Inside Logistics

Learning Curve: Issues around working hours

Changes to the Employment Standards Act will affect supply chain operations


May 5, 2015
by Tracy Clayson

Tracy Clayson is managing partner, business development of Mississauga, Ontario-based In Transit Personnel.

Tracy Clayson is managing partner, business development of Mississauga, Ontario-based In Transit Personnel.

Some folks will always push up against—or creep slightly around—established rules. Everyone knows it, and so do regulators.

In 2014, the Ontario Employment Standards Act, 2000, (ESA) added a few significant new amendments that apply to most employees of every provincially regulated employer in the province.

Of specific relevance to our industry are two changes coming into effect on May 20, 2015. First, under the category “Compelling Mandatory Self-Audits,” an employment standards officer will now have the power to require an employer to conduct an examination (self-audit) of its own records, practices, or both, to determine whether the employer is in compliance with the ESA or its regulations. Such employers will be required to conduct the self-audit and report the results to the Employment Standards Officer.

Also, effective May 20, employers will be required to provide each employee with a copy of the most recent informational poster published by Ontario’s Ministry of Labour (MOL), and ministry-prepared translations of such posters, if available, and if requested by the employee.

The MOL says proactive audits of various industries are designed to educate employers, enforce compliance of the ESA, establish the self-audit system, communicate it and raise awareness of the policies.

I say the prime reason for the amendments was to remove wiggle room for those taking liberties. Whatever the motivation, I don’t believe the amendments address the whole problem—especially when it comes to areas currently struggling with contentious rules, such as, for example, around trucking firms and overtime.

A four-year analysis (2010-2013) of the MOL’s workplace inspections determined the top five complaint areas were unpaid wages, vacation pay/time, termination pay, public holiday pay and overtime pay.

The “What You Should Know” poster amendment was put in place as a result of this analysis, as well as a second inspection action in 2014-2015.

On the positive side, most of content on the poster is easily interpreted, with the requirements well known, and easily applied. On the negative side, there are two items on the poster sure to cause employers trouble.

One is around the “hours of work” section that says generally, employees cannot be forced to work more than a daily limit of eight hours a day or the number of hours in a regular work day (if that is more than eight). Employees may work more than the daily limit if requirements for obtaining their written agreement are met. Employees may also work more than 48 hours in a week if requirements for obtaining their written agreement are met and the employer has an approval from the Director of Employment Standards. (In certain cases and subject to restrictions, where an approval application has been pending for at least thirty days, employees may work a limited number of excess weekly hours.)

The second thorny area is overtime pay. Posters state that most employees must be paid overtime pay after 44 hours of work each week and that the overtime rate must be at least 1.5 times the regular rate of pay.

But in the trucking industry, there are exceptions to both hours of work and overtime pay for for-hire carriers that don’t apply to private fleet operators. Information on exceptions is listed elsewhere on the MOL website. Unfortunately, because the poster does not reference this information, the document can be misleading to both employees and employers.

This grey area needs correcting, so that members of the audit group at the MOL can spend their time enforcing the rules rather than interpreting them. This would also answer questions like: how would an employer seek to protect itself from an inspection that results in violations, when, for example, a temporary help agency employs workers in that industry?

After all, drivers of trucks used in local cartage and drivers’ helpers are entitled to overtime pay for hours worked over 50 in a work week. But the section in the ESA for highway truck drivers shows overtime pay for hours worked in excess of 60 in a work week.

As stated earlier, the employer is required to calculate the overtime rate using the higher hours of work allowed only if an employer has applied to the MOL and obtained written approval from the ministry’s Director of Employment Standards. The employee still needs to sign off on the agreement to work hours that exceed the standard hours of work outlined in the poster. It’s unclear, to say the least.

Unfortunately, regardless of good intentions to level the playing field through better enforcement and auditing, some firms will choose to break the rules. I am not making a blanket argument for more government regulation and more meddling in companies’ business practices. And, maybe I am being naive to think companies start doing business only with ethical suppliers because it’s the right thing to do. This is really all about cost-containment—but at what price?