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13. Temporary Help Agencies
In 2009 the province passed legislation regulating the temporary help industry (what is now Part XVIII.1 of the ESA), where workers register with a temporaray help agency which then offers them temporary work with third party clients, typically taking a healthy percentage of the fee they charge the clients. These new rules clarified a variety of legal issues surrounding this relationship, particularly the key issue of between which parties to this triumvirate relationship the employment relationship exists (it's between the worker and the agency) - and as well establishes a number of important employee rights which the agency is required to respect and comply with [ESA 74.1(1)].
The language used in the legislation is that the agency now 'assigns' the 'assignment employee' to the 'client' (the third party who benefits from the work performed). For these purposes, the definition of "work" includes training which is directed at performing work [ESA 74.1(2)]. The employment relationship can be established by written, oral or implied contract [ESA 74.3].
While an 'assignment' begins when work is first performed for the 'client', and ends "at the end of the term of the assignment or when the assignment is ended" by any party, that is not the case with the employment relationship between the employee and the agency. The employment relationship begins when the temporary help contract between the employee and agency commences, and ends either by express act of either party (eg. a fire or quit) or by operation of law. Neither the assignment of an employee to work, and even the lack of such assignments, constitutes a termination of the employment relationship [ESA 74.4(1-4)].
This section also addresses and explains various modifications of basic ESA substantive rights (ie. holiday pay, termination and severance entitlements, reprisals) that apply to temporary help employees, as well as modifications to the procedural administrative enforcement mechanisms which otherwise apply generally to all ESA-granted rights. On these issues this section has to be read in conjunction with those more specific chapters in this Isthatlegal.ca Employment Law (Ontario) Legal Guide, which explain the general topic but also note any special temporary agency treatment.
(b) Exemption for Community Care Access Centre-referred Workers Under the Long Term Care Act, 1994
The province has established a province-wide system of Community Care Access Centres (CCACs) to provide central information and referral points for people accessing "professional services, personal support services or homemaking services" (as defined in the Long Term Care Act, 1994, such as nursing and therapy). Such referrals and work are exempted from the application of these temporary help agency rules [ESA 74.2], if they are made under a contract between the CCAC and either the worker or their employer.
(c) Agency Information Duties to Employee
Once an employee is hired by an agency then they have a legal duty to "as soon as possible" provide the employee, in writing, with [ESA 74.5(1)]:
Additionally, when offering an employee a work assignment, the agency must advise them orally of the following information, to be followed in written form as soon as possible thereafter [ESA 74.6(1-2)]:
- the legal name of the agency, as well as any operating or business name of the agency if different from the legal name,
- contact information for the agency, including address, telephone number and one or more contact names; and
- a copy of this temporary help agencies information sheet produced by the Director of Employment Standards [ESA 74.7(1-4)]:
Your Employment Standards Rights: Temporary Help Agency Assignment Employees
(d) Prohibited Agency Fees and Practices
- the legal name of the client, as well as any operating or business name of the client if different from the legal name;
- contact information for the client, including address, telephone number and one or more contact names;
- the hourly or other wage rate or commission, as applicable, and benefits associated with the assignment;
- the hours of work associated with the assignment;
- a general description of the work to be performed on the assignment;
- the pay period and pay day established by the agency, and
- the estimated term of the assignment, if the information is available at the time of the offer.
The temporary help agencies rules also prohibit agencies from charging an employee (or a prospective employee) certain fees, and from engaging in certain practices, as set out below [ESA 74.8(1-4)]. These prohibitions apply both with respect to employees and prospective employees. Additionally, any provisions in contracts between the agency (on the one hand) and either the employee (or prospective employee) or the client (on the other hand) which purport to override these prohibited fees and practices are themselves void in law [ESA 74.9(1-4)].
. Prohibited Agency Fees Against Employees
A temporary help agency is prohibited from charging the employee (or prospective employee) any fee in connection with [ESA 74.8(1)]:
In the event that any of the above illegal fees are charged by a temporary help agency:
- "him or her becoming an assignment employee of the agency" [para 1]
This broad prohibition should prohibit application fees, hiring fees, and anything charged an employee at the commencement of the employment relationship, and during the initial intake and hiring process.
- "the agency assigning or attempting to assign him or her to perform work" [para 2]
This is a similar rule, prohibiting any fees charged to the employee for a work assignment (as opposed to the agency's 'cut' from the rate they charge to the client).
- "assisting or instructing him or her on preparing resumes or preparing for job interviews" [para 3]
- "a client of the agency entering into an employment relationship with him or her" [para 5]
- other fees as prescribed by Regulation (none yet prescribed) [para 9]
. Prohibited Agency Fees Against Clients
- an Employment Standards Officer (ESO) may make repayment arrangements with the agency [ESA 74.14(1)].
General ESA provisions applicable to such repayment arrangements [as set out in Ch.7, s.5(f)] apply here, with necessary modifications [ESA 78.14(5)].
- an Employment Standards Officer (ESO) may Order repayment to the Director (of Employment Standards) in trust [ESA 74.14(1)].
An administrative fee shall be added to any such Order in the amount of 10% or $100, whichever is greater [ESA 74.14(2)], and such an Order "shall state the paragraph of subsection 74.8 (1) [as noted above] that was contravened and the amount to be paid" [ESA 74.14(3)]. General ESA provisions applicable to Orders (as set out in Ch.7, s.4) apply with necessary modifications [ESA 74.14(4)].
The agency may not charge a fee to a client in connection with their entering into an employment relationship with the employee, except if charged to the client (not the employee) within six months after the employee first has performed work for the client. This six month period runs regardless of the amount of assignment work performed by the employee during that six month period, or whether such work has been continuous [ESA 74.8(1) para 8, 74.8(2-3)].
A client may sue the Agency to recover these or any other prescribed prohibited fees (none yet prescribed) [ESA 74.8(1) para 9, 74.15].
. Prohibited Agency Practices
A temporary help agency is prohibited from [ESA 74.8(1)]:
In the event that any of the above prohibitions are contravened an Employment Standards Officer (ESO) may Order compensation to be paid to the Director of Employment Standards in trust for the employee (or prospective employee) for any loss caused thereby [ESA 74.16(1)].
- restricting an employee from entering into an employment relationship with a client [para 4],
- restricting a client from providing employment references for an employee [para 6], and
- "restricting a client of the agency entering into an employment relationship with" the employee [para 7]
- otherwise imposing restrictions as prescribed in the Regulations (none yet prescribed) [para 10]
An administrative fee shall be added to any such Order in the amount of 10% or $100, whichever is greater [ESA 74.16(2)], and such an Order "shall state the paragraph of subsection 74.8 (1) that was contravened and the amount to be paid" [ESA 74.16(3)]. Otherwise general ESA provisions applicable to Orders (as set out in Ch.7, s.4) apply with necessary modifications [ESA 74.16(4)].
(e) Public Holiday Pay
Holiday pay rules are some of the most complex of all the ESA's provisions, and they are explained generally in Ch.3, s.3. The normal holiday pay rules are that the worker either gets the day off with pay, or - if they have to work it - then holiday pay that varies in calculation according to their specific circumstances.
Another one of these general ESA rules is that where an employee is on "temporary layoff" when a public holiday occurs, then they get holiday pay for that day. However where that lay-off has advanced (through the passage of specified periods) to the point of being a "termination layoff" [as these terms are explained in Ch.6, s.1(c)], then no such entitlement exists. The holiday pay rules for temporary help agency workers follow this general rule, with any day that the worker is not working being considered a day of lay-off such that if it also a holiday then they get holiday pay for it. Of course, once the lay-off extends in length so as to become a termination lay-off then this entitlement ends [ESA 74.10(1,2)].
(f) Termination, Severance and Lay-Off
A range of variations from the normal ESA rules for termination, severance and lay-offs [see Ch.6] apply to temporary help agency workers, as explained below.
Note however that while these new temp agency rules come into force 06 November 2009, the total length of an employee's employment with a temporary agency shall, for all ESA termination and severance purposes, include periods both before and after that date [Reg 398/09, s.8]. This contrasts with some ESA provisions (below), which only count periods after that date (eg. to determine whether a lay-off is temporary or permanent).
Normal ESA rules when a lay-off occurs are explained in Ch.6, s.1(c), which sets out the basic rule that lay-offs of a duration under a threshold [roughly: 13 weeks out of 20 consecutive ("simple temporary lay-offs"), or 34 weeks out of 52 consecutive ("extended temporary lay-offs")] are "temporary lay-offs", and those over those thresholds are "termination lay-offs". These rules are modified (as explained below) for temporary help agency workers, starting with the common sense concept that a lay-off starts in any week where "the employee is not assigned by the agency to perform work for a client of the agency during the week" [ESA 74.11(1)].
Normal ESA lay-off rules do not count "excluded weeks" as lay-off weeks. The temporary agency worker counter-part of that concept is similar except that the definition of excluded weeks is varied slightly as follows [ESA 74.11(2-4)]:
“excluded week” means a week during which, for one or more days, the assignment employee is not able to work, is not available for work, refuses an offer by the agency that would not constitute constructive dismissal of the employee by the agency, is subject to a disciplinary suspension or is not assigned to perform work for a client of the agency because of a strike or lock-out occurring at the agency.For temporary agency workers, only full weeks occuring after 05 November 2009 (the day before the in-force date of the Temporary Help Agency amendments to the ESA) are counted towards the 20 and 52 lay-off 'base week' calculations mentioned above, and similarly only actual lay-off weeks occuring after that date are counted towards the determination of whether a lay-off is a simple or an extended temporary lay-off [Reg 398/09, s.4]. Where this rule is applied 'across' the in-force date and the lay-off later becomes permanent (ie. a 'termination lay-off') then the normal ESA rule that the first day of lay-off is then deemed to be the date of termination is changed such that the date of termination is 06 November 2009 [Reg 398/09, s.5].
. Mass Termination Notice
In Chapter 6, s.2(e) I set out the contents of 'mass termination notices' that are required to be served on the ESA Director when a mass termination takes place (ie. when an employer terminates the employment of 50 or more employees at the employer's establishment in the same four-week period). Under normal ESA rules such notices are not served on employees themselves but are instead posted in the workplace (the employees do receive 'normal' Notices of Termination) however in the case of temporary help agency workers the employer is obliged to serve the mass termination notice of the workers as well (or at least the information content of such notices) "on the first day of the notice period or as soon after that as is reasonably possible" [ESA 74.11(5)].
Further, with changes passed into law on 15 December 2009 (though retroactively effective to 06 November 2009) [ESA 74.11(4.1)], the employer duty to issue such mass termination notices for assignment workers is now triggered by assignment terminations (not full terminations) within the same four week period of "50 or more assignment employees of the agency who were assigned to perform work for the same client of the agency at the same establishment of that client" [ESA 74.11(4.2)]. These are essentially the same grounds as for regular ESA mass terminations, except that they relate to assignment terminations rather than full terminations. Despite the retroactive effect of these changes, the employer is not excused from compliance with them [ESA 74.11.1].
The notice periods required remain the same as the regular mass terminations, namely [ESA 74.11(4.3)]:
In the transition to these new Temporary Help Agency rules, only full four-week periods that end before 06 November 2009, or that start on that date or later, shall be considered when determining if these added temporary agency worker notice requirements apply [Reg 398/09, s.6].
- 50-199 assignment terminations ....... 8 weeks
- 200-499 assignment terminations ...... 12 weeks
- 500 or more assignment terminations ........ 16 weeks
. Terms of Employment May Not Change During Working Notice
In Chapter 6, s.2(b) I set out the normal ESA rules that, during the period after a Notice of Termination is issued (ie. the period of 'working notice') employers shall not reduce the employee's regular wage rate or alter any other term or condition of employment, and that benefit plan contributions shall continue until the termination date. These rules apply as well to temporary agency workers with the following modifications in the calculation of the regular wage rate used for this purpose (to accomodate their more irregular working status) [ESA 74.11(6,7)]:
. Pay-in-Lieu of Notice
- for those terminated by 'termination lay-off' (see "Lay-offs", above), regular wage is calculated as the average of the wages earned over the last 12 weeks, counting back from the deemed date of termination;
- for all other terminations, regular wage is calculated as the average of the wages earned over the last 12 weeks, counting back from the last day the employee worked for the agency.
Where an employer 'buys out' an employee's period of termination - ie. pays them their full ESA wage entitlement over the termination period to achieve immediate termination rather than letting the working notice period run out (this is called 'pay-in-lieu') [see Ch.6, s.2], then the weekly amount of the lump sum payout they are due is calculated in the same fashion as 'regular wages' are in the discussion of "Terms of Employment May Not Change During Working Notice" (above) [ESA 74.11(8,9)].
. Severance Criteria
In Ch.6, s.3 I set out the normal ESA law applicable to 'severances'. Roughly - under the normal ESA rules - a severance occurs when employees of five years or more duration are terminated and if [ESA s.64(1)]:
Under such 'normal' ESA law the 'terminations' which can trigger a severance include:
- the severance occurred because of a permanent discontinuance of all or part of the employer's business at an "establishment", and the employee is one of 50 or more employees who have their employment relationship severed within a six-month period as a result;
- the employer has an annual payroll of $2.5 million or more.
Variations in the (above-cited) normal ESA severance law that apply to temporary agency employees are as follows [ESA 74.11(10,11)]:
- (i) employer's dismissal or other refusal or inability to continue employment [ESA 63(1)(a)];
- (ii) employer's constructive dismissal of the employee followed within a "reasonable period" by the employee's resignation in response [ESA 63(1)(b)];
- (iii) termination lay-off (ie. a lay-off of 35 weeks or more in any 52 consecutive week period) [ESA 63(1)(c)];
A week of lay-off for these purposes, and for those who have a regular work week, includes [ESA s.63(2-2.4)] any week where the employee earns less than 25% of their regular rate ["regular rate" excludes overtime pay (ESA s.1 Defns)].
For employees who do not have a regular work week, the lay-off criteria is met if for 35 weeks out of 52 consecutive weeks "he or she earns less than one-quarter the average amount he or she earned per week in the period of 12 consecutive weeks that preceded the 52-week period".
However for these purposes a week shall not count as a week of lay-off (an "excluded week") if during the week, for one or more days, the employee is not able to work, is not available for work, is subject to a disciplinary suspension or is not provided with work because of a strike or lock-out occurring at his or her place of employment or elsewhere - although such a week shall count as one of the 52 consecutive weeks.
- (iv) lay-off on permanent discontinuance of business [ESA 63(1)(d)]; or
- (v) after receiving a notice of termination, the employee gives two weeks written notice of termination with a termination date within the employer-given notice period. However, the severance will still be deemed to have occured on the original date of termination [ESA s.63(1)(e), 63(3)].
. Severance Pay Calculation
- in (iii) above, the definition of "excluded week" set out there does not apply, but instead the definition of "excluded week" set out in "Lay-offs" (above) is used;
- in (iii) above, a week where an employee earns less than 25% of their regular rate does not count as a week of lay-off;
- in (iii) above only base weeks and lay-off weeks that occur on 06 November 2009 or later shall be taken into account to determine if a termination lay-off has occured [Reg 398/09. s.7(1)];
- in (iv) above, only lay-offs on permanent discontinuation of the business that begin 06 November 2009 or later are counted [Reg 398/09, s.7(2)];
- in (v) above, only notices of termination issued 06 November 2009 or later come under this rule [Reg 398/09, s.7(3)].
As is discussed in Ch.6, s.3(d), the normal ESA rule for calculating the amount of severance pay is one regular work week's wages for every year (counting excess full months as a decimal fraction) of employment duration [ESA s.65(1)], however this is capped at a maximum of 26 regular work week's wages [ESA s.65(5)].
For temporary help agency workers the calculation of a regular week's wage is varied [ESA 74.11(12-14)]:
(f.1) Joint Liability of Agency and Client for Unpaid Wages
- for 'termination lay-off' severances [ie. (iii) above], by calculating it as the average earned from the last 12 weeks, counting back from the week of deemed termination;
- for all other severances [ie. (i), (ii), (iv) and (v) above], by calculating it as the average earned from the last 12 weeks, counting back from the week immediately preceding the first day of the lay-off.
Both the temporary help agency and the client are jointly and severally liable to the employee for unpaid wages [ESA 74.18(1)]. Since the primary duty to pay wages resides with the agency [who is legally deemed the 'employer': ESA 74.1(1)], these provisions really just extend the duty to pay wages to the client, in the event that the agency defaults.
Note that in this situation ESA proceedings by the employee against the client may be commenced before their remedies against the agency are exhausted [ESA 74.18(4)]. Procedures for collecting unpaid wages against the client are the same as those available against the agency [ESA 74.18(5,6)].
For these purposes 'wages' include [ESA 74.10(3)]:
.Where multiple clients of the agency have each used one employee whose wages remain in whole or part unpaid, then their share of liability for the total amount of unpaid wages shall be apportioned in accordance with the number of hours that the employee worked for each of them [ESA 74.18(2)]. Be clear that liability is not spread in proportion to the amounts that the clients owes the agency respecting the employee, nor the amount owed to the employee by the agency with respect to each client, but rather in proportion to the hours worked for each client as a proportion of the total hours for which the employee, calculated at each pay period.
- regular wages;
- overtime pay;
- public holiday pay, and
- premium pay.
(g) Reprisal by Agency Client
The temporary help agency worker rules also extend regulation over agency clients (ie. the direct beneficiaries of the work performed) and their representatives. The ESA prohibits the below-listed agency reprisal behaviours ('agency reprisal behaviours'), if they are motivated by the worker exercising or participating in any of a specific list of triggering (mostly ESA-related) activities or rights ('legal activities') (also below-listed) [ESA 74.12(1)]. When such an allegation is made there is an evidentiary presumption that the reprisal occured, with a reverse onus lying on the agency to disprove it [ESA 74.12(2)].
The prohibited agency reprisal behaviours are any of the following:
The triggering legal activities are any of the following:
- intimidating a worker,
- refusing to have a worker perform work for the agency,
- terminating the assignment of a worker, or
- otherwise penalizing a worker or threatening to do so.
In the event that any of the above reprisals are committed, an Employment Standards Officer (ESO) may Order compensation to be paid to the Director of Employment Standards in trust for the employee (or prospective employee) for any loss caused thereby and/or that the employee be reinstated to the assignment [ESA 74.17(1)]. In the case of a reinstatement Order "the temporary help agency shall do whatever it can reasonably do in order to enable compliance by the client with the order" [ESA 74.17(4)].
- the worker asks the agency client or the temporary help agency to comply with their respective obligations under the ESA and it's regulations,
- the worker makes inquiries about his or her rights under the ESA,
- the worker files a complaint with the Ministry under the ESA,
- the worker exercises or attempts to exercise a right under the ESA,
- the worker gives information to an employment standards officer,
- the worker "testifies or is required to testify or otherwise participates or is going to participate in a proceeding under" the ESA,
- the worker participates in proceedings respecting a by-law or proposed by-law under section 4 of the Retail Business Holidays Act (tourism exemption to holiday closing rules),
- the worker is or will become eligible to take a leave, intends to take a leave or takes a leave under Part XIV of the ESA (see Ch.5, s.2), or
- the agency client or temporary help agency is or may be required, because of a court order or garnishment, to pay to a third party an amount owing to the worker.
An administrative fee shall be added to any such Order in the amount of 10% or $100, whichever is greater [ESA 74.17(2)]. General ESA provisions applicable to Orders (as set out in Ch.7, s.4) apply with necessary modifications [ESA 74.17(3)].
(h) ESO Administrative Enforcement Meetings Extended to Agency Clients
As is mentioned in Ch.7, s.6, an Employment Standards Officer (ESO) may require employees and employers to attend investigative meetings. This authority is extended [ESA 74.13] to temporary help agency clients, corporate directors and employees of agency clients, and both temporary help agency workers and prospective workers.
(i) Record-Keeping Duties of Agencies and Clients
As of 02 November 2015, both temporary help agencies and their clients are required to record the number of hours worked by each assignment employee in each day and each week.
These records must be retain for at least three years (this is a 'running' three years, not calendar years), and this duty may not be shifted to the employee. Such records must be readily available for inspection as required by an employment standards officer, no matter who holds them [ESA 74.4.1-74.4.2].
For temporary help agencies these record-keeping duties are in addition to those required of them by their status as employers, as explained in Ch.3, ss.6 and 8.
14. Foreign National Live-In Caregivers
The "Employment Protection for Foreign Nationals Act (Live-in Caregivers and Others), 2009" ("EPFNA") came into force in Ontario on 22 March 2010. The EPFNA applies to foreign nationals who work as live-in caregivers, to their employers and as well to recruiters of such workers. For these purposes the following definitions apply [EPFNA, s.1(1)]:
“foreign national” means an individual who is not,The EPFNA sets out an extensive regulatory regime over such workers which borrows and refers heavily to the ESA regime which is the subject of much of this Employment Law (Ontario) Legal Guide. However I have not yet integrated the EPFNA into this Guide, so readers must refer to legislation itself, which I link here for reference:
(a) a Canadian citizen, or
(b) a permanent resident within the meaning of the Immigration and Refugee Protection Act (Canada);
“live-in caregiver” means an individual who,
(a) provides child care, senior home support care or care of the disabled in a private household where the person being cared for resides, and
(b) resides in that household;
Employment Protection for Foreign Nationals Act (Live-in Caregivers and Others), 2009