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Winds of change in the world of work

One week on from the midterm elections, there are differing reports of how the Democratic majority in the House of Representatives will affect the legislative agenda in the US. It is likely that labor and employment issues will be a key focus of their agenda, but with Republicans controlling the Senate, their influence will be limited at the federal level.

Meanwhile, elections this year in Canada, Italy and South Australia have already resulted in dramatic reversals of government policy on some significant employment issues affecting the world of contingent labor.

Canada’s Bill 148

In the general election held in June, Ford’s Progressive Conservatives ousted the Liberals who had governed Ontario for 15 years with a decisive majority. And on Oct. 2, Ontario Premier Doug Ford stated that his government would be “getting rid” of Bill 148, the Fair Workplaces, Better Jobs Act, which only became law in November 2017.

One of the most publicized aspects of Bill 148 was the increase to Ontario’s minimum wage to C$14 from C$11.60, followed by a subsequent increase to C$15 on Jan. 1, 2019. On Sept. 26, 2018, Ontario Labour Minister Laurie Scott announced that the provincial minimum wage would be frozen at the current rate of C$14 per hour and that the scheduled increase would not take effect on Jan. 1.

In addition to the increased minimum wage, Bill 148 implemented several labor reforms to address the changing work environment and the increasingly insecure nature of work. These included increased vacation entitlements, increased entitlement to parental leave, paid emergency leave, and equal pay for contract and temporary employees.

The replacement for Bill 148, the “Making Ontario Open for Business Act [1],” or Bill 47, was introduced on Oct. 23. Among its reforms is the removal of the controversial provision of equal pay for temporary workers, which came into force on April 1, 2018. The entitlement to be paid the same rate as the client’s employees for doing substantially the same work, with the same skill and effort under similar conditions, follows similar laws in the EU and Japan.

Bill 47 also removes the presumption that a worker is an employee unless the employer can prove they are an independent contractor. However, there is still an express prohibition against misclassification by employers.

The reversal of the equal pay conditions and other employee-friendly provisions will be welcomed by businesses; but for those who have already put in place policies and mechanisms to deal with the amendments in Bill 148, this creates further unwelcome cost and administration.

Italy’s Jobs Act

In Italy, the election of a new populist government in June 2018 led to a swift change in the laws, known as the Jobs Act, that had introduced greater flexibility in 2015.

As of Nov. 1, all fixed-term contracts, as well as all extensions and renewals, issued to both employees and agency temporary workers will be subject to new restrictions.

Decree 87/2018, converted into Law No. 96 on Aug. 9, has retroactive effect for fixed-term contracts signed on or after July 14. It reduces the maximum length of fixed-term contracts of employment to 24 months, rather than the previous 36 months, and the number of renewals permitted to four from five. Any contract entered into for longer than 12 months, including any renewals, will need to be justified by setting forth in the contract the reasons that support this choice.

The aim of the decree was stated as limiting temporary employment, but it also contained an increase in the penalties that employers would face when rescinding permanent contracts, which are often a strong incentive to resort to temporary employment.

It remains to be seen whether this measure will have any effect on the labor market, other than creating more uncertainty for employers.

South Australia’s Labor Hire Licensing Act

The most complete about-turn by a newly elected government occurred in South Australia, where the Liberals claimed victory from Labor in March after 16 years in opposition.

The Labor Hire Licensing act passed by the previous Labor government came into effect on March 1, with staffing firms required to become licensed within six months. However, on Sept. 21, the new attorney general announced that the Liberal government would introduce legislation to repeal the act by the end of this year.  Consumer and Business Services have informed the public that they will cease accepting applications for licenses and will refund any application fees that had already been paid upon the Act becoming repealed.

While a bill to repeal the act has not yet been introduced into Parliament, the South Australian Labor Hire Licensing Act is formally still in force. However, according to the attorney general, the licensing scheme it introduced will not be enforced. The government announced that instead of a licensing scheme, a task force would be established to consider whether existing laws are sufficient to protect labor hire workers.

Inevitably changes in employment law have a significant impact on employers, but rarely have changes been so radical as when closely aligned to polarized political views and ambitions.

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