CONTENTS
Tuesday 20 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:
Coppen, Shirley, (Niagara South NDP) for Mr Dadamo
Witmer, Elizabeth (Waterloo North PC) for Mr Jordan
Clerk pro tem: Manikel, Tannis
Staff:
Hopkins, Laura, Legislative Counsel
Nigro, Albert, Legislative Counsel
The committee met at 1004 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.
The Chair: Before we get down to Bill 70, there is one matter, a letter dated August 2, 1991, from Rev Dr David Williamson from Victoria Avenue United Church in Chatham, who writes thanking the clerk for the opportunity to speak to this committee on Bill 70 when this committee commenced its consideration of the bill. He had the understanding that he would receive some compensation for travel expenses and very respectfully, politely requests compensation for the return trip from Chatham to Toronto, 600 kilometres, and requests that we let him know. Can I ask that there be unanimous consent for compensation to Rev Williamson?
Agreed to
Mr Offer: That is the Legislative rate, is it not?
The Chair: First, we might have persons sitting at the table who are not members of the committee, identify themselves and who they are with so that we know who is here and for what purpose.
Ms Hopkins: My name is Laura Hopkins. I am legal counsel to the Ministry of Labour.
Mr Jenkins: My name is Peter Jenkins. I am provincial specialist with the employment practices branch.
Ms Muir: I am Cherith Muir, policy project manager for this project with the Ministry of Labour.
The Chair: Are there any matters to be raised by any members prior to consideration of Bill 70?
Mr Offer: If I might ask the parliamentary assistant, you indicated yesterday that for the last portion of the bill there would be explanatory notes and I am wondering if we might be able to expect those some time today.
Ms S. Murdock: Yes. If Cherith would answer, it would be appreciated.
Ms Muir: I will have to ask you to repeat the question. I was conferring about something else and I did not quite hear it.
Mr Offer: Yesterday we were provided with a very good explanation of the first part of the bill. We were informed that the last portion of the bill would also be available today. The question is, will it be?
Ms Muir: Yes, we will have additional portions. We will not have right to the end, but we do have an additional portion for you, and my colleague will be bringing it.
Mrs Witmer: I have one question. What additional amendments were made by the government as a result of the presentations to the committee several weeks ago?
Ms S. Murdock: I do not know exactly. We were just discussing that this morning, so I have to apologize for not having that right at the tips of my fingers. There are a couple of amendments still to come from suggestions made at the hearings, but the ones specifically we are looking at are the agreements with the federal government's lines that were made during the public hearings.
The other thing is that this whole bill is an example of all of the comments made not just at the public hearings but prior to the public hearings, with the comments made in the House during debate as well as all the letters the Ministry of Labour received on director's liability, for instance and the amendments that have been made subsequently to this reprint, as evidenced from the first reading to this reprint of the changes that have been made.
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Mrs Witmer: If there are additional amendments that have been made as a result of that week of presentations, I wonder if we could have a copy of those amendments.
Ms S. Murdock: As an example, the one group that was before the committee during the public hearings was in the construction industry asking for a number of things. They are still being negotiated and it is really difficult because the language has to say what we have discussed in the consultations with them. Even looking at the draft language this morning, there are still some changes that have to be made. So as soon as I have them, you will have them. I do not have them yet myself. That is for sections 40qa and 40qb, which will relate to 40f as well.
Mrs Witmer: I have a problem giving approval to parts of this legislation when we have not seen all of the amendments that the government is going to be introducing, because I am not sure of the impact of the additional amendments on what I am already giving approval to.
Ms S. Murdock: I understand the question. It took a little while, I apologize. The reprint has the amendments, with the exception of the three. When I get to them, I am going to ask to stand them down until we have the language, because sections 40qa, 40qb and 40, which will relate to section 40f, all having to do with the construction industry, are the only areas out of the reprint where we will be asking for any amendments. Everything else is what we are asking.
Mr Offer: Following Ms Witmer's question, I think we might have a small problem that I believe should be clarified right at the very outset. The problem I see is that we passed unanimously, if memory serves me correctly, the reprint of the bill, which embraced the amendments the minister had announced in the Legislature. I think we are not dealing with that bill now. I think we are dealing with the bill that not only embraces the amendments the minister announced, which we had agreed to do, but also amendments which were as a result of the public hearing process. I think that might be a difficulty because I would have thought those amendments would have been most properly moved as other amendments so that we could clearly see from the government's side what amendments to the reprinted bill were being moved by the government. Right now, we are going to have to relook at the reprinted bill, find out what amendments are as a result of the minister's announcement in the House and what amendments, as reprinted, are as a result of the public hearing process. It somewhat puts us in a difficult position.
I think a clear example of that is the final amendment in this book, which talks about the right of the minister to enter into an agreement. I do not believe that was part of the original bill. I do not believe that was part of the minister's statement in the House on amendments to the bill. I do not believe that was part of the motion that we all agreed to, to reprint the bill, but it happens to be found within the reprinted bill and that is one example. There may be other changes of a word, of a technical change here or there which is not self-evident. I think that amendments to a bill have to be evident to the members of the committee before they can pass it.
The Chair: You are quite right. Any amendments that are not contained in this Bill 70, as amended, are going to have to be presented just as you have presented them and just as the Conservative caucus has presented them. They are going to have to be moved and they will be debated and voted upon. Otherwise, the agreement, as I understand it, is that Bill 70, as amended, as reprinted, will constitute notice and moving of the amendments contained in the reprinted bill. Any other amendments, you are quite right, are going to have to be moved and will then be debated.
Ms S. Murdock: Mr Chair, I would like to ask the clerk a question. I remember during the public hearings when we passed with unanimous consent, as Mr Offer has stated. This was submitted to you at that time, was it not?
Clerk of the Committee: I am sorry, I do not understand.
Ms S. Murdock: When were the amendments submitted to you?
Clerk of the Committee: I did not receive any amendments until I got the reprinted bill last Thursday.
Ms S. Murdock: Okay. We had it reprinted.
The Chair: Section 1 of the bill, being subsections 1(1) and 1(2).
Ms S. Murdock: We have discussed this with the other members and have asked to stand down the first section.
The Chair: Do we have unanimous consent in that regard?
Agreed to.
Ms S. Murdock: If I may just stand down the second section, the third section, the fourth section and go immediately into part XII-A of the act.
The Chair: Do we have unanimous consent with respect to the other sections which Ms Murdock speaks of?
Agreed to.
Section/article 5:
The Chair: Okay, dealing with part XII-A of the act, and nothwithstanding that this is section 5 of the bill, we have already agreed that we will deal with it section by section as it will appear in the amended act. Ms Murdock, subsection 40b(1). I say subsection because there will be, as I understand it, amendments proposed to subsection 40b(2).
Ms S. Murdock: Subsection 40b(1) is the establishment of the employee wage protection program. Subsection 40b(2) is the definition of wages. Do you want to do it subsection by subsection?
The Chair: In view of the fact that there are going to be amendments moved with respect to subsection 40b(2), we are going to have to deal with subsection 40b(1). Otherwise, we can have that stood down so we can deal with all of section 40b, subsections inclusive.
Ms S. Murdock: My feeling would be that we should do section 40b and all of the subsections clause-by-clause.
The Chair: Is there consent in that regard?
Agreed to.
The Chair: Thank you. Perhaps you can proceed then on the basis of dealing with all of section 40b, subsections (1) through (7), by way of explanation and then there will be amendments moved.
Ms S. Murdock: All right. Subsection 40b(1) is simply naming the program and establishing it. Subsection 40b(2) is defining what "wages" will mean for the employee wage protection plan, and in clause (a) it is wages, commissions, overtime, vacation, holiday, termination and severance. In (b) it is wages under subsection 33(4), which is where the employer has violated the equal pay requirements under other legislation.
Clause (c) is the section referring to the Support and Custody Orders Enforcement Act and (d) is "such additional payments as may be prescribed by regulation." That specifically, in this particular instance, relates to the construction industry but is also regulatory, so that in other areas where it may become necessary, such as the garment workers who presented their presentation to us. it may be needed there.
Subsections 40b(3), (4), (5), (6) and (7) go into a clarification of what vacation pay, holiday pay, overtime wages, termination and severance will mean.
If you want more detail, I can go further, but that will sort of summarize what that entire section says, and I know that there are recommended amendments from the Liberals and the Conservatives on a number of those areas.
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The Chair: Mrs Witmer moves that subsection 40b(2) of the act, as set out in section 5 of the bill as reprinted, be struck out and the following substituted:
"(2) When an employee is compensated by the program, the wages for which an employee may receive compensation are regular wages and vacation pay."
Mrs Witmer: As I have said many times and as our party has said many times, we certainly do support the principle of employees receiving wages that they are owed. We are simply looking to define wages as those wages that are actually earned and we would include within that vacation pay, holiday and overtime. We also feel that this would parallel the proposed federal program.
At the present time, employees in this province have no protection such as is being proposed by the wage protection program, and this is certainly a move in the right direction, but we are very concerned about the addition of the severance and the termination pay. At the present time, when we take a look at our economy, we take a look at the number of businesses that are closing in this province, the number of businesses that feel very uncertain and very threatened by the economic climate because of some of the proposals of the provincial government, we take a look at the deficit, which is $9.7 billion and probably will be more, we take a look at the projected doubling of the provincial debt to $77 billion by the year 1994-95, we have to ask ourselves the question, can we afford to be this generous at this time? Can we afford to include within the wage protection program termination and severance pay? I guess the answer we come to is that we have a lot of difficulty with this.
I think we have to take a look at the small business person as well. When their company goes bankrupt, they are left oftentimes without their home as well, and they have no recourse to anything such as the wage protection program. They lose all their earnings as well, and it certainly would be difficult to guarantee every person in this province some sort of protection.
We are concerned that the fund is going to cost $175 million in the first 18 months. That is going to expire, by the way, as of April 1992, and we are concerned that after that time this fund might be financed by a payroll tax, which we are very concerned about. That is going to mean more uncertainty and it is going to have more of an impact on the economic climate in this province.
We feel that workers are protected by the unemployment insurance system, and the minister has indicated that workers who have received their unemployment insurance premiums from the federal government may even have part of their employee wage protection program claim clawed back, because the federal government does deem severance and termination pay as income. In essence, if that were to happen, you would have the province paying the federal government. We certainly have many concerns about the inclusion of the termination and the severance pay.
We are also concerned about the impact that Bill 116, An Act to amend the Employment Standards Act with respect to Notice of Termination, could have on the employee wage protection program. It would probably increase the amount of money that is paid out beyond the $5,000 per employee.
I guess overall we are concerned that the taxpayers in this province are going to be saddled with a very large financial burden, and the question we keep coming back to is, can we really afford this at the present time? We are already taking a major step forward by offering these people, as they should be offered, the wages they have rightfully earned and are entitled to, but at the present time, given the economic circumstances, we certainly cannot accept including termination and severance pay. We are very concerned about the financial impact. We are concerned that it is going to cause more businesses to close. We are concerned about the difficulty that small businesses are going to have getting insurance, and they are going to be forced to close. We feel in time this could lead to fewer jobs in this province. I believe this government should be putting money aside to help create jobs, rather than possibly contributing to the further loss of jobs in this province, and we would suggest this amendment.
Mr Waters: I would respectfully disagree with Mrs Witmer on this. To start with, we have invested for a number of years on the other side of the fence as a government. We helped people go into business, and in these tough times I have had a number of business people coming to me asking for loan extensions and various other things to assist them. Not all of these people are necessarily going bankrupt. Some of them are escaping to the United States, they are escaping to Mexico. They are doing all of these nice and wonderful things and leaving their employees in the lurch.
I cannot see why as a government we cannot treat both sides equally and help both sides of the fence, the employee, when times are tough, as well as the employer. We are already helping many employers, as the government has historically done, and at this point I think it is time to start turning some of our focus to help the employee. After all, they are part of the Ontario mosaic. If I have worked for a corporation for 30 years and have some severance due me, I do not see why I should lose it. The creditors come in before me. I think there is a responsibility of the directors and of the employer and all of those involved with the corporation to give me my due as an employee, and I think it is long past the time that it should have been installed.
I really disagree with the fact that you just want to include pay and vacation pay on this. I think it has to go to the termination and the severance.
Mr Offer: I think we all recognize that this is a matter which we were going to have to discuss at the very earliest moment in this particular bill, certainly because of where it is positioned in the bill. Certainly I have thought about that particular issue.
I think we have to recognize that there were concerns raised by the business community. I think we also have to recognize that there is an Employment Standards Act, which talks about wages, vacation pay, termination pay, severance pay and the entitlement to those things by workers in particular circumstances. That is something which is legislated.
I see this particular section as stating whether an employee can access a fund, and it is not from the business community, but rather can access a fund and have the opportunity of having wages, vacation pay, termination and severance up to a particular limit satisfied.
I think we have to be cognizant of whether there is an impact on the business community. I believe there will be amendments further on that will limit the liability of the business community, the directors, etc, to the wages and vacation pay. That is already an amendment which the minister has indicated he will be bringing forward.
As such, I think the concerns raised by the community have been lessened. I heard a number of businesses come before the committee and clearly indicate that they recognize what their rights and obligations are. They came forward with certain concerns as to how that may be lessened, and we will be bringing forward amendments which talk to the small business community, which I believe made a very good series of presentations. We will be talking about an amendment which will exempt the enforcement mechanism of this bill from directors of the small business community. That is what I heard them say.
We will also be talking about amendments which will give to directors of business generally the right to argue reasonable diligence. We believe it is a right and responsibility of government that if it creates an enforcement mechanism which has the potential of holding people personally liable, it is obligated to make certain that those they have potentially held personally liable make argument against that.
As a result of what is now contained in the Employment Standards Act, as a result of amendments we will be putting forward in short order, as a result of the fact that the directors of business are not going to be personally liable under this particular piece of legislation, save as to wages and vacation pay, I believe the bill as it stands is supportable.
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Mr Klopp: After hearing that, I am perfectly clear.
Mrs Witmer: I appreciate the comments made by Mr Waters. There is no intent on our part to not make sure that employees are taken care of and given the money owed, because this bill actually is a very important step for the employees in this province. At present they do not have any protection such as the wage protection plan. We are simply suggesting that, given the present economic circumstances in this province, given the hardship many taxpayers are facing, we simply limit the definition of wages to actual wages earned, actual vacation pay and holiday pay, and not include the severance and the termination. Perhaps that should be considered at a later date.
One of our real concerns is the hardship this fund is going to create for the taxpayers in this province when we already take a look at the deficit and the provincial debt. The one thing we do not know is how the government plans to fund this program over the long term.
Yes, employers who employ these people should be reimbursing the employees their termination and severance pay, but that is not where the money is going to come from. It is going to come from the taxpayers in this province in many cases. Until such time I and our party know how the government is going to fund this program over the long term, I have tremendous difficulty with including termination and severance pay.
As of April 1992, which is just a few months away, this government is going to have to let people in this province know how this is going to be funded because that is when the change is going to take place. I regret we do not have that information at present, and I am very fearful of a payroll tax. I believe it would contribute to more small business bankruptcies and more unemployment. I would just end by saying employees should be reimbursed.
The Chair: All those in favour of Mrs Witmer's motion? Opposed?
Motion negatived.
The Chair: Mr Offer moves that clause 40b(2)(d) of the act, as set out in section 5 of the bill, as reprinted, be struck out.
Mr Offer: There are complementary amendments down the line and this really speaks to the regulatory power of the government to do two things: first, to increase the amount per claim from what is currently $5,000, by regulation; second, to expand, to broaden the scope as to what may be claimed, again by regulation.
We believe in the principle of the legislation; that is clear. Right now this money is being funded by the taxpayers and we all realize that we would like to get the answer as to what the long-term funding plans are by the Treasurer. I made that motion yesterday and it was defeated. I think that is important information. However, because of the defeat of that motion, because the Minister of Labour has been unable to provide us that information, we must realize clause (d) permits by regulation the $5,000 limit to be ostensibly expanded to $50,000 with the stroke of a pen.
I think we have an obligation to the taxpayers of the province to say that if there is to be any change to the limit of expenditure under this plan, it must go through the Legislative Assembly; it must be part of amendment to legislation; it must be part of public hearings. We must provide the forum where any changes in this area are sensitive to the concerns of the business community and the workers of this province.
Doing it by regulation takes away that safeguard. We were elected to recognize change, to analyse and examine, to have public consultation and be responsive to that. Regulation does not allow that. It takes away from us some of the things for which we were elected. If we permit this motion to fail, then we are allowing government, cabinet, by the stroke of a pen to take away one of our functions as MPPs, to take away the opportunity for the general public, business, labour, to input into these decisions. I believe it is absolutely essential for us to make certain that any change to the monetary amount -- and we know how this can happen -- and to the length and breadth of what can be covered, strikes at the very principle of the bill.
We have an obligation to make certain those changes go through the legislative process. I could not believe the government members could vote against accountability, consultation and taxpayer representation. If you vote against this motion, that is exactly what you are doing. I do not believe you will do that and so I ask that this motion be supported.
Mrs Witmer: We will be supporting the motion by Mr Offer and I would agree with many of the points. One of the things taxpayers across this province are very concerned about is the increase in taxes. We believe that when there are any changes to increase the ceiling of this program or to add additional components to the compensation package, there is a need for complete and full public scrutiny into any spending increases that are going to take place.
We need to give adequate notice to the public. We need to consult with the public. We need to hear from them before we make any changes that are going to impact on the amount of taxes the people in this province pay. We need to be accountable to our taxpayers and so I believe there is a need to allow full public debate on any changes that take place. We will support the amendment.
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Ms S. Murdock: Voting against this motion is in no way a vote against accountability, in my view. "Such additional payments as may be prescribed by regulation" specifically relates to what we heard during the public hearings in terms of the difference of the kind of employee a construction worker is. There is nothing in this bill the way it stands without that regulatory power allowing the construction worker to have the different kinds of wages he receives to be covered.
They explained it in great detail here during the public hearings and clause (d) does allow for the negotiations, as I had said when the clause-by-clause opened this morning, that have been ongoing since the public hearings, just trying to get the wording right in terms of how those regulations are going to actually work and not provide extra benefits or things beyond the scope of this bill.
The other thing is that we also heard during the public hearings from the ladies' garment workers, who also are not able to appeal under this legislation as it stands. With exceptions such as clause 40b(2)(d), we will also be able to negotiate and discuss how they could be included. That is why "additional payments" does not mean what was stated earlier, that we can move from a $5,000 cap to a $50,000 cap. It means that if a payment from whatever group we are talking about can be considered a wage under this definition, which is what this section is, then it would be included under a regulation and it would not have to then go through the whole legislative process, which is, as we are discovering, an arduous one.
Mr Klopp: I am speaking against the motion too because of the points my colleague brought out about accountability and circumventing the system. There are two ways, regulation and full-blown hearings like this, and my feeling is that if you do not have the backing of the business community or labour, you are going to hear about it in the public process, whether it is tax dollars immediately or whether it is through the business people. Those people are voters and they will definitely mount quite a lot of dust and dirt thrown your way if you try to do something that is totally ridiculous. Mr Offer pointed out that he has experience. If that is the opposition party's experience and that is why they do not want regulations, I do not think you should paint us with that brush. I would have concerns too probably.
This is not going to create the holus-bolus problems. If there is a cabinet that wants to spend, as you pointed out, the $5,000 to the $50,000 with a stroke of a pen, I am sure if the business world does not complain, it must have done some good consulting, or the labour people must have done good consulting and that is what the people wanted, whether they are taxpayers or whether it comes out of whatever fund it is. There are enough checks and balances with those problems, which I was worried about too. But my sense is that people do not let you get away with those things that easily, and because of what my colleague pointed out on trying to make this thing as fair as possible for people like the garment workers, I think in this particular instance the checks and balances are there.
Mr Offer: I am dismayed to hear that the democratic process has been referred to by members of the government as arduous. I would have thought that is why we were elected, to deal with these things. The fact of the matter is that this particular clause talks to the words "additional payments." It is not specific. It has the potential of being applied in various ways down the line and I do not think we as legislators should allow that to be determined by regulation. I think we have an obligation that if there is to be a change to the legislation we should be listening to the people, that we should take this to the Legislature, that we should have hearings on the matter. I think this bill is a clear example as to why we need legislation.
The bill as first introduced, I guess, might have been thought of as being the result of some great consultation, but what happened after it was first introduced into the Legislature was a hue and cry throughout the province as to what this means. The government did not understand that, so what did it do? They announced amendments to the legislation. This is an example as to why you need legislation. What if that could have been done by regulation? The difference is that the hue and cry would be talking about areas that are already the law. But what has been able to have been accomplished because it was through legislation is that there has been some receptiveness to some of those concerns.
What we have to do is make certain that the task we were elected to do is able to be accomplished. It cannot be done through regulation. We are not talking about anything specific here. We are not talking about, as the briefing notes indicate, coverage of benefit contributions in the construction industry. That is an example of what an additional payment may be. It is not what this particular subsection talks about. This particular subsection does not talk about coverage of benefit contributions in the construction industry. It talks about additional payments, and that is not limited to the construction industry.
I believe we have to be sensitive to what it is we are doing here. The only way we can do that is not to just shuck off our responsibility and say, "Cabinet, you sign it, and we will hopefully deal with the ramifications of that afterwards." This is much too important, this bill. We have an obligation and responsibility to safeguard the continued operation of the bill in the way in which it was first announced. That announcement, as we all know, was in October, and we want to make certain that it continues to operate in the same way and in the same vein as at its first announcement.
By voting against this amendment, thereby allowing additional payments as prescribed by regulation, we as legislators lose control, and that is something we should not do. We must be accountable to the people who elected us. By voting against this amendment, you are saying no to that.
The Chair: All in favour of Mr Offer's motion? Opposed?
Motion negatived.
The Chair: Mrs Witmer moves that subsections 40b(4), (5), (6) and (7) of the act, as set out in section 5 of the bill, as reprinted, be struck out.
Mrs Witmer: This actually is a companion amendment to the first amendment that we made, and certainly the rationale is the same as I put forward at that time.
Motion negatived.
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Mr Offer: The opposition and third party released their amendments to the government yesterday and I am sure in that period of time government members have had an opportunity to review the amendments. Is it the intention at this point in time that the government members are going to support any amendment proposed by either the opposition or third party?
The Chair: Mr Offer, I appreciate your interest, but surely you cannot expect these people to indicate how they are going to vote on a motion until they have heard the debate which would inevitably flow, and some of it could be more persuasive than others. Now, come on.
Mr Offer: I was just curious.
Mr Klopp: Maybe he knows what he has been arguing is not worth arguing.
The Chair: Shall subsections 40b(1) through (7) carry? Those in favour? Opposed? Subsections 40b(1) through (7) carry.
The Chair: I am sorry to interrupt you, but the clerk is going to distribute a replacement page that supersedes the current page in your instructional manual regarding subsection 40e(1).
That was just an announcement. Section 40c.
Ms S. Murdock: Section 40c is the appointment of the program administrator by the Minister of Labour and the powers and duties exercised by the minister, the authority to delegate, as well as bringing any legal proceedings that may be necessary in order to perform the functions of the job. It is an administrative function, basically.
The Chair: Shall subsections 40c(1) through 40c(4) carry? Carried.
The Chair: Ms Murdock, section 40d.
Ms S. Murdock: Section 40d is that the program administrator is not compellable as a witness and in testimony in civil proceedings, that he cannot be called. There was much discussion during the public hearings on the compellability and I am sure I will be hearing about it, but that is what that section does.
Mr Offer: Just a short note on that: I did not hear in the public hearing process a great deal of discussion on this whole issue of compellability. I would like to get some indication as to the necessity for that. The reason I ask is that we will be proposing an amendment which will incorporate some of the concerns of business in terms of being able to use due diligence as a defence, as one example. I am concerned that this type of provision may hinder the full expression of the defence of due diligence, and I would like to get some reaction to that.
Ms S. Murdock: The program administrator cannot be compelled to appear in a civil hearing. The powers can be delegated. Now, it is usual that employment standard officers can and do so voluntarily appear in civil matters and will continue to do so. This act is not going to change that. Forgive me, maybe I am missing something, but I do not see how it would directly hinder a due diligence argument by a director.
Mr Offer: Currently, is there a compellability provision in the Employment Standards Act?
Mr Jenkins: There is a non-compellability provision in the Employment Standards Act for employment standards officers.
Mr Offer: There is right now?
Mr Jenkins: Yes. It is a non-compellability provision.
Mr Offer: My question is, does the non-compellability provision currently in the Employment Standards Act mirror the provision of section 40d?
Mr Jenkins: Not entirely, no.
Mr Offer: May I be informed as to where it deviates and why?
Mr Jenkins: The non-compellability clause in the Employment Standards Act at present is subsection 45(3). It reads:
"No employment standards officer is a competent or compellable witness in a civil suit or proceeding respecting any information, material or statements acquired, furnished, obtained, made or received under the powers conferred under this act except for the purposes of carrying out his duties under this act."
The last phrase, "except for the purposes of carrying out his duties under this act," does not appear in section 40d, so you cannot say that the two are mirror images of each other. The reason that the last phrase, "except for the purposes of carrying out his duties under this act," does not appear in section 40d is that it was felt that in most circumstances the program administrator would not be testifying at a proceeding personally, that the people who would be testifying pursuant to their duties under the act would be the officers who had made the decision concerning the substantive entitlement under the act, that it is more appropriate to have "except for the purposes of carrying out his duties under this act" in the non-compellability clause concerning officers and that it was not really appropriate for the one concerning the program administrator.
Mr Offer: The provision speaks not just to the program administrator but also to any person employed at the ministry or, in fact, to any person to whom the powers and duties have been delegated. Does that not encompass all of the people who had any play in the determination of liability?
Mr Jenkins: No, it does not. The program administrator's powers of decision are quite limited and the substantive assessment of the entitlement would rest on the officer who prepares the order. In determining whether or not to issue an order against a director, the officer would be the one who would consider whether various defences, if any, applied. There is no such defence in the bill at present.
Mr Offer: Okay, thank you. That is quite helpful. So what we are talking about with respect to the program administrator is the person who administers the program. We are not talking about the individuals who would determine whether a particular director or whatever is actually liable.
Mr Jenkins: That is right.
Mr Offer: Okay. So long as that is our understanding, I have no problem with it.
The Chair: Shall section 40d carry? Carried.
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Ms S. Murdock: I would ask, Mr Chair, that section 40e be stood down. My ministry staff has advised that there is a further consideration. It has been pointed out that the way one of the sections is worded could be misunderstood.
The Chair: Is there unanimous consent?
Agreed to.
The Chair: Section 40f, subsections (1) through (3).
Ms S. Murdock: Mr Chair, 40f is with regard to the construction workers. Basically, the construction workers have to apply if moneys are not paid to them through a construction lien. They must process that lien before they are eligible to apply under this fund, under section 40f.
In subsection 40f(2), if the program administrator is satisfied that for some reason the employee was not aware of the right he had to the construction lien or that he must do it within a 45-day period, then under those special circumstances the program administrator can allow an extension of the time period for application. And if an employee who is entitled does not go through the lien process and money is paid to that employee under the fund, then the program administrator is entitled to go to the lien program to be repaid for the portion of money that can be recouped.
Mr Offer: Just to be clear, because there were some very good presentations made on this particular point, basically what we are saying is that a person who may be able to register a lien claim need only register and need not have to go through the next phase of perfecting the particular claim. Is that the understanding?
Ms S. Murdock: Yes. The employee must file a lien claim and then apply into the fund.
Mr Offer: I do not have the first bill, but is this an example of the point that Mrs Witmer brought up at the beginning? This particular amendment is one which did not appear in the original bill and was not the subject matter of the minister's statement to the Legislature on amendments to the bill.
Ms S. Murdock: In the first bill -- it is on page 3 -- the section on lien claim preservation and enforcement has been altered. In order to be eligible for this fund, they were not only going to have to preserve their lien claim but were going to have to have it enforced. In some instances that can take much longer than the two-year limitation period. So therefore that was raised in the House in debate and subsequently amended in the reprint.
The Chair: Shall section 40f carry? Carried.
Ms Murdock, section 40g. Is that self-explanatory?
Ms S. Murdock: I would think so, but I do not want to make that presumption.
The Chair: Are there any questions or persons wanting to debate these very self-explanatory subsections (1) and (2) of section 40g? There being none, shall section 40g carry? Carried.
Section 40h.
Ms S. Murdock: Section 40h concerns settlement or a compromise of wages. This section ensures that workers who make a settlement with their employers are bound by the terms of the settlement if the employer has paid the amount agreed upon, if the money has been paid into trust. They are bound by it.
Mr Offer: Are we on section 40h in whole or are we on subsection (2) also?
Ms S. Murdock: No, subsection (1). Subsection (2) is where there has been an agreement but the money has not been paid by the employer. Then the full amount of up to $5,000 is payable by the fund. The plan would pay the compensation up to the cap if the employee were eligible to receive that amount. The average rate paid is $4,200. They may never have to reach the cap.
Mr Offer: There is no question in section 40h that the maximum that can possibly be paid out would be the $5,000, is that correct -- that the cap and the limit will always remain in force?
Ms S. Murdock: Right. To clarify that, it does not anywhere in there, obviously, say $5,000. It just says the maximum amount recoverable.
The Chair: Shall section 40h carry? Carried.
Section 40i.
Ms S. Murdock: Section 40i is the maximum recovery provision. The intent of the section is to cover the inflationary aspects. It is a $5,000 cap at present.
The Chair: Mrs Witmer moves that section 40i of the act, as set out in section 5 of the bill, as reprinted, be amended by striking out "$5,000 or such greater amount as is prescribed" in the fourth and fifth lines and substituting "$4,000."
Mrs Witmer: The reason for doing this, of course, is that we feel the maximum compensation should be $4,000 at the present time, given the present economic circumstances. This is also the amount that parallels the current maximum liability that an employment standards officer can order an employer to pay. Also, if we follow through in our first argument in believing that only outstanding wages and vacation pay should be covered, since it has been indicated that only about 10% of the money that is going to be given to employees will be for wages and vacation pay, we feel that this amount will more than adequately cover the amount of the outstanding wages and vacation pay.
Ms S. Murdock: It has been clearly stated I think by both the ministry and then the minister and the deputy minister when questioned by the committee that the average rate of payment under the employment standards branch, including termination, severance and so on, is $4,200, which is more than the $4,000 presently capped in the present ESA. The $5,000 would certainly cover that. Should the federal government ever put into place Bill C-22, the province would apply for the $2,000 cap therein to be reimbursed into our fund. We felt that the $5,000 left enough leeway in terms of an average that it was a more fair and equitable rate.
The Chair: All those in favour of Ms Witmer's motion? Opposed?
Motion negatived.
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Mr Offer: Mr Chair, I have an amendment.
The Chair: Mr Offer, if I were to rely on rulings made by Chairs of committees that I was an opposition member of, I would rule this motion out of order because it replicated the contents of a previous motion. But I do not rely on those and I am not ruling this motion out of order.
Mr Offer: If you want to rule the motion out of order, certainly as a member I will have no alternative but to listen to your rulings.
The Chair: Mr Offer moves that section 40i of the act, as set out in section 5 of the bill, as reprinted, be amended by striking out "or such greater amount as is prescribed" in the fourth and fifth lines.
Mr Offer: What we are doing here is continuing the debate as to whether, by regulation, a government should be able to increase the limit of $5,000 to whatever limit it feels is appropriate without the benefit of such a change going through the Legislature, without the benefit of consultation, without the benefit of committee hearings, without the benefit of full debate and without the benefit of being accountable and accessible to the people, business, community, labour and taxpayers of this province.
I believe that one of the things that has been clear in this bill is the $5,000 figure. People may have, as a result of that, taken a position on the bill. I believe that because the $5,000 figure has ostensibly been derived as a result of some discussion on the average type of claim and is part of legislation already, it must logically proceed that any change to $5,000 must also be part of legislation.
If the legislation read that the maximum amount of compensation is that amount, as is prescribed and one voted in favour of it, then logically one could argue that any change must also be, or could also be, by regulation. But the legislation does not say that. The legislation states the number $5,000. Logically, in keeping with the bill itself, any change to that, any new number, must also be by legislation. This section says, first instance, $5,000 is legislation; second instance, somewhere down the line some other number is by regulation.
My argument is, if it was in principle good enough for the Minister of Labour to announce $5,000, then surely it will be good enough for the Minister of Labour, in the event he or she so wishes, to announce a change by legislation. Whether one agrees with $5,000 or not is not the issue here. The issue is that it is a number by legislation, so any change must also be by legislation.
Another issue is, what are we doing here if we cannot have a say in a change in this figure? What are we doing if people, business, labour organizations say that the number is wrong? What response is it of us as legislators to say, "Well, you know, I don't have any say in that because it's by regulation"? And they say, "Well, you know, this means a big thing in our ridings." What do we say to those people who come to us and say. "You know, this really has an impact"? Do we say: "Well, I'm sorry, it's by regulation. I voted in favour"? Well, I am not going to vote in favour of that. If the Minister of Labour said it was good enough to put $5,000 in legislation, then we as a committee should say it is good enough that any change also be by legislation.
If you are going to be consistent, then this is where you are consistent. If you are not going to be consistent, then you vote against my motion. It will send out an incredibly negative message over a principle that we certainly agree with, but we cannot allow a change to be made by regulation when its initial figure is by legislation.
We have a choice here. You have a choice. You can be consistent or not. You can be accountable or not. I hope you will vote in favour of my motion.
Ms S. Murdock: I appreciate the lesson on democracy and how regulatory changes are made, but we are into the same basic argument that we had before in terms of whether or not something should be legislated or whether something should be able to be changed by regulation.
I clearly stated on the record that the intent of section 40i is the inflationary aspect and not to change the $5,000 sum into some larger amount at a later date. I do not believe, in this democratic system that we have, that members of provincial Parliament, elected by the people of this province, would go in, whether they are government members or not, and sit on the legislation regulations cabinet committee; would, as decent and honest human beings, look at a regulatory change and indiscriminately, without thought to what would happen to the constituents in their riding and throughout the province, make the kinds of dramatic changes that are intimated by the previous speaker. The regulatory change required here, if it is required, would be on the inflation basis alone.
Actually, listening to the basics of Mr Offer's argument, it sounds quite reasonable and logical. But that is reasonable and logical, I believe, if you also believe at the same time that any government in power is just willy-nilly going to make changes and increase a $5,000 amount to some dramatic amount at a future date. I do not believe that is the way of the world.
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Mrs Witmer: We will support this amendment. Again, I guess, one of the concerns we have is about the lack of long-range planning as to what is going to happen with this bill. How is it going to be funded? What type of maximum will there eventually be? What is the cap? Certainly I believe that if there is going to be any public spending in this province, there is a need for public consultation and complete scrutiny. At the time, I think what this 40i does by saying "such greater amount as is prescribed" is to create uncertainty. It certainly does not allow employers to plan for their future, because they have no idea what increases are going to occur or when that is going to happen. So I believe there is a need for accountability and complete public scrutiny and consultation.
Mr Waters: I look at this, and with it being the discussion over regulations I have some sort of a problem with what I am hearing from the other side. To start with, even before we got into the public hearings, from what he had heard from the members across in the House and also from the public, the minister altered the bill, because he had listened to them. I would hope this minister and ministers in the future would be listening to the public and would come down with fair decisions, as he did.
I see this as a way of just tying up, should there be in the future a need to either go up or down. The minister would still be hearing from the public and would hopefully be making his decisions on that. The public made itself very clear. That is why we had the amendments before we went into hearings. The public, through their elected representatives for the most part, made the point that they thought there was something unfair about the original proposed bill. Here we are now and you are saying that the system is not going to work in the future.
I have doubts about that. I feel that system would work. We have friends on both sides. I have friends who are in labour, naturally -- I came out of that organization -- and I have friends who are in business, and both of them were out here. I think we came down with a fair decision, and you have to allow some discretion within that. There will be consultation, believe me. If we wanted to raise it, you people would be knocking on the door and so would all my business friends. If we wanted to drop it, labour would be knocking on my door. So I think there is a certain amount of protection there, and the members are allowed to work.
Mr Arnott: I would just like to indicate that I intend to support this amendment as well. The parliamentary assistant's assurance that it is only an inflationary factor and that is the only reason behind it is one I just do not accept, and I cannot accept her explanation. It is not set out specifically that an inflation factor will be included. I have grave concern that it will be increased significantly over time. I certainly concur with what has been said with respect to ensuring that these considerable new exposures to the taxpayer be brought before the Legislature so that we all have an opportunity to speak to them, to debate them, to discuss them, to bring forward the views of our constituents, rather than to have the minister sit there with his civil servants and with the stroke of a pen increase the exposure to the taxpayer.
Mr Klopp: I just want to back up what my colleague Mr Waters said. I think not only opposition members but even members of the caucus made points. He brought up his friends in business, and I too had people, as a small business person myself. I think the checks and balances under this particular proposal are fine.
You can argue both sides. I got into government, and there are things which are regulated and things which are legislated. The argument is that, trying to get them changed, we have to go through the legislative body and it takes too long. I have heard them say, and I have even heard former ministers who now are on the opposition side say, "Yes, if it would have been regulated, I could have changed that because it made sense, but it took too long." You can argue both sides. I think there are good checks and balances. I believe there are 130 members of Parliament at the present time and the majority can raise enough good arguments to have things changed or retracted. So on that, I have to speak against your motion.
The Chair: Mrs Witmer. I trust you are going to be responding briefly to points that were raised, rather than repeating what you said initially.
Mrs Witmer: I am going to. There was a concern that people were going to be listened to. I would just remind Mr Waters that the employer groups that appeared before this committee all indicated that they opposed the ability of the government to increase the program ceiling by regulation. They believe future changes should be made by amendment to the act to allow for full public debate. So I guess that was one of the reasons I initially asked what amendments the government had brought forward as a result of the public hearings.
Mr Offer: Just shortly, I am absolutely unconvinced by the response by members of the government. Mr Waters spoke about increasing or decreasing the amount. The legislation does not speak to that. It only speaks one way, and that is greater. It does not speak to change, it speaks to increasing the amount. I have no doubt that this particular section has nothing to do with inflation, because if it did, it would say so. It has to do with increasing the base amount of $5,000 to another amount. I believe that must be done by legislation. I do not know why members of the government would feel at all reluctant to have such a crucial aspect of the bill be the subject matter of legislation. The $5,000 initial figure is the subject matter of legislation. Why cannot a change to that also be the subject matter of legislation? Do we not have an obligation? Should we not have a guaranteed opportunity to debate any change to that basic amount? Legislation gives us, as members of provincial Parliament, that opportunity. It cannot be changed without at least giving us the opportunity to debate that. Regulation takes that away from us.
Today we are talking about taxpayers' dollars. Somewhere down the line it may not just be taxpayers' dollars. I think we have to provide, as members of this Legislature, a guarantee to ourselves to be able to debate any change. That is all we are asking for in this case. We are not saying the $5,000 should be $2,000, that the $5,000 should be another number; not this motion. What we are saying is that any change to it should give us a guarantee to debate it, to talk about it. I do not care what legislative committee you prop up; regulation does not give you that guarantee. Legislation does.
If you say no to that, I know you are saying no to every other amendment that both the opposition and third party are going to propose. I know that is what it means. It means you have discussed our amendments last night and you have said no to every one. If you cannot agree to this one, which does not change the bill in any real way -- what it does is to guarantee the future changes by legislation -- then I know you must have had some sort of subcaucus meeting and said: "We're going to just say no to all of their amendments. We will listen politely, but we will in the end result prop up and we will have six members against whatever else goes." Incredible.
So I ask those who have spoken to reconsider. This motion should pass because, by voting against this motion, you are voting against the principle that your minister himself announced. He said he is unafraid for the $5,000 figure to be debated in the Legislature. Why can you not follow his lead and say, "And we're unafraid that any change to that also be debated in the Legislature"?
The Chair: Thank you. All those in favour of Mr Offer's motion? Opposed?
Motion negatived.
The Chair: Shall section 40i carry? Carried.
Ms Murdock, Section 40j.
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Ms S. Murdock: Subsection 40j(1) is when compensation becomes payable. It is basically the process of the claim. Subsection 40j(2) is apportioning the amounts by the program administrator for each of the four types of the covered payments. That is basically it for the apportionment breakdown for federal purposes. Subsection 40j(3): Upon approving compensation to the employee, deductions are made, again for the purposes generally of the law of Canada but also the law of Ontario.
The Chair: Shall section 40j carry? Carried.
Section 40k, Ms Murdock.
Ms S. Murdock: Compensation during employer-initiated appeals: Where an employer initiates an appeal against an order to pay wages further to section 50, compensation from the plan will not be paid until the referee hearing the case rules that the workers are entitled to payment under the order to pay and the employer does not pay. In subsection 40k(2) compensation in appeals initiated by the employment standards branch may be paid after the referee determines wages are owed. I think that is pretty clear.
Subsections 40k(3) and (4) are interim compensation during hearings, specifically instances where if it is determined that only one portion of the eligibility for payment is disputed, the undisputed portions can be paid pending a decision on the disputed portion.
The Chair: Shall section 40k carry? Carried.
Ms S. Murdock: Section 40L is orders to pay where the worker initiates an appeal. If a worker is appealing an employment standards branch decision not to issue an order for unpaid wages, he may receive fund compensation following an adjudicator's decision to allow the claim.
Mr Offer: Might I just get a clarification as to what that means? Is this where there has been an initial determination of not to pay and there is some sort of a --
Ms S. Murdock: Employee appeal.
Mr Jenkins: Where the officer initially determines that the employee is not entitled to the wages, the employee has a right of appeal, which is heard by an adjudicator under section 49. If the adjudicator rules in the employee's favour, then the program administrator may approve compensation from the fund at that point in time.
Mr Offer: You said "may" approve. Are they not bound to approve compensation? What would be the reason they would not?
Ms Muir: At the point at which the adjudicator decides the person may indeed have some entitlement, an order to pay would be issued against the employer, if there is an employer. If there was no employer or the employer was unable to pay, then the administrator would make a decision about paying out compensation from the fund. So it is not automatic. It can be discretionary, because first an order to pay would be issued against the employer.
Mr Jenkins: In other words, the employer might comply voluntarily. There may be no need to pay out compensation from the fund, so that is why the word "may" was used.
Mr Offer: Okay. The point I am bringing out is to be absolutely certain there was no provision in the particular section which would permit an order to pay during the hearing of the matter, prior to its final determination.
Mr Jenkins: Do you mean like an interim payment from the fund?
Mr Offer: Yes, where a right of appeal or review has not yet expired. I think we want to make certain that the legislation, though giving the workers the right, also makes certain that an order to pay will not be made until, first, a review has taken place and, second, if there has been an appeal, that appeal has been heard and determined. All we want to do is make certain that an order to pay will not be processed until all of the individuals involved in the matter have had their opportunity to bring forward the claim and any appeal period has expired or been heard and disposed of.
Mr Jenkins: Yes. There is no authority in 40L for interim payments during the section 49 hearing. The hearing would have to be concluded before the administrator could approve a payment from the fund.
Mr Offer: Is there a provision whereby a matter may not just be on the basis of wages, may be also on the basis of wages and vacation pay, termination and severance? Is there a provision whereby the matter, for instance, of wages has been at one point heard and there are other areas that still have to be heard, but an order can be sort of pared off -- "Okay, pay out the wage order now" -- before the full matter has been decided?
Mr Jenkins: In a section 49 hearing specifically?
Mr Offer: Yes, in any hearing under this bill.
Mr Jenkins: In section 50, which is the employer appeal hearing, there is the provision in the bill to approve interim payments where certain issues are disposed of or agreed upon prior to the conclusion of the hearing.
Mr Offer: That is the only place in the legislation where that might happen?
Mr Jenkins: That is right. In section 51 hearings as well, but not in section 49 hearings.
Ms S. Murdock: Just on that point, subsection 40k(3), which we just passed, is for the section 51 hearings, but your point is just relating to the section 49 hearings. Am I correct in understanding your question, Mr Offer?
Mr Offer: My point relates to any hearing which is under the wage protection plan, whatever section you want to refer to it as. If there is any hearing which deals with whether an employee is entitled to wages, vacation pay, termination and severance, and dealing with the entitlement of that particular person to the wage protection plan, I think it is important that we all recognize that there will have to be a decision on entitlement and that if there is an appeal or a review of that decision, that will proceed prior to the payment of any dollars. I imagine that would be just self-evident.
Mr Waters: But on that, there was one scenario brought up during the hearings where there could be a partial payment already; in other words, the employer has agreed to a certain amount and the employee is arguing the rest. Surely they would be entitled to that first amount.
Mr Offer: I appreciate that. That is not the question I am asking, because that presupposes agreement between employer and employee. I am working on the basis that where there is no agreement, there is the necessity for a particular hearing or an appeal. I think we all recognize that, though very much in favour of the principle of the legislation, we also want to make sure there is no provision in the bill that would allow any payment to be made prior to its final determination.
Ms S. Murdock: Under section 49, which is what we are talking about here under section 40L, no, you are right. Your fears may be allayed.
Mrs Witmer: But we did just pass it under section 40k.
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Ms S. Murdock: Yes, you did under subsection 40k(3), because this is where an ESB officer has already decided that you are not getting any money, you are not entitled, and the employee appeals, which is different from the other section, 40k, under a section 51 application, which we have not gotten to yet. It is not the same set of circumstances. So the answer to Mr Offer's question is no.
The Chair: Shall section 40L carry? carried.
Section 40m. Ms Murdock, is that self-explanatory?
Ms S. Murdock: Yes, I guess, except to say that it has been put in there especially for cases of obvious fraud where the intent is to defraud the fund.
Mrs Witmer: I would like to get some more information about the overpayment policy that the Ministry of Labour is going to be developing. There were no details last time. How is this going to take place?
Ms S. Murdock: That has been discussed. A policy is being put in place. Basically, I think it is safe to say that the previous policy of the government, for instance, in the Ministry of Community and Social Services, has been that if the error on an overpayment is made through the ministry bureaucracy, in computation or whatever, the error is not the fault of the recipient and payment is absorbed by the ministry. I have made my position on this very clear because I am a firm supporter of that in terms of workers' compensation overpayments as well. When you get into large bureaucracies, you cannot expect that the people who are not involved in the rules and everything else that happens within a government know it all. So the policy is such that if the error is one of government or one of bureaucracy, then overpayments in that regard would not be -- what is the word? -- sought after. But in cases where it is evident that fraud has occurred or collusion of some type has occurred and the attempt is definitely to defraud the fund, and obviously where it is obvious, then that is where section 40m would recover an overpayment. It is an opportunity to try. There is always somebody who will try.
The Chair: I wonder if any of the staff want to expand on what Ms Murdock had to say.
Ms Muir: I think it is quite clear.
Ms S. Murdock: They agree with me.
The Chair: Or perhaps provide some elaboration for the assistance of the committee?
Ms Muir: Perhaps what we could add is that a regulation will be prepared that will set out criteria that would be used to govern overpayments so that it will be quite clearly and publicly known what the policy is.
Mr Jenkins: I think we would want to consider such factors as whether recovery would create an undue hardship on the employee, in addition to other factors as well.
Mr Offer: I am just wondering where the legislative entitlement to create a regulation exists, that basis.
Ms S. Murdock: We have not covered that section yet.
Mr Offer: Project me forward.
Ms S. Murdock: That is section 65.
The Chair: Shall section 40m carry? Carried.
Subsections 40n(1) and (2).
Ms S. Murdock: It is the top-up of compensation paid to workers where the plan initiates subrogative proceedings, third-party garnishment certificates, directors' liability proceedings on behalf of a worker who is owed wages. The worker is entitled to receive any amount which exceeds the compensation he or she has received from the plan.
The Chair: Shall section 40n carry? Carried.
Section 40o.
Ms S. Murdock: Again, it is subrogation of the plan administrator to the rights of individual workers. The administrator will be able to exercise any legal rights of the individual to recover wages owed in other legal matters.
Mr Offer: Just one second here. Under 40o, the program administrator basically is able to get the rights of the employee and take action as the administrator sees fit. Can I ask how we gel that section 40o with that old non-compellability clause of 40d? I cannot recall what section it is now. I am asking just for my information. You are permitting the program administrator to take action and also allowing not being required to testify in a civil proceeding. I am just wondering whether you might help me out on it.
Ms S. Murdock: If I may, basically subsection 40c(4), which we have already passed, in the name of his or her office may bring any proceeding --
Mr Offer: No, 40d is my question.
Ms S. Murdock: No, earlier, and you said how it matches up -- "may bring any proceeding he or she considers necessary in relation to the program" and may respond to any proceeding in that name. It is in the name of the program that the administrator goes. If money has been paid out of the program to the employee, then the administrator, through the program, can apply to whatever third party if funds are available or entitlement is there. The administrator can apply for that payment to be made back into the fund. I think that power was granted in section 40c.
Mr Offer: I would like to get some clarification on this particular point. I am not certain I agree with that explanation. Just help me out on that. The subrogation of rights is different from bringing something in your own name. Subsection 40c(4) talks about bringing something in their own name. Section 40o talks about being able to bring something as a result of rights which accrue to an employee. My question remains, if I can get an explanation, how that gels with section 40d, that non-compellability section.
Ms S. Murdock: I misunderstood the original question. Section 40d is compelling the administrator, as a witness to a particular order, to pay. Section 40o is not the same thing. You are applying for moneys to a third party under different pieces of legislation, but 40d is taking the person of the administrator and compelling him to be a witness in a matter under the Employment Standards Act or before another court in a civil proceeding. It is not anywhere the same thing. Laura is legal counsel; maybe she can explain it better than I can.
Ms Hopkins: The provision about non-compellability speaks to the program administrator as a witness in someone else's lawsuit, in a suit the administrator is not a party to. In section 40o, we would be dealing with lawsuits the program administrator is a party to.
The Chair: Shall section 40o carry? Carried.
Section 40p.
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Ms S. Murdock: Interest may be paid or collected on money owed. I think it is pretty clear.
The Chair: Shall section 40p carry? Carried.
Section 40q.
Ms S. Murdock: Section 40q is specifically agreements to artificially increased fund entitlement. This is the collusion aspect and it is directly spoken to in section 40q.
Mr Offer: I am wondering whether ministry staff or the parliamentary assistant might be able to inform us as to how that decision may be arrived at. What is going to kickstart that type of process of inquiry, and what rights do the people have who are party to that in dealing with the issue at hand?
Mr Jenkins: Decisions of the program administrator are exempt from the Statutory Powers Procedure Act, so there would be no formal hearing held. The principles of natural justice would still require that evidence be heard viva voce perhaps, or through written submissions, but there will be no formal hearing held. The program administrator will just make the decision on the basis either of interviews with the people or written submissions.
Mr Offer: I do not think we have passed that SPPA exclusion yet, but as a result of that we might want to think about it. There is going to be a very serious allegation made in order to kickstart section 40q. The allegation is going to be that the employer and employee have jacked up some sort of agreement to get moneys that might otherwise not be justified. I wonder whether we should make certain how that happens and surely make certain that there is going to be a hearing process in this matter. We are talking about matters and allegations which are very, very serious in nature.
Ms S. Murdock: I am hearing two concerns from Mr Offer, the first one being, how does one determine whether there is collusion occurring? Basically, when the employment standards officer goes in to examine the books and so on to determine whether employees are entitled to whatever entitlement they have, if there is some hint that the books are cooked -- I know that is the term -- or that ESO has an indication or a feeling or just something that would say there is something wrong here or that it is not sitting right, the administrator then has the power to question that. There are no hard and fast criteria here; it is simply going to be each and every case in its own situation.
Having said that, if the administrator says, "Aha, you're not going to get paid this; you're going to get paid that lesser amount because we suspect collusion," and if as the employer or employee I do not like that decision under the legislation we are discussing, now I have the right to appeal. So there is that appeal process already within what we are doing here now. There is none specifically related to a collusion aspect, but there is if you disagree with the order to pay and the order to pay amount is not correct in your mind. If the employer says, "No, that's too much," or, "No, that's too little," then it can appeal that decision.
Mr Offer: I certainly have no problem with having the administrator being able to make certain there is not that type of problem, but I do not know that the resolution of the matter is met because the dollars can be reviewed. There is a more serious issue that comes before: whether it should be $2,000 or $5,000. Ms Murdock's response was: "Well, there's an agreement and $5,000 was the amount of money. The administrator should have the right to say, `I think that looks a little curious to me,' and as a result of the review come down and say it should be $2,000." I guess they have every right to do that, but they are not just talking dollars; they are now saying there was some sort of arrangement made.
I think the parties may want the right to have that matter argued. They are being called crooks. Is that not what they are being called here under this legislation? Should they not have the right to argue that is not the case, and should the legislation not provide the opportunity for parties to argue that is not the case, not to carry that stigma? This legislation does not allow that. This legislation says, "It's $5,000; we don't like the deal so it's really $2,000," but they are not talking about it. They are talking about people who may say, "We think you're wrong and we don't want to be labelled or stigmatized by what is inferred there."
By taking away that hearing process, you are leaving the people to carry that stigma around. You are leaving them without the opportunity to argue something, and the administrator may be wrong. You are not giving them any opportunity to clear their name and to clear what is a definite stigma that will be attached. I think we have to have that in the legislation. I am not against the administrator being able to look behind matters, but if we give the opportunity to the administrator to look behind those matters, as the administrator should, then we also have to allow the parties to that to argue their case. That is where this does not hold up. They do not get their hearing.
Ms Muir: They are not going to get a requirement for a hearing before the program administrator makes that decision. They are going to consider all the evidence and provide the parties, just on the grounds of natural justice, with an opportunity to present each side of the argument. Presumably, although there is no formal requirement to hold a hearing on the matter, there would be an opportunity for the parties to make their views known.
Mr Offer: Just on the basis of fairness and equity and everything that sounds right, should there not be that? Should the legislation not have that, if there is the possibility of an administrator saying that this particular arrangement is no good for not the best reasons in the world? Whether they exercise it will be up to them, but should the parties not at least have, in clear form, the opportunity to come before a body, a tribunal, and say, "No, this transaction was good"?
They do not have it in clear form. That right is not there. The right of the administrator to say, "I don't like this deal," is there, but there is not the following right to say, "I don't care what the administrator says, I want the right to prove that the transaction I entered into between the employer and employee is good." We are not talking about the difference between $5,000 and $2,000; we are talking about something where the relationship between parties being called into question, or is it not?
Ms S. Murdock: Maybe I am missing something here, because if section 40q is called upon by the administrator and, for whatever suspicion, the parties are called before to give an explanation or given a different order to pay or whatever the situation is, they do get their opportunity to present their arguments. I do not know why you would think there needs to be a special system for that particular infraction, separate and apart from the system that is already in place.
Mr Offer: Then why was the response by ministry officials that there is not a forum except that prescribed by natural justice?
Ms S. Murdock: I am going to let Laura answer, because she probably can say it much more succinctly than I.
Ms Hopkins: As a matter of administrative law and common law, if the program administrator is going to make a decision that might affect someone's entitlement to compensation from the program, the administrator is going to have to give the parties an opportunity to be heard.
The program administrator can do this in one or two ways. One is the kind of hearing that most of us understand to be a hearing where people come before him, say their piece, listen to the other party say his piece and respond. That is the conventional kind of hearing. Or there is something called a paper hearing where the parties submit their views in writing. The views are shared with the other party and there is an opportunity to respond.
In all respects this is like a judicial determination and the program administrator must make decisions based on what is put before him by the parties. This does not need to be stated in the act in order to be the status of the law, and so it may be clearer to say, "Yes, as a matter of administrative law and common law, there will have to be a hearing before a decision is made by the program administrator here."
Mr Offer: What is the response to the first reaction to my concern, that says this would not be permitted because of the exclusion or the non-application of the Statutory Powers Procedure Act?
Ms Hopkins: The requirement of the program administrator to hold a hearing is not what is set out in the Statutory Powers Procedure Act. The SPPA describes the process that the hearing might take. In the absence of the SPPA applying, there can be a different kind of process, but there has to be the opportunity for the parties to be heard.
Mr Offer: Fine. What type of process is contemplated in the absence of the SPPA?
Mr Jenkins: As I mentioned, written submissions, possibly also viva voce evidence presented. There will not be, of course, examination and cross-examination and testimony given under oath the way there would be in an SPPA hearing, but as counsel mentioned, the parties will have an opportunity to submit evidence and also to rebut the other party's evidence, if necessary.
Mr Offer: You say there is not cross-examination, etc., of all that, but there is the opportunity to rebut evidence.
Mr Jenkins: That is right.
Mr Offer: Okay.
The Chair: I am wondering if I might interrupt to indicate that it is 12:05, and subject to what the committee might direct, perhaps we could break for lunch. We are scheduled to return at 2. There may well be a more specific response to your questions at 2. I cannot be certain of that, I do not know, but there may well be. So subject to anything the committee might direct now, I would suggest that we recess until 2 o'clock this afternoon.
The committee recessed at 1205.