STANDING COMMITTEE ON PUBLIC ACCOUNTS
COMITÉ PERMANENT DES COMPTES PUBLICS
Thursday 3 March 2005 Jeudi 3 mars 2005
2004 ANNUAL
REPORT,
PROVINCIAL AUDITOR
MINISTRY OF LABOUR
The committee met at 0936 in committee room 1, following a closed session.
2004
ANNUAL REPORT,
PROVINCIAL AUDITOR
MINISTRY OF LABOUR
Consideration of section 3.09, employee rights and responsibilities program.
The Chair (Mr. Norman W. Sterling): Welcome. My name is Norm Sterling; I'm the Chair of the public accounts committee. Thank you for coming.
Deputy Minister Kivisto, welcome to our committee. Perhaps you would like to introduce those people who are with you at the front, and if some people come forward to answer questions of the committee later, perhaps you would introduce those people at that time as well.
I invite you first to make any opening comments you might like. Just before you do that, a member of the committee had a point of order.
Ms. Shelley Martel (Nickel Belt): I do have a point of order, and I want to ask for the indulgence of the ministry staff and the people from the public who are here. I want to move a motion. I don't intend to take a long time to do it. I'll move the motion and make some remarks, and then we'll get right to your questions. I'd like to hear what you have to say too, and I have questions for you as well. But before I do that, Chair, I'd like to move a motion, and I'd like to ask Tonia if she can give the committee members and the auditor's staff a copy of it. It reads as follows:
"I move, as per section 16 of the Audit Act, that the public accounts committee direct the Auditor General to fully examine the $15.8-million sale of York University-owned land to Tribute Communities to determine if the public received value for money with this transaction/deal, and that the Auditor General report his findings and recommendations as soon as possible to the public accounts committee and to the Legislative Assembly through the Chair of the committee."
If I can make some remarks, Mr. Chair?
The Chair: Go ahead.
Ms. Martel: A couple of points that I'd like to raise: Firstly, members of the committee will know that this matter was raised in the Legislature this week by my leader, Howard Hampton, on both Monday and Tuesday. What we know of the matter is as follows:
(1) That this multi-million-dollar land deal was untendered, even though its value was $15.8 million;
(2) The land was sold for less than half of its value; and
(3) The person who brokered the land deal for the university, one Joseph Sorbara, is a close business associate of the land purchaser, Tribute Communities.
I think we all need to remember, and this was pointed out during question period, that this is a publicly funded university. It receives a great deal of tax dollars, and these precious Ontario taxpayers' dollars should go to students and not into the pockets of developers. On the face of it, it appears that there was a potential huge loss of funds for the university and for students, and that there is a conflict of interest as well.
Because it is a matter that involves the public purse and the public trust, we drafted a letter to go to the Auditor General, requesting that the Auditor General do a value-for-money audit of the land deal. My leader asked both the Premier and the Minister of Finance to sign that letter, to acknowledge their support for an audit to go forward. However, regrettably, both the Premier and the Minister of Finance refused to do this.
We do know, because we hear in the media, that the board of governors at the university has indicated that they will have this matter reviewed. The board has offered to bring in someone to review the deal they authorized. I can tell you that I and my colleagues in the New Democratic Party do not have a great deal of confidence in a process where the board that authorized a rather suspect deal in the first place is now also going to bring in someone and set the terms and conditions for a review of that same deal.
We think an investigation of the deal requires transparency. It requires an independent process. We believe that an audit by the Auditor General will achieve transparency, will achieve independence, and will give the public and ourselves every confidence that this matter has been most thoroughly examined and reviewed and that the recommendations that may come forward would be acted upon.
Those are my remarks with respect to this motion.
The Chair: Further comment?
Ms. Laurel C. Broten (Etobicoke-Lakeshore): First of all, we want to get a ruling from your perspective that the motion is in order. It has been the tradition of the committee that we receive advance notice of motions that would be brought before the committee. I'd like that determination on your part, and then I will make some very brief submissions.
The Chair: I've asked the clerk, and the clerk is of the opinion and I am of the opinion that the motion is in order.
Ms. Broten: Thank you. In response to the comments Ms. Martel made, I think her focus has been extensively on the need for an independent process. At this point, I would suggest that the motion is premature. The university itself is undergoing an independent process and examination at this point. They have indicated that they will willingly open up the process and appoint an individual to look at that. That was certainly the information that has been made available to us. Obviously, this committee wants to see the results of the independent process being undertaken by the university itself in examining this. We can look at these issues at some point in time after the processes that are currently undertaken have proceeded to their conclusion.
Mrs. Julia Munro (York North): I just wish to add a couple of comments to the motion we're looking at. It has certainly been the practice of this committee, even prior to the extended legal authority of the Auditor General, to act as an independent committee of the Legislature and ask for special audits. First of all, it is something that is definitely within our purview to ask for, particularly in this case, as it is part of the expanded area of responsibility of the Auditor General, so I certainly support this motion.
Ms. Martel: If I might respond, there are two points I'd like to make.
Number one, I think the issue is, do people have confidence in the review the university will undertake? I have to say that we don't have confidence in the review the university will undertake, because the board of governors that authorized the deal in the first place is now the same board of governors that will hire the services of someone and set the terms and conditions for a review of the deal that they have already authorized. From a public perception, I don't think that fits the bill, in terms of responding to people's need to have a transparent process independent of the board that already signed the deal. The auditor -- not only this auditor, but successive auditors -- and the office itself have been the vehicle and the mechanism by which people have confidence that an independent process, a thorough value-for-money audit, would and could take place and indeed, in this case, should take place. That is why I raise this very serious concern, that the university will have its review whether or not anyone, at the end of the day, has confidence. Though the outcome remains to be seen, I suggest that people will not, given the fact that it is the same board that authorized the review in the first place that is now having someone come in and is setting the terms and conditions for a review of a deal they already agreed to.
Secondly, I would have hoped the McGuinty government would have been interested in letting the auditor have a look at this and in signalling their support for that, because this is the same government that, just in the last session, through amendments to the Audit Act, increased the powers of the auditor to do audits like this. On November 22, 2004, Minister Sorbara himself said, "We will allow the Auditor General to shine a light on organizations that spend taxpayer dollars, ensuring that Ontarians are getting value for the money they invest in public services." We think the auditor should shine a light on this very suspect deal.
I remind people that it's a land deal that was untendered. Secondly, the land was sold for less than half of its value. Third, the person who brokered the deal for the university, Joseph Sorbara, is a close business associate of the land purchaser, Tribute Communities. We should shine a light. I think the Auditor General is the exact person to do that, and do that as soon as possible. I hope the committee members support this resolution.
Mr. Richard Patten (Ottawa Centre): Before you call the vote -- it certainly suits the opposition parties' purposes, of course, to try to embarrass the government.
Every time we hear something has gone amiss and we then discredit and undercut the governance of universities or what have you, what does that say to them? They have called for an independent review. They will make this review transparent and share that with everyone.
By the way, the Auditor General has full access now to these institutions. I think it's premature, and I won't be supporting it.
The Chair: No further discussion?
Ms. Martel: I'd like a recorded vote, please, Chair.
Ayes
Martel, Munro.
Nays
Broten, Flynn, Mauro, Patten, Zimmer.
The Chair: I declare the motion lost.
We will now proceed with our examination of the auditor's report with regard to the Ministry of Labour.
Mr. Paavo Kivisto: Thank you, Mr. Chair and members. We have copies of my speaking notes that we'll pass out for your convenience. I'd like to introduce my colleagues with me here this morning.
The Chair: Before you do that, just so you know how these microphones work: They go on automatically; you turn them off by pushing the button.
Well, they're supposed to do that. I guess they don't. Go ahead.
Mr. Kivisto: I'm joined this morning by Helle Tosine, who's the assistant deputy minister of operations for the Ministry of Labour; Brian Lemire, who's the director of the employment practices branch; and Len Marino, who's the acting chief administrative officer for the Ministry of Labour.
Thank you for the opportunity to address the standing committee on public accounts to discuss the Provincial Auditor's report -- it was the Provincial Auditor at the time, though I understand that it is now the Auditor General -- and to report on the employment rights and responsibilities program.
The program is charged with the effective administration and enforcement of the Employment Standards Act. We recognize that the act plays an important role in the everyday lives of approximately six million workers and their employers in Ontario. The act protects workers by legislating minimum standards related to wages and working conditions. It sets out, amongst other things, the minimum wage and lays out rules about public holidays, vacation pay, overtime and hours of work. It deals with matters that affect working people, particularly vulnerable and low-paid workers and those who don't belong to a union.
The act is also important for employers, particularly small business. It gives them a common set of minimum employment standards that they and all their competitors must meet. The Employment Standards Act establishes ground rules so that workers are treated fairly and a level playing field is established for employers. Most employers treat their workers fairly and benefit from improved loyalty, morale and productivity.
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We thank the Provincial Auditor for the report. On an overall basis, the ministry accepts and has acted swiftly to address the recommendations in the audit. We have placed a high priority on making changes.
I am pleased to tell committee members that work was already well underway in a number of key areas identified in the audit. In late 2002, the ministry recognized the need to make significant changes in the emphasis and operation of the employment standards program and began tackling many of the issues that were subsequently identified by the Provincial Auditor. The audit report underscored the need to continue with the changes that were underway, while it also made important recommendations for improvement in other areas.
The ministry has adopted a vigorous three-pronged strategy which addresses issues raised in the auditor's report. The three prongs are (1) heightened awareness, (2) improved claims administration and collection of money, and (3) strengthened enforcement.
Over the past months, we have made a dramatic shift in our approach to the administration and enforcement of the Employment Standards Act. We are making major progress in all areas dealt with by the audit, including: expanding access to information for employers and workers; new measures to recover more money owed to employees, with $2.3 million more recovered; proactive targeting of employers and sectors with bad employment standards records, with 1,418 proactive inspections completed so far, resulting in the recovery of $690,049 owed to employees; strong, new emphasis on enforcement, with 229 prosecutions commenced since July 2004; and action taken to quickly address shortcomings in the administration of the trust fund. We readily acknowledge that the steps we have taken are just the beginning. It will take time to fully implement them. We are confident that our actions will result in a higher compliance rate by employers, faster turnaround time of claims and better results in recovering money owed.
Before I go into details, I want to provide members with some context. It's critical to remember that the vast majority of employers comply with the law and provide their employees with the wages and working conditions required by the act. Unfortunately, however, that's not always the case with respect to some employers. In the last year, 16,175 claims were filed with the ministry under the Employment Standards Act. Typically, the employment standards officer finds contraventions of the act in about 70% of these workplaces. We have strong indications that in some sectors, we don't hear about the majority of compliance problems. Many workers don't contact the ministry or file complaints. The auditor has pointed out the need to take steps to improve the overall compliance rate, not just deal with complaints, and we in the ministry agree. From our perspective, the point of increasing the compliance rate is to reduce the need for workers to file complaints with the ministry. People should not have to fight to be treated fairly.
I will now take you through some of the key steps we are taking to deal with the issues raised by the audit and fill you in on some of the actions that we already had underway before the audit started.
In April 2004, the ministry launched a three-part strategy to improve compliance with the act and deal with other specific issues raised in the audit. The three components of the strategy are outreach and awareness, improving claims processing, and collections and better enforcement.
In the area of outreach and awareness, the ministry provides information to employers and workers through a call centre, through written publications and on the Internet. There were about 440,000 calls to the call centre in the last fiscal year. In 2004, there were about 3.3 million visits to the employment standards section of our Web site. During these visits, 3.8 million pages or documents were viewed. This tells us that there is considerable demand for information on the act and its administration.
The act is complex, and in some parts it can be hard to fully understand. That problem is heightened when we have employers and employees whose first language isn't French or English. The ministry has undertaken significant new initiatives to assist workers and businesses in learning about their rights and responsibilities. We've acted in two areas: We have provided businesses with access to Web-based information, and we have made information available to those whose first language is not English or French.
For businesses, the Ministry of Labour worked closely with the Ministry of Consumer and Business Services to develop and launch the workplace gateway. It's essentially a one-stop Internet site where both employers and workers can access information. This site was launched on November 2, 2004. It complements the extensive multilingual information about employment standards already available on the Ministry of Labour's main Web site.
In October, the ministry released four brochures which contain clear and concise information about key aspects of the Employment Standards Act. We made these available in 19 languages in addition to French and English. The response to the other languages has been very good, with strong interest in multilingual products on our Web site, including the brochures.
To further assist employers and employees, the ministry revised and simplified the employment standards poster, which must be posted in all workplaces. We made it easy to download and free, and we published it in 19 other languages in addition to French and English.
Acting with community partners to get information to those who need it, the ministry has reached out to over 100 organizations to seek their assistance in providing information on employment standards to their constituents. These organizations include legal aid clinics and various multicultural community groups. We've also partnered with the Ministry of Economic Development and Trade to provide information on the program to potential business entrepreneurs, including those from other countries, and, at times, in languages other than English and French. The ministry will continue to seek additional partnerships and ways of making information on employment standards available to workers and businesses.
In the area of improved claims processing and collections, the ministry is making significant changes to speed up the rate at which claims are processed and to improve the effectiveness and timeliness of collections.
In the area of claims, part of our strategy has been to streamline intake and implement a triage system to put claims into the hands of decision-makers earlier, thus reducing overall time to render decisions. We've also established centralized, dedicated teams that now deal with complex files. This allows the ministry to better use resources and creates a centre of best practice. We have set a program target to render decisions on 80% of claims within 90 business days of receipt, and we are exceeding this target. As of December 1, 2004, we are rendering decisions on 82% of claims within 90 days. By moving claims through the system efficiently, a decision can be made much earlier as to whether money is owed and whether claims need to move to our collections process.
The ministry has recognized that it needs to increase its collections rate. In July 2003, we initiated a review of the collections function and set up a centralized collections unit in the central region. This unit ensures that all collection and enforcement options have been exhausted on all files. The central region deals with 55% of the province's collections workload. The unit has already resulted in the collection of $2.3 million since its inception in 2003. This is money that would otherwise not have been collected.
As the auditor noted, the best collection rates across the country are in the range of 20% to 35%. Even this is not satisfactory. The ministry is continuing to explore best practices with other provincial ministries and jurisdictions to identify ways to increase the effectiveness of its collections process. However, both the investigation of claims and collections activities are the tail end of the process. The objective is to get compliance rates in the workplace such that workers get monies they are owed without having to file a claim with the ministry. Outreach, proactive inspections, and enforcement are critical to improving the compliance rate.
In terms of enforcement, the ministry acknowledges that its approach to enforcement has been largely reactive over the years. This approach has not provided a sufficient deterrent to non-compliant employers, and has not been an effective tool in ensuring the collection of unpaid monies. Therefore, our approach to enforcement has significantly changed.
In 2001, the ministry began using notices of contravention as an enforcement mechanism, as a result of the introduction of the Employment Standards Act, 2000. These notices are administrative monetary penalties that range from $250 to $1,000 per offence per employee. So far this year, there have been 309 notices of contravention issued.
Beginning in the latter part of 2002 and early 2003, the ministry started revamping the program to put more emphasis on strengthening enforcement and outreach. In April 2004, the ministry launched a three-part strategy to improve compliance with the act. The three strategy components are outreach and awareness, improving claims processing and collections, and better enforcement.
We now have a new prosecution policy that provides clear direction to officers on the circumstances where prosecution should be considered. Since the implementation of the policy in July 2004, there have been 229 prosecutions commenced. That compares to only 18 prosecutions in the past five years, as reported in the audit. In addition, we have committed full-time resources to carry out proactive inspections, and we increased the range of enforcement tools available to employment standards officers.
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A fully dedicated inspection team was put in place as of July 1, 2004, with the objective of conducting 2,000 inspections. These inspections are targeting high-risk employers in high-risk sectors and employers who have a history of multiple claims filed against them. The ministry has already conducted 1,418 proactive inspections and is working very hard to achieve its commitment of conducting 2,000 by the end of March 2005 -- the end of this fiscal year. As of February 18, these inspections have resulted in a total of $905,243 being assessed, with a recovery rate of 76%, resulting in the recovery of $690,049 for workers.
Since July 1, 2004, employment standards officers have been issuing tickets to employers for employment standards violations under part I of the Provincial Offences Act. This new ticketing tool is an effective means to increase compliance.
More serious offences will continue to be prosecuted under part III of the Provincial Offences Act, which has larger fines and imprisonment.
We also acted on the Provincial Auditor's recommendations to place greater emphasis on extending investigations of claims to cover other employees. We have taken action on three fronts:
(1) When an employment standards officer investigating a claim believes that other employees may also have entitlements, they may refer the issue to our proactive team, which will follow up with an inspection of the workplace in question.
(2) Our proactive inspections are targeting high-risk employers who have a history of multiple claims filed against them.
(3) In about 10% of claims where violations are found, the officer continues to conduct an investigation that expands the audit to include other workers.
I would like now to turn to a few other specific concerns raised by the auditor.
On information systems, the audit noted that our employment standards staff needs access to accurate, relevant and timely information for decision-making. It recommended that the ministry obtain approval for the development of a new information system. We are moving ahead on this recommendation as part of a broader service delivery strategy that includes providing information to the public through multiple channels and in multiple languages. For example, I mentioned earlier that we have launched our workplace gateway, which provides employers and workers with easy access to employment standards information, among other things. We're providing information in 19 languages, in addition to French and English.
We're also pursuing approval to implement a province-wide information system, as recommended by the auditor. The system will provide our staff with information they need, while also providing better service, including allowing the public to file claims electronically and to check on the status of their claims on a 24-hour-a-day basis.
On quality assurance, the auditor recommended that the ministry improve its documentation of claims and investigations. The audit also proposed expansion of quality assurance procedures to ensure that the information we obtain is adequate for enforcement and management decision-making.
The ministry recognized the need to put a quality management system in place to ensure that policies and procedures were followed. A quality assurance audit system was developed and implemented in 2003, which entailed auditing 5% of files. This quality assurance audit found that officers are generally doing well in areas such as following policy and procedures during investigations, reaching decisions on claims, and completing information enforcement orders and related materials. However, areas for improvement were also identified, including mailing timely acknowledgement letters to claimants and completing information required to fully document the claim.
The findings of the Provincial Auditor are similar to those found by the ministry's quality assurance audits. The ministry has taken steps to ensure that staff are able to make the necessary changes, and the ministry is monitoring compliance with policy and procedures through the quality assurance audit process.
Next month, in April, we will be reviewing the results of our 2004-05 quality assurance audit to further strengthen program delivery. This is an ongoing continuous improvement process to ensure that we're monitoring enforcement activity and supporting management decision-making.
Measuring and reporting on program effectiveness: The ministry agrees with the current audit findings that more comprehensive indicators to measure the program's effectiveness are needed.
Beginning in the latter part of 2002 and early 2003, the ministry started revamping the program to put emphasis on strengthening enforcement and outreach. The work also entailed developing outcome measures, including client satisfaction and compliance rate. These new measures were launched on July 9, 2004.
The program measures are to achieve a compliance rate of 80% for specified sectors, to achieve a 78% overall customer satisfaction rate, and to render decisions on 80% of claims within 90 days.
In response to the auditor's recommendation that the ministry should report on other program indicators, we will be publishing information on our targeted enforcement initiative, including the more common violations and enforcement measures. We are now piloting this information on the ministry Intranet Web site -- that's internal to the ministry -- and will be publishing it on a public Internet site soon.
Trust funds and financial controls: The ministry has taken immediate and concrete action to address the audit's recommendations on safeguarding assets held in trust. Immediately following the audit, the ministry brought in its chief accountant and other financial control staff to bring the expertise needed to ensure that proper controllership principles and practices were implemented.
One of the most important findings of the auditor relates to the lack of monthly reconciliation with the bank's accounts. The root cause is that head office and 26 field offices were making deposits into the trust fund. This made it very difficult to reconcile. In September, we put a stop to that practice. Now all deposits are made and accounted for in our main office. This enables more effective reconciliation. However, the work is labour-intensive and we are looking for software to ease the workload and enable more accurate accounting.
Action has been taken to follow up on specific situations cited in the audit report and to take appropriate action, including payment of any outstanding monies to claimants.
Random audits of files are also being conducted as part of an ongoing quality control program to ensure integrity of information.
The audit expressed concern about an inability to locate claimants and give them money. We've addressed this issue, and 44% of the claimants have now been located.
On a going-forward basis, the claim forms have been revised to include alternate contacts, including address and telephone number, and a message asking people to advise the ministry of address changes.
These interim steps represent a good start, but we recognize that we need to go further.
A review of the trust fund operations is continuing, with a view to further improve the effectiveness of financial controls. The internal audit division will conduct a follow-up audit on the appropriateness and effectiveness of trust fund controls in this fiscal year, 2005-06.
Before I wrap up my presentation, I would like to acknowledge that the audit report highlighted five areas where issues that were raised in the 1991 audit had still not been resolved at the time of this latest audit.
The five specific areas from the 1991 audit highlighted in the report are: ministry officers not extending an investigation to determine whether similar violations have occurred with the same employer; no proactive inspections; virtually non-existent prosecutions; inadequate computer and communication technology; and unsatisfactory measuring and reporting of the program's effectiveness.
As I have already outlined, we accept these findings and have taken steps to deal with those outstanding issues.
Committee members may wonder why it took the ministry so long to act on recommendations made in 1991. Although it was recognized that prosecutions, proactive investigations and the other issues raised by the auditor were important, the ministry spent almost all its time dealing with claims. The emphasis was mainly on getting people the monies they were owed.
The ministry did manage to carry out more than 1,000 proactive inspections for four years starting in 1998-99, but that was not sustained. A backlog in claims arose and, as a result, the ministry refocused its efforts on dealing with claims.
It is not that significant improvements were not made in the 1990s. For example, one major focus for the ministry in those years between 1991 and 2003 was improving public access to information about the Employment Standards Act. The ministry introduced an employment standards call centre, which now receives more than 400,000 calls a year. It started providing comprehensive information to employers and employees through the Web site. We began accepting e-mail inquiries, answering 4,000 a year. But overall, it wasn't until late 2002 that the ministry recognized the need to make significant changes in the emphasis and operation of the employment standards program. That is when work began to strengthen enforcement and outreach and to improve collections. That culminated in April 2004, when the ministry launched a three-part strategy to improve compliance with the act, which I talked about earlier.
We readily acknowledge that the steps we have taken are just the beginning. It will take time to fully implement them. Other improvements must still be made.
We have our strategy in place: of heightening awareness, improving claims administration and collection of money, and strengthening enforcement. We are confident that our actions will result in a higher compliance rate by employers, faster turnaround of claims, and better results in recovering the money owed to workers.
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The ministry administers and enforces the Employment Standards Act to provide fairness for workers and their families, to level the playing field for business, and to promote productive workplaces that provide a healthy economy for all Ontarians.
I thank the committee members for the opportunity to provide them with an update on a dramatic shift in approach and on progress we are making to improve the administration and enforcement of the act at the Ministry of Labour.
Mr. David Zimmer (Willowdale): With regard to these proactive investigations, can you give this committee a sense of what industry sectors tend to have more problems or to be repeat violators? Just by sector; don't name anybody.
Mr. Kivisto: Certainly we can. We did analyze our complaint investigation information and identified that 80% of the contraventions were occurring in specific sectors. I'll have Brian just mention those to you. My recollection is that restaurant and tavern and some of the service sectors were particularly noted.
Mr. Brian Lemire: The three sectors that we identified as having the majority of claims filed against them, and where we're focusing our proactive inspections, are the restaurant/tavern industry, the retail sector, and business management services, which includes occupations such as cleaners in buildings and security guards, for example.
The Chair: Could you introduce yourself, sir?
Mr. Lemire: I'm sorry. My name is Brian Lemire. I'm the director of employment standards.
Mr. Zimmer: Just following up on that, then, I note that you've got a plan underway to publish notices and information on an Internet service and so on. My question is, on the premise that those sectors employ significant numbers of new immigrants who perhaps have language difficulties and no access to electronic transmissions and so forth, what's the plan to reach out to those sectors, given the typical employee profile in the sector?
Mr. Kivisto: In Ontario, the extent of immigration is very significant compared to the rest of the country. The information that we have is that approximately 70% of the new workers are going to be immigrants. They have their unique challenges in terms of culture and language. That's why we work hard to produce information in 19 languages other than English and French. We did that on the basis of the nature of the immigration profile that we have and people joining the workforce. We've also reached out to over 100 organizations, many of which interact with these cultural groups and minority groups, as a way to help bridge the information needs of those workers and the Ontario government.
We believe that our outreach and awareness activities are starting to have an impact, though we need to continue to work aggressively to identify additional ways of reaching out to workers so that they understand their rights. I think the goal here is, if workers understand their rights, if employers understand their responsibilities, they'll be treated fairly and they won't need to come to the government to file a complaint, and we'll have less conflict in the workplace.
Mr. Zimmer: My last question: I'm assuming that that 80% in the sectors where you've got the majority of the problems -- for the most part those are sectors not covered by collective agreements?
Mr. Kivisto: The way the Employment Standards Act is written is that if there is a collective agreement in place, the workers are expected to work through their union to achieve compliance with the Employment Standards Act. So the focus of the Employment Standards Act and its administration is almost entirely on non-union workplaces.
Mr. Zimmer: So now we have the situation where we have a sector with about 80% of the complaints, a non-unionized environment, and new immigrants with cultural and linguistic challenges. I expect you're going to redouble and triple your efforts in that area.
Mr. Kivisto: Absolutely. Part of the strategy going forward was a heavy emphasis on outreach and awareness, and we have worked really hard to improve in that area in the last year or so. That will continue to be an area of focus for us because, really, that is a tremendous challenge.
Mr. Zimmer: When you're working in that area, going forward, what are the measures that you're going to measure yourself against to decide whether you've made progress or been successful in covering the sector?
Mr. Kivisto: You have to have multiple levels of measures. The ultimate measure is that there's compliance with the law, so compliance rate is a really important area. We are doing random inspections of one of those sectors, the restaurant sector -- about 200 -- to establish what normal compliance is. Once we have that, we will then put a concerted effort in place with the workers, with the employers in that sector and others to improve their knowledge of what's a contravention finding and things they can do to address it so that we get a better compliance rate. Clearly, also, we have an employment standards working group of stakeholders, which is chaired by the parliamentary assistant, Mr. Flynn, that brings the stakeholders together with the ministry to help guide us about ways that we can improve the administration and operation of the ministry's program, including this piece. I think, through getting feedback from the 100 organizations we've partnered with from that action group as well as our own observations in the workplace, we'll get a pretty good sense of whether we're achieving a higher compliance rate.
The Chair: The auditor has a supplementary.
Mr. Jim McCarter: Just a follow-up: It was good to see that you've done 1,400 proactive inspections. That's a big improvement from the last couple of years. I just wondered: You were finding a violation rate of between 40% and 90% on your proactive inspections in the past. Are you still finding that sort of percentage?
Mr. Kivisto: I'll ask Brian Lemire to respond to that. He'll look at the numbers. When I looked at the numbers in preparation, there was quite a range from year to year in terms of the compliance rate, and much depends on how effective your targeting is. You would hope that if we're effectively targeting, we'll pick the sectors with the poorest compliance rates, so I would expect to see that number higher than what we've seen.
Mr. McCarter: What I was wondering is, when you only do very few, you're probably targeting very, very high-risk, so you probably get a higher violation rate than if you're doing, say, 1,400. I was just curious to know if the violation rate -- and I don't need the answer now, if it takes a minute to get it. I was just curious.
Mr. Lemire: I can tell you that it's above 70%, and it's more in the range of 75% to 85%. I don't have the exact figure, but I can get back to you with that.
Mr. Kivisto: We need to see the outcome of those random audits on the restaurant sector, the 200, because those aren't necessarily targeting repeat offenders. That's what's going to establish a compliance rate for the sector as a whole, knowing that we're targeting most of the proactive inspections to what we believe are the poorest performers.
The Chair: I have Ms. Martel and then Mrs. Munro next, but I'm going to allow Mr. Flynn to go next because of the brief time of your question.
Mr. Kevin Daniel Flynn (Oakville): I'll be brief as well. I've got three questions that don't require, I don't think, extensive answers. In the opening remarks, you said that, for the most part, you agree with the auditor's findings and respected them. What was said on page 243 of the report was, "To more effectively enforce the Employment Standards Act, 2000, and better protect the rights of currently employed workers, the ministry should: expand investigations when individual violations are found and increase the number of proactive inspections in higher-risk industries...."
I know you've said, on a few occasions this morning, that you've put a great deal of focus on the proactive inspections. I'm interested in the process you use: How did you choose the high-risk industries? What happens? Is there no advance notice of a visit? You just show up on-site: What follows after that?
Mr. Kivisto: As we embarked on our three strategies, we were thinking very carefully about how we can make the biggest impact through the proactive inspections. In the past, as the auditor noted, our activities were largely complaint-driven. In order to ensure that we don't fall off the wagon, as has happened in the last few years, by putting a full-time dedicated team -- that's all they do; they don't get distracted by complaint investigations or calls from workers asking about the status of their claim -- we think we've got enough focus and ability to manage that activity so we can deliver those 2,000 inspections.
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We did carefully select the sectors, based on historic information. As a consequence, that team is out delivering those inspections. They are working very hard: 1,418 have been conducted to date. We are going to achieve that 2,000 by the end of March. We're very serious about our commitments and we're pursuing that with vigour. As I said earlier, the sectors that we've chosen were based on complaint records and the investigations and an 80% compliance rate in those specific sectors where we do it.
In terms of the specific process, I'll ask Brian to describe how the officers plan their work and carry out the proactive inspections.
Mr. Lemire: The dedicated enforcement team used a risk-based approach to developing its methodology that was based on work that was done by an investigations, enforcement and inspection secretariat. Helle Tosine, the ADM, might be able to speak to that a little more broadly.
The officers look at the history of that particular company, if there happen to have been any claims filed with that company in the past. They're also looking at the types of violations that have been historically found with that sector prior to going in. When they announce their visit, if they do announce it, it's scheduled perhaps a week in advance in order to make sure that records are there. At other times, the officer will conduct a surprise visit, without giving previous notice.
They will inspect the workplace and the records of the workplace. They'll speak to individuals in the workplace to determine, for example, if they're working beyond 48 hours and there is a requirement for written agreements, whether those written agreements are in place and whether the employee voluntarily agreed with working those excess hours.
The investigation results in an inspection report, which may include orders issued. It may include tickets that might be written if there are violations per our prosecution policy that warrant the issuance of those tickets. The officer may require the employer to post the results of that investigation report in the workplace so that it can come to the attention of the workers there.
Mr. Flynn: It has been almost a year since some of the changes were implemented, the three-pronged approach. Have you been able to review the progress you've been able to make in a quantifiable way yet? Are we seeing any sort of results from the changes you've made, or is it too early to tell?
Mr. Kivisto: If the real measure of the results is improved compliance rate, it's probably too early to tell that. But we can certainly see the outcome in activity of the field visits. We know precisely how many field visits we've done. We manage that on a weekly basis, and we are ensuring that we deliver on that.
We also have a lot of data about orders issued, the kinds of orders issued and prosecutions. As I mentioned, it has resulted in 229 prosecutions.
We monitor the amount of money that has been assessed and how much is collected. I talked earlier about the proactive inspections resulting in close to $900,000 being assessed and about 76% of that being recovered and paid out to workers.
One of the unique facets of that program as well is that the officers sometimes request the employer to carry out a self-audit. So if the employment standards officers found there are some contraventions and suspect that it may be more widespread, they have asked the employer to carry out a self-audit and submit it to the ministry. Employers have identified errors they've made and oversights, and it has resulted in considerable monies as well being voluntarily paid by employers to workers. I think that speaks to the fact that some employers just have a hard time understanding legislation, and when they understand that they've made mistakes, they correct those. I think the proactive inspections certainly are putting money in the hands of workers. We are finding contraventions. We're dealing with those and following up to make sure there is compliance with the law. In the longer term, I think we'll be able to talk about compliance rates, and that will really tell us whether or not we can shift our attention to some other sector.
The Chair: Can I ask a supplementary in this area? You were talking about 1,400 proactive investigations. The recovery rate is about $700,000 for the 1,400. That comes down to a recovery rate of about $400 or $500 per visit. One of the problems I have with the 1,418 is that I don't know how big those employers are and whether this is a two-hour inspection or a two-week inspection. Can you provide the committee with the number of employees who are covered by these 1,418 inspections?
Mr. Kivisto: I certainly can. There were approximately 931 employers involved in those 1,418 proactive inspections. We know that the self-audits that we asked for in 236 of those cases covered about 4,685 workers, with about $624,000 being collected and paid out voluntarily. So we are talking about thousands of workers in those places.
These tend to be small to medium-sized businesses. I believe that a typical inspection -- Brian can correct me -- is about two to three hours on-site, plus the preparation time. Our average claim in employment standards -- these aren't huge figures when you look at it from the outside, but for those workers and their families, these are significant dollars. What is the average claim to the ministry -- the average dollar value?
Mr. Lemire: The average dollar value is somewhere between $750 and $1,000.
The Chair: Because of the way you seem to have set the parameters here, I just don't want your inspection team, because you're shooting for 2,000, to overlook a larger employer because you only get one inspection out of 2,000.
I'm sorry, Mr. Flynn.
Mr. Flynn: That's fine. Good question.
I have a question that is almost supplemental to the previous question, and that is on the aspect of the collections that was pointed out by the auditor. If you read the report, it seems to say that the private agency isn't really doing that well and that the ministry itself isn't really doing that well and that we should be more timely and more vigorous in our collections. With the moves that you've made to date -- even though it is early, and they've only been implemented for less than a year -- are you seeing any increased results on your collections?
Mr. Kivisto: Collections certainly is a challenging part of the work that we do. It's also a challenge for other jurisdictions, as the Provincial Auditor has noted, across the country. Collection rates are varying: 20% or less. In Alberta, they're 20% to 35%. Even at that, that's not as good as it needs to be.
We put that centralized collections unit in place in the central region in July 2003. It has a handful of staff, but they are rigorously reviewing all the files where we're going to seek collections activity before they go to the collections agency. Here in Ontario we use a mixture of public and private services, as Alberta does. When a file goes to a collections agency, they do their work to achieve collections and then they return it to the ministry if they've been unsuccessful. We go through that file again and make sure everything possible is done to collect the monies. That unit has recovered, since July 2003, an additional $2.3 million. The collections agency is achieving about an 18% collection rate, and just from my preliminary look at our data over that period of time, we've about doubled that. They collected $2.3 million, over that year and a half to two years we're collecting about $1 million, and a private agency is collecting about the same amount.
So I think we're making good inroads. Is it good enough? No, it's not. Is it a problem elsewhere, in other jurisdictions? Yes, it is. It's a problem for other ministries. We have started discussions with some other ministries to take a look at the collections activity across the Ontario government to see if there are some best practices that we can all learn from, because, really, some of those files are very, very difficult, but at the same time, you need to do everything possible and you need to operate efficiently.
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Still, there is the tail end of the process. The claims investigating and collections activity, although it's important and we need to work hard to improve -- getting into the workplace with information, the proactive inspections and other things so that there's compliance with the law before people have to file a claim, I think, is a better strategy. Having all three elements will help us be more successful in ensuring compliance with the act in workplaces.
Mr. Flynn: Thanks for the answers.
Thanks for the time, Mr. Chair.
The Chair: I'm tracking: 20 minutes up to the Liberals and five minutes up to the PC caucus on that 25 minutes.
Ms. Martel: Thank you for being here this morning. I have a number of questions, but I just want to make a general comment. I appreciate what you've said in terms of trying to redirect your strategy, and some early indications of that success. I guess I need to put this in a context in terms of what you're up against.
With 151 inspections last year, you would have covered about 0.1% of Ontario workplaces. If you get the 2,000 done by the end of March -- you've said that you will, so I assume that will happen -- you will have covered 0.7% of Ontario workplaces. That leaves a lot of employers out there who will never be inspected, and a lot of employees out there who may never have their issues dealt with. I compare that to the figures from your health and safety branch, which say that on an annual basis you're probably into about 12% of Ontario workplaces. I would make the argument that that's not enough either.
While I hear what you're saying and I appreciate the changes that have been made, I don't see, with that low, low level of possible inspection coverage, how the ministry can really be clear that even doing the 2,000 inspections is going to act as a deterrent, and how you're really going to get into those workplaces where there is systemic exploitation of workers. I want to say that right off the top.
My concern is that I don't know what's going to happen in this next budget process, but it's going to be interesting to see if you're going to even be in a position to carry on the 2,000 inspections, depending on what your funding is. I don't know that there's going to be an opportunity for much more. I think that's going to continue to be a problem for workers out there as a result, and for employers who know that it's likely that no one from ESA will ever darken the door of that place of employment.
The 2,000 inspections were, as I saw in the government announcement, very much for this year. Is this an ongoing inspection pattern? Is this going to be 2,000 inspections for sure, with hopefully the possibility of more this year, next year and the year after? Do you have the financial commitment from the political wing to allow that to happen?
Mr. Kivisto: I think the short answer is yes. Proactive inspections are one of our three main strategies. Clearly, we're fully committed to that. I think what's different is that it's a full-time team -- it does nothing else other than proactive inspections -- so that an officer is not torn between dealing with complaint investigations and calls from workers. We need to evaluate, as we move forward, how effective our strategies, including the proactive inspections, are in achieving better compliance rates, and then adjust our strategy and then perhaps our resourcing, as needed.
I am confident that with the goal being to achieve better knowledge about rights and responsibilities in the workplace -- if we can do that, that will go a long way to ensuring that workers can get what they're entitled to get under the legislation, by engaging those 100 organizations to help us champion that with workers, so that they're more confident. We've heard from the action group that was formed with stakeholders the message that sometimes workers, particularly immigrants and some other vulnerable workers, are afraid to come to government. So if we've got other partners who have good relations with them, they'll help us communicate with them and ensure that their issues are brought forward.
Ms. Martel: If I might, Deputy, I really don't think the problem is workers understanding their rights; I think the problem is workers having their rights enforced. I just can't say that strongly enough. There are some cases I could raise here today where immigrant workers, with the help of some of those same organizations, have been to the ministry endless times and still don't have their money and still don't have their issues resolved. The ministry can issue publications in 19 languages to tell workers of their rights, but frankly, if the ministry isn't doing inspections or using all the enforcement tools at its disposal, then having those rights is meaningless.
I think that's the real problem. I don't think it's a question of workers not understanding their rights or not wanting to get them enforced; I think the problem is that they're not getting those rights enforced or they feel it's useless to try because other workers in the same workplace have tried and gotten nowhere. I think that's the biggest problem you've got.
Mr. Kivisto: I agree. I think I acknowledged up front that doing only information provision isn't the solution. You have to have laws and effective enforcement of laws. We have shifted a long way toward that in the last year or two. We've talked about the prosecutions that have been commenced since July 2004. We talked about the 309 notices of contravention that were issued this past year. Eighteen prosecutions in the last five years, compared to those numbers, is a significant change. Employers need to understand that the laws are there and the laws are being enforced, and workers need to see that as well. The auditor's recommendation that we publish this information so that the message is out that government is serious is an important part of our strategy.
I agree with you completely that that has not been the practice. This is now the new practice, the new approach, and I think it will have significant impact on the issue you just talked about.
Ms. Martel: Could I get some information about the number of those issues? You said there were 16,175 claims in the last year. Is that 2004-05, to this point?
Mr. Kivisto: I'll ask Brian to respond, but that's my understanding.
Let me just say that the number of claims that have been filed with the ministry vary from 13,000 to about 15,000 or 16,000 per year. The statistic I was given last was 16,000-and-some this past year. There were 16,175 in 2003-04.
Ms. Martel: So it was higher than the number that was noted in the auditor's report. Right now, how much money is owed to how many workers in the province?
Mr. Kivisto: Perhaps the way to look at it, Brian, is if you look at the collections information.
Ms. Martel: I wasn't sure that the collections would give me a true understanding. You have money coming in that's being collected; you have money that's not being collected. I want to get the collections too, but I'm interested in the total owed right now across the province, and in how many workers are affected by that.
Mr. Lemire: Perhaps we could get back to the member on that today.
Ms. Martel: OK. There might be a whole series of things you're going to get back to me on. That's the first thing: How much money is owed, and how many workers does that involve?
Could you give us a sense of how many workplaces are involved -- I don't know if you can do that breakdown, but I'm assuming you can, because a worker would be attached to a workplace. How many workplaces in the province does that represent?
I'd like to know how many extended inspections have taken place since the audit done by the Provincial Auditor.
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Mr. Kivisto: Just to address the broader issue, of the 15,000 or so claims that come in to the ministry, about 80% to 85% of the workers get some or all of their money from early intervention with the ministry. We put the remaining 15% to 20% into our investigations and collections activity. About 20% to 22% of the claims we get in are not founded; there's no entitlement.
So workers are accessing monies -- sometimes all or part of it -- just through raising it with the ministry, and we work with the employer to get that sorted out. The 20% that go to collections we put into claims investigations, write orders to pay and pursue the collections activities.
We can give you some of that information now.
Mr. Lemire: I have the figure for the number of employees who have been assessed as owing money this last year. It totals 13,820.
The amount of money that has been referred to the collection agency as a result of not being able to collect that money on behalf of the employee through an order to pay or through the investigation that's currently with the agency is $16.3 million.
I will have to get back to you on the number of employers.
Ms. Martel: Is that in one fiscal year, or is that the total? You would have a carry-over from a number of years, right?
Mr. Lemire: There would be, but this is for 2004-05, to date.
Ms. Martel: It would be great if you could give me the cumulative total -- and you can get that for us -- in terms of workers implicated and money owed.
Mr. Lemire: If I may, over what period of time?
Ms. Martel: How far does this go back? At what point do you close your files? Do you do it after five years or 10 years, or do you have a different process?
Mr. Lemire: The longest time a file is probably open is if a writ has been filed with the court and it remains with the court for six years.
If there's a determination that there are no realizable assets -- it's a shell corporation or there's no money in the bank account -- once the collection agency and the centralized unit that the deputy referred to have looked at this money, and once we've pursued director's orders to pay, and related companies that may have ties and obligations owed to the original company -- once that has expired, we close the file. So the longest is somewhere in the neighbourhood of six years, because of the filing of the writ in court.
Ms. Martel: You would have that information on file already, then?
Mr. Lemire: I don't know that we would have that collated in the way you're asking for it, but the records would be kept. If a file has a writ applied to it, then that file is kept with the ministry.
Ms. Martel: How about I say, for as much as you can have a sense of what the whole total is, is what I'd like to get. I'm not sure I understand all the complications involved in getting that, but I'd appreciate having the most appropriate cumulative total you can get.
I asked you how many extended inspections took place this fiscal year as a result of the auditor's report.
Mr. Kivisto: While Brian is looking for the information, I know that the percentage of extended investigations varies from about 5% to 15% from year to year, and I think we were in that ballpark in the past year.
Ms. Martel: You did about 802 last year. I'm going to assume that has increased, given the recommendations that the auditor made. Again, I'd like to get that figure.
Of the 1,400 proactive inspections you did, do you list the employers in a public way? Also, if money was recovered, do you provide that publicly, so that other employees in a similar workplace who haven't been covered by an extended inspection might actually know that some money has been recovered and then might come forward? In what way do you publicize what has happened?
Mr. Kivisto: We have not been publishing a lot of program information for the public; we have committed to doing that, as the auditor recommended. Will it get down to the employer level? That's a question I can't answer today. We will be publishing the names of employers who have been prosecuted. That was brought in with the recent bill, so our intention is to make that public. There is a provision that allows us to do that. We need to be careful around privacy laws. We still have to ensure we don't compromise that. So we will give program information publicly on the Intranet site about our enforcement activities -- total charges and fines. Will it get down to the employer level? I'll have to get back to you.
Ms. Martel: I'd appreciate that. I noticed that yesterday, for the Ministry of Labour, you talked very publicly about a health and safety prosecution. The name of the employer is listed and all the information about what happened, including the fine: Lumsden Brothers Ltd., food wholesaler, was fined $55,000 on March 1, 2005. I'd like to know if you can do this with ESA employers too.
Mr. Kivisto: Since March 1, when the legislation was put in place, we now have the legislative authority to do that, and we will be.
Ms. Martel: I know you said you were going to have some other stuff up on the Internet, and I noticed some information that has come out, jointly I think, between the Ministry of Labour and WSIB. It's got stop-work orders, work refusals, inspections by program area, investigations. I'm assuming it's that kind of format you're going to use to publish information about ESA violations. Am I correct? Can you give us some of the parameters you're going to be putting on the Internet?
Mr. Kivisto: I can tell you what we're putting on our Intranet site now, and much of that same information will go on to the Internet. We are putting in our claims investigation activities and the results of that. We're tracking monies collected. We're tracking prosecutions. All of our proactive inspections are being tracked. All of our statistical information on the program that shows what we are doing and what we are finding will be available on the Internet site once we've got our formatting and information flows figured out.
Ms. Martel: Would that include orders? Would it include contravention notices as well?
Mr. Kivisto: It will include all the statistical information.
Ms. Martel: And ticketing?
Mr. Kivisto: That as well.
Ms. Martel: When do you expect to have that available to the public?
Mr. Kivisto: I said "soon." The reason I said "soon" is that we need to sort out how we do it. You can publish information once, but you've got to get your processes behind the system to be able to keep the information accurate. It will be the next month or two.
Ms. Martel: The extended workplaces: Any luck on that, Brian?
Mr. Lemire: In 2004-05, to date, extended investigations, both a full audit and a test audit, which happens sometimes in larger workplaces: 489. In 2003-04, the full year: 692.
Ms. Martel: The auditor shows 802 for 2003-04.
Mr. Lemire: The total, also including our self-audit investigations, which are reviewed, once they're returned by the employer, by the officer: If I go back to 2004-05, it would be 566 to date and, yes, 802 for 2003-04.
Ms. Martel: So you've done less this year than last year?
Mr. Lemire: We've done less this year, but this information is as of February 18.
Ms. Martel: So there's going to be a big push on those by the end of the fiscal year to get it past 802?
Mr. Kivisto: It's left to the discretion of the employment standards officer in terms of determining when they extend the audit. Historically it varies from year to year a bit, but in the 5%, 10%, 15% range is what we're seeing.
The Chair: Ms. Martel, if you could put the question and finish for now, then I'll allow Mrs. Munro, because she has to leave.
Ms. Martel: If you want to start, Chair, because I have some more questions.
The Chair: Pardon?
Ms. Martel: If Mrs. Munro wants to start, that would be fine.
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Mrs. Munro: Thank you very much. I have a couple of questions I wanted to ask you. I think it's important for us to understand the rationale you've used for the proactive inspections and to understand where the sectors are that you've identified. I wondered if you could give us -- I appreciate that it's perhaps premature -- a sense of the impact the proactive inspections are having. It would seem to me, just intuitively, that, as the word spread, there would be a kind of reaction. I wondered if you could comment on that.
Mr. Kivisto: I can certainly talk about some of the successes. I've also heard some concerns from some employers. We know we've done 1,418 to date. We've had a lot of enforcement activity attached to that. There have been 931 employers inspected and 640 compliance orders. There have been 229 prosecutions. There has been money assessed and recovered, partly voluntarily by employers and partly as a result of the ministry's actions. We've recovered $690,000 for workers.
We're still learning a little bit about how to do this better. There have been remarks made to me personally by officers who said some employers have thanked them. I've had some angry letters that have been directed our way, upset about what the ministry did, both in terms of the decisions made or the actions of the officer. I think, personally, that it's working well, but we need to refine our method of targeting. We need to finish that benchmarking exercise on the restaurant sector for compliance rates and start pushing hard at some of the other activities to improve compliance rates. I still think it's early days, but it's clearly a necessary component of our strategy and is important in terms of ensuring that the knowledge of employment rights and responsibilities for both workers and employers is raised, and at the same time that the laws are being followed.
Mrs. Munro: What kind of timeline would you have in mind in terms of making assessments on the success of doing this? You've identified some clear indicators in terms of this year's activity, but have you looked at other jurisdictions? Is there a way to look at this in terms of, in two years or five years we should be seeing this kind of a number? Have you got those kinds of expectations identified?
Mr. Kivisto: Let me speak to start and then I'll ask Brian to contribute some of his research on other jurisdictions. From all the information I see from other jurisdictions -- I talk to deputies from other jurisdictions twice a year, and also researchers in the business who look at contingent workers and issues -- I think Ontario is at the forefront on many of the things we do in terms of proactive inspection. I think the challenges in Ontario are quite unique in terms of the size of our workforce, the nature of our workforce, and the ethnic, cultural and linguistic issues we have. We have some unique challenges that we need to wrestle down.
The compliance rate we've talked about is achieving an 80% compliance rate in specified sectors, so those 200 random inspections of the restaurant sector will help us establish what the compliance rate is now, whenever that may come out. We'll know in a couple of months when we've done the analysis. Then we will work really hard with the stakeholders and our staff to reach that 80% figure. I don't think it'll happen in a year, but it should be seeing progress in two to three years. It is a process where you need to do the work. We review everything we do as we proceed. In other words, as we put the centralized collections unit in place, as we put the proactive teams out, we'll launch it and then pull everybody in and say, "Look, what's happening? How are things working?" and institute best practices. So part of our process has to be engaging the staff and the managers who are delivering that service, hearing from stakeholders and refining what we do, with the objective of working hard for the outcome. Activity is important, but the outcome is getting the compliance rate up.
Mrs. Munro: Since you are primarily and initially a complaints-driven process, would you be able, then, to identify a change in the sources of complaints from the proactive activity?
Mr. Kivisto: I can give you the theory: If awareness is up with employers and increased with workers so they know their rights and responsibilities, if there's a strong enough deterrence for those who choose not to comply -- so the people who want to learn and want to comply have information. For those who are not fulfilling their obligations, there is effective inspection, investigation, collections and enforcement activity so there's a strong deterrence. All those elements working together should see improved compliance and a decrease in complaints over time in the sectors that we're working hard on.
Mrs. Munro: Have you got a second list of high risk? In other words, when you have done these particular employee groups identified as your first tier, have you got a second tier ready?
Mr. Kivisto: The ones that Brian mentioned, where we had 80% non-compliance, are as good a place to start as any. We're piloting in the restaurant sector to get processes working and our strategies in place; we can mirror that in the other sectors as we move forward. So clearly, unless the compliance patterns change quickly, which we will keep monitoring, I would say that the next sectors would be the ones we've identified as having the 80% non-compliance rate now.
Mrs. Munro: My final question deals with the issue of employer education. I wonder whether you would give us a comment here, because obviously in many cases these would be people who have relatively few employees. Is that a sector where there is a greater level of compliance or a reduced level of compliance? Is it an issue? I'm thinking of fewer than 10, for instance.
Mr. Kivisto: The question is by size?
Mrs. Munro: Yes.
Mr. Kivisto: Do we have enough differentiation that we understand the size? I think the point is that the larger the business, the more likely they are to hire an accountant and some other people who can help them understand the legislation and how it applies. That certainly helps. A sole proprietor may have much more of a challenge than someone who has enough capacity to bring in professional expertise as part of their business. I would think that that would be generally what we would expect to find.
There is no doubt, particularly in small businesses, that they have a lot of responsibilities, including complying with the law -- not just the Employment Standards Act but many laws -- and part of our job is to bring the important things to their attention in a way that they can understand, so they can act.
We have engaged some of the employer organizations in helping us determine that through the action group. We have the Canadian Federation of Independent Business at the table; we have the hospitality sector represented there. They are very interested in working with us to improve knowledge and awareness of employer groups, so I think using employer associations as much as possible to help drive change will make a difference.
We did launch the gateway. The gateway was about bringing information from various parts of government into one place that's easy. I know from when I was at the Ministry of Consumer and Business Services that 70% of businesses do most of their information gathering over the Internet. We had an organization that was called the Canada-Ontario Business Service Centre, a joint federal-provincial organization here in Ontario that delivers information to businesses. They started a call centre to provide information to business and they launched a Web site. It took a year or two, but 80% of the businesses were using the Internet for the information, not the call centre. Business people, if that pattern holds true, tend to like to find information when they have the time to do that, and often that's not during business hours, and they'll use the Internet extensively.
I think the workplace gateway, making Web services available that will support business and working with the employer associations to raise knowledge, is also another important strategy. For those businesses that still don't respond appropriately, then you need a strong ministry presence.
Mrs. Munro: I have noticed in your remarks about the workplace gateway -- my question with regard to that is -- it's difficult; you can track who goes there, but do you have a sense of a percentage? Are we missing a lot of people who should be getting those messages? I think that's really important as legislators, obviously, in terms of accountability. You can have something out there, but is it actually meeting the target audience, and is it meeting their needs? Do you have any sense of the effectiveness of this initiative?
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Mr. Kivisto: I know that on the gateway we've had 32,476 visits since October 2004, so there is traffic there, but is it meeting all the needs? Obviously not. I think the sessions with the Minister of Economic Development and Trade, where we're talking to entrepreneurs and explaining the legislation, are helpful. I think those brochures, the posters in plain language, anything we can do with organizations that interact with business is helpful. I think all government agencies, whether they're federal, provincial or municipal, have a real challenge in helping to package information in a way that's helpful to businesses, particularly those that don't have the infrastructure to fully understand that. We're part of that challenge, and I think we've got some good things going on.
Your questions are well-made. I think one thing we can consider down the road, as part of our activities, is doing surveys of employer knowledge and making sure they help to shape our information through feedback to us about the products we've produced so far.
Mr. Jim Flaherty (Whitby-Ajax): It's good to see you again, Deputy. When I was Minister of Labour in the last century, literally in the last century, it was a pleasure to work with you, and I'm happy to see that you're the Deputy Minister of Labour now.
A couple of things. What I hear in my constituency office generally about the ministry from people is about employment standards: "I've lost my job"; "I've been laid off"; "I've been fired"; "I've been downsized" -- whatever -- "I went to the local employment standards branch, and it's taking too long for them to deal with my claim." Usually they have a right to something like eight weeks of pay, and the employer is only paying them three or four, or not paying them. It's that kind of issue. It's not a huge sum of money, but it's an important sum of money for someone who has to make a mortgage payment or pay the rent. So my first question is directed toward that question of delay.
I was looking in your remarks. If I've got the right section, you said, at the bottom of page 5, "We have set a program target to render decisions on 80% of claims within 90 business days of receipt. The ministry is exceeding this target...." Am I in the right area for that type of issue?
Mr. Kivisto: Certainly, but I can give you maybe another sense. I've received phone calls from workers who have to pay bills and don't have their money, and they're obviously upset and rightfully so. Part of it is driven by the legislation that allows appeal periods and other things. Part of it is the ministry's processes.
For the purposes of the committee, back in the early mid-1990s, we had an officer turnaround time of 90 to 94 days. We worked really hard to improve our processes, and it's down to about 37 to 40 days when an officer finishes a file. Is that good enough? Probably not. We have some instances, and I see the odd report, where an officer would make a decision the same day and it gets resolved the same day. As I said -- I don't think you were here, Mr. Flaherty -- in 80% to 85% of the cases, when the ministry intervenes, the employer and the worker settle the money that's owed, either in full or in part, and that happens very quickly.
What takes time is when there is a dispute that doesn't get resolved. Then we do the full investigation, and orders are issued. They could be appealed, and if they're appealed, you've got to wait on the appeal process and a decision by the OLRB. If there's still money owed, then we get into a collections process. Unfortunately, due sometimes to difficulty in reaching agreement on the monies owed, sometimes because we just need to pursue the collections process, it can be quite some time before an employee might get the wages.
We're working hard to streamline our activities, both in terms of our claims intake and management and our collections activities speed, as much as possible. At the same time, understand that it is a serious concern, particularly for the workers and families who are affected by that.
Mr. Flaherty: On the issue of collections, the auditor had specific concerns about collecting for claimants. Historically, the auditor noted that since 1998, up to three collections agencies have been used to collect overdue orders to pay. I was reading your remarks, Deputy, about a new, centralized collections unit in central region, which has the majority of the work in the province. How are the collections being done now, in terms of the ministry's work and work done by outside contractors, if any?
Mr. Kivisto: The change that we've made, with the establishment of the centralized unit in the central region, is that we put more rigour into making sure that the information that goes to the collections agency is accurate and complete, because if you don't give them good information, they have difficulty doing their work. That has improved substantially.
At the same time, the collections agency will make a certain amount of effort to collect monies, but on some of their files they either have difficulty or don't put as much effort in as we'd like them to, based on the business model and the contract we have with them. The centralized unit receives all the files back and goes rigorously through those files to make sure we've done everything possible. It takes action to pursue those monies. I've reported in my speaking notes that they've collected, since July 2003, another $2.3 million based on activity. We think it's having a marked improvement.
So there's a combination of the ministry doing good-quality work leading up to the collections activity, both in claims investigation and in making sure the file's complete, watching the collections agency carefully, ensuring that they're fulfilling their contract with us, and then us taking all the files that come from there and working hard to pursue every other possible avenue that they haven't taken. It seems to be having a much better outcome in terms of that.
I also made the comment in my notes that the best jurisdictions in Canada are running a 20% to 35% collections rate, but that's not good enough. I think we can and must reach that, but collections across all of government and in other jurisdictions is a real challenge. We continue to look at other jurisdictions. We're talking to other ministries that have a collections function in the Ontario government, because there are some best practices there and things I'm sure we can do to improve success for all the collections activities across government.
At the end of the day, you need to do what you can as efficiently as possible to get monies in the hands of workers when they're owed, understanding that at times there's nothing that's possible. There are companies that are just insolvent; there are no assets, and that's what you find after a long process. Brian explained that a few minutes ago, and that's the reality. There's a problem with the federal bankruptcy legislation, in the case of insolvencies, where workers don't have the same priority as secure creditors, so we continue to pressure the federal government to consider amending that federal statute to recognize that issue.
Mr. Flaherty: Finally, on the percentages, you mentioned the best in Canada -- I guess it's Alberta -- at 20% to 35%. Where is the Ministry of Labour in Ontario now, in terms of percentages, given the collection of $2.3 million?
Mr. Kivisto: I'll give you a couple of numbers, and then Brian can correct me if I'm wrong. The collections agency is now collecting 18%. The ministry was taking it into our central collections unit, and that collected $2.3 million since July 2003. I think it has roughly doubled what the collections agency achieved in that time frame, so the math tells me that we're approaching the Alberta benchmark at this time.
Mr. Flaherty: Is that the goal?
Mr. Kivisto: The goal would be to get 100%, if possible, but understanding that we do have insolvencies and other things, the goal is to be better than other jurisdictions, sure -- at least the best we can be, and we're not there yet.
Mr. Flaherty: Better than Alberta, I hope.
The Chair: Thank you, Mr. Flaherty. Other questions?
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Mr. Bill Mauro (Thunder Bay-Atikokan): There was an indication earlier that the dramatic increase in the number of proactive investigations is a good thing. I think everybody would agree. However the numbers were manipulated in such a way as to try to portray it, it still represents a very small percentage of all the employers who are being investigated in the province, which I suppose, if you look at it in its totality, is accurate. I would imagine that most of those proactive investigations are being targeted at what you consider to be the high-risk. Maybe you can recharacterize it for me in terms of the increase in percentages targeted at the high-risk. Do you have any of that kind of data?
Mr. Kivisto: We can certainly give you what we have. You're absolutely right, Mr. Mauro, that we'll never have the kind of capacity to be in every workplace every day. That's not the goal. The goal is to provide knowledge and information to employers so they know their obligations and their rights and they fulfill those, and then to use the information the ministry has to target its activities where there is high risk. We've done that. We have committed to a significant number of proactive inspections: 2,000. They're focused on those sectors and repeat offenders. Repeat offenders are people who have multiple claims of overtime.
I think we will re-evaluate how we're making out in terms of achieving higher compliance rates. I suspect that, over time, as we are successful in achieving better compliance rates, we'll be able to take more of the resources we have on the reactive side of the business and work the proactive side.
Mr. Mauro: My point is that even though 1,200 or 1,400 proactive investigations might only represent less than 1% of the total employers in the province, it might represent 5% or 10% of the total high-risk employers in the province, and you would agree.
What we leverage from that kind of initiative would be -- and I don't know if you've had enough time yet to have analyzed this data or if it's available -- that there will be a corresponding decrease in the number of complaints that you're going to receive. Can you speak to that, or is it too soon to know that that proactive initiative is leading to, I would hope, a significant decrease in the number of complaints that you're receiving from the high-risk sector?
Mr. Kivisto: As I talked about the high-risk targeting, and in particular the restaurant sector, I talked about us taking 200 random inspections in that sector -- not just looking for repeat offenders -- to establish whatever the compliance rate is. It may be 30%; it may be 70%. We set a goal that we're going to achieve 80% compliance in that sector over time, so we will then evaluate our information about what kind of contraventions are taking place. We'll communicate with restaurants, with employers and workers in that sector, and achieve the kind of compliance rate that would be indicative that the workers are treated fairly.
It is early days yet. We don't have the results of the proactives to tell you what the compliance rate is today, but we will have, in the next month or two. Then we'll launch our strategies to deal with this so that that sector falls off our complaint list and we can focus on others.
Mr. Mauro: This increase in the proactive investigations has been over the last 12 months or so. In that 12-month period, you would historically have received X number of complaints. You can't tell me, in the past 12 months, how many complaints you've received yet, if it's gone down or up?
Mr. Kivisto: No, and I would think it's too soon. Having launched the proactives in July of last year, I think we need a bit more time.
Mr. Mauro: OK. Fair enough.
There is indicated in the report that there was an internal collections function report coming. It's not here yet. Do we know why it's not here or if it's still coming? In the auditor's report there is reference that in 2003 a report was requested or was underway on the internal collections function.
Mr. Kivisto: Perhaps I can clarify. We had launched an internal review of the collections function a couple of years ago, recognizing that we weren't satisfied that all was being done. That report was completed in February, and we've taken the information from there to improve our process within the centralized collections unit. So the review was completed, and it helped inform our practices that we're following now. I think it's part of the reason why we've done a little bit better through the centralized unit.
Mr. Mauro: Was 1998 the year we went to privatized collections?
Mr. Kivisto: The contract with the three collection agencies -- I'll ask Brian to look that up, but I think that's roughly the time.
Mr. Mauro: Close enough.
I'm curious if you have any way to sort of analyze the net on the financial side. Clearly there's an administrative cost to pursuing things when it's in-house, and there's a cost associated with the collection agencies. Do you have thoughts or information or data, from a fiscal perspective, on what's the best approach to take, why Alberta was doing better and what their more stringent requirements are that seem to lead to a higher success rate?
Mr. Kivisto: I think we need to be doing cost-effective, efficient collections, and having a mixture of public and private activity makes sense. The collections agencies externally have good techniques and tools for certain kinds of collections activity, and they're pretty efficient at it. They're achieving an 18% collections rate in the last year. At the same time, the ministry also has some capabilities, and we've learned, through that centralized collections unit, that they've been quite successful.
Mr. Mauro: You said that 80% to 85% are settled between the officer and the employer. When we get to that point -- the other 15% -- do we still administratively pursue it to some degree before it's turned over to a --
Interjection.
Mr. Mauro: You do. OK.
I guess my last question would be about this quick turnaround time that is referenced. I can understand how that would be important from the employee perspective, if they're owed money, but does it also militate against the number of prosecutions you're willing to go to the wall on? Is there an inclination within the ministry to sometimes achieve a turnaround target? I'm thinking that the employer may sometimes benefit from our attempt to achieve a quick turnaround time, if you understand my point.
Mr. Kivisto: Let me see if I do by giving you an answer, and perhaps you can clarify the question. It's important, for a couple of reasons, that the ministry be as efficient as possible in its handling of claims intake and investigation, for a couple of reasons. There's uncertainty, both on the part of the worker and the employer, about what needs to happen. As well, if there's money owed, then the sooner that's resolved and collected, the better. I would tend to think that the older the file, the information gets stale and is more difficult to investigate -- that's been my past experience -- because the memories of workers and employers aren't the same, and sometimes the records are harder to retrieve. So timely investigations are important from a perspective of helping resolve the dispute between the worker and the employer, and at the same time, ensuring that businesses that haven't given attention to employment standards issues understand that the government is serious, and developing a reputation that when the ministry comes in, they mean business and will get the job done, will help create an incentive for better compliance.
Mr. Mauro: Is the entire cost of the prosecution borne by the ministry, or, if you're successful in court, is there a mechanism to apply some of your costs against the employer?
Mr. Kivisto: There are two kinds of monetary penalties, if you like, that we have in place. One is a notice of contravention and the other is prosecution by way of part I or part III. When you pursue prosecution by part I and part III, the fines are paid to the municipalities. The municipalities run the courts, and the fines help pay for the administration of the courts. There's a surcharge put on top, and that is returned to the provincial government. On notices of contravention, the money accrues to the provincial government.
The Chair: I'm going to go to Ms. Martel in a moment, but could I just ask one question related to your proactive inspections? There are 1,400-plus that we've done this fiscal year, and I think you said there were almost 1,000 firms involved with those 1,400 and you're targeting the high-risk areas. How many of those 970 or 1,000 employers did not have any problems? In other words, how many were good employers? About 200?
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Mr. Kivisto: Out of the 931, how many employers did we find in contravention? I think Brian gave a rough estimate that he thought it was higher than 70% where there's a problem.
The Chair: So that means that there are 30% on the other end. Do we do anything for those employers that are really good employers? Do we give them some kind of acknowledgement, and what is that acknowledgement?
Mr. Kivisto: I'll turn that question over to Brian.
Mr. Lemire: When we conduct an audit and we find out that there are no violations, we do a couple of things. Where there might be some lack of knowledge on the part of the employer -- there hasn't been a violation, but in discussions with the employer it becomes apparent that they're not quite sure what particular provisions mean and how they're applied; they haven't necessarily violated this, but they have questions -- we provide information by way of materials, and we educate them to some degree. We leave, with every employer we visit, a CD that has on it all our fact sheets and all our information with respect to policies and procedures, as well as a self-audit tool that they can use to do a check themselves in the future.
The Chair: I guess I'm not making myself clear. In times past, we've had ISO 9000, ISO whatever, in terms of environmental management etc. Particularly when you're going into high-risk areas where they're competitors, if it's a 70% non-compliance rate, many of their competitors are not living up to our employment standards. I just feel that the ministry should reward, in some way, those people who are operating in a field where their competitors aren't meeting the standard and they are going the extra step and are meeting their standards or may even be exceeding their standards. There should be some acknowledgement by the ministry -- maybe a plaque or something that they can put in their waiting room when people are coming to apply for a job there -- that this is a class A1 employer in terms of what they're doing.
Mr. Kivisto: That's an interesting idea, and it's certainly worth pursuing. There has been some discussion within the public service about an enforcement strategy that looks at high performers and how we can promote that kind of good practice and recognize it. I think that's something that we should go back and think about a little bit. It kind of reminds me of what you see when you go to a restaurant and you've got the yellow and the green and the red. I certainly look at those every time I walk in a door, and it'll be a factor in whether I'm going to come back.
In theory, if we were able to do that well with the issue of employment standards -- for example, if a worker was thinking of working somewhere, if they knew what the rating of that workplace was, it may be a factor in whether they choose to work there or not. So on the one hand, publishing results of prosecutions and other stuff will inform them on the negative side, but it would be nice to see something on the positive side. Thank you for the idea.
The Chair: I think Ms. Martel has about 20 minutes. Just for staff purposes, we'll probably be about another 30 minutes in total.
Ms. Martel: I'm going to go from employers that the Chair would like to acknowledge to an employer whose information is correct -- and I have no reason to doubt that it is not correct -- a deadbeat employer whom I really wish the ministry would get all over and get this issue resolved. I wasn't going to raise this, but in light of what the Chair just did, I think I've got to raise the flip side of what we really should be doing.
Beautiful South, owned by Scott MacDonald and David Buck, a Toronto garment manufacturer: The first employee was owed $6,000 in wages when she went to the Ministry of Labour in March 2003 for help. She doesn't have her money yet. In the meantime, after that, another five employees were forced to quit in May 2004. They are owed over $30,000 in unpaid wages and statutory benefits.
To date, this is what the ministry has tried to do, after a lot of pressure from TOFFE, who is representing these unorganized workers: "The ministry has filed writs with the sheriff's office in October 2004 but has not yet ordered the sheriff's office to seize and sell any assets of the company or its directors." The ministry informed TOFFE that they must be sure that "seizure and sale will result in the recovery of wages for the workers and not a loss for the ministry. According to Beautiful South workers, the company owns many expensive embroidery and sewing machines" that could obviously be seized and sold to bring in the money to pay for the wages. That's the first action that could be taken. You're going to correct me if I'm wrong, but it doesn't look like any action has been taken on the writs.
The second action: I gather that the Ministry of Labour, after getting information from TOFFE about some of the clients of Beautiful South, told Beautiful South clients to pay the ministry now and in the future. I'm under the understanding that even though the clients were identified and they are certainly in a position to pay, this money is not being directed to the ministry.
The third action had to do with seizing money from the accounts of the owners themselves. I gather that the banks told the ministry that all the accounts were overdrawn or subsequently closed. But TOFFE knows, and so do the workers, that Beautiful South continues to operate and do a steady business. So I don't know where they're hiding their money.
You can answer me now, or you can answer the committee later, but it would be really useful to know what's happening in this case. There's about $36,000 now owed to workers, a very classic case of what one can only describe as a deadbeat employer who makes everybody look bad. I have no reason to believe that the facts are not correct as they've been given to me. I don't know if you want to respond now, Deputy, or if you want to get back to the committee about what the ministry is going to do to finally get these workers what they're owed.
Mr. Kivisto: I can certainly comment a little bit on that matter. There are a couple of handfuls of specific cases that I have a personal interest in, that being one of them. I am being updated every two weeks on everything we're doing with respect to that file and other files. There are certainly some very difficult cases and some very unfair cases in terms of workers. The ministry's job is to do everything it possibly can do. My goal in reviewing those files is just to elevate in the organization -- to ensure that if there's something that's legally possible to do, we're pursuing it. I'll be happy to have someone talk to you, aside from that, on that specific file in terms of the current status.
We also have engaged TOFFE and other groups on specific files. They've been very helpful in giving us information. In some cases, it has been tremendously helpful, and we've had some success. In others, it just continues to frustrate both the ministry and workers who are owed monies.
Ms. Martel: Can you at least tell the committee if this company is still operating?
Mr. Kivisto: I see a nodding head behind me; that's "yes."
Ms. Martel: I'd appreciate, certainly, getting an update on how come they're still operating and people are still owed money, especially that kind of money. There's something wrong here.
Let me ask a couple of other questions, then. I think you said earlier that the 1,400 inspections have resulted in a total of $905,000 being assessed, and the recovery rate is 76%. So I guess about $215,000 is still owing from those inspections; that's money still owing to employees. Is that correct?
Mr. Kivisto: That would be the situation at this time.
Ms. Martel: And how much time are you giving these employers to get this money in to the ministry?
Mr. Lemire: Once the investigation is complete and the decision is rendered to the employer, the employer has five days to provide the money to the ministry or an order to pay will be issued. When the order to pay is issued, there's a 30-day appeal period. Following that appeal period, within five days the file is sent to the centralized collection group for pursuance of collection activities and the collection agency.
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Ms. Martel: Is there any other action you can take? I'm assuming all these employers are operating, because it was a most recent inspection, so there shouldn't be an issue that they've gone bankrupt and you can't collect. Instead of it going to the collection agency, what about some of the enforcement tools you have that are listed in the auditor's report -- the notice of contravention etc.?
Mr. Lemire: The notice of contravention is an administrative monetary penalty. That doesn't put the money back in the hands of the worker; that's a penalty. Similarly, the tickets and the prosecutions, unless directed by the court, don't put money back in the hands of the worker. The primary tools for actually getting money that we can provide to the worker is through recovering bank account monies, through the writs and through third-party demands placed through the bank.
Mr. Kivisto: But we will clearly follow enforcement activity beyond trying to get the money. We do two things: We issue directorate orders and we initiate either a notice of contravention or a prosecution for non-compliance with an order. So we have a parallel track: the collections activity that Brian talked about and the enforcement activity where there's non-compliance with orders of the ministry or repeat offences. So on the proactive inspections you'll see both happening.
Ms. Martel: Should I assume that of the balance, where there's money owing, in those cases there is proactive enforcement happening right now, that you're using directors' orders; that you're talking to them about prosecution -- at least in the most current ones, where you know they're operating; that you're getting on top of them?
Mr. Lemire: Every file that goes through this centralized unit where an order to pay has not been satisfied is reviewed for the potential for directors' orders, if there's a corporation that has directors listed. Writs are filed in the courts, and they're pursuing possible section 4-related companies to see whether there's another organization that could be held accountable for that.
Ms. Martel: Can you tell me about the 229 prosecutions since July? How many of those would have been repeat violators of the act? Do you have that information?
Mr. Kivisto: I probably don't have that information with us. None of us have it today, but the fact is that some of the proactive inspections, a portion of them, are targeted to repeat offenders, so then a portion of these would be related to just that circumstance.
Ms. Martel: Could you get that information for us? That would be great.
Of the 309 notices of contravention -- I understand those are administrative penalties and the money would be going to the consolidated revenue fund -- what was the monetary value of those 309 notices?
Mr. Lemire: I can tell you that most of them would be the first offence, which is $250. I believe there may have been some that were a second offence, but to give you an approximate value, it would be the $250 times 300.
Ms. Martel: Of the inspections that you did, how many orders were issued?
Mr. Lemire: Of the inspections we've done to date, we've issued 640 compliance orders, 111 orders to pay wages, and four directors' orders to pay. This is by the inspection team, not the team that would pursue the file if the orders were unfulfilled, who also look at directors' orders. The dedicated team issued 87 notices of contravention. The other notices of contravention would have come through the investigation of claims.
Ms. Martel: OK, I understand that. A couple of other questions. Can you tell me the value of the fines associated with the 229 prosecutions?
Mr. Kivisto: They've been launched; that doesn't mean to say they've been completed through the court process, so we won't be able to give you that information until the court process is complete.
Ms. Martel: Until what process is complete?
Mr. Kivisto: Until they're finished with the courts. In other words, there are 229 prosecutions initiated.
Ms. Martel: Most of them would be at the starting stage, then? There are very few that have been --
Mr. Kivisto: They're at various stages.
Ms. Martel: There was a suggestion from the auditor that the ministry should consider assessing employers for some of the costs around inspections as a mechanism both to act as a deterrent but also to gather some increased funding -- if the money was targeted, obviously -- to allow the ministry to do more inspections. Can I ask what's happening with that recommendation, if anything?
Mr. Kivisto: We certainly looked at that recommendation and we've looked at the other jurisdictions who have that capability. What we discovered in British Columbia was, although they have the law, they've never used it. They found there were some real complications with putting it into effect. We think that we need to finish moving forward with the current initiatives on enforcement -- in particular, pushing the targeted inspections and the other enforcement activity -- and then review where we are at that point in time and decide whether or not that's something that we need to bring forward to the government. So at this stage, it's not the top issue on our table.
Ms. Martel: I wanted to ask about a commitment that the minister made almost a year ago, on April 15, 2004. This was after there were a number of immigrant workers who were at Queen's Park at a press conference with cheques that had bounced from their employers. The minister said at that time -- this is a Canadian Press story: "Labour Minister Chris Bentley said Thursday the government is preparing legislation this spring" -- that would have been spring 2004 -- "that will give the ministry more teeth in enforcing employment standards across Ontario." He also said, "`We're going to change the dial on enforcement in this province,' said Bentley, who expects to have more details in the next few weeks."
Can you tell me where the legislation is?
Mr. Kivisto: The government came forward with a schedule of offences for the ticketing piece in and around that time. Perhaps that's what the minister was thinking. As well, the more recent legislation creates the capability for the minister to publish the names of organizations that have been prosecuted. That's the second element, perhaps.
Ms. Martel: That's it? Even when you do ticketing, your money goes to the municipality. It can't even go back to help you do more inspections because it's a provincial offence. I would argue that if you were really tough on the other measures that you already have in enforcement, you may not have needed the ticketing. If you were really getting on top of people with respect to administrative fines, with the notices of contravention and scaling up to $1,000 for repeat offenders, if you went at those repeat offenders with respect to fines -- up to $50,000 and 12 months in jail. There are lots of enforcement tools at your disposal. I'm not sure what the ticketing does to really deter anybody, and I'm not sure how useful it's been, when I think you already had in place a lot of enforcement mechanisms that really needed to be put into place by ES inspectors. From your perspective, there's no other legislation that's being worked on internally that would address some of these issues? The minister was really clear: He said "legislation," and he said it more than once, in terms of this particular press story.
Mr. Kivisto: The enforcement approach of the ministry changed dramatically. The introduction of tickets was one additional tool that the employment standards officers have. The number of prosecutions that have been initiated, both through part I and part III, are 229 versus 18 in the previous five years. I know, from talking to employment standards officers who are on the dedicated team in the field, that they issued a ticket for a poster, in one circumstance, and suddenly all the posters disappeared out of the ministry inventory in that location. So they did seem to have an impact within the business community and that geography.
I think we need to continue to monitor how effective the various tools are. There's a place for notices of contravention. There's a place for tickets. There's a place for an order. There's a place for a part III prosecution, which has the more severe fines and penalties, including imprisonment. We need to pursue all of those, as appropriate in the circumstance. We now have, I think, a good suite of enforcement tools available to employment standards officers.
We put a new prosecution policy in place to make it absolutely clear to ESOs when they had to consider prosecution. A lot of the discretion, as much as was reasonable and possible, was taken out so that there's a clear message that part of the job is not just chasing money for workers; it's also holding employers accountable, through the courts and through other means, for fulfilling obligations. Having prosecutions through other means in place allows you to track repeat offenders through the court process so that if you show up with a repeat offender down the road, you have a history behind that employer. I think that's very powerful in terms of the court deciding how they'll choose to deal with the matter.
I think we now have a pretty good mirror between what we do in health and safety and what we're doing in employment standards. We are still in the midst of continuing to train the rest of our employment standards officers. We've got the dedicated team fully trained in some of these tools, and over the next few months, as that takes place, we'll see a continued increase in effective enforcement measures targeted by the ministry to repeat offenders and serious offences. I think we need to see how that plays out, to see if anything more is needed.
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Ms. Broten: I wanted to touch on the issue where the auditor had concerns about measuring and reporting on program effectiveness. I know you made mention in your opening comments about implementing some new programs in that regard. Certainly that's an area of significant importance for this committee: making sure of value for government dollars and effectiveness of programs. What I'm wondering is when information will be available that could be provided to this committee to start having a baseline measurement against which we can look at progress or non-progress in terms of where compliance rates are going in the province.
Mr. Kivisto: I agree that having that information published will be extremely helpful. We will be completing the work on targeting the 200 random inspections in the restaurant sector in the next month or so, and then analyzing those results. Then we'll publish the compliance rate for that sector. At the same time, I've indicated that we're already producing information internally, on the ministry Intranet site, for staff on our enforcement activity, our proactive inspections and our collections activity. Within the next month or two, that'll be made public. I would think that within the next couple of months you'll start seeing a better understanding of what the ministry is doing, the kind of results it's achieving in terms of outputs from activity, and also how we're making progress on the compliance rate in those sectors we targeted. We're well on the way to being able to make that transparent.
It's important that it be transparent, and it's important that you capture, as the auditor pointed out, that it's not just about claims investigation times; it is about achieving outcomes and making information about the work the ministry's doing public, so that any interested stakeholder, including this committee, can see that the ministry is working hard on delivering on its commitments, and that it's having the kind of impact it needs to have for the resources that are invested in the ministry.
Ms. Broten: What are the plans and timelines with respect to the expansion of the pilot project, if any?
Mr. Kivisto: The pilot project on the central collections unit? Was that the question?
Ms. Broten: In terms of the measuring and reporting programs, the new measures that were put in place in July, you've indicated with respect to the restaurant sector. I'm wondering, is there a phase-in plan in place as to moving into other sectors? Where would you see this program four years from now?
Mr. Kivisto: Four years from now I would think that we would have dealt with and launched initiatives in the three poorest sectors. We have been well along the way in ensuring that workers and employers knew what they needed to do, knew the most recent contraventions, and had information and help. We had an improvement in terms of what we see through our proactive inspections. We'll see a reduction in claims. Obviously, if the restaurant sector is the first, we'll see compliance rates starting to improve there from whatever we're finding out in a month when we analyze it. We'll do public reporting on that through our results-based plan.
Ms. Broten: Did you have anything you wanted to add?
Mr. Lemire: Perhaps just to augment the fact that the targeted sectors we're currently looking at compose 90% of the areas where we're getting claims. We will look at whether we need to bring in other new sectors, but we first of all are focusing on those sectors representing 90% of where we think the issues are. We'll be establishing the baseline compliance in the restaurant sector this year, looking at activities that will help raise that.
The other sector that we have continually been involved in, and will continue to work in, is the garment sector here in the GTA.
Ms. Broten: Thank you.
The Chair: I think that brings a close to the questioning. David, do you have anything else you need to clear up?
Mr. David McIver: No; I think we're OK.
The Chair: Thank you very much. We appreciate your appearance here in front of the committee. We'll probably issue our report sometime in May, hopefully, as we get going down the road.
With regard to the information which Ms. Martel asked for, if you would direct that to the committee, we can share it with all members of the committee.
Mr. Kivisto: We'll do that. Thank you.
The Chair: Members of the committee, we have lunch in the next room if you want to get a sandwich, and then we'll reconvene after and have our in-camera session to talk about and give direction to our researcher with regard to writing the report.
We will recess for, let's say, five or 10 minutes.
The committee recessed from 1146 to 1153.
The Chair: I believe it's the wish of the committee to go in camera; therefore, we will adjourn the formal part of our hearings. Agreed? Thank you.
The committee continued in closed session at 1153.
CONTENTS
Thursday 3 March 2005
2004 Annual Report, Provincial
Auditor: Section 3.09, employee rights
and responsibilities program P-309
Ministry of Labour P-309
Mr. Paavo Kivisto, Deputy Minister
Mr. Brian Lemire, director, employment practices branch
STANDING COMMITTEE ON PUBLIC ACCOUNTS
Chair / Président
Mr. Norman W. Sterling (Lanark-Carleton PC)
Vice-Chair / Vice-Présidente
Mrs. Julia Munro (York North / York-Nord PC)
Ms. Laurel C. Broten (Etobicoke-Lakeshore L)
Mr. Jim Flaherty (Whitby-Ajax PC)
Ms. Shelley Martel (Nickel Belt ND)
Mr. Bill Mauro (Thunder Bay-Atikokan L)
Mrs. Julia Munro (York North / York-Nord PC)
Mr. Richard Patten (Ottawa Centre / Ottawa-Centre L)
Mrs. Liz Sandals (Guelph-Wellington L)
Mr. Norman W. Sterling (Lanark-Carleton PC)
Mr. David Zimmer (Willowdale L)
Substitutions / Membres remplaçants
Mr. Kevin Daniel Flynn (Oakville L)
Also taking part / Autres participants et participantes
Mr. Jim McCarter, Auditor General
Clerk pro tem / Greffière par intérim
Ms. Tonia Grannum
Staff / Personnel
Mr. David McIver, research
officer,
Research and Information Services