Tuesday, January 19, 2010

The Unfolding Mystery of the ESA: Bill 139

Temporary Help.

Say it.  Say it so many times that it has lost all meaning.  Say it until the permanence of opacity.  Say it one more time.  Now you know the effect of Bill 139 on the consulting industry.

I don't mean that to be flippant or derogatory; I just mean that this bill has been passed with very poor definitions.  In certain situations, the meaning is clear.  If you run a temp agency, the bill applies; if you run a consulting agency, well, then maybe it applies, depending on a four test common law application, depending on the integration, dependency, control, appearance, whether we apply Sagaz or Re Becker Milk Co... (mumbles and trails off incoherently).

Okay, to begin with, a quick background.  Bill 139 attempts to give temporary workers the same rights and protections afforded by law to permanent employees.  This means such things as receiving holiday pay, vacation pay and notice of termination (or payment in lieu).  It also means that after six months, the temporary help agency cannot prevent the client from hiring the temporary worker as a permanent employee.  So far, so good.  Well, one could rightfully debate the merit of the bill, but I think we all get the basic idea: temps need protection from exploitation (that's the non-cynical explanation and, for the purposes of this post, I'm going to run with it).

The problem comes with firms, like my current employer, who are not really temporary help agencies.  We are not body shops that farm out desperate low-skilled workers.  We do not trade in what is the generally perceived definition of a temp.  We trade in the services of highly skilled (and deservedly highly paid) professionals.

Unfortunately, it is unclear if Bill 139 makes such a distinction (though, for some reason, it makes an explicit exception for home-care professionals... I have no idea why).  It could be that this new law will make all or most consultants employees.  Unfortunately, there is no way to know this.  Neither the ESA nor the Ministry of Labour is willing to make a definitive statement as to what constitutes an employee.  To a certain extent, this is understandable.  Employment and work dynamics are changing so much these days that rules that had been in place for decades may no longer be applicable.  Attempting to define 'employees' may be near impossible.

In Ontario's common law, there are numerous tests and criteria that are laid out to make such a determination.  Unfortunately, none of the tests are considered definitive and the list of criteria is not considered to be exhaustive.  The common law does not give appropriate guidance to firms and consultants.  Worse yet, Bill 139 seems to be, at least in part, an attempt to codify the common law.  Institutionalized Uncertainty:  it's all the rage at Queen's Park this season.

One blog post is not sufficient space to fully explore all the issues surrounding Bill 139, but I will leave you with one final thought:  The Ministry of Labour has responded to an inquiry I made about the nature of employment of an independent consultant; an agent of the Ministry wrote, "[s]uch a ruling can only be made by an Employment Standards Officer following an investigation into a complaint, by an arbitrator when a grievance has been filed by an employee..."

So, the only way to determine if a consultant is an employee is to lose a complaint lodged against you through the Ministry of Labour.  For those companies who wish to abide by the law, this is of little comfort.

Stay tuned...

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