Small business clampdown

New employment standards legislation in Ontario is making it easier for unions to organize in the province.

When Bill 148, the “Fair Workplaces, Better Jobs Act” came into effect on January 1, it lowered the threshold from 50 to 20 percent signup of union cards in the private sector to allow access to employee data through the Ontario Labour Relations Board.

According to Julie Kwiecinski, Canadian Federation of Independent Business (CFIB) director of Provincial Affairs, Ontario, the federation has 42,000 members in Ontario. The CFIB was not consulted during the bill’s review process. She believes the act, which also raised the minimum wage from $11.60 to $14 per hour immediately, and other reforms, are union biased and backed. “This is a way for the government to curry favour with the unions,” says Kwiecinski.

Custom millwork shop owner Livio Passalent, president of Crescent Cabinet Company in Hamilton, Ont., worries about the consequences for the woodworking industry and considers the government action “short-term gain for a long-term pain.” Passalent, who currently has 10 employees, is all for workers receiving a living wage, he says, “but there are not enough young people getting into our industry. Add to it that any minimum wage job where people get exposed to it, there is going to be less of a chance for an employer to hire that minimum-wage earner. That is one less person who may have a potential to want to come into the industry.” He points to Europe, where some countries are struggling with high youth unemployment, in part due to high minimum wage levels.

But these issues are just the tip of the exposure iceberg for Ontario employers, according to the CFIB. In December, it conducted a survey and asked members what changes they have met to prepare for the increase in the minimum wage to $15.00 per hour, effective January 1, 2019. The results echo the concerns of Passalent.

“Some of the results included 51 percent have already raised prices,” says Kwiecinski, “28 percent have already reduced the number of employees from staff, 31 percent have already reduced overall staffing hours, 51 percent reduced or eliminated plans to hire young workers and 54 percent reduced or eliminated plans to hire new workers.

“I think that is a telling picture of what’s to come. We warned government that small businesses, when forced to absorb a 32 percent increase in the minimum wage in only 15 months, would have to make difficult choices. Many of them feel that they are being backed into a corner and are in survival mode. They need to find ways to absorb this and they are making very sad choices, choices that they don’t want to make.”

CFIB members are wondering how they can afford a 32 percent wage increase in only 15 months, on top of other costs. “EI (Employment Insurance) just went up,” says Kwiecinski. “CPP (Canada Pension Plan) is going up. We are still trying to find out the financial impact of cap and trade. Hydro is going up again. Also, people may not remember that WSIB (Workplace Safety and Insurance Board) premiums will likely go up, too, based on what the payroll costs are.”

In Alberta, where the minimum wage will be also $15/hour, but starting October 1, 2018, has had a softer ramp up than Ontario. On October 1, 2017, it stood at $13.60/hour and $12.20 the year prior to that date. Ryan Neumann, president of the Onsite Group of Companies in Edmonton, Alta., says that he always pays above minimum wage. “You try to create an environment where you are paying them enough money where no one will pay them what they are making with you,” he says of his 42 employees.

Neumann has recently observed that many local service and manufacturing industries that he knows about have been doing rollback and wage freezes.

Passalent also believes that by looking out for your employees, the chances of a union getting a toehold become much slimmer. “Before anyone brings in a union the employees need to know the pluses and the minuses, and the implications of what it means to be part of a union. Their wages may go up but it may be lost due to union dues. They can lose some control over the destiny they have in small shops.

“Let’s call a spade a spade here. People who pay for something expect a return on what they are paying. When my clients pay me to do millwork for them, they expect the millwork to be done at a certain level of quality, professionalism and on a certain timeframe. The reality is that the employees’ clients are their bosses.

“My belief is if you treat people fairly and honestly and respectfully there is no need for a union.” Historically, Alberta has been very anti-union, Neumann says. “I will shut my shop down before a union comes in here.”

For employers in Ontario wanting to ask questions about the new labour standards, the government has an employment standards hotline. “We can’t even get through,” says Kwiecinski. “Government was not prepared for this. One CFIB business counsellor tried 14 times.
“Unfortunately, there is a lot of information in this bill with a lot of grey areas, where they did not completely explain something.

“A small business might be thinking that they need an HR department to keep up with the paperwork that this bill will cause.”

Enforcement is another whole kettle of fish entirely, according to Kwiecinski. “The government is planning to hire an additional 175 employment standards officers by the year 2021. The Minister of Labour indicated in a news conference that the first class of that group will be graduating very soon. So, you have more labour police and fines are going up by 30 percent. You’ve got increased powers beyond belief for the employment standards director who will have the authority to issue warrants, place liens on personal property, hold securities, collect and share personal information.”

Although Crescent Cabinet has skilled labour pay well above the minimum wage, Passalent asks, “‘What it would do if I needed to hire a labourer to clean up or move things.’ I would think twice because I would rather keep the guys that I have. There is always time to find something to do, there is always time to clean up.

“Do more with less is what the essence of this legislation will do for me and the company personally.”

Passalent notes that with the new labour standards, he’s looking at a number of issues, such as employees getting an extra week vacation after five years. “Calling in sick creates more exposure to me across the board. As it stood, I would pay all of the stat holidays and pay a couple of extra holidays as a small benefit. I would be understanding with it. Now I am mandated to give them an additional two days of time off.

“I don’t want to penalize people when they are ill because they are suffering with the illness they have and they aren’t making money. I’m not overly for the legislation and I’m not overly against it. I’m trying to be fair to my guys and most of them are longstanding employees.

“They appreciate that I look out for them. When times are slow, I like to keep them on and keep them busy. When times are busy I sometimes make more requests of them and say we are all in it together.”

The Financial Accountability Officer of Ontario filed a report in September 2017 that says raising the minimum wage would be an inefficient policy tool for reducing overall poverty. “If you want to help people that are dealing with poverty, it is a much bigger discussion,” says Kwiecinski. “It is not just about labour costs. It is about child care, welfare, education and housing.

“To simplify it to this level is a disservice to the very people who are struggling with poverty issues. It is sad because the government is doing this to get reelected.”

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