal’s notice that it accepted a complaint within thirty days of the date on which information or circumstances which formed the basis of the application came to the respondent’s attention. Additionally, the respondent must file the dismissal application at the same time that they file the Response to Complaint Form, where the Tribunal has added a respondent or, if the Tribunal has extended the time for filing a Response to Complaint Form.
As a result, respondents must make considerable effort to dismiss marginal complaints. Given the formality of the Tribunal's system, and as the complainants are represented by a free advocacy and legal services, the respondents must usually hire a lawyer.
While the Tribunal encourages early mediation, and also mediation prior to the hearing, many respondents feel that mediation of a marginal complaint amounts to blackmail; i.e., pay me X or you will go through a lengthy and costly hearing. The Tribunal hearings average between three to five days.
The bottomline is that the playing field is not level for respondents.
THE CHAMBER RECOMMENDS
That the provincial government:
1. amend its contract with the Human Rights Clinic so that complainants must meet a means and merits test in order to receive free legal aid;
2. create a legal aid clinic or system for human rights respondents;
3. amend the Human Rights Code to give the Tribunal more vetting power for marginal complaints on their own, prior to sending the complaint to the respondent;
4. move the Tribunal to a less formal system, which results in shorter hearings and less paper; and
5. give the Tribunal power to award costs to the successful party.
b) Abolition of Mandatory Retirement and Age Discrimination
The current BC Human Rights Code prohibits discrimination in employment based on age. Age, however, is defined in a restrictive way, meaning those age of 19 years or more and less than 65 years. As a result, mandatory retirement at age 65, although not required in British Columbia, was not prohibited as contrary to the Human Rights Code.
The trend across Canada has been to eliminate mandatory retirement and age discrimination at age 65.
The Premier appointed Dr. Patricia Baird to chair a council on ageing and senior issues. The council held hearings throughout 2006 and issued a report with recommendations to the Premier on November 30, 2006. The report recommended, inter alia, that the province immediately change the Human Rights Code to extend human rights protection to those over age 65, thereby eliminating mandatory retirement in BC. The council also recommended that exemption clauses that allow bargained and employer-imposed retirement ages should be removed and further, the ground of age be extended to Section 8 of the Code which deals with discrimination with respect to accommodations, services and facilities.
The Premier was quick to announce that the Government would introduce legislation eliminating mandatory retirement in British Columbia. The BC Chamber, along with other business groups such as the Coalition of BC Businesses, have participated in discussions with government in respect of the form of the legislation. The Chamber recommends that mandatory retirement legislation ensures that it accommodates the needs of small- and medium-sized employers. The BC Chamber supported the recommendations of the Coalition of BC Businesses issued March 2007. Those initiatives and recommendations include:
• Urging the BC Government to proceed cautiously towards eliminating mandatory retirement taking into account the implications of such legislation on small- and medium-sized businesses;
• The legislation should not be retroactive;
• There should be a minimum of a one-year grace period before the introduction of the legislation. This would be consistent with Ontario’s recent approach of providing one-year’s lead time before the elimination of mandatory retirement;
• Elimination of mandatory retirement should not increase the cost of employment to the employer;
• Employers should be exempted from continuing group benefits after age 65 and, in particular, as it applies to long-term and short-term disability plans and life insurance plans. This would include exempting unionized employers;
• The status quo with respect to WorkSafeBC benefits should be maintained;
• Bona fide occupational requirements allowed the Human Rights Code should be replaced with criteria that are reasonably related to the requirements of the position or occupation. In this regard, common sense, not legal arguments, should prevail; and
• The duty to accommodate requirements under the Human Rights Code should be modified such that the duty of providing reasonable accommodation balances the needs of the employee with the financial and infrastructure resources available to the small-and medium-sized employer.
THE CHAMBER RECOMMENDS
That the provincial government consider and follow the principles noted above when enacting legislation abolishing age discrimination and mandatory retirement at age 65.
Employment Standards
The “Employment Standards Act” (the Act) affects all business in BC but notably small businesses are the most affected, as they do not have collective agreements. The Act has been amended several times in the last couple of years. Several of those amendments are of concern, notably:
a) Averaging Agreements: An employer and employee can now agree to average the schedule work hours over a period of 1, 2, 3 or 4 weeks. Averaging agreements must be in writing and have a start and an end date. While large employers have the capacity to create written averaging agreements in advance, small businesses often do not. They are generally scrambling, as the ultimate multitask employer. A written average agreement adds another dimension which is often confusing and difficult to create.
b) Penalties: Effective November 30, 2002, the Director of Employment Standards can add a $500 monetary penalty for each violation of the Act, a $2,500 penalty for the violation of the same section of the Act or regulation at the same location within three years of the first violation, and a $10,000 penalty for the violation of that same section at the same location within three years of the second violation. Typically, the Director will add penalties for each section of the Code that is alleged to have been violated. For example, where a business closes due to financial circumstances, penalties can be added for every section of the Act that has not been met; i.e., unpaid statutory holidays, unpaid vacation pay, failure to pay wages within the time limits of the Act, etc. Furthermore, if there were two employees who were owed wages, the Director could issue a penalty for $2,500 for that second employee and then $10,000 for the third employee.
The Director has no discretion under the Act about issuing penalties. There is no due diligence test to the issuance of penalties. A penalty is often issued where an employee has been fired for what the employer feels is just cause. Ultimately, just cause is a judgement call which may or may not be held up on review. Yet there is at least a $500 penalty for that determination.
c) Investigation and Adjudication: The Director rarely investigates complaints of unpaid wages. Instead, the Director has created a Self-Help Kit and an adjudication process which is conducted before one of the Director's officers. While, in some circumstances, that adjudication process may be helpful, in other cases it is not. An investigation can be simpler, less costly and time-consuming for the employer. Often the hearings are long and formal. They are conducted before an officer who often has little experience or training in adjudication. The Director has founded its adjudication process on very little statutory power to do so, s. 76(2).
d) Director's Role: The Director has a statutory neutral role, “BWI Business World Inc. BCEST #D050/96 and Mitchell v. Director of Employment Standards, Dec 28, 1993” decision of Justice Vickers. The exact nature of that role is often very uncertain; i.e., neither the Director nor the BC Employment Standards Tribunal (the BCEST) has a policy statement or pamphlet on the Director’s role before the BCEST. Sometimes the Director does not appear on Appeals. Other times, the Director appears but takes a neutral role and other times the Director is aggressive in its role. That lack of clarity and consistency is problematic for appellants. The Director’s neutral role also dovetails with their statutory obligation under s. 112(5) to disclose the full record to the Tribunal. This is not consistently done; i.e., “JC Creations Ltd BCEST #RD317/03”.
e) Failure to Follow BCEST Decisions: There have also been several instances recently where the BCEST has upheld appeals on the basis that the Director has failed to follow previous decisions of the BCEST. This has notably occurred in decisions involving commission sales. For example, in “Parklane Ventures Ltd., BCEST # D211/03”, the Director argued that it may ignore BCEST decisions. The BCEST Tribunal member said that that view "smacks of an abuse of the decision-making and appeal processes established by the legislature".
The business community is caught in this tension between the Director and the Tribunal. The Tribunal has set law and the Director is failing to follow it, either in its decisions or in providing the record to the Tribunal, or in its role before the Tribunal.
THE CHAMBER RECOMMENDS
That the provincial government amend the Employment Standards Act by:
1. removing the penalty provision entirely, or placing a broad due diligence style defence, and clarity around the circumstances when a penalty may be issued;
2. providing clear statutory direction on the role of the Director in investigating and determining complaints, and in its role and obligation before the BCEST;
3. giving clarity and simplicity to the Averaging Agreements;
4. binding the Director to decisions made by the Tribunal; and
5. awarding costs against the Director for failing to provide a record to the Tribunal and in failing to follow directions and decisions of the Tribunal.
WorkSafeBC – Introduction
In late 2001 and early 2002, the then Workers’ Compensation Board underwent a pair of Core Reviews conducted by Alan Hunt and Alan Winter. Government has taken some initial steps to address concerns raised but more needs to be done as WorkSafeBC with its costly administration and weighty regulatory burden continues to represent a challenge to conducting business in BC today.
The Chamber recognizes the work the provincial government has done to date but advocates further measures to reform WorkSafeBC.
WorkSafeBC – Occupational Health and Safety
For nearly a decade The Chamber has consistently advocated a regulatory regime better suited to the needs of small business. Although progress has been made in many areas of the WCB there are still some basic challenges presented by Occupational Health and Safety regulations as they currently stand. These include:
• Complexity – Neither SME operators nor many of their employees have the expertise to understand a host of complex regulations, all formulated by experts in a variety of fields. Large organisations and government have the resources to keep such experts on staff but this is not an option for SME’s. This leaves small businesspeople with two options. They can run the risk of being unknowingly in violation of the regulations, or they can hire a series of experts to ensure their workplace is not in violation, a near prohibitive expense for an average SME;
• Cost of compliance – One of the largest expense concerns of SME’s is directly related to the complexity of the regulations. In order to comply with the regulations as written, SME’s would have to hire a battery of consultants. They would need toxins experts, engineers and architects just to determine if they are in violation. This expense alone precludes compliance. There are also regulations that create unnecessary direct costs both by arbitrarily assigning to employers responsibility for issues that are not legitimately their concern, and by being so vague they can be interpreted as all-encompassing. Furthermore, there is no evidence that these regulations will actually decrease the number of workplace injuries. Until a cost/benefit risk analysis can be conducted there is no way to justify such expense.
• Prescription and inflexibility – The problems described above are all caused by the approach taken within the regulations. The regulations are prescriptive in nature and attempt to regulate every single activity that may or may not occur in a workplace. The regulations are aimed at the lowest common denominator, those few employers who do not follow regulations. These few employers, however, will not follow regulations, regardless of how restrictive or all encompassing the WCB attempts to make them. The Chamber believes that this approach is ineffective and, indeed, unrealistic. Compliance instead must be encouraged through positive means.
WorkSafeBC should set clear and consistent health and safety standards and leave businesses with the flexibility to determine how best to meet those standards. This approach would allow the employers to spend time and resources addressing potential problems rather than spend that time and those resources following needless and complex regulations. This approach would also put pressure on employers to produce results; they would be unable to hide behind the loopholes and red tape inherent to any attempt to create such comprehensive regulations.
Through the Industry Services Branch WorkSafeBC has attempted to address some of these issues. Initiatives they have undertaken include the production of sector specific guides that would help employers in certain sectors to better understand what regulations apply to them and how best to comply.
Although this incremental approach has not had the revolutionary impact the business community has consistently advocated for, we wish to continue working with the ISB to further implement business-friendly amendments to the current regime.
Despite the further work required within this report, there are several recommendations supported by employers including the recommendations to fine workers who knowingly breach safety rules and the recommendation that regulatory review be continuous and completed every three years.
THE CHAMBER RECOMMENDS
That the provincial government:
1. revise the current Occupational Health and Safety regulations to introduce a goal-based model that will allow the employer the flexibility to achieve the required safety targets and to emphasize a preventative and proactive approach that encourages education for employers and workers about their rights and responsibilities;
2. continue to rescind the provisions that create unnecessary bureaucracy such as requiring health and safety committees, and the appointment of safety representatives for small, low risk workplaces;
3. continue to implement the Commission recommendation to fine workers who knowingly breach safety rules to recognize that both employers and employees are responsible for workplace health and safety;
4. implement the Commission recommendation to complete a regulatory review every three years to reflect the constant pace of change in the workplace; and
5. ensuresthat WorkSafeBC do a better job of educating employers about their rights and responsibilities by ensuring that communications are in plain, easy-to-understand language.
WorkSafeBC – Rehabilitation Costs
One of the major objectives of the workers’ compensation system is to assist injured workers in a timely return to productive employment. The Chamber strongly supports this goal and believes that more must be done to help make it a reality.
Early intervention by WorkSafeBC is the key to achieving successful rehabilitation results. Unfortunately, the experience of many employers is that WorkSafeBC’s administrative processes in adjudicating and monitoring claims may result in lengthy delays before any vocational rehabilitation services are considered. In too many cases, the disabled worker has been away from work for such a lengthy period of time before vocational rehabilitation services become involved, that there is little chance of successfully returning the employee to any form of productive employment. This is evidenced by the massive increase in the number of days to return an employee to work over the past two years and the corresponding increase in costs.
THE CHAMBER RECOMMENDS
That WorkSafeBC encourage timely return to work for injured employees by improving the practices of the compensation division and the delivery of vocational rehabilitation services.
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