CONTENTS
Wednesday 21 August 1991
Employment Standards Amendment Act (Employee Wage Protection Program), 1991, Bill 70 / Loi de 1991 modifiant la Loi sur les normes d'emploi (Programme de protection des salaires des employés), projet de loi 70
Adjournment
STANDING COMMITTEE ON RESOURCES DEVELOPMENT
Chair: Kormos, Peter (Welland-Thorold NDP)
Vice-Chair: Waters, Daniel (Muskoka-Georgian Bay NDP)
Arnott, Ted (Wellington PC)
Cleary, John C. (Cornwall L)
Dadamo, George (Windsor-Sandwich NDP)
Huget, Bob (Sarnia NDP)
Jordan, Leo (Lanark-Renfrew PC)
Klopp, Paul (Huron NDP)
Murdock, Sharon (Sudbury NDP)
Offer, Steven (Mississauga North L)
Ramsay, David (Timiskaming L)
Wood, Len (Cochrane North NDP)
Substitutions:
McLean, Allan K. (Simcoe East PC) for Mr Arnott
Witmer, Elizabeth (Waterloo North PC) for Mr Jordan
Clerk pro tem: Manikel, Tannis
Staff:
Nigro, Albert, Legislative Counsel
Hopkins, Laura, Legislative Counsel
The committee met at 1017 in committee room 1.
EMPLOYMENT STANDARDS AMENDMENT ACT (EMPLOYEE WAGE PROTECTION PROGRAM), 1991 / LOI DE 1991 MODIFIANT LA LOI SUR LES NORMES D'EMPLOI (PROGRAMME DE PROTECTION DES SALAIRES DES EMPLOYÉS)
Resuming consideration of Bill 70, An Act to amend the Employment Standards Act to provide for an Employee Wage Protection Program and to make certain other amendments.
Reprise de l'étude du projet de loi 70, Loi portant modification de la Loi sur les normes d'emploi par création d'un Programme de protection des salaires des employés et par adoption de certaines autres modifications.
Section/article 6:
The Chair: Good morning. We are ready to resume our consideration of Bill 70, clause by clause. Is there any discussion regarding section 40y?
Mr Offer: Could you give us some ideas as to how an order might read? You are saying that a director who fails to comply with an order is potentially liable. How would that order read, the style?
Ms S. Murdock: I will let Mr Jenkins answer.
Mr Jenkins: It could require that the director pay the amount directly to the employees or it could require that the director pay the money of the capital to the director of employment standards, in trust. It would be either one of those two.
Mr Offer: It would be named directors?
Mr Jenkins: That is right.
Mr Offer: And the service of the order is found in section 40x.
Mr Jenkins: That is right.
Ms S. Murdock: I wish to point out too that this is in line with what is already in the Employment Standards Act in terms of the dollar amount of the penalty, but it actually is a lesser penalty in that the jail term that is in the ESA is no longer in this section.
The Chair: Shall section 40y carry? Carried. Ms Murdock, section 40z.
Ms S. Murdock: Subsections 40z(1) and 40z(2) are that directors may not contract out of their liability under this act. There is an indemnification for directors by the employer. It is a further protection for directors and it parallels what already exists, reinforces that the employer has the primary responsibility for payment.
Mr Offer: Just a question under subsection 40z(1) where it talks about the not contracting out: Is that similar to what is under the Ontario Business Corporations Act now? I am not certain.
Ms S. Murdock: Yes, section 136 of the OBCA covers that.
Mr Offer: In subsection 40z(2), I know in words that the employer is the one who is primarily responsible, and I underline in words only. This provision is permitting a director to potentially be indemnified by an employer if the director has paid out money in good faith. This is just permitting an employer to do that. Why is this type of section necessary?
Ms S. Murdock: Actually, I asked the same question, but it also mirrors what is in the OBCA. Legal counsel felt that it was clarification and it created certainty that this provision is allowed.
Mr Jenkins: It assists the parties in obtaining the proper insurance, because under some of the insurance policies the company will be the one that takes out the policy and then the insurance company will reimburse the company for the moneys which the company pays the director under the indemnification agreement. So it facilitates that arrangement.
Mr Offer: Is it of any concern how acting in the "best interests of the employer" is determined?
Mr Jenkins: Again, as I understand it, a lot of policies will not cover situations where the director has acted in bad faith and it mirrors what is in the OBCA.
Mr Offer: Just as a short point, it would be nice if this almost due diligence clause were expanded to the enforcement mechanism in the bill itself.
Ms S. Murdock: Just an additional point is that in many of the directors' contracts where there is coverage some of them do not have the explicit provisions listed. This gives them an additional protection for them, but most contracts do have explicit provisions.
The Chair: Shall section 40z and all of its subsections carry? Carried.
Ms Murdock, section 40za.
Ms S. Murdock: Civil remedies available to persons against officers and directors or to officers and directors against others are not affected by this legislation. So rights to sue in the OBCA, in other legislation or in common law are unaffected.
The Chair: I am pleased to see that the government is reinforcing the right to sue. I hope there is consistency in that regard to the history of this government. Just an observation. Is there any discussion?
Mr Offer: To Hansard, I want the page that this is going to be located on for future reference.
The Chair: I want it first.
Ms S. Murdock: I do not think there is any doubt as to Peter's position.
Mr Offer: I would expect that the government will probably be consistent.
The Chair: Shall section 40za carry? Carried.
Section/article 7:
The Chair: We are now dealing with section 7 of the bill, which contains what would be section 42a of the act.
Ms S. Murdock: It is the appointment of adjudicators provision. They will be appointed to hear appeals from employees against any employment standards branch decisions not to issue orders for wages or other entitlements the employee believes are due. Appeals filed by employers or reviews initiated by the Employment Standards Board will continue to be heard by referees appointed by the minister.
Mr Offer: In dealing with the appointment of adjudicators, my question is whether the ministry has made any decision as to whether, apart from adjudicators, other persons are going to have to be employed, how many and when they expect to be employed. Also, how many adjudicators are intended to be employed and when?
Ms S. Murdock: It is expected that under this legislation there will be 129 new employees throughout the province of Ontario, many of whom initially will be to cover the backlog that exists presently under the employment standards branch. So some will be on contract. When the backlog is caught up and we are into the expedited provisions under this legislation, there are 11 branch offices throughout the province, so those 129 will be spread out through them. The majority of the 129 will be the officers, as I understand it. In terms of the adjudicators' appointments, I would have to get direction from the ministry staff because I do not know.
Mr Jenkins: We have presently determined, I believe, that five full-time adjudicators would be hired. Of course, no appointments have been made yet. It is not certain the exact structure the group of adjudicators will take, but we have determined at this point that five full-time adjudicators would be hired.
Mr Offer: On that point, in dealing with the new staff and also the things that go with it, dealing with offices and all of those things, is the budget for those individuals contained in the $175-million allocation or is it something else?
Ms S. Murdock: I am seeing nods that yes, it is contained in the $175 million.
Mr Offer: So the $175-million fund is not just for the wages but rather for the whole setup of the administration.
Ms S. Murdock: For the entire program.
Section 7 agreed to.
L'article 7 est adopté.
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The Chair: Now we are dealing with section 7a of the bill, section 46a of the act. Ms Murdock.
Ms S. Murdock: This should please Mr Offer because it is just a definite clarification that deemed wages under clause 40b(2)(d) is stated emphatically that that is what it is for.
The Chair: Shall section 7a carry? Carried.
Section/article 8:
The Chair: Section 8 of the bill has two subsections.
Ms S. Murdock: The amendment to clause 47(1)(c) eliminates the $4,000 cap on orders to pay and replaces the term "penalty" with "administration costs" of 10%.
Mr Offer: What does that mean? Does that mean that if the order is, for instance, $2,000 wages and vacation pay, $1,000 termination and $1,000 severance, that the total order, of course, would be $4,000, but there could be a 10% administration cost on wages? Would that be on the $2,000 or on the $4,000?
Ms S. Murdock: When the order is issued, it includes a 10% administrative fee, so if that is not --
Mr Offer: No. I understand an order can really be made up of four categories: wages, vacation pay, termination and severance.
Ms S. Murdock: Yes.
Mr Offer: If an employee is, for instance, entitled to all four of those categories -- I will use the example of it being $4,000 -- is the administration fee 10% of the $4,000, which would include wages, vacation pay, termination and severance, or is it on just the accrued wage portion of the order?
Ms S. Murdock: It is on all four. Suppose the order for payment was $20,000 and the $5,000 comes out of the fee, the 10% administration fee would only be on the $5,000, not on the $20,000. Is that not correct?
Mr Jenkins: No, that is not correct. The 10% administration fee would be on the entire amount of the order.
Mr Offer: I have a question on the order. Although the directors could only potentially be liable for the wages and vacation pay multiplied by the number of employees affected, the order could be wages, vacation pay, termination and severance, so an order could ostensibly be $15,000. The directors would only be liable for the wages and vacation pay and the $50,000 fine would only kick in if they did not pay the wages and vacation pay?
Mr Jenkins: If they did not comply with the order. It is a quasi-criminal matter and it would be pursued rarely.
Mr Offer: I know, but I am wondering on what basis it is pursued. Is it pursued on the basis that a director did not pay $2,000 or a director did not pay $4,000?
Mr Jenkins: It would be pursued on the basis that he did not comply with the order against him which would be for wages and vacation pay only.
Mr Offer: I know I am just picking out figures, but I think even in terms of your figures, the wages and vacation pay on an average basis would be approximately $2,000.
Mr Jenkins: No. As I understand it, the wage and vacation pay component is substantially less than that on an average claim.
Mr Offer: I know we brought this up very early in our deliberation. I do not want to get any false sense of comfort by that, but are we talking about an average payment of $1,000, $1,100, $1,500 or $3,500? Something just sticks in my mind that it is $2,100 and $4,000. I do not know why.
Ms S. Murdock: The average of all of them was $4,200, but I do not recall a figure. Perhaps you have it.
Mr Jenkins: Of the total files that have been assessed so far in our backlog, in dollar terms approximately 85% of the assessment represents termination pay and severance pay. If the average claim is $4,200, you can extrapolate from that what sort of average wage and vacation component we are looking at. The figures are not finalized.
Mr Offer: I just want to be very clear. I am going to use an example that a company has gone bankrupt and it has 10 employees and each employee is entitled to two weeks' wages and a little bit of vacation pay. Let us say that adds up to $2,000. The order against the director would be $20,000, would it not?
There would be severance and termination pay also of, say, another $3,000, so we have a different figure. The order against the director would not be $50,000, it would only be $20,000. Is that correct?
Ms Muir: The order against the director will just be for six months' wages and 12 months' accrued vacation pay maximum.
Mr Offer: That would be maximum.
Ms Muir: Yes, in your case.
Mr Offer: But I am saying that in reality, I do not know anybody who would be working for six months without pay. The maximum they could ever probably get in vacation pay would be one year. But we will just leave that for a moment.
Ms S. Murdock: You are right that it is $20,000 because only wages and vacation pay are covered for directors.
Mr Offer: And added to that is a 10% administration fee, or $100, whichever is the greater.
Mr Jenkins: No, there is no administration fee levied against directors.
Ms S. Murdock: Only the employer is levied an administration fee.
Mr Offer: So this issuance of an order to pay, in terms of the administration, is against the employer and not the director. The director is exempt from that. Okay.
Mr McLean: Where does it say in here he is exempt?
Mr Jenkins: The administration fee is provided for in section 47 which refers to orders against employers. Section 47 does not refer to orders against directors. Orders against directors are issued under sections 40u and 40v.
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Mr Offer: Just re-reviewing this, is a director potentially liable under this particular bill in any way, shape or form for the administration of the order in the same way as clause 47(1)(c), as amended, provides? Is it possible for a director to be hit --
Ms Muir: With the administration charges?
Mr Offer: Right.
Ms Muir: No.
Mr Offer: Anywhere in the bill?
Ms Muir: No.
Ms S. Murdock: Just to clarify for Mr McLean, if you look at clause 46a(c), on page 10 of the reprint, in the middle of that section it says, "such order shall provide for payment, by the employer to the director, of administration costs in the amount of."
The Chair: Shall subsection 8(1) of the bill carry? Carried. Now, Ms Murdock, please, subsection 8(2) of the bill.
Ms S. Murdock: We are looking at subsection 47(1a). This is a situation where the employment standards office arranges a settlement or a compromise with the employer and the employer then defaults. This covers those situations where the default has occurred and you are eligible to apply to the fund for the max. If the employment standards officer makes an arrangement with the employer for whatever the settlement will be and issues an order and the employer does not pay, then the settlement agreement with the employment standards officer is not binding.
Mr McLean: Then who pays?
Ms S. Murdock: As an example, if an arrangement, a settlement or a compromise was made where the amounts paid -- it would be like a union agreement perhaps where it might be less than the fund provides, if that is the case, or more, but the fund will only go to a maximum of $5,000. But if it was less than that and the employer agreed and then, for whatever reason, did not and defaulted in the payment, then the employee will be paid to the maximum of the amount up to the cap, and the settlement is no longer in force.
Mr McLean: So then the employer would be off the hook.
Ms S. Murdock: No, the employer is never off the hook. Supposing the employer had made a deal that each employee was going to be paid $3,000 and, for whatever reason, he reneged on the deal, but the employees were owed $4,000, for example, but because of his financial circumstances the employment standards officer and everybody agreed to this, and then the default occurred, then the employer is on the hook, as you say, for the $4,000 and not the $3,000. The settlement is just null and void.
Mrs Witmer: I have one further question related to that. Would they then go through the normal steps of the wage protection fund, and the directors become liable as well?
The Chair: Did you want to respond to that?
Ms S. Murdock: I am nodding.
Mr McLean: Did I hear you say the directors were then responsible?
Ms S. Murdock: The employer is always primarily responsible. The directors are responsible as well, but you go after the employer first so that if a deal is made and the employer does not follow through with it, you would have recourse both to the employer and the directors.
The Chair: Shall subsection 8(2) of the bill carry? Carried. Shall section 8 of the bill in its entirety carry?
Section 8 agreed to.
L'article 8 est adopté.
The Chair: Referring back to section 6 of the bill, having been considered piecemeal and carried piecemeal, shall section 6 of the bill in its entirety carry?
Section 6 agreed to.
L'article 6 est adopté.
Section/article 9:
The Chair: Ms Murdock, dealing now with section 9 of the bill.
Ms S. Murdock: This is subsection 49(1) and a number of subsections right through to subsections (2), (3), (4), (5), (6), and (7). I think I will just run through what subsection 49(1) is. Subsection 49(1) is "Where an order will not be issued," and it is obviously where wages have already been paid, where the employee has no other entitlements under the Employment Standards Act or where there have been no other actions ordered by the employment standards officer.
Subsection 49(2) is employee appeals. This is what we were discussing yesterday in terms of where the employment standards officer has ordered a payment, the employee disputes the employment standards officer judgement and appeals to an adjudicator.
Subsection 49(3) is where a director appoints an adjudicator to hear that appeal.
Subsection 49(4) states who the parties to a section 49 appeal are because -- and this includes the employee -- the employment standards officer becomes a party, the employer is a party and any directors are parties.
Subsection 49(5) is the powers of the adjudicator, and I should point out too that under the present Employment Standards Act in the past another employment standards officer has been doing the hearings, and this puts an independent person who will be doing that.
Subsection 49(6) is the notice of the adjudicator's decision consistent with the Statutory Powers Procedure Act.
Subsection 49(7) is an adjudicator's order as final and binding on the parties in ensuring conclusive decisions in the appeal process.
Mr McLean: Who pays for the adjudicator? Does that come out of the fund?
Ms S. Murdock: It comes out of the fund. All the costs come out of the fund.
Mr McLean: That is paid by the province?
Ms S. Murdock: It is paid for by the taxpayers of Ontario.
Mr Offer: What are the rules that govern the hearing process?
Ms Muir: The rules that govern the hearing process under section 49, section 50 and 51 are the Statutory Powers Procedure Act rules.
Mr McLean: The order of the adjudicator is not subject to a review under section 50 and is final and binding on the parties. Would the employee not have a further right to appeal to the minister if he was not satisfied with the adjudicator's order?
Ms S. Murdock: Are we on section 49 or section 50? We are still on 49, are we not?
Mr McLean: Yes, subsection 49(7).
Ms S. Murdock: As far as I know, no. No, I was right.
Mr McLean: There is no further appeal to the minister?
Ms S. Murdock: After that you can go through judicial review. You do have access to that. If there is an error in law you can go through the judicial review process. You still have that route, but not to the minister.
The Chair: Shall section 9 of the bill in its entirety carry?
Section 9 agreed to.
L'article 9 est adopté.
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Section/article 10:
Ms S. Murdock: Section 10 is section 50 of the act, and this section is the administrative procedures for employer appeals. Subsection (1) is where the employers may appeal, and of course in any order that is made against them there is automatic right of appeal. Subsection (2) has not changed. In subsection (3) the amendment gives the director authority to appoint referees to hear employer-initiated appeals.
Subsection 50(1a) is payment of interest on wage debts. Under subsection (5a) when the employer makes the application for a review he or she must supply reasons for not believing the order to be correct. Under subsection (5b) no money is paid while there is an appeal in process. Under subsection (5c) if there is an undisputed portion of the order, the undisputed portion of the order may be paid but the disputed portion would then go to the review. Subsection (5ba) clarifies that the director of the employment standards branch may extend the appeal time limits for a good reason and whatever decision to be made are on the basis of those reasons. Subsection (5d) is that the decision will be made within 90 days of the appeal date application. That is all of section 50.
Mr McLean: I just have a question. Subsection (5a) says "the director within 15 days of applying for the review." Why 15 days and not 30?
Ms S. Murdock: I do not know.
Ms Muir: It is in the interests of an expedited appeal process so that workers who potentially might be entitled to compensation from the program -- it would be preferable to have a 15-day period instead of a 30-day period, but extensions are possible. Also, the 15-day period is currently the applicable time period in which the employer may apply under section 50 as the act now stands.
Ms S. Murdock: And just to add to that, for instance, for smaller employers during the public hearings it was stated that sometimes you do not do your books till the end of the month, so 15 days may come and go. You can apply for an extension, as is stated in the other subsection. Those considerations will be made.
Section 10 agreed to.
L'article 10 est adopté.
Section/article 11:
Ms S. Murdock: Section 11 is section 51 of the act. Subsection (1a) eliminates officers from the section, as has been done throughout the bill, corrects a cross-referencing error, because it should have been subsections (8) and (9) instead of (7) and (8), and limits the liability of directors to wages and vacation pay only.
Under subsection (1b), directors are not required to put any money in trust; employers are. Under subsection (1c), the employer is to provide a summary of its argument. When an employer disputes a worker's entitlement to wages in a section 51 review, the employer must provide a summary of his argument prior to the hearing before the referee. Subsection (1d) is the expedited hearing within 45 days after a referee is appointed to hear a case. Subsection (1e) is again interim orders for unpaid wages. Where a referee finds that a certain portion of the wages owed are not in dispute, the referee can order to pay the undisputed portion. Under subsection (1f), the referee's decision is to be issued within 90 days. That covers all of section 51.
Mr Offer: Under (1c), "Where an employer disputes the entitlement of a worker to wages...it must provide a summary of its argument prior to the hearing before the referee." Is it taken that the employer receives a hearing as a right notwithstanding the reasons for it?
Ms Muir: Yes.
Mr Offer: Is there any corollary requirement to the employee to respond to the summary of the employer?
Ms Muir: No.
Ms S. Murdock: Just to clarify further on that, if the referee feels that in the particular circumstances of that case no written response or summary is necessary, they can be waived.
Mr Offer: I do not know where that is permitted. Oh, it says "unless the referee waives this requirement." Okay. A question under section 51, which is the review section: Would there not be an order against the employer and that order is potentially under this section reviewed for a variety of reasons? Is that what section 51 is about or is there something else?
Ms S. Murdock: For a variety of reasons? This requirement extends it to disputes over compensation for violations of Sunday work, lie detector tests, pregnancy leave. It does extend it to that but I will let Laura, our legal counsel, respond to that.
Ms Hopkins: Section 51 of the act is used in the situation where no order has been made. If an order has been made against an employer and there is a dispute about it, the employer seeks a review under section 50. If there is an order or a decision not to make an order and an employee disputes it, the employee's dispute is handled under section 49.
Mr Offer: Section 51 does not speak to a dispute as to wages, vacation pay, termination and severance. Section 51 speaks to matters in dispute over other things.
Mr Jenkins: Section 51 could cover a dispute over any entitlement arising under the Employment Standards Act. It is basically used, as counsel said, where a decision is made not to issue an order. Section 51 is more in the nature of a reference which goes before a referee who decides the matter.
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Mr Offer: But what would the subject matter of the reference be? And in that regard, I am asking, would the subject matter of a reference under section 51 ever be entitlement to wages, vacation pay, termination and severance?
Mr Jenkins: Yes.
Mr Offer: Or are those things carried in a section 50 or 49 review?
Ms S. Murdock: Under section 51 it could be wages, holiday, severance, termination, Sunday work, pregnancy leave. It could be any one or a combination of those within that.
Mr Offer: Under section 50 or 49 there are reviews of the entitlement under the proverbial wage protection plan.
Ms S. Murdock: Where orders have been made.
Mr Offer: Where orders have been made. In the event that an order is not made, then a section 51 reference may take place. I do not follow that. It does not seem right. Something seems to be missing here. Help me out.
Ms Muir: A section 51 review is not initiated by the employee or the employer. It is initiated by the director of the employment standards branch. So the subject matter of the review under section 51 could be any violation of the Employment Standards Act, could be non-payment of wages or any other potential violation of the act, but it is initiated by the employment standards branch itself.
Mr Offer: The only thing I am trying to grapple with -- and it must be me this morning -- I see there is a process of determining entitlement, a process of appealing that determination, and I see that can be done by an employer or an employee, a director in section 49 or 50, and those section 49 and 50 types of reviews focus in on the employee wage protection plan.
Section 51 speaks to, in my mind, something broader than the wage protection plan. The entitlements and the final determination are decided under previous sections. Section 51 talks about whether people have a grievance, whether they are working on a Sunday, or whether they have been forced to take a lie detector test or all those other things, but it is not the wage protection plan. All I am asking is, is that correct? Because these are not matters which are kick-started by an employer or employee, director or whomever, but kick-started by the employment standards branch.
Ms Hopkins: Section 49 is not wage-protection-plan-specific; it is a general review power about orders. Once an order has been made, there may be implications for the wage protection fund but it does not necessary follow. So section 49 is the general review process available to employees. Similarly, section 50 is the general review process available to employers independently of the wage protection fund. After an order has been made there may be some implications but section 50 is not tailored to the wage protection plan. Similarly, section 51 may have implications for the wage protection plan but it is not directed specifically at it.
Mr Offer: The difference between sections 49 and 50 is that they are commenced by an employer or employee and section 51 is commenced by the employment standards branch.
Ms Hopkins: That is true.
Mr Offer: Why is this section necessary?
Mr Jenkins: In general terms, section 51 is used when there is a novel point of law. For example, where the branch is not entirely sure whether an order to pay should be issued, in those circumstances it will not issue an order to pay; it will proceed to section 51 which is, as I said, in the nature of a reference. There is no requirement for the employer to put the money into trust in advance of a section 51 hearing such as there is in a section 50 hearing. So section 51 might be used where there is a novel point of law involved.
Ms Hopkins: The point that I found confusing when I first approached this was trying to decide when someone is not making an order because there is not an entitlement. If the employment standards officer says, "I'm not going to make an order here because you, employee, are not entitled to anything from the employer," then the employee seeks a review of that decision under section 49. It is a clear decision by the employment standards officer. When the employment standards officer says, "I'm not going to make a decision here because I'm not sure and I need a clarification of that novel point of law," that is when the employment standards officer under section 51 will say to the director, "I think we ought to have a hearing here and sort this out." Does that help?
Mr Offer: It takes me into the world of strange. It is better I say nothing. This is permissible now, is it not? What we are doing is expanding this. Since there are no other questions, it just must be me this morning.
Mrs Witmer: What presently happens when there are disputes over compensation for violations of Sunday work or lie detectors or pregnancy leave? What options are there?
Ms S. Murdock: They still appeal under the Employment Standards Act for payment for that or redress if they have been terminated or whatever.
Mrs Witmer: So what is new and different?
Ms S. Murdock: I really do not know the details so I will let legal counsel go on that as well -- she is smiling.
Mr Jenkins: You want to know what is new and different in the appeal process?
Mrs Witmer: What is new and different in disputes over compensation in those three areas: the Sunday work, the pregnancy leave and the lie detectors? Why are we including this here? What is going to be done differently?
Mr Jenkins: Disputes concerning orders made under those sections will be heard as before by a referee under section 50 or under section 49. If the employment standards officer refuses to issue an order, it will be heard by an adjudicator. The basic system is not changing except for the institution of adjudicators to hear employee appeals and the expedition of the employer appeals. Other than that the appeal system should be as before in general terms.
Mrs Witmer: In regard to the people who it is determined have compensation due to them, where does that money come from if there has been a violation?
Mr Jenkins: In a section 50 appeal, the employer will be required to put the money into trust in advance of the appeal. Depending upon the results of the appeal, the money will either be returned to the employer or distributed to the employees in accordance with the decision.
Mrs Witmer: But if the employer does not have money, then the directors are liable?
Mr Jenkins: That is right. A director can appeal an order without putting money into trust.
Mrs Witmer: So this really is a little bit different.
Mr Jenkins: The amendments to section 51 which we are considering now, as I mentioned, are not an appeal but a reference and do not contain any requirements to put money into trust by any of the parties.
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Mrs Witmer: The question I have is, if it is determined that you must compensate someone for Sunday work or lie detector, or pregnancy leave, is that money coming out of the wage protection fund in any way, shape or form? It is being advertised as compensation when companies go bankrupt, etc. Are these people going to be reimbursed out of that particular fund as well?
Mr Jenkins: To the extent --
Ms S. Murdock: Not out of the wage protection plan. For Sunday work -- that is what you are asking, are you not? If part of the order or part of the review was on Sunday work or pregnancy leave or whatever other matter other than wages or holiday pay, termination or severance, only the wages, holiday, termination or severance would come out of the EWPP. The allocation for Sunday work, if that was the disputed issue, would come out of the employer, but it would not come out of the EWPP.
Mrs Witmer: I would like to have that confirmed. I am not sure that is what is being said here.
Ms Muir: If you could just refer back to section 40b, which is a section that we have already passed. It talks about the definition of wages for the purposes of compensation. Clause (c) there indicates "compensation awarded under sections 39, 39c and 39f and clause 39k(3)(b) and section 39m in so far as the compensation is awarded for loss of earnings and for termination pay and severance pay." So where there is an award made in regard to a violation of the provisions respecting pregnancy leave or any of those other enumerated sections, that amount could be payable as compensation under the EWPP.
I would point out, however, that directors would not be liable for amounts that are payable as compensation in regard to any of those sections, because directors are only liable for actual wages owed. They are not liable for certain amounts under these sections that might be classified as deemed wages.
Mrs Witmer: But the money is going to come out of the employee wage protection plan.
Ms S. Murdock: I stand corrected because I was not making the connection, strangely enough, that if I was an employee and I was disputing Sunday work and it was determined that I was owed for the Sunday work I had done, then that obviously is wages and it would come under EWPP.
Mrs Witmer: And pregnancy leave.
Ms S. Murdock: If it is determined that it is wages. If I was terminated employment because I was pregnant and it was shown that was the case and if that was deemed wages I was owed or defined as wages under clause 40b(2)(d), then that would come under EWPP. I do not know about lie detector tests.
Mrs Witmer: I would appreciate a little bit more information about lie detectors. I am not sure why this is here. I guess we did not deal with that section 39 yet.
Ms Muir: There is a clause in the Employment Standards Act that refers to the illegal use of lie detector tests and how employees can seek redress where they have been dismissed presumably or have suffered some kind of employment penalty because of their refusal to allow a lie detector test. It is just a reference to that. They are not changing that section. It just refers to compensation that might be payable under the circumstances.
Mrs Witmer: I have a little concern about the extension and the inclusion of these areas. It is certainly a little different, I think, than the public perception about this wage protection fund. This wage protection fund was supposedly hailed as a fund that was going to help those employees who suddenly found themselves without a job and without compensation from their employers. Now it is being used to include other violations as well. I am really concerned that taxpayers could be subject to additional amounts of money that they had not even imagined they would be.
Ms S. Murdock: I would not agree with that because, yes, it is the establishment of the wage protection plan, but it is amendments to the Employment Standards Act, in which those areas are already covered. But it needs to be stated in reference to the sections that it is going to be dealing with. Laura has some further explanation on that, but the bill we are discussing is an amendment to the Employment Standards Act in which the employee wage protection plan is being established.
Mrs Witmer: I understand we were going to get some additional information.
Ms S. Murdock: Yes.
Ms Hopkins: In relation to section 51 here, the reference to the other kinds of entitlements is intended to make sure that a hearing can deal not only with money orders made by employment standards officers but also with the other kinds of orders that employment standards officers might make, orders like reinstatement if you have been improperly fired as a worker for failing to take a lie detector test, for example. So the result of making the change that is proposed here is to make the review more comprehensive in order to protect employers and employees against non-money decisions that would otherwise be unreviewable.
Ms S. Murdock: Just another clarification on that, because I think it is important. I did not realize -- it seemed so straightforward to me when I was reading it. This makes it quite clear that in these review mechanisms and appeal procedures, the adjudicator or the referee would have the power, that it is inclusive and you do not have to go to two different places to get individual things done. I just think it is a clarification, but I obviously was wrong.
Mrs Witmer: I guess I would indicate again that I am really concerned about the possibility of additional money coming out of the wage protection fund, a fund that is going to be financed by taxpayers. It is certainly going above and beyond what it was originally hailed to do, which was to help employees who found themselves out of work and without an employer to reimburse them.
Mr Offer: On the issue of the lie detector question, if an employee has been asked to take that test, whether he does or does not, is there a monetary award that may result as a result of the lie detector issue?
Ms S. Murdock: I will stand corrected if I make any errors or do not state it clearly enough. If the employee refused to take a lie detector test and as a consequence of that refusal was terminated, then of course the mechanisms go into place for him to appeal that decision on the basis of what the ESO determines, or whatever. So that portion would come under EWPP. But if there were damages as a cause of that, no. EWPP does not pay damages; it only pays the provisions as stated under section 40b, and what are determined to be wages in that particular section. I do not think there is any other way of saying that.
Mr Offer: My next question is, what happens now? Where does that employee get the dollars now?
Ms S. Murdock: You have to go against your employer for it in court.
Mr Offer: Does this bill permit, by regulation, expanding the type of issues such as lie detectors, such as this, such as that?
Ms S. Murdock: No. This is the Employment Standards Act. I am not sure, but I think I am hearing that there is a differentiation being made between an employee who loses his or her job due to a closure of a plant and an employee who loses their job on an individual basis for whatever reason. Regardless of how your job is terminated in those individual kinds of examples, you still come under the Employment Standards Act, and if wages, vacation pay, termination or severance are involved in any way, then you fall into the employee wage protection plan. I do not know if that clarifies anything. Cherith may be able to help out a little bit more here.
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Mr Offer: With the lie detector issue -- let's not use the lie detector issue, but we can use the Sunday shopping issue -- how would that kick in?
Ms Muir: If you are owed wages because of a refusal to work on Sunday, then potentially there might be an entitlement for compensation for those owed wages. But in any of the circumstances where there has been a violation of the act and you are owed wages as defined -- so that would be wages, vacation pay, severance, or termination -- there would have to be an order from the employment standards branch issued. That order would be issued against the employer.
Mr Offer: My thought is if somebody loses wages somehow as a result of the Sunday shopping legislation -- they may not lose their job, but they lose wages for a day or two -- what do they do now? Can they access the fund for wages which emanate out of a discussion over whether or not to work on Sunday when they are still holding the same job?
Ms Muir: The employment standards officer is going to issue an order to pay only in circumstances in which the Employment Standards Act has been violated. So if you are asking if people lose two days' pay because they refused to work on a Sunday, that is possible.
Mr Offer: The concern that I think we are getting is that there seems to be an expansion over who and what is eligible for the fund. I think there is this thought -- and if this is incorrect, then we had better clear it up -- that people lose jobs; they have lost them because of a bankruptcy, insolvency or whatever, but they have lost the jobs, and they have certain entitlements under the Employment Standards Act -- termination and severance, vacation pay and their wages -- and they should not be out of those things they are entitled to. But what we are now talking about is something in principle much larger than that.
You may say, "What's a couple of days' Sunday shopping or what's taking a lie detector test?" The principle is crucially important because it is a key to opening an extremely large door. It is expanding the fund to something that I believe an awful lot of people do not recognize. If you think that by allowing somebody to get a couple of days' wages as a result of some contravention of the Employment Standards Act over retail business hours or a lie detector -- if you do not think that is not a major expansion in terms of its potential over the fund, you are just way, way off base.
What is this fund designed to recompense? Is this fund designed to look at wages, vacation pay, termination, severance, or is it designed to look at those things plus potentially a lot of other things? And those other things are when the person still has his job; the person has not lost his job. He may have lost two days' wages, but he has not lost his job. I believe a lot of this bill is premised on the fact that not only have people lost the things, but they have also lost their jobs.
Mr Wood: I think in explanation to Mr Offer, there is some misunderstanding on the part of some of the people over there. Wage replacement is for companies that go into receivership or bankruptcy. This is what the fund is for, what the $135,000,000 is set out there for. If the company is still operating and is solvent, there might be money put out for it, but it is going to reimbursed through the court, one way or the other, and it is going to be reimbursed into the fund.
All you are talking about here is replacement for bankruptcy or receivership. It is not to be expanded into these other areas as far as using the fund for that, as far as I can gather from the way I understand it. It would be the same as what it is right now. If an employee makes an appeal that he has lost two or three days' pay or something like that, he goes through the courts or he goes through the Employment Standards Act and he gets his money out of the employer. I hope that clarifies it.
Ms S. Murdock: Yes. Exactly that. The EWPP is predominantly for those people out of work due to closures for whatever reason: that the employer has had to declare bankruptcy or has had to close or has taken flight. In all other circumstances, for lie detectors or pregnancy leave or whatever, if the employer is solvent, there is no change. You just still go through the same procedures, and if there is an order to pay, the solvent employer has to pay. If it is not paid, the employee can get the money, but then the director goes after the employer for reimbursement.
The Chair: Mr McLean, did you want to join this dialogue?
Mr McLean: Yes, I would like to get into this dialogue because the member had just indicated that this bill was primary for a specific purpose. What is the rest of the bill for that is not primary for the wage legislation? Why is there compensation in here for disputes for violation of Sunday work? Why is there compensation in here for pregnancy leaves and lie detectors?
Ms S. Murdock: It is not compensation. It is powers given to the referee.
Mr McLean: What has this got to do with a company that has gone bankrupt?
Ms S. Murdock: Under the Employment Standards Act, the application for the referee -- I am going to let legal counsel explain this because I am obviously not explaining it properly enough. I guess it is because I am not seeing the problem. I am sorry; I am just not understanding what the problem is.
The Chair: Prior to giving the floor over, I might suggest to people that the title of the act and the explanatory note provided as a part of the act may well be revealing.
Ms Hopkins: I was going to make the same suggestion, that there would be a helpful outline of the issues addressed in the bill in the explanatory note. I have a copy that I am pleased to give to Mr McLean if that would help him.
Ms S. Murdock: I have a feeling that this still is not clear. Might I ask for a five-minute recess?
Agreed to.
The committee recessed at 1130.
1139
Mrs Witmer: I would like some clarification about the discussion we have just had about the extension for compensation for violations of Sunday work legislation, lie detectors and pregnancy leave. Is it now my understanding that if an employee is employed, he can apply to the fund and receive compensation from the fund while still working if the employer refuses to compensate him for this?
The Chair: Perhaps the counsel will respond to that.
Ms Hopkins: Yes.
Mrs Witmer: I am very, very concerned about what has been done here. I believe that the government has always indicated that this bill was to compensate those employees who lost their jobs, were not employed. I now hear that the employee wage protection fund, which is going to be funded by the taxpayers of this province, will indeed give compensation to those individuals who are employed and receiving wages. I really would like an explanation as to why this is being included at the present time.
Mr Klopp: On your first part, when you are saying that people who are employed are going to get money out of this paid by the taxpayers, then I agree. That concerns me, but the answer that I understood on that point is "No, the employer reimburses the fund." So the taxpayer is not getting ripped off. That is my understanding on the first part. On the other part, you can explain the rest. Why has it been put in? It is an interesting question.
Mrs Witmer: Why is an individual who is employed going to be able to access this fund? I thought this was only for those individuals who had lost their jobs. When Mr Rae first made the announcement, it was certainly based on that premise. It was to deal with all of those people who had lost their jobs during this recession and had no avenue to regain and receive the compensation due to them. Now we hear that you can be employed and still access this fund. Yes, the employer will be asked to reimburse the fund, but again, there are going to be additional administrative costs involved. I am very surprised that this has been included at this time. I am disappointed.
The Chair: Based on advice that I have received, confirmed with a copy of the bill endorsed by the Clerk of the House on April 11, the matters about which concern is being expressed now were a part of the bill on April 11, 1991. I simply raise that as advice I have received and to assist those participating in this discussion.
Ms S. Murdock: I almost wish I could get a recall. The primary purpose but not the only purpose of the employment wage protection program, is to assist those people who are out of work in situations where employers have had to shut down, as has been stated time and again.
Encompassed in the Employment Standards Act is the right of the employee, employed or unemployed, to have access to that act. This is a situation where yes, you could be employed and have a complaint against it for non-payment of a wage portion. If the employer is solvent, in general the employer is going to pay, but if the employer does not pay, yes, then that is correct. What has been said earlier is that the employee then would be paid by the fund and the director would go after the employer for repayment and reimbursement into the fund.
I have been advised that in the past 10 years there have only been two lie detector cases; since the previous Sunday shopping legislation was in there, there have been 10 cases brought before the ESB. I do not know about pregnancy cases, but I imagine they would be more frequent. Just because it does not happen often does not mean it should not count for anything. If the impression is that the wage protection program is only and exclusively for unemployed workers, then it is a perception that is erroneous. I mean, just the name of it alone, employee wage protection program, says it.
Mrs Witmer: I would just like to quote from the minister's remarks when he spoke to us on July 29. He indicated, "It is one of the most important steps this government has taken to ease the damaging effects of the recession...and to help workers through these difficult times." Certainly the impression created by the minister and the government is that this was a fund that was going to be accessed by those workers who were owed wages. He goes on to indicate he has already received 15,000 potential claims.
You have just indicated that not many people have applied for compensation because of lie detectors and what have you. Once people become aware they can do this, I can assure you there will be many individuals applying for some sort of compensation. I think the wage protection fund is going to cost the taxpayers of this province far more more money than originally intended and it is going far beyond the scope most individuals are aware of. I suspect that most of those who made presentations to this committee were not aware that this was going to be included. I do not believe that most people understood you could be employed and still access this fund.
Mr McLean: I have some other concerns I wanted to raise, and one is the dispute entitlement of a worker with regard to the money being put into a fund before a hearing is held. Is it a fact that the money is put up before the hearing is held?
Ms S. Murdock: By an employer?
Mr McLean: Yes.
Ms S. Murdock: Yes. It is in trust.
Mr McLean: I have one other. We refer here only to directors, the board of directors; it is not officers any more. Directors are usually paid a wage or stipend by the board that they are directing.
Ms S. Murdock: None of the boards I sat on, but yes.
Mr McLean: What happens if the company says now it has a board of officers and not directors? Where would they qualify in this bill? I have a "board of directors" now and I am going to change that board to a "board of officers."
Ms S. Murdock: Under the Ontario Business Corporations Act, you would have to follow the provisions under that legislation. If the requirements of that particular piece of legislation require you to have a certain list of names, be you to title them officers or directors, it would come under -- this act is tied so closely with OBCA that I do not think you would be able to get away with it.
Mr McLean: This bill is directed towards companies and corporations.
Ms S. Murdock: Incorporated, yes.
Mr McLean: Now we find out these other provisions in this act, which deal with what Ms Witmer has just indicated.
Ms S. Murdock: That particular aspect has not been changed. It is just that --
Mr McLean: Were you aware that this bill covered those other people who are still employed?
Ms S. Murdock: Yes. I never understood anything any differently. I guess that is why earlier in the discussion I was not understanding what the problem was, because any employee has access to this fund.
Mr McLean: Is there anywhere in the Hansard reports of previous meetings and hearings that have been held where you have indicated the broad scope of what this bill covers?
Ms S. Murdock: No. I do not remember this ever being raised by anyone. I mean, I personally do not remember.
Mr McLean: I guess you were hoping that it did not get raised, I guess that was the whole thing.
Ms S. Murdock: No, do not impute any motives here because that is not the case at all. I did not see it in truth as a contentious area.
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The Chair: Does Mr Offer have yet another observation to make?
Mr Offer: I think the concern is that we read the bill in a different way. We are all now reading the bill in the same way and there is a concern as to that reading. The concern we are expressing is that on one hand there is the message that this fund is for people who are out some wages as a result of their company closing up. They are not working for that company any more. They are the victims of the recession.
The bill, however, does not read that way. It reads that they can still work for the company. They may be out two, three or four days' pay, but they can access the fund as well as the employee who is a victim of the recession. I think everybody agrees that that is how the bill reads, and there is a concern as to whether that is in fact the way the bill should read.
We have stood down the opening sections of the bill, which talk to a contravention of the Retail Business Holidays Act, where an order can be made in an amount not exceeding $4,000 -- that, I think, is going to be raised potentially to $5,000 -- in lieu of reinstatement for loss of earnings or other employment benefits.
The concern that arises is that an employee who may be wrongfully dismissed as a result of the Retail Business Holidays Act and is out of a job will be able to access this fund for wages which resulted from a contravention of other provisions of the act.
I do not believe the minister or the Premier has ever said that this fund is to be used in this way. I believe they have always, if not stated, certainly intimated that this is a bill that is required as a result of the many thousands of jobs being lost as a result of the recession.
The message being given by the government and the words of the legislation do not jibe. They are not the same. I think you have to accept that. They are just not the same, unless someone from the government side can show me a single sentence that has ever been stated by any member of the government, from the Premier on down, that this bill can be used for any contravention of the Employment Standards Act.
Ms S. Murdock: We will certainly look over lunch-hour. Let me tell you, if I find one word, let alone sentence, stating that, I will be happy to show it to you. I just want to state that if the impression is -- and I am hearing that from the members opposite -- that this is a bill for the purposes of the recession, it is legislation that is going to be in place regardless of whether there is a recession or not and it is employee-directed.
Yes, it is true that I do not think we made -- I do not recall anyway -- any distinct statement saying that it was for everyone. My understanding has never been that it is strictly for people in a bankrupt or insolvent position. It is for workers who, for whatever reason, do not have a job or have not been paid for work done. If you are still employed and there is a section of your period of time that you have not been paid for work done, then you are still eligible under this plan. I am not going to say any more. The Chair should be happy to hear that.
The Chair: I suspect that Mr McLean wants to make a very brief response to Ms Murdock's most recent comments.
Mr McLean: I have a very brief clarification that I would like. If I worked in a Mike's milk store on a Sunday and I thought I was getting double time and I got paid for normal time, could I then go to this fund?
Ms S. Murdock: No, you do not --
Mr McLean: I can appeal.
Ms S. Murdock: Yes. Right. You do not go to the fund. It is not an automatic payout system. You have to go through an employment standards officer, who determines whether you are owed any money.
Mr McLean: That is right.
Ms S. Murdock: It may be determined that you are not owed a penny and then you do not have any left. Then you can appeal under section 49.
The Chair: Ms Murdock might go on to say that if then the employer is no longer solvent --
Ms S. Murdock: Yes, if the employer is no longer solvent then it comes out of the fund. If the employer is solvent, you get it from the employer. In most instances the employer is going to pay. If the employer does not pay, yes, your concern then clicks in.
Mr McLean: Who is paying for the time of that person to do the inspection and look into that condition?
Ms S. Murdock: It is already being done now. That is what the employment standards officers are doing.
The Chair: All of that having been said and there having been a full and complete debate of section 11 of the bill, along with virtually every other section of the bill, shall all of section 11 of Bill 70 carry?
Section 11 agreed to.
L'article 11 est adopté.
Ms S. Murdock: Since I see it is coming near to lunch, rather than introduce a new section I would just note that we have handed out the three motions that cover the parts that were stood down the other day, subsection 40e(2) and the construction section, 42qb, and an amendment to subsection 65(1). I just wanted to bring to the attention of the members opposite that they do have them and I hope the lunch-hour will be used wisely.
The Chair: Is section 12 of the bill self-explanatory? Are there any questions on section 12? Shall section 12 of the bill carry?
Section 12 agreed to.
L'article 12 est adopté.
The Chair: I propose that having dealt with section 12 we recess for lunch until 2 pm.
The committee recessed at 1159.
AFTERNOON SITTING
The committee resumed at 1404.
The Chair: Mr Waters moves that the amendments contained in the copy of Bill 70 as reprinted by the ministry be deemed to have been read and moved by Sharon Murdock.
Mr McLean: Mr Chairman, I think the amendments should be read into Hansard so that we know what they are. Are these the three amendments?
The Chair: There had been an agreement by the members of the committee during its first week of hearings that the bill as reprinted -- not the amendments that are being presented today but the bill as reprinted in the Queen's Printer for Ontario copy that you have before you -- was agreed upon in that traditional format. You are quite right, Mr McLean; it would be entirely inappropriate for that motion to apply to the motions that the government proposes to make today. You are 100% right in that regard.
Motion agreed to.
The Chair: I will also advise people that they have received, I am told, copies of motions that the government intends to move this afternoon. Among those is what would appear to be a duplicate but in fact is a second version of the same which corrects a typographical error as to identifying clauses which the government will be moving amendments to.
Section/article 13:
Ms S. Murdock: Subsection 54(1) deals with a certificate. It is a provision that ensures consistent enforcement of orders to pay unpaid wages, and the issuance of the certificate makes an order to pay enforceable by a court. With regard to subsection 54(2), this amendment adds directors to the parties who must be notified when a certificate is issued ordering payment. That is all for section 54.
Section 13 agreed to.
L'article 13 est adopté.
Section 14 agreed to.
L'article 14 est adopté.
Section/article 15:
Ms S. Murdock: I have a government motion on subsection 65(1).
The Chair: Perhaps prior to the motion you could briefly identify what the government contends the purport of section 15 is.
Ms S. Murdock: It is a regulation-making authority. Regulations may be made about the definition of wages, criteria for seeking repayment of overpayments, payment of interest, consolidation of hearings and apportionment of compensation. The amendment corrects cross-references to the definition of wages and provides authority to revise the employee wage protection program ceiling by regulation. Do you want me to go through the clauses?
The Chair: As you deem appropriate.
Ms S. Murdock: Clause 65(1)(rb) permits the addition of other forms of compensation to the definition of wages.
Clause 65(1)(rc) provides the creation of criteria to be used by the administrator when he or she decides whether to seek repayment of compensation to which a worker is not entitled. Criteria in the proposed regulation might include financial hardship, use of fraud or collusion to obtain payment, administrative error and other factors.
Clause 65(1)(rd) provides for a regulation specifying circumstances under which interest will be collected and paid and the rate at which payments will be made. This provision ensures that a policy about interest payments may be developed after the bill is proclaimed.
Clause 65(1)(re) facilitates the consolidation of hearings under the act. Where more than one order to pay unpaid wages is filed against directors and the employer, it may be preferable to consolidate the hearings. This amendment allows the director of the employment standards branch to consolidate proceedings on the basis of criteria to be set out in regulations. Consolidation of hearings may also be relevant where directors have filed individual appeal applications and when both an employee and an employer appeal have been filed.
Clause 65(1)(rf) contemplates a regulation to apportion compensation between wages, vacation pay, termination pay and severance. This means that where a worker receives a payment from the program, he or she will receive a statement breaking the payment down into those categories. The federal unemployment insurance program will use the amounts designated as severance and termination pay to extend a worker's waiting period before entitlement. This regulation may also be significant for integrating EWPP and any federal wage protection program that might be resultant.
Clause 65(1)(rg) permits regulation to specify the maximum EWPP compensation.
1410
The Chair: Ms S. Murdock moves that subsection 65(1) of the act, as amended by section 15 of the bill, as reprinted, be amended by adding the following clauses:
"(rh) prescribing persons or classes of persons for purposes of section 40qb;
"(ri) governing the conditions that must be met before there is a deemed assignment of compensation under section 40qb and the restrictions that may be placed on such assignments."
Mr Offer: On a point of order, Mr Chairman: I ask whether that motion is in order, because we have stood down the actual section. I do not know if we can move a regulation to a section that we have not yet passed. We have had enough surprises this morning.
The Chair: That is a point well made. What is the response of Ms Murdock to that well-made point?
Ms S. Murdock: It is a very well made point. We should probably go to section 40qb in order before we enact, but I leave it to the discretion of the Chair since I am new at this. I cannot do that?
The Chair: The Chair has modest --
Ms S. Murdock: Authority?
The Chair: -- discretion and has occasionally been accused of being indiscreet. As a matter of fact, much has been made of some of my indiscretions. The suggestion is that we stand down section 15 of the bill.
Ms S. Murdock: Yes, I suggest that we do.
The Chair: Consent?
Mr Offer: Are we talking about the amendment that you have read or the section?
Ms S. Murdock: Oh, I see. We could go that way too.
Mr Offer: Because it would just seem to me, just as some friendly advice, that we could deal with section 15. When that is finished, then go back to section 40qb and then go back to your amendment.
The Chair: I appreciate the advice, but it would seem that would deal with section 15 of the bill in a piecemeal fashion. If you are going to deal with section 40qb, deal with section 40qb and then come back to section 15 and everything it might entail, not just for the government but for other persons on the committee who have things, I am sure, to say about section 15 and perhaps motions to make. So are you suggesting that it be stood down? I understood the consent to be unanimous. Consideration of section 15 of the bill is stood down.
Do you wish, in view of having stood down two earlier parts of the bill, to revert to those now or do you wish to carry on with the balance of the bill?
Ms S. Murdock: Where are we in terms of the balance of the bill? Sorry, section 16.
Mr Offer: Your call.
Ms S. Murdock: I think we should go to section 40 of the act and then go back to section 65 and finish it that way.
Section/article 5:
The Chair: There are two parts of section 5 of the bill, section 40e and section 40qb. We are on page 3 of the reprinted bill, what is stated as being section 40e of the act if the bill passes.
Ms S. Murdock: Thank you, Mr Chair. Never having done this before, I need some direction here. When there are, as in this case, three subsections of a section and we are going to be asking for a motion to amend one of the subsections, what is the procedure? How does one do that?
The Chair: I suppose there would be 1,001 ways to do it. By way of suggestion only, why do you not move the motion amending section 40e, specifically subsection 40e(2), and then deal with all of section 40e and its three subsections? Far be it from me to tell you how to do it.
Ms S. Murdock: I asked for directions, so I thank you for that. That sounds like the way you go about it.
The Chair: You have another --
Ms S. Murdock: Government motion.
The Chair: Fine, that is the government's motion, because there are other people who wish to make motions with respect to section 40e. Let's go ahead, government motion first.
Ms S. Murdock: This is going to get confusing, I can tell.
The Chair: Ms S. Murdock moves that subsection 40e(2) of the act, as set out in section 5 of the bill, as reprinted, be amended by striking out "less the amount already paid" in the fifth line.
Your argument on the motion?
Ms S. Murdock: It is a technical matter of administration. It was felt that the way it was worded, the interpretation could be -- I guess it is easier to use numbers here -- that since the cap is $5,000, if an employee was paid $500 by the employer but was still owed money, the $500 would be deducted from the $5,000 cap instead. Suppose the order was for $6,500 and the employee had already received $500 from the employer and the employer then could not pay any more. The way this reads, with those words there, it would be that he would receive $5,000, less money paid, which would be $4,500, instead of $500 off the order to pay.
Mr Offer: We are discussing section 40e right now?
The Chair: Yes, sir. We are discussing Ms Murdock's motion.
Ms S. Murdock: Subsection (2).
Mr Offer: May I ask what happened with subsection 40e(1)?
The Chair: We will discuss and deal with subsection 40e(1). It is a government amendment and Ms Murdock made her motion amending subsection (2) of section 40e.
Mr Offer: Okay. We have not done anything with subsection 40e(1) though, right?
The Chair: No, and you will be invited to at the right time and so will Mrs Witmer. All in favour of Ms Murdock's motion, please indicate. Opposed?
Motion agreed to.
The Chair: There are notices of motion from Mr Offer and from Mrs Witmer. Subject to what the committee might direct, I suggest that Mr Offer's motion is more appropriately dealt with next.
Mr Offer: Thank you, Mr Chair. I believe it has just recently been circulated.
The Chair: Mr Offer moves that clause 40e(1)(a) of the act, as set out in section 5 of the bill, as reprinted, be amended by striking out "by a court" in the third line.
1420
Mr Offer: If I might explain, yesterday I circulated an amendment which spoke to this matter. I am just trying to find it again; I can hear it coming. The amendment which I circulated yesterday stated "by striking out `receiver appointed by a court with respect to the employer' in the fourth and fifth lines and substituting `employer's receiver.'" After some discussion, it was felt that the new amendment, which has now been circulated, is more appropriate. Let me tell you why I am moving this amendment.
The bill as it now reads speaks to the issue of a receiver appointed by a court. This, of necessity, will exclude all other receivers. There are in existence other receivers. There are receivers appointed by statute, there are receivers appointed by a court and there are receivers appointed by contract, certainly through, for instance, a loan arrangement which will talk to the issue that in the event a receiver is needed, they appoint a receiver. The bill as it now stands will exclude receivers under statute and will exclude receivers under agreement found within a loan document. I believe the particular bill is not meant to exclude those people as such. I think this motion will make certain that those receivers who are appointed either by statute or by loan agreement will also be included. This motion makes that possible.
Ms S. Murdock: I am still digesting this. Where there is a privately appointed receiver, right now, as I stated I believe yesterday, the way it stands under the Employment Standards Act is that it is considered then that there is still an existing employer, and an order can be issued against that employer. When it is a court-appointed receiver, the order cannot be issued. In terms of the administrative function, and for collection actually, it is easier for us without what Mr Offer is suggesting in the Liberal motion. I would appreciate if I could have five minutes with my staff for clarification for my purposes.
Mr Ramsay: Why do we not just have them clarify it directly? You can refer to them.
Ms S. Murdock: Okay. Then I do not have to take a five-minute recess. Thanks. I do not know all of the ramifications of how the process works.
Ms Muir: Given the fact that it is possible, where there is a privately appointed receiver, someone who is appointed as a result of a security arrangement or if one of the creditors gets nervous about the ability of the employer to repay the loan and sends in a receiver, there is still an entity called the employer against whom we could issue an order to pay. That is a different type of problem from the problem we have with a court-appointed receiver or the trustee in bankruptcy, where we do not have the jurisdiction to issue an order to pay against the court-appointed receiver or the trustee in bankruptcy. That is why we addressed them as a special case here and why we consider it to be superfluous to specifically deal with the privately appointed receiver as a different category.
Ms S. Murdock: I think I would still like the five minutes.
The Chair: For a number of reasons, I think five minutes would be in order.
The committee recessed at 1425.
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The Chair: Ms Murdock, you wanted to address Mr Offer's motion.
Ms S. Murdock: As Mr Klopp says, to clarify the mud. It is no different from what I said yesterday in relation to the motion for amendment, but for clarification purposes I think our legal counsel from the ministry can explain it more clearly than I can.
Ms Hopkins: In subsection 40e(1), court-appointed receivers and trustees in bankruptcy are addressed in clause (a). The situation of the other kinds of receivers, privately appointed and appointed by statute, are addressed in clause (b), although they are not visible in clause (b). The privately appointed receivers stand in the shoes of the employer and so they are, for all purposes, the same as the employer in clause (b).
The reason we need to break trustees in bankruptcy out separately has to do with the matter of constitutional law. When we are into the bankruptcy area, then the province loses jurisdiction in some respects, so we have to treat trustees in bankruptcy separately.
The reason we treat court-appointed trustees separately is that for the employment standards officer to make an order against a court-appointed trustee might be understood to be a contempt of court, so they too are separately set out so that the wage protection program can accommodate those special needs.
The situation in which one might make an order against an employer under clause (1)(a) and one cannot is addressed in subsection (3) of this section. That is a technical subsection that will allow the rest of the wage protection program to function in those special circumstances. That is the reason those two kinds of receivers are addressed separately and the privately appointed receivers are not.
The Chair: Mr Offer, did you want to add anything?
Mr Offer: No, the points I made earlier have already been made. I can see where this motion is going, and I am not surprised, but thank you very much for the explanation.
The Chair: All those in favour of Mr Offer's motion, please indicate. All those opposed?
Motion negatived.
The Chair: Mr McLean moves that section 40e of the act, as set out in section 5 of the bill, as reprinted, be amended by adding the following subsection:
"(1a) Despite subsection (1), an employee is eligible for compensation from the program only where his or her employer is bankrupt, is insolvent for an extended period or chronically fails to pay the employee's wages."
Mrs Witmer: I think after listening to the many concerns that were expressed by the small business community during the hearings, this is certainly in response to the concerns expressed by it. They were concerned that there was going to be recourse to the fund when a small business failed to meet its payroll due to a very temporary cash flow problem. Obviously, an order to pay from the employment standards branch could prematurely bring in other creditors and then the fund could quite inadvertently force small companies into bankruptcy, so this amendment would hope to eliminate that from happening.
Ms S. Murdock: We have a problem with this in that the definitions that would be required for "extended period" and "chronically fails to pay" put us in a situation where some determination is going to have to be made as to what that means, and in actual fact I think it is administratively very difficult to apply. On that basis, we would not be able to support this motion.
Mr Offer: I was not going to make any comments, but after listening to the response by Ms Murdock, I do not think those terms and definitions are going to be any less difficult than those provisions now in the bill that talk about "prescribing other payments that are wages," "establishing criteria for seeking repayment," "providing for the manner of apportioning compensation." Those are some of the terms which you are going to be moving as soon as we finish this.
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Ms S. Murdock: Are you referring to section 65 there?
Mr Offer: That is right. Some of the terminology which is now in the legislation has caused the government no difficulty, and so if the government is going to be against this motion, I would hope that the reason for it would not be the wording of the motion but for some other reason which I have not yet heard.
I say this because 40e(1) contains clause (d), and that talks about some things that we spoke to this morning. It spoke about the expansion of this legislation, that it no longer just cover wages which are owed to employees who are out of work because their company has gone bankrupt and they do not have a job, they are victims of the recession. It talks about a variety of other matters, where they are, for instance, under the Employment Standards Act docked pay. Now this legislation will permit those employees, while still in the employ of another, to potentially have access to the fund. I think that is an expansion of the legislation which was not made terribly clear. I asked the parliamentary assistant if she might be able to find me one sentence uttered by any member of the government, from the Premier on down, that this legislation is to cover those matters. I would be more than pleased to receive that.
Mr Klopp: For argument's sake, and even Mr Offer has said it, maybe it was not made very clear but it always was in the act that this thing covered wage protection for people not getting paid. For the record, it was right in the bill; it has been there since April 11. The fact of the matter is that with this here, the person is insolvent or whatever, the wage protection fund can be looked at and be kicked in.
The point that I think might concern us a little bit is that maybe other people will get nervous if they are not paying their wages. But my sense is that most business people's creditors are also aware of that long before wages have not been paid or whatever. My sense is that with companies that are in trouble, the other creditors would be nervous and would be jumping in regardless of this, and the fact of the matter is the wage protection plan protects people who are not getting paid. That system starts to kick in and start to look at it. Therefore, I cannot support this motion.
The Chair: Ms Murdock, did you want to add anything?
Ms S. Murdock: Just in relation to the specific language concern that we have. That is very true in the regulation-making powers under section 65, which we have yet to pass, but in this particular section, where clause (a) specifically deals with court-appointed receivers or trustees in bankruptcy, I think it is imperative that the language be much clearer than what this motion has before us, and that, I think, differentiates it from the situation Mr Offer has stated.
In regard to the other comment, I did not, unfortunately, bring my public hearing materials with me, but I understand that the particular issue that was raised this morning and that is being raised again here was referred to by the Canadian Bar Association during the public hearings. While it is true, and I guess we just accepted the view that all employees in Ontario would have access to this fund -- and that is what was said in the press releases and we double checked that, so that was said -- I do not know, and part of my problem this morning was that I did not understand what was not being understood. Perhaps we should have pointed that out, but it was pointed out in the public hearings, so it should not have come as a complete and total surprise today.
Mrs Witmer: I would reiterate once again that our caucus is very concerned about the extent of coverage within the wage protection program and the amount of money that it is going to cost the taxpayer. Not only is this wage protection fund going to be protecting those people who have lost their jobs and not received compensation from their employers, we now understand as of this morning, that those people who are employed, and because of Sunday violations or pregnancy leave or lie detector tests, although they are employed, can also receive money from the fund.
I am very concerned about what the government is intending to do. I know that the small business people are very concerned. This amendment is simply to help those people to stay in business, and I would hope that before we finish our discussion today or tomorrow, the government would support some of these amendments that are being put forward. We have listened to small business and yet we are not responding to any of the concerns it has expressed, and I am very concerned about that.
The Chair: Thank you. All those in favour of Mr McLean's motion, please indicate. Opposed?
Motion negatived.
The Chair: During the course of debating the three motions that have been made with respect to section 40e, there has been considerable debate about the overall content of section 40e. Those people wishing to engage in further debate about subsections (1), (2) and (3), as amended? Mr Offer.
Mr Offer: Just before we leave section 40e -- and I can count the number of members in this room -- I just hope we recognize that you are expanding the principle of this legislation.
We spoke in favour of the principle of the legislation. We spoke about how important it was to protect the wages, the vacation pay, the termination pay, the things that are earned by employees that cannot be collected because that employee is the victim of a recession. That person is no longer working at the place where he worked. This section now not only includes that but also includes potentially an employee who is still working for the same person and will continue to work for the same person, allowing that person to access the fund, which is made up of taxpayers' dollars.
I know the section is going to pass -- I mean, six government members -- but just before you do it, think about whether this is in keeping with the Premier's initial statement which he made in October and whether is in keeping with the statement by the Minister of Labour when he first announced the bill and introduced the bill, and also when he announced amendments to the bill and, finally, whether it is in keeping with the statement made by the Minister of Labour to this committee at the introduction of this particular bill. He spoke about the recession, he spoke about job loss; this 40e is not job loss.
Mrs Witmer: I would just like to stress again that it now appears that Bill 70, this wage protection fund, protects any individual whether employed or unemployed as a result of a violation of the Employment Standards Act, and I am very concerned about what I feel is an expansion of what was intended and the eventual cost to the taxpayer of this province. I wonder if all of these additions were calculated. We keep hearing that there are so many claims from unemployed workers, but we now understand that those people who are employed can also apply to the fund if the employer does not come forward with the money. I just wonder how much extra money this is going to cost the taxpayer eventually. For example, is drug testing going to be included under here too? I do not know. It appears that the minister and the government have the power to do anything by regulation. They can make whatever changes they want.
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Mr Wood: I would just like to go back to a point I made earlier this morning. Bill 70 reads very clearly, "An Act to amend the Employment Standards Act to provide for an Employee Wage Protection Program and to make certain other amendments." The point I raised this morning was the fact that in companies that are solvent, the employer is going to be expected to pay the employees through the labour standards act. If money does come out of the wage protection fund, it is going to be reimbursed by the employers as the officers go out and do their jobs, their investigations. I cannot see where there is any extra cost, because the officers are out there now doing their job anyway. It is just a matter of certain minor amendments that were made at the same time the legislation was brought in.
The Chair: Shall all of section 40e, as amended, carry? Those in favour indicate, please. Opposed? Section 40e, as amended, carries.
Ms Murdock, has a motion with respect to section 40qb.
Ms Murdock moves that section 40qb of the act, as set out in section 5 of the bill, as reprinted, be struck out and the following substituted:
"(1) Except as provided in the Support and Custody Orders Enforcement Act, 1985 and in this section, no amount payable as compensation under this part is capable of being assigned.
"(2) The program administrator may deem that an assignment is made if the prescribed conditions are met and the prescribed restrictions are not breached.
"(3) The number of deemed assignments respecting an employee that a person may present in any period may be restricted.
"(4) Deemed assignments of compensation are limited to additional payments as described in clause 40b(2)(d).
"(5) Deemed assignments may only be made to a prescribed person or to a person who is a member of a prescribed class of persons."
Ms S. Murdock: This is a section that specifically deals with the construction industry. As was explained in the public hearings pretty clearly -- and both groups that were here explained very well -- their wages, or what is classed as wages, are so different that they have to be handled somewhat differently than the separation of wages, vacation, termination and severance. In consultation with that particular industry and how the liens trustee is dealt with, in order to access, with the movement and the transience of most of the construction workers in Ontario, we had to allow a method whereby the trustee would be able to act on behalf of the employee without giving third-party access to the fund. These subsections will allow that.
The other thing is -- and this is handled by subsection 40qb(3) -- that where a construction worker may end up with five or six employers in any given year doing a particular job, we had to think about the aspect of how many times an employee can dip into the fund. There has to be some method whereby a restriction or prescribed criteria are going to be provided, and this gives us the right to do that.
Motion agreed to.
The Chair: The motion having passed and that amendment constituting the new 40qb, shall 40qb, as amended, carry? Any opposed? Section 40qb, as amended, carries.
Section 5, as amended, agreed to.
L'article 5, modifié, est adopté.
Section/article 15:
The Chair: This takes us to section 15 of Bill 70 and your motion with respect to section 15, which I presume you are going to move now.
Ms S. Murdock: The motion that was read earlier, is that still applying?
The Chair: Let me read it again.
Ms S. Murdock moves that subsection 65(1) of the act, as amended by section 15 of the bill, as reprinted, be amended by adding the following clauses:
"(rh) prescribing persons or classes of persons for purposes of section 40qb;
"(ri) governing the conditions that must be met before there is a deemed assignment of compensation under section 40qb and the restrictions that may be placed on such assignments."
Ms S. Murdock: I have already referred to clauses (rb) to (rd). Clauses (rh) and (ri), if may take a moment here -- I have so many papers.
The Chair: Is this self-explanatory?
Ms S. Murdock: I think it makes sense. Clause 65(1)(rh) just prescribes the persons or classes of persons that can be regulated or stated by regulation and (ri) governs the conditions that must be met before there is a deemed assignment.
Mr Offer: I do not yet know if this is in order, but I want to speak to section 15 as moved by the parliamentary assistant. We have an amendment to the section, but I think it is probably out of order. It is best that we just vote against the section that we want struck out.
The Chair: You are on a point of order suggesting that Ms Murdock's motion is out of order?
Mr Offer: No, I am ruling myself out of order.
The Chair: Look, somebody is going to make a motion, as I understand it, in short order, dealing with section 15. I called upon Ms Murdock to move her motion amending section 15 before the other motions were put. When I said that, I suggested that in view of what these respective motions were, that was the more appropriate, more logical way of doing it. So what do you have to say to Ms Murdock's motion?
Mr Offer: I am going to pass.
Motion agreed to.
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The Chair: There is a motion. Notice of this motion were presented by both the Conservative caucus and the Liberal caucus. They are identical. The one that was presented first was from the Progressive Conservative caucus.
Mrs Witmer moves that clause 65(1)(rb) of the act, as set out in section 15 of the bill, as reprinted, be struck out.
Mrs Witmer: Again, this goes back to the real concern we have about the power of the government to make changes by regulation as opposed to through public consultation and public scrutiny. We want to eliminate the ability of the government to make those changes by regulation. We believe governments need to be fiscally responsible and accountable to the taxpayers they serve, certainly on any issue as important as this wage protection fund.
We are finding out on a day-by-day basis that there is more included here than we had originally anticipated. There needs to be consultation with all members of the public. The public needs to be fully informed. There needs to be adequate notice given to the public before any changes are made and any further spending takes place.
I think we heard most of the employer groups state, when they came in to talk to us, that they certainly were very opposed to the ability of government to increase the ceiling of this program or to add any other additional components to the compensation package by regulation.
I indicate again that we hope members of the government will be responsive and will understand the need to continue to be fiscally responsible to the taxpayers in this province and to keep them fully informed at all times as to what is happening.
Mr Wood: Just briefly, I think we have heard that the average being paid out now is probably around $4,200, because of the serious recession that has hit over the last year and a half, or close to two years now, with a cap of $5,000. I do not see any reason why, if there is another recession in a number of years from now -- it could be 5, 10 or 15 years from now -- whoever is in government at that time should not be able to say, "The average lost wage now would be $5,500 or $6,000." We should be able to bring in a regulation to adjust that for inflation or adjust it for the amount of increases that have taken place. As far as minimum wages are concerned, I believe it has been done by regulation by previous governments over the years where it was brought up from $2 to $2.25 or $2.50, then $2.75. It is done in Ontario and it is done in Quebec, basically on October 1 of every year, although we are making some further increases to make it a fairer system. All that this is looking for is to make it fairer to the ordinary working people of this province now and in years to come.
Mr Ramsay: I just want to say to Mr Wood when he alludes to the annual setting of the minimum wage, the formula was established by statute through the Legislature that it would be a certain percentage. I believe it is CPI, cost of living every year from a base. The legislators at the time agreed to a formula.
The point being made is that when you really authorize the expenditure of taxpayers' money, it should be done through the Legislature and not through the executive branch of government. That is why both opposition parties feel, in principle, very strongly about that. Any type of expenditure increase should be authorized by the Legislature of Ontario, as everything else is, and not by regulation.
The other ramification is the potential increase in cost of the premiums for directors to insure themselves for this protection. Now, through this legislation, we know what the maximum liability is to the fund and I think that has an effect, so we would like to see it established by the Legislature and not by regulation.
Mr Offer: In speaking to Mrs Witmer's motion, I recognize that it is verbatim to the motion we were going to bring forward. I think it has been said, first, that we have a role as legislators, and part of that role is to make certain the tax dollars are wisely spent, and second, that a particular piece of legislation continues to address the problems it was first hoped it would deal with.
Clause (rb) takes that right out of our control. You have absolutely no say in this. The only thing you will be able to do is to read press releases after the fact. If you think something else is the case, then I suggest you have a hard look at the difference between legislation and regulation. The general public will have no input into matters that will directly affect it.
Over the last couple of days I think we have spoken about this whole role of legislators, of MPPs, and I see that we are really into the whole regulation-making power. This regulation allows the government to expand the breadth of what is to be covered, and it may be that the areas, if they are to be expanded, are correct. That is not the point. The point is that before that takes effect, should we allow the general public to share its opinions with us to tell us what it feels, to share with us what the implication and the effect will be and how it may or may not make for a better workplace and a more competitive province?
By allowing this to stand in regulation, you will not hear that. You will never be able to hear that. The only time you will hear anything like that will be after the fact, after it comes into existence. I think we have a responsibility, where possible, to say that should not be the case, and by taking this out of regulation, we are meeting it. By allowing it to remain within regulation, we are not. I have nothing more.
Mrs Witmer: I am becoming a little concerned about the direction this government is going. This is a government that came into office talking about consultation and the need to involve all people in decision-making. We were certainly all elected to represent the individuals in our constituencies and consult with them before we voted on issues. By taking away the opportunity for this to be discussed in the Legislature and allowing a small group of individuals to make the decisions and the rest of us to be informed after the fact, there is no opportunity to discuss this. There is no opportunity to look at the implications of any changes or increases. This is the same thing that happened before Christmas when we discussed the creation of French school boards and, again, the executive was given regulation powers, as opposed to bringing it forward through legislation.
I guess I am very surprised, because this government has talked about consultation, and yet it appears the path it is on right now is to push things through by means of regulation without any public scrutiny or public consultation and without any adequate notice. Mr Wood talked about fairness. Why would it not be fair to consult with all the taxpayers in the province before you make changes?
The Chair: All those in favour of Mrs Witmer's motion, please indicate. Opposed?
Motion negatived.
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The Chair: Shall section 15, as amended, carry?
Mr Offer: I would like to speak on one aspect of section 15, not just on Mrs Witmer's motion.
The Chair: Sorry, I was not trying to squeeze you out. That is why I waited and looked around waiting for people to indicate if they wanted to talk; by all means.
Mr Offer: Thank you. I think we should speak directly to clause (rg), "Prescribing a maximum amount of compensation under section 40i."
This is allowing the government to increase the maximum amount from $5,000 to $500,000, to $5,001, to $5,002; the principle is the same. Government members may shake their heads, but the principle is the same. It is allowing the maximum amount to be increased without its proceeding through the Legislature. It is allowing the government to increase the amount without the members knowing what the impact will be on the insurance policies that will now have to be taken out by every business and director in this province. You will have no idea what that impact will be. You will have no idea what that cost will be in terms of jobs, in terms of ongoing operating expense of any particular business located in your riding, probably next door to your constituency office.
The question you have to ask yourselves is, should you not have the right as an MPP to discuss that in the Legislature? As an MPP, should you not have the right to say, "This amount which is to be changed is right or wrong for these reasons; I as a member have heard these particular concerns"? These are the people in our ridings, the people who employ people in our ridings. What you are doing is saying, "I am absolving myself of the responsibility to discuss this matter."
The Minister of Labour did not feel it was improper for him to put down $5,000 in the legislation. He expected that would be debated. People came before us and spoke about that issue. That will not be permitted any longer, because it will be done through regulation. In other words, the change of $5,000, which will only be increased, it cannot be decreased, will be done in the absence of your input as an MPP and as a member of your community. If you think you are serving your community by saying: "I have no opinion on this; I don't have any opinion of what the impact will be on my community in terms of the cost to small business, jobs and all those other things," I disagree with you.
I ask you to vote against clause (rg). Take it out of regulation. It does not say the government cannot increase the amount. It would say the amount could only be increased if an amendment to the bill were introduced in the Legislature. Surely we cannot be worried about that.
Mr Klopp: You are making an assumption. Maybe the previous governments worked like that. I am in the new government and this is my government. I have only been on the government side, but I surely hope the minister's staff does not act in a vacuum. I assume that if anybody comes forth, he or she does not wake up some morning and say: "Today let's look at this act. We're going to change this to $5,003."
I am assuming someone is probably going to knock on the minister's door and say, "We want this changed." If that minister is worth his or her salt, or whatever's salt, I would assume that he or she is going to do some consulting around and ask some people in the ministry: "What do you think of this? What are the ramifications?" I certainly hope that minister goes forth and asks his or her fellow colleagues what they think.
But short of that, we have a new government in down the road. They have some people who do not do those things you are concerned about, which, if I happened to be the member -- which I am now, and sometimes there are things done, whether I was consulted or not. I do not hide behind and which my constituents do not allow me to hide behind that, saying, "Well, the minister did it." Whether it is legislation or full-blown hearings like this, if the people in my riding do not like it and I happen to be on the government side of things, that argument will not wash. Maybe it washes in some of the city ridings, I do not know, but it sure does not wash in rural Ontario.
The way this act is allows for simplicity, maybe even to save government money. I think there are enough checks and balances in this particular case to agree with clause (rg) and the whole bill as it stands. That is why I can support this at this time.
Mr Offer: The points Mr Klopp made are exactly the points you would make in voting against (rg). That is exactly what you should be doing. You as a member should be saying, "I recognize that the ministry is looking around at all these things," but as you said, it does not wash in your riding. Why would you not say, "Because of that, I should make certain it goes through legislation"? The argument you posed makes the point why you especially should vote against (rg).
The Chair: Shall all of section 15 of the bill, as amended, carry? Those in favour, please indicate. Those opposed?
Section 15, as amended, agreed to.
L'article 15, modifié, est adopté.
Section/article 16:
Ms S. Murdock: This is the retroactive eligibility section. It provides that the provisions of these amendments to the Employment Standards Act go back to October 1, 1990. Subsection 16(1) provides, for wages due and owing on or after October 1, 1990, that application can be made to the employee wage protection program. It is on or after: workers affected by permanent layoffs, workers owed wages for any time after October 1 and workers terminated on or after October 1.
Subsection 16(2) covers that orders to pay unpaid wages issued for that period be limited by the previously existing ceiling of $4,000, excluding severance and pregnancy leave entitlements which exist in the current Employment Standards Act.
The Chair: Mrs Witmer moves that subsection 16(4) of the bill, as reprinted, be amended by striking out "$5,000" in the third line and substituting "$4,000."
Mrs Witmer: As I indicated previously, this is consistent with what is happening at the present time.
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Ms S. Murdock: The thinking behind this was that the severance aspect was a consideration in that $4,000 in wages, vacation and termination under the current ESA. In the transition period, if the worker has a large claim for the termination and no severance claim, then he or she may receive the $4,000 maximum.
I do not have anything further to say. There are going to be instances where it is more suitable for the $5,000 than the $4,000, but the $4,000 is beneficial to the employer, so I see what Mrs Witmer is saying. But there are going to be circumstances where the maximum of $5,000 in instances of severance has to be considered.
Mrs Witmer: The reason we have limited the maximum compensation to $4,000 instead of the $5,000, as has been indicated, is that this amount currently parallels the maximum liability an employment standards officer can order an employer to pay. Also, we had put forward a motion originally indicating that we wished the wage protection fund to include only wages and vacation pay. This, of course, included holidays and overtime as well. We wanted to eliminate the termination and the severance pay from the amount covered. We looked at that figure and determined that the $4,000 would adequately cover the outstanding wages and vacation pay since, in the discussions we had, the bulk of the money an employee will be receiving is going to be severance and termination. Approximately 90% of what they would be receiving would be severance and termination, and 10% would be wages and vacation pay, so we feel that figure of $4,000 is adequate.
I would also like to remind the committee that the legislation being proposed here and the amount of money being made available to employees is certainly much greater than anything available in Canada at the present time. We are on the leading edge of providing compensation to employees, but I think we also have to look at the other side of the balance sheet and the impact this legislation and this amount of money could possibly have on the amount of money it is going to cost directors and small businesses to get liability insurance; the additional cost, the red tape of being involved in this program. I think we need to be concentrating on job creation, economic recovery and looking at ways to put government money to use to help employees get new jobs.
The Chair: All those in favour of Mrs Witmer's motion, please indicate. All those opposed?
Motion negatived.
Section 16 agreed to.
L'article 16 est adopté.
Mrs Witmer: I just want to be clear. What are we dealing with now?
The Chair: We have dealt with section 16. Perhaps your motion might be in order now.
Mrs Witmer: Section 17?
The Chair: No, section 16a.
Mrs Witmer: Okay, section 16a.
The Chair: Mrs Witmer moves that the bill, as reprinted, be amended by adding the following section:
"16a. This act is repealed on the earlier of, (a) the 28th day of February, 1993; or (b) a day to be named by proclamation of the Lieutenant Governor."
Mrs Witmer: The intent of this motion would be to allow for a sunset provision in order that the Legislature and the people of this province could completely review this program at the end of the first 18 months. This would ensure that all the workers who have been affected by the recession and who have lost jobs would be compensated for unpaid wages and vacation pay, and if any changes needed to be made, they could be. Also, part (b) would allow the provincial government to dissolve the program, if that was the wish, when the federal employee wage claim program, Bill C-22, comes into effect.
This amendment will indeed protect those people who have lost jobs to date, but it will allow for future discussions and allow the federal government to assume that responsibility over the long term.
Mr Klopp: I have to speak against the motion for a couple of good reasons -- well, maybe three or four, but we will get down to a couple. Unfortunately, even in the good times companies still sometimes go broke. We kind of forget about it, but history has shown that every once in a while jobs are lost. This is a wage protection bill for whatever reason, in the good times and the bad, and although it was maybe brought forth quicker because of the recession we are in, like so many bills -- myself in agriculture. So many times the government, when finally the fire is so danged hot, come up with a new idea. But it should probably have been done five years sooner or, heaven knows, 20 years sooner. We have to remember that.
Also, when you brought up the point about the federal government, it has been talking about a wage protection fund for 25 years. I understand they have come forth seven times reading something, probably just before elections, and then it has got lost in the shuffle. I think that proves even federal governments at one time were thinking: "We need some kind of protection for workers. Ontario is taking the stand. Let's do this."
If other things get in place, this may become a redundant bill. Heaven knows, I can only hope that happens, but to put a sunset clause in it would defeat that purpose of trying to protect workers down the road, so I cannot support this motion.
Mrs Witmer: I think it becomes obvious as discussions take place that this bill certainly was intended to deal with more than the victims of the recession. I believe that was how the government originally spoke about this bill, but I see now that this bill probably is going to be expanded in the future, the cost obviously to the taxpayers is going to increase, the cost of doing business in this province is going to increase as the compensation package is increased. If this type of legislation and protection is indeed needed, I am not sure why the government is opposed to reviewing the program at a certain time. Maybe at a certain point there might be a need to do something else to help workers in the province, as opposed to having an employee wage protection program. I am not sure why we would fear a full review of the program. If it is a good program, if it is meeting the needs of the workers, we have absolutely nothing to fear.
Mr Huget: I think Mrs Witmer is quite right, it is past a recessionary item. The principle of employees being able to collect wages owed to them is one principle that should not disappear in any sunset. It is more obvious during times of recession, but it is a principle that can readily be supported by, I believe, anyone and certainly is supported by myself and this government. So you are quite right; it is a principle that will not disappear.
The Chair: Do you feel compelled to reply to that?
Mrs Witmer: I do. I believe the government should have been honest and forthcoming when this bill was introduced and indicated all of the reasons this legislation was being proposed, and also not continually stressing the need that this was to help the poor victim of the recession, because certainly it is going to go far beyond that and I can see it expanding quite rapidly in the months ahead to deal with other cases that occur. As I said, I have made a reference to drug tests; what is going to happen in that instance, I really do not know.
The Chair: I thought you would have felt compelled to reply to that, and now you have generated the similar compulsion, I believe, on the part of Mr Huget.
Mr Huget: I am a little surprised and disappointed in the suggestion that the government is anything less than honest and forthcoming in this legislation or in the wage protection fund, because quite clearly that is not the case. I hope it was emotion that led you to say that.
I think, however, there is no confusion around the need to protect employees' wages. It becomes more of an item and more of an issue and one that is much more prevalent in a recessionary time when many people are losing their wages.
The government, in introducing this legislation, did not suggest that the protection of employee wages was something that expired after a recession. It is a principle that we very strongly believe in, that employees who are owed money must receive it and employers who are owing to their employees must be accountable and responsible to pay that. The fund is part of that process in the event that we are not able to collect those moneys from an employer. It is a principle that I am very proud of and I am very proud of the fact that it will not disappear. It is certainly not misleading and the government is not being dishonest or not forthcoming in its presentation of the principle behind this bill. It never has been and never will be, and I am distressed to hear a remark like that from Mrs Witmer.
Mrs Witmer: In response, I have no problem with what the government is proposing; however, I do wish some of the points you have made, Mr Huget -- and I think they have been well spoken and well said -- had been made previous to today by the government, and there had not been the continual stress on the poor victim of the recession, because certainly it is the impression of the public that Bill 70 is intended to deal with those people who are victims.
The Chair: All those in favour of Mrs Witmer's motion, please indicate. Those opposed?
Motion negatived.
Sections 17 and 18 agreed to.
Les articles 17 et 18 sont adoptés.
Section/article 1:
The Chair: Ms Murdock, that takes us to section 1 of the bill, please.
Mr Offer: We still have sections 1, 2, 3 and 4 to complete.
The Chair: That is my understanding.
Mr Offer: That is all that is required?
The Chair: Yes, sir.
Mr Offer: May I ask if I might have a two-minute recess.
The committee recessed at 1534.
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Ms S. Murdock: I move we adjourn and commence again tomorrow morning at 10 o'clock.
The Chair: Ms Murdock moves to adjourn. Non-debatable. All in favour? Opposed? Motion carries. We return here at 10 o'clock tomorrow morning.
The committee adjourned at 1539.