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Key topics in employment law
This document summarizes a webinar presented by Jennifer Dolman and Brian Thiessen of Osler, Hoskin & Harcourt LLP on key topics in employment law, including issues in franchising. It discusses the definition of a franchise, the risk of franchisors being deemed joint employers, Ontario's Changing Workplaces Review and recommendations, and implications of Ontario's proposed Fair Workplaces, Better Jobs Act, including potential impacts on unionization in franchising.
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Key topics in employment law
- 1. Osler, Hoskin &Harcourt LLP Jennifer Dolman Partner Key Topics in Employment Law July 2017 Brian Thiessen Partner
- 2. 2 BRIEF THE BOARDWEBINAR WEDNESDAYS: KEY TOPICS IN EMPLOYMENT LAW Jennifer Dolman Partner Osler, Hoskin & Harcourt LLP Tel: 416.862.5911 Email: jdolman@osler.com Brian Thiessen Partner Osler, Hoskin & Harcourt LLP Tel: 403.260.7018 | 604.692.2764 Email: bthiessen@osler.com
- 3. Labour and EmploymentIssues in Franchising
- 4. 4 BRIEF THE BOARDWEBINAR WEDNESDAYS: KEY TOPICS IN EMPLOYMENT LAW What is a Franchise • a franchise relationship is distinct from an employment relationship • a franchise is broadly defined under franchise legislation like Ontario’s Arthur Wishart Act (Franchise Disclosure), 2000 (the AWA) • under the AWA, the key elements of a franchise are: ◦ Payment to franchisor in course of operating business or as a condition of acquiring franchise or commencing operations ◦ Franchisee granted right to sell, offer for sale or distribute goods or services substantially associated with franchisor’s or franchisor’s associate’s trade-mark, service mark, trade name, logo or advertising or other commercial symbol, and ◦ Franchisor exercises significant control over, or offers significant assistance in, franchisee’s method of operation • the AWA expressly doesn’t apply to employment relationships
- 5. 5 Joint Employer Status •in 2015, the Changing Workplaces Review was initiated in Ontario by the Ministry of Labour to consider issues affecting the workplace • 2 Special Advisors were tasked with making recommendations to address the changing nature of the workforce, the workplace, and the economy, with a focus on Ontario’s Labour Relations Act and the Employment Standards Act • public consultations were held in 12 cities across Ontario in 2015 • an Interim Report and Guide were issued in July 2016 containing approximately 50 issues and over 225 options for further consultation • one recommendation was that franchisors be deemed joint employers with their franchisees of their franchisees’ employees
- 6. 6 Joint Employer Status •prior to the proposed amendment, the question of whether a franchisor was a joint employer was decided on a case by case basis, with varied results, and depended on the franchisor’s control of its franchise’s day to day operations • the idea that franchisors could be deemed to be joint employers was considered a significant threat to the franchise model and Ontario’s thriving franchise industry • joint employer status could expose franchisors to employees’ claims under employment and labour laws, collective agreements, wrongful dismissal suits, wage and overtime class actions, and human rights claims
- 7. 7 Joint Employer Status •direct and indirect impacts of joint employment on a franchisor’s business could include: ◦ increased liability in respect of their franchisees’ commitments to their employees, including liability for: • wages, salaries, overtime, vacation pay and benefits • termination notice and pay in lieu of notice • severance pay and employment-related premiums • payroll taxes ◦ increased costs and operational burden to ensure a franchisor’s business is compliant with statutory labour and employment obligations, and internal policies and practices
- 8. 8 Joint Employer Status ◦changes to the economics and incentives in a franchisor’s business model as it tries to flow these increased costs and operational burden through to its franchisees ◦ franchisees, in turn, experiencing a loss of autonomy over the operation of their independent businesses ◦ increased risk that franchisees’ employees will become unionized
- 9. 9 Joint Employer Status •the Special Advisors released their Final Report on May 23, 2017 • fortunately for franchisors and franchisees alike, and the entire franchise industry, the Final Report specifically rejected the adoption of a new deemed joint employer status for franchisors • this was great news for the franchise industry but franchisors continue to remain at risk of being found to be a joint employer • this is especially the case because of the publicity surrounding the joint employer issue • franchisors should expect to be dragged into disputes between franchisees and their employees
- 10. 10 Avoiding Joint EmployerStatus • to avoid a finding of joint employer status, franchisors should think carefully about the extent to which they control the day to day operations of their franchisees • franchisors must afford franchisees a significant level of independence and discretion when it comes to employee hiring/firing, scheduling, wages, and personnel files • franchisors must strike a careful balance between: ◦ controlling the brand (and ensuring brand recognition and integrity); and ◦ controlling a franchisee’s relationship with its employees • franchisors should focus on practices that impact the consumer’s experience with the franchisor’s brand such as product/service quality standards, uniforms, hours of operation, and authorized suppliers
- 11. 11 Avoiding a Findingof Joint Employer Status • franchisor should eliminate controls in franchise agreement and operations manual that aren’t necessary to protect or enhance franchisor’s brand or system • franchisors should make sure that the franchisee’s name, and not the franchisor’s, appears on store level receipts, stationery, employment application, paystubs, accounts, websites, advertising and social media • franchisee should make it clear to its customers that it is an independently owned and operated business, under a franchise agreement with the franchisor
- 12. 12 Unionization • although theFinal Report didn’t recommend that franchisors be deemed joint employers, it did recommend a process that could create a more direct route to unionization, and allow employees of multiple franchisees operating the same brand at multiple locations the opportunity to bargain collectively
- 13. 13 Fair Workplaces, BetterJobs Act, 2017 • the Final Report was accompanied by a statement from the Ontario Minister of Labour, that the government would announce its response within a week • on June 1, 2017, the Ontario government released Bill 148, the Fair Workplaces, Better Jobs Act, 2017 • second reading was dispensed with • Bill 148 has been referred to Standing Committee to consider over the summer • Bill 148 is intended to implement certain recommendations from Final Report
- 14. 14 Fair Workplaces, BetterJobs Act, 2017 • fortunately for franchisors, Bill 148 doesn’t propose that multiple franchisees of same brand operating in same geographic area be required to bargain together with local employees towards one collective bargaining unit • nor does Bill 148 reflect the recommendation in the Final Report that an “employer bargaining agency” made up of representatives of the franchisee employers represent the franchisees at the bargaining table with the union
- 15. 15 • there areproposed changes to the Labour Relations Act, however, that may increase the number of union drives, and successful applications for certification ◦ amendments would allow Ontario Labour Relations Board (OLRB) to change structure of bargaining units within a single employer • this would make it easier for employees of a single employer operating multiple businesses to be certified as one business unit • this could impact multi-unit franchisees and franchisors with multiple corporate stores in close geographic proximity to each other ◦ it would be open to trade unions in building services, home care and community services, and temporary help agency industries to apply for certification without a representation vote Fair Workplaces, Better Jobs Act, 2017
- 16. 16 Fair Workplaces, BetterJobs Act, 2017 • “building services industry” is broadly defined and includes cleaning services, food services and security services – segments of economy that are commonly serviced by franchised brands ◦ the OLRB would have the discretion to certify the union if satisfied that more than 55% of employees in bargaining unit are members of trade union ◦ the OLRB would also have discretion to dismiss applications for certification without a representation vote where it finds upon application of an “interested person” that there is evidence that application does “not likely reflect the true wishes” of the employees
- 17. 17 Fair Workplaces, BetterJobs Act, 2017 • where no trade union has been certified as bargaining unit and no collective agreement in place, a trade union may apply to OLRB for an order for an employer to provide a list of its employees ◦ if successful, the trade union can use the list in its campaign to establish bargaining rights • there are also other proposed changes to the Ontario labour and employment law regime that will impact not just franchisors and franchisees but all small businesses, including: ◦ New shift scheduling rules (target effective date January 1, 2019) ◦ Equal pay for equal part-time work provisions: casual, part-time, temporary and seasonal employees ◦ Increased minimum wage – up to $14 an hour by Jan 1, 2018, and then $15 an hour by Jan 1, 2019
- 18. Random Drug andAlcohol Testing
Editor's Notes
- #19 [BRIAN] General Introduction: Good morning, we’re happy to be here talking to you today about an increasingly important topic – cybersecurity. My name is Brian Thiessen, and I’m a partner in the employment and privacy groups here with Osler here in Calgary. I’m joined by Shaun Parker and Adam LaRoche, my associates who practice in the same areas. We also have a special guest speaker here with us this morning – Jonathan – who is with the Canadian Security Intelligence Service, or “CSIS” as you might otherwise know it. You might be wondering why our law firm has teamed up with one of Canada’s national intelligence services to bring you this presentation. The answer is this – cyber attacks and data breaches are no longer simply a concern at the organizational or corporate level. As we’ll discuss, these incidents are often state level – and sometimes state sponsored – events that engage national security concerns. The companies represented in the room here today control a sizeable piece of the “critical infrastructure” needed for Canada’s economy (and society) to continue to function properly. This is particularly true for our energy companies, who hold the dubious honour of being the most cyberattack-targeted sector, after government. And while the average cost of a data breach in Canada costs the target company a little more that $6 million (Spotlight Article), the cost of an especially effective cyberattack to the Canadian economy could be much, much higher.