On April 29, 2019, the Government of BC introduced Bill 8 – Employment Standards Amendment Act (“Bill 8”) which, for the first time in over 15 years, introduced significant changes to the Employment Standards Act (“ESA”). This is the first of what is expected to be a two-part amendment process to the ESA.
There are both substantive and administrative changes being proposed to the ESA. For employers, the most significant amendments being proposed are: (1) a requirement that, essentially, all of the main components of a collective agreement must “meet or exceed” the corresponding Parts of the ESA; (2) the addition of further unpaid leaves; and (3) the extension of the period for which employees can recover wages payable.
Applicability of the ESA to Collective Agreements
Since 2002, large parts of the ESA have not applied to collective agreements if they had any provision dealing with these specific parts of the ESA: hours of work or overtime, statutory holidays, annual vacation and seniority retention recall, termination of employment and lay-off. This is in contrast to the situation prior to 2002 where the ESA would only be excluded from applying to a collective agreement if the applicable provisions of a collective agreement “met or exceeded” the requirements of the corresponding Part of the ESA when considered together (the “meet or exceed” test).
Bill 8, essentially, reverts to the pre-2002 regime. Only if the collective agreement terms corresponding with the specific Parts of the ESA “meet or exceed” that specific Part will that Part of the ESA not apply to the collective agreement.
Bill 8 delays the implementation of this new regime until the expiry of the current collective agreement in force. More specifically, employers will not need to address this until their current collective agreement expires and a new collective agreement is negotiated. As such, all employers will have to consider what they will need to address in their next round of collective bargaining to satisfy this new law. For employers, having the ESA apply as a minimum floor to their collective agreement is generally viewed as interference in their collective bargaining relationship.
As with the pre-2002 era, it will be within the jurisdiction of an arbitrator pursuant to the collective agreement to decide whether the specific provisions of the collective agreement, when considered together, “meet or exceed” the corresponding Part of the ESA. The pre-2002 experience is not attractive for employers. Many, many very lengthy and expensive hearings took place in this era as all applicable provisions in a collective agreement had to be examined as a whole and then compared to the applicable corresponding Part of the ESA. Included in this analysis is the negotiating history of all of the relevant sections of the applicable collective agreement.
It should be noted that the BC Law Institute’s comprehensive report on the Employment Standards Act and the many recommendations for change did not include a recommendation for change in this area. While the BCLI report addresses the pros and cons of making a collective agreement subject to large parts of the ESA, there was such a wide divergence of opinion amongst the members of the task force that no recommendations were made. As such, it is quite surprising to see this significant amendment contained in Bill 8, which will potentially impact all collective bargaining relationships in the Province.
New Leaves: Critical Illness or Injury Leaves and Domestic Violence Leave
Bill 8 provides for job-protected leave for those caring for a critically-ill family member. Employees will be allowed to take up to 36 weeks on an unpaid basis to care for a critically ill child and up to 16 weeks to care for an adult. This has been tailored to align with Federal employment insurance benefits.
Domestic violence leave provides up to 10 non-consecutive days of unpaid job-protected leave. In addition, employees will have a second option that would provide up to 15 weeks of consecutive unpaid leave. The 10 day leave period can be taken in individual day blocks while the 15 week period of unpaid leave can be taken in “one unit at a time” or more than this with the employer’s consent.
Recovery of Wages
Bill 8 extends the period for an employee to be able to recover owed wages from 6 to 12 months. There is a possibility of extending that to 24 months, the circumstances of which will be, it appears, set out in the Regulations. The BC Labour Ministry Backgrounder states the extension to 24 months would be “in cases involving wilful or severe contravention of the Act”.
Other ESA Changes of Note
Child Employment Protections
Bill 8 will, generally, raise the age a child may work from 12 to 16. Exemptions are allowed for 14 and 15 year olds to perform “light work” that is safe for them (such as “stocking shelfs at a grocery store”). Bill 8 also introduces provisions “to better protect the safety of 16 to 18 year olds by putting tough restrictions on the type of hazardous work they can be asked to perform” (BC Labour Ministry Backgrounder). Existing regulations that allow children to work in recorded and live entertainment with parental consent has been maintained.
Treatment of Tips/Gratuities and Resignation
Bill 8 sets out a framework for regulating tips and tip pooling. It prohibits employers from withholding tips or gratuities, from deducting amounts from the tips or requiring tips to be turned over to their employer. While Bill 8 permits tip pooling, it specifies that the employer may not share in the tip pool except where the employer performs the same work as some or all of the employees who share in the pool.
There will be a new requirement that when an employee, with at least 3 months’ employment, gives notice of resignation, if the employer wants that employee to leave earlier than the effective date of resignation, the employer will have to pay the employee the lesser of the money the employee would have earned during the resignation notice or the amount the employer is liable to pay on termination.
Administrative Changes to the Employment Standards Branch
The self-help kit introduced in 2003 as a first step for an employee trying to collect owed wages has been eliminated. There will now be no need to use the self-help kit before filing a complaint. Bill 8 sets out a number of new provisions to toughen enforcement. The Director of Employment Standards will be required to be proactive in investigating complaints in addition to dealing with individual complaints. The Director must investigate all complaints “accepted for resolution by the Branch”. The Director is now given the authority to waive or raise penalties. The Director also can require employers to inform workers of their rights. Labour Minister Bains announced a C$14 million, three year increase in the budget specifically for funding enforcement.
Director's and Officer's Liability
Bill 8 eliminates the personal liability exemption for directors and officers in the event of bankruptcy or insolvency. Directors and officers will be personally liable for up to 2 months of unpaid wages for each employee even where the company files for bankruptcy or insolvency, unless the unpaid wages consist of unpaid termination pay.
The proposed administrative and enforcement provisions contained in Bill 8 are not particularly contentious, nor are the changes to the child labour provisions.
The further unpaid leaves may cause a number of employers to have scheduling and logistical problems and could well increase staffing costs. Time will tell.
The changes to the period for which employees can recover wages payable will expand potential liability for employers.
The “meet or exceed” provisions of Bill 8 are the most significant of the proposed changes as all unionized employers will have to carefully scrutinize their collective agreements to ensure the key components of their next collective agreement “meet or exceed” the corresponding Parts of the ESA.
Finally, it must be remembered that this is the first of two ESA amendment acts. Bill 8 is viewed by the BC Government as addressing the most pressing areas for change. The next amendment act will likely target overtime hours and rates and the right to refuse overtime; overtime averaging; compressed work weeks and advance notice of shift schedules; and, possibly, the requirement for just cause termination. When the next amendment act will be tabled is unclear.
STAY TUNED for other bulletins concerning Bill 8 and other legislative changes being introduced by the Government of BC including amendments to the BC Labour Relations Code, which were introduced on April 30, 2019.