Employment Standards Act, 2000 - Overtime Averaging in Unionized Workplaces
Bill or Act:
Employment Standards Act, 2000
Summary of Proposal:
Existing rules under the Employment Standards Act, 2000 (ESA)
Most employees are entitled to overtime pay if they work more than 44 hours in a work week. (Some occupations are exempt from these provisions and several industries have a higher overtime pay trigger.)
An employer and employee (or a trade union on behalf of the employees it represents) can agree to average the employee's hours of work over a specified period for the purpose of calculating the employee's entitlement to overtime pay. This is referred to as "overtime averaging". Under an overtime averaging agreement, the employee would only qualify for overtime pay if the average hours worked per week during the averaging period exceeds 44 hours (or the higher overtime pay trigger, if applicable).
The Restoring Ontario's Competitiveness Act, 2019 (ROCA) recently made changes to the ESA's rules in this area.
1. Prior to ROCA, there was no limit on the number of weeks over which an employer and employee could agree to average hours of work for the purpose of calculating overtime pay. ROCA set a cap of four weeks as the maximum period over which hours of work can be averaged.
2. ROCA eliminated the requirement that employers obtain approval from the ministry to average overtime. Some of those pre-ROCA ministry approvals permitted averaging over a period that was longer than the current four-week maximum.
(There are transitional provisions for previously approved overtime averaging agreements. See the Ministry of Labour's Guide to the ESA-Overtime chapter for more details.)
Change being considered
In unionized workplaces, the employer and trade union can negotiate overtime averaging agreements for the unionized employees. The new four-week cap applies to any such agreements (subject to transitional provisions for previously approved averaging agreements).
The government is considering giving unionized parties the ability to negotiate agreements that average hours of work for overtime pay purposes over a period that exceeds four weeks. A higher cap could be imposed (e.g., eight weeks) or there could be no cap at all.
The government is considering this change only in respect of employees covered by a collective agreement. Non-unionized employees and their employers would continue to be subject to the four-week cap.
What the government would like to know
• Do you support changing the four-week cap as it applies to unionized workplaces? Why or why not?
• What do you think would be the best approach to take if the government proposed changes to the cap? For example, do you think that there should be no cap or that a higher cap should be imposed instead?
June 19, 2019
Comments Due Date:
August 5, 2019
Ministry of Labour, 400 University Ave., Suite 1502, Toronto, ON, M5G 1S7