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Modernization and the gig economy: Impact of rolling back reverse onus

Aug 26, 2019

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A promise to scrap many workplace reforms has been kept to business owners employing full-time and contingent workers in Ontario.

The Government of Ontario passed a sweeping labour reform legislation on Wednesday, November 21, 2018 that will effectively roll back many of the changes brought in by the previous liberal regime. Bill 47, Making Ontario Open for Business Act, aims to revamp many of the recent changes made to Ontario’s Employment Standards Act through Bill 148.

And a significant change, the repeal of reverse onus, is one expected to impact employers across the province.

When Bill 148 passed in November 2017, organizations who engage independent contractors faced a reverse onus obligation to prove these contractors are not, in fact, employees of their organization.

This was a big deal. When rates are negotiated at the start of an engagement, which party bears the employer costs is a principal factor, and independent contractors earn higher rates because they’re agreeing to take these costs on.

Yet with no guidance for organizations on how to meet reverse onus obligations, independent contractors currently on assignment were sudden risks to both large and small businesses in Ontario – who were abruptly faced with the question as to whether or not the province was a safe place to engage these types of workers.  At the same time, reverse onus did little to improve conditions for vulnerable workers forced into independent contractor relationships.  These workers still had to pursue civil litigation against the client organization to access their rights and compensation as an employee, a prospect that is uncertain, expensive and can take years to reach a resolution.

What does a more sustainable approach to regulating the gig economy look like?

In the wake of removing reverse onus, there’s still more work to be done in Ontario. The gig economy is a phenomenon sweeping the world. For people, organizations and governments, developing a sustainable framework to regulate this workforce has become a large social and economic issue.

To be sustainable, any policy update must encourage and support the developing economy while protecting and respecting the diverse groups of workers that exist within it. There are those that seek independent engagements by choice and those that are unfortunately forced into it out of their necessity to find employment.

Is sustainability possible?

It can be, by updating the classification criteria to consider issues in the public interest (like cyber security issues around tool use, and open access to training), while at the same time establishing a predictable framework for reclassification. 

A better approach to reclassification can forgo civil litigation, creating an administrative process overseen by the Ontario Ministry of Labour to give both workers and independent contractors the right to choose their preferred engagement model, while at the same time, granting employers protection from hefty retroactive costs when a worker’s preference changes and the employer acts promptly on the reclassification request.  

There’s no perfect solution for the challenges facing the gig economy and precarious employment, but a sustainable approach offers a significant improvement in the protections available to workers forced into an independent contractor style engagement, without putting the sizeable market for niche consulting at risk.  

For more insights on mitigating risk in your contingent worker program, download our free Checklist on CW risk factors: 

DOWNLOAD CHECKLIST

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