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Employment Standards Amendment Act, 2004

by Leanne E. Standryk

This article by Leanne E. Standryk takes the reader through the Employment Standards Amendment Act, 2004.

The Employment Standards Act R.S.O. 1990, c.E.14, was rewritten in its entirety and replaced by the Employment Standards Act 2000 S.O. 2000, c.41. On December 9, 2004, the Ontario Legislature passed the Employment Standards Amendment Act (Hours of Work and Other Matters) 2004. That Act primarily amends provisions relating to hours of work agreements, overtime averaging agreements and came into effect March 1, 2005.

According to the Government, the purpose of the Act is to ensure employees have a genuine choice about working extra hours; allows for greater balance between work and personal lives; protects employees’ right to refuse work after 48 hours in a week; gives employees and employers flexibility in their employment relationship and protects health and safety. A secondary but equally important aim of the legislative amendments is to increase awareness of workplace rights and responsibilities, and ensure a more rigorous enforcement of employment standards. Although several of the old legislative provisions remain the same, the amendments are significant and will likely affect many employer workplace policies. Contravention of any provision contained in the new Act can be devastating both in terms of potential monetary penalty and the dissatisfaction and unrest within the workplace. When introducing the amendments, Labour Minister, Chris Bently, sent employers this resounding message:

“The law as written contains the enforcement tools, they just need to be used….Starting today, enforcement is back in style.”

News Release, Ministry of Labour April 26, 2004

The purpose of this paper is to provide a general overview of the developments which have occurred since the introduction of the Employment Standards Amendment Act 2004.


The law, prior to March 1, 2005, prohibited employers from requiring or permitting an employee to work more than 48 hours in a work week or 8 hours in a day (except where an employer had established a work day of greater than 8 hours) unless the employer and employee entered into a written agreement in accordance with the criteria established by the legislation. Hours in excess of 60 each week required application to and approval by the Director of Employment Standards.

As of March 1, 2005, the government established the maximum 48 hour work week. Employers are now required to apply to the Director of Employment Standards for an approval allowing any employee to work more than 48 hours in a work week. Effective March 1, 2005, employers are prohibited from requiring or permitting employees to work more than 48 hours in a work week unless:

  1. the employee has entered into a written hours of work agreement;
  2. the employer has given employees an information sheet published by the Ministry of Labour setting out their rights and the employer’s obligations respecting hours of work and overtime pay; and
  3. the employer has applied for and received consent for an approval for excess working hours by the Director of Employment Standards

Prior to March 1, 2005, employers were only required to seek the approval and consent of the Director if the hours of work exceeded 60 hours in a work week. The effect of the legislative amendment is to put an end to the 60 hour work week.

EMPLOYER/EMPLOYEE AGREEMENTS: Information to be provided to non-union employees

The hours of work agreement as of March 1, 2005, is the same as the hours of work agreement prior to that date except that additional obligations are imposed on employers with respect to non-union employees.

The Director of Employment Standards has published an information sheet called “Information for Employees about Hours of Work and Overtime Pay”. This fact sheet must be provided to all non-union employees who enter into an hours of work agreement. If the hours of work agreement is made after February 28, 2005, employers are required to provide non-union employees with a copy of the most recent information sheet before the employee enters into the agreement. In addition, the agreement itself must contain an acknowledgement that the copy was provided.

An hours of work agreement made prior to March 1, 2005, will remain valid as long as the Director issues an approval. However, an employer who has pre-existing hours of work agreements with its non-union employees must provide those employees with a copy of the information sheet before June 1, 2005.

Requirements of a Valid Agreement

Section 1(3) of the ESA 2000 requires that unless otherwise stated[1], the agreements between the parties must be in writing. The employment standards officer will look to an number of factors to determine the enforceability of the agreement, namely:

1. does the agreement cover future events:

Agreements will only be effective with respect to events that take place after the agreement is made. To the extent that the agreement purports to take retro-active effect, it will not be valid, even if the employee agrees to the retroactivity.

2. the agreement is signed or in the case of an electronic document, whether the employee did something to demonstrate confirmation of the agreement:

Signatures are usually the best evidence to establish that both parties intend to be bound by the agreement. In the absence of signatures, the parties must show some evidence of an intention to be bound.

For example, the employer’s intention may be established by virtue of preparing/drafting the agreement. The employee’s intention may be established by a return e-mail confirming his/her agreement. In other words, there must be a positive act by the employee to demonstrate their agreement; simply not responding to an e-mail that says “if you don’t respond, you will be considered to have agreed” does not constitute an agreement as required by the legislation or Program policy.

3. are the terms clear and specific:

The agreement must specifically set out what is being agreed on. For example, the parties must specify what employment standard the parties intend to vary and what arrangement specific to the parties is replacing that standard. With respect to excess hours agreements, Program policy recommends that the parties state that the employee is agreeing to work in excess of 8 hours a day (or longer established regular day) and/or 48 hours of week, and it should state the specific number of hours up to which the employee is agreeing to work (up to a maximum of 60). Program policy recommends that the parties avoid the use of words such as overtime because “overtime” is not the same as excess hours.

As a general rule of thumb, your agreement should be drafted in plain English, and be specific and clear enough for an independent third party to know what was being agreed upon.

4. are the consequences of making the agreement understood:

A valid and enforceable agreement requires that both parties understand the meaning and consequences of signing the agreement. In order to ensure this objective, the agreement should set out the consequences of the document.

5. was the employee coerced into making the agreement or was there any threat of reprisal for failure to enter into the agreement:

An essential element of a valid and enforceable agreement is that the parties entering the agreement must have done so freely and voluntarily without threats, coercion and/or reprisal. An example of such conduct may include: – threat of termination – threat to reduce work hours or pay – refusal of a promotion, vacation entitlement, etc. Different types of agreements contemplated by the ESA 2000 may have very specific requirements. Accordingly, employers should have reference to the provisions of the ESA 2000 and/or legal counsel to ensure that the proposed agreement meets the requirements of a “valid agreement” pursuant to the ESA 2000.

Excess Hour Agreements

The first condition that must be met before an employee is allowed to work more than 48 hours in a work week is that the employee must have entered into an agreement with the employer that he or she will work the excess hours.

Excess hour agreements must be in writing as required by s. 1(3) of the ESA. The Ministry in its Policy and Interpretation Manual states:

Agreements to work excess hours can specify the exact number of hours that the employee is agreeing to work, or they can specify an upper limit (e.g. up to 10 hours a day). …Section 17(2) contemplates both “one off” agreements, where the employee agrees in writing to work excess hours on a single occasion and more open-ended “as required” agreements, where the employee agrees in writing to work a specified number of excess hours whenever required by the employer within a future time frame set out in the agreement. For example, a retail employer preparing for a busy Christmas season may ask an employee to agree to “with 2 days’ notice, work up to 12 hours per day and 60 hours a week when required during the months of November and December, 2002”.

The Ministry has indicated that agreements to work excess daily hours and excess weekly hours are two separate agreements, however, they can be embodied in the same or separate documents. The agreement need not specify that both standards are being varied where the variation of one necessitates a variation of the other by implication.

As of March 1, 2005, hours in excess of 48 each week require approval of the Director. Approval is discretionary and Ministry policy sets out those factors that the Director may consider in exercising this discretion. An agreement submitted to the Director for approval must specify the exact number of hours that the employee is agreeing to work or an upper limit (i.e., 65 hours/week).

Agreements may be revoked by an employee by providing an employer with at least 2 weeks’ written notice. The notice must be in writing. Verbal notice will not meet the requirement of the statutory provision. The employer may revoke an agreement after giving the employee reasonable notice. Notice by the employer is not required to be in writing. What is “reasonable” depends upon the circumstances of each case, however, the Ministry has indicated that it does not view “reasonable notice” in the context of revoking an excess hours agreement under the ESA 2000 to be the same as “reasonable notice” as that term is used in the context of a notice of termination under the common law.

There is one exception to the ability to revoke an agreement with notice. Where an agreement to work more than 8 hours in a day was made at the time of the employee’s hiring and the agreement has been approved by the Director, such an agreement is irrevocable unless both the employer and the employee agree to the revocation.

Overtime Averaging Agreements

Prior to March 1, 2005, the Employment Standards Act 2000 permitted averaging of an employee’s hours of work over period of up to four consecutive weeks for the purpose of calculating the employee’s entitlement to overtime pay merely on the basis of a written agreement to that effect between the employer and the employee. Only agreements to average an employee’s hours work over a period of more than four week required Director approval.

As of March 1, 2005, an employee’s hours of work may only be averaged over a period of two or more weeks with respect to calculating the employee’s overtime entitlement if:

  1. the employer and employee agree in writing; and
  2. the approval of the Director of Employment Standards is obtained

The agreement must contain an expiry date to be valid. For non-union employees the agreement cannot exceed two years from the date the agreement takes effect. The Director’s approval can expire on a date that is earlier than the expiry date of the agreement. The agreement cannot be revoked by either party before it expires unless the employee and the employer agree in writing. The Director can revoke an approval upon giving the employer notice that is reasonable in the circumstances.

Averaging agreements entered into prior to March 1, 2005, and that have not expired or been revoked, continue to be valid agreements on and after March 1, 2005. However, as of that date, employers with overtime averaging agreements are required to obtain an averaging approval from the Director of Employment Standards. Approvals provided by the Director before March 1, 2005, for four weeks or longer, are of no further force or effect as of February 28, 2005 and a “new” approval is required.


Step 1: Provide Employees with Ministry Information

The employer must provide the non-union employee with the Ministry Publication.

Step 2: Enter into a valid written agreement

The employer must enter into a written agreement with each employee (or with the union).

Step 3: Obtain and Complete the Application

The employer must obtain and fill out the Hours of Work and Averaging Hours application which is available on the Ministry web site and which can be completed and served electronically. The Application requires the employer to provide the Ministry with the following information:

Employer Information: business name, business activities (sector/industry classification); type of legal incorporation/registration and corresponding registration numbers; operating jurisdictions and number of employees in Ontario;

Employee Contact Information: including contact information for a specific corporate representative;

Application Type: whether for excess hours or work or for averaging arrangements;

Locations where Work will be Performed: including contact information at alternate sites and number of employees affected;

Employee Information: occupational group(s) or positions of employees affected; number of weekly hours required/number of weeks to average over; date new arrangement to start; date new arrangement will end; number of employees affected and union representative contact information, if applicable.[2]

Confirmation: confirmation that written agreements with employees with respect to excess hours of work or overtime averaging are in place;

Reasons Supporting the Application: brief reasons with respect to why excess hours (or averaging agreements) are necessary. Employers must include information respecting whether other methods of getting work done have been attempted, the implications for the employer if approval is not granted, and measures being adopted to avoid or reduce excess hours.

Offence History: confirmation that the employer has not been convicted of an offence under the Occupational Health and Safety Act of the ESA 2000 in the three years preceding the application and, that the employer has no outstanding orders to pay under the ESA 2000.

Step 4: Serve the Application on the Director of Employment Standards

The Application must be served on the Director. Service may be done by e-mail, verifiable mail (i.e. Registered, Priority, Courier), facsimile, or hand-delivery. The appropriate address and contact numbers must be listed on the application form.

Step 5: Post the Application in the Workplace

At least one copy of the Application must be posted on the date of service in every workplace where the affected employees work. The application must remain posted until the employer receives approval from the Director.


The Ministry has expressed that it expects to process applications in a timely manner. However, in the event that an employer has not received a decision on its application within 30 days of filing, employees may work additional hours, provided the following conditions are satisfied:

(i) the employees have entered into a valid, written agreement respecting excess hours and/or averaging agreement; (ii) the employer has served the application on the Director in the required form; (iii) the application for approval applies to the employees who are being required to work extra hours or to average their work hours; (iv) 30 days have passed since the application was served on the Director; (v) the employer has not received a notice that the application has been refused; (vi) the employer’s most recent application, if any, was not refused; (vii) the employer has posted and kept a posted copy of the application in a conspicuous spot at the workplace, so that it is likely to come to the attention of the employees to whom the application relates; and (viii) the employees’ hours of work in a work week do not exceed any of: (a) the number of hours specified in the application, (b) the number of hours specified in the work agreement, and (c) 60 hours.

The same criteria are applicable in the case of averaging applications except that there is no requirement to post a copy of the Application and employers are only entitled to average over a two (2) week period pending Director’s approval.

When assessing an application for approval for either of the applications, the Director has broad discretion and will consider all relevant factors such as the employer’s compliance history with respect to employment standards and the potential impact on the health and safety of its employees.

Miscellaneous matters of Note

Hours of work do not include eating periods. For example, an employee who receives a total of one hour for eating periods in a twelve hour shift is considered to have worked eleven hours. Thus, an employee working that schedule four days per week is only considered to have worked a total of 44 hours in the work week. This approach to the calculation of hours may impact whether an hours of work agreement is required.

When reviewing applications for excess hours, the amendments specifically state that the Director can take into consideration contraventions of the Employment Standards Act 2000 as well as the Occupational Health and Safety Act.

Transitional Rules

Employers are encouraged to apply for new approvals for these practices as soon as possible. For those employers who have submitted applications in advance of March 1, 2005, the 30 day period referred to above will not be deemed to have passed until March 1, 2005.

Existing agreements to work excess hours or to average hours will be honoured and continue, in accordance with their terms, after March 1, 2005 with the following exceptions:

a) the employer must have applied to the Director for approval before February 28, 2005 in order to continue the existing agreements on or after March 1, 2005; b) the employer cannot permit employees to work in excess of 60 hours per week, until approval for that arrangement has been received; and c) the employer must provide its employees with a copy of the information sheet no later than June 1, 2005.

Record Retention Requirements

All agreements relating to hours of work and overtime averaging are to be retained by the employer for a period of three (3) years after the work was last performed under the agreements.


Emergency Leave

The emergency leave provisions of the ESA 2000 provide employees whose employer regularly employs 50 or more employees with a maximum of 10 days of unpaid leave per year. The leave can be taken due to personal medical reasons or the death or illness of, or an urgent matter relating to a child, spouse (which includes same-sex spouse) and certain other relatives.

When the section originally came into force on September 4, 2001, it provided that the entitlement was to 10 days’ emergency leave “each year”. Section 50(5) has been amended by the Employment Standards Amendment Act (Hours of Work and Other Matters) 2004, to provide that the entitlement is to the 10 days’ leave “each calendar year”.

On May 8, 2002, the Ministry of Labour released a revised “Information Bulletin No. 2” related to the Emergency Leave provisions containing a revised discussion of what “regularly employs 50 or more employees” means.

According to Ministry policy, one must look at the circumstances that generally prevail in determining how many employees an employer has. Where the employer has maintained a staff of 50 or more employees for 7 of the previous 12 months, the section will likely apply. The Ministry bulletin also deals with those situations where the number of employees in the previous year is not representative of the number that the employer “regularly employs” (the “Quirk Principle”: what happened last year was not representative of the employer’s usual or regular situation[3]), or where there has recently been a radical change (the “Sea Change Principle”: a significant increase or decrease in employee compliment of some permanence making it highly unlikely that the employer will be able to employ 50 or more employees for some time to come) in the number of employees which appear to be permanent[4]. Accordingly, an employer may no longer be considered to regularly employ 50 or more employees where it makes a change of some permanence during the year.

Family Medical/Compassionate Care Leave

Section 49.1 of the ESA 2000 provides employees with the entitlement to take up to eight (8) weeks of unpaid family medical leave with respect to a particular individual. Week is defined in section 49.1(1) as being a period of seven consecutive days beginning on Sunday and ending on Saturday. There is no requirement that the eight weeks be taken consecutively and employees who have taken less than a full week are deemed to have taken an entire week of leave.

The family medical leave entitlement is provided to enable an employee to provide “care or support to the ill family member” and is in addition to an employee’s entitlement to emergency leave provided by section 50 of the ESA 2000. This will, according to Program policy, include for example, psychological and/or emotional support to the family member, arranging for care by a third party provider, and directly providing or participating in the care of that family member.

Family members include: · the employee’s spouse; · the employee’s parent, step-parent or foster parent; · a child, step-child or foster child of the employee or of the employee’s spouse, or · any other person designated as a family member in the Regulations.

Anyone covered by the Employment Standards Act 2000 is eligible for compassionate/family medical leave from the first day of his or her employment. This would also include employees of employers with less than 50 employees. Where more than one employee takes family medical leave under s. 49.1 of the Act, with respect to the same family member, the eight week leave must be shared by the employees.[5] Employees sharing the leave can be on leave at the same time or different times.

An employee is eligible for family medical leave if “a qualified medical practitioner” provides a certificate stating that the family member has a serious medical condition with a significant risk of death within 26 weeks or a shorter period specified in the Regulations. Employers are entitled to request and receive a copy of the certificate issued by the medical practitioner and should also consider requesting a copy of the certificate required by Employment Insurance as part of the application required for compassionate care benefits.

Employees are required to provide their employer with notice in writing prior to commencing the leave. Where advance notice is not possible, employees are required to advise the employer as soon as possible after beginning the leave. The requirement to provide notice in writing applies with respect to each time an employee begins any part of his or her eight week leave. There is no requirement that the employee specify a return date.[6] The legislation contemplates that there may be circumstances during which an employee can not provide advance notice to his/her employer, hence the requirement to advise the employer of the leave as soon as possible after beginning it. Accordingly an employer who disciplines or terminates an employee for failing to provide “advance” notice would violate S.74 of the Employment Standards Act 2000 regarding employer reprisals.


Changes to pregnancy and parental leave became effective December 31, 2000 in response to the Federal government’s commitment to extend pregnancy and parental leave benefits contained in the Employment Insurance Act from 6 months to one year. Eligibility for pregnancy and parental leave has not changed; an employee must still be employed for at least 13 weeks before the expected due date or commencement of the leave.

Pregnancy Leave

An employee is entitled to pregnancy leave if she has been employed for a period of at least 13 weeks immediately preceding her due date had she worked until that date. It is not necessary that the employee be actively working for all or any part of the 13 week qualifying period.[7] The employee is entitled to an unpaid pregnancy leave of 17 weeks which may commence no earlier than 17 weeks before the expected birth date or the date on which the employee gives birth even if that date is more than 17 weeks before the expected due date.

An employee taking pregnancy leave must provide the employer with two weeks’ notice of the date the leave is to begin and, if requested, a medical certificate from a legally qualified medical practitioner stating the expected birth date. If the employee has to stop working because of complications caused by the pregnancy, a birth, still birth or miscarriage before the due date, the employee must within two weeks after stopping work, provide the employer with written notice of the day the pregnancy leave began or is to begin and, where the employer requests, a medical certificate regarding the special circumstances within two weeks.

Parental Leave

An employee who has been employed by his or her employer for at least 13 weeks and who is the parent[8] of a child is entitled to an unpaid parental leave following the birth of the child or the coming of the child into the employee’s custody, care and control for the first time. Parents of both newly born and adopted children are entitled to parental leave.

The parental leave provisions of the ESA 2000 extended parental leave from the previous maximum of 18 weeks to 35 weeks for those employees who took pregnancy leave and to 37 weeks for those who did not. Therefore, a birth mother who is eligible to take leave is entitled to a combined unpaid pregnancy and parental leave of 52 weeks.[9]

Parental leave may begin no later than 52 weeks after the child is born or comes into the employee’s custody, care and control for the first time. An employee wishing to take unpaid parental leave is required to give the employer a minimum of 2 weeks’ written notice prior to the day on which the leave is to begin.

Where an employee wishes to change the end date of his/her pregnancy/ parental leave s/he may do so by providing written notice to the employer at least 4 weeks before the earlier date of return or 4 weeks before the original date of return where his or her leave is prolonged. The new Act stipulates that where an employee does not plan to return to work at the end of his or her leave, s/he must give the employer 4 weeks’ written notice of the resignation. While this is a positive for employers who need to plan staffing, the Act does not provide a practical enforcement mechanism. Having said this, employers should publish this requirement in their internal workplace policies.


Benefit Plans

The rights of employees who take emergency, pregnancy and parental leave and/or family medical leave are entitled to participate in certain employee benefit plans unless they elect in writing not to do so. Benefit plans are defined broadly to include pension plans, life insurance plans, disability benefit plans, a health insurance plan or a health benefit plan, accidental death plans, dental plans or any prescribed type of benefit plan. During the leave, the employer must continue to make the employer’s contribution for the named plans, unless the employee has given the employer written notice that the employee does not intend to pay the employee’s contributions, if any.

Length of Employment

The Act is clear that the period of leave is included in calculating one’s length of employment, length of service and seniority for the purpose of determining rights under an employment contract. However, leave is not included in determining whether the employee has completed a probationary period.

Job Protection/Reinstatement

An employer must reinstate an employee who takes a leave to the position the employee held prior to taking the leave if it still exists, or to a comparable position, if the previous position does not exist. An employer is required to pay a reinstated employee a wage that is at least the greater of the wages most recently paid to the employee or the wages that the employee would have been earning had the employee worked throughout the leave.

If the employer’s operations are suspended or discontinued while the employee is on leave, the ESA 2000 requires the employer to reinstate the employee when the operations resume, in accordance with the employer’s seniority system or practice, if any. There is an exemption to the reinstatement provisions where the employee’s employment is terminated “solely for reasons unrelated to the leave”. It is not clear how this exemption will be interpreted, however, it is believed that an employer will be entitled to claim that the employee’s employment was terminated as a result of a restructuring where it is caused by legitimate business reasons. It is always good practice for employers to exercise care and obtain the appropriate legal advice prior to terminating an employee who is on leave.


The Employment Standards Act 2000 was originally intended to provide greater flexibility in the employment relationship and achieve a greater work life balance. What has occurred is the creation of a highly technical area of workplace management. Navigating through this minefield requires employers to develop a working knowledge of the legislation in order to reduce the potential risk of liability arising from violations of the Act. Employers are well advised to seek legal counsel for assistance with respect to updates and amendments with an aim to ensuring legislative compliance and preparation for proposed amendments.

[1] The only provision where it is otherwise stipulated is s.20(2) which allows employers and employees to agree, “whether or not in writing”, that the required 30 minute meal break be broken into two shorter periods that total 30 minutes. [2] Arrangements for excess hours up to 60 per week cannot exceed 3 years and arrangements in excess of 60 hours cannot exceed 1 year. [3]For example: an employer employed 60 employees for more than half of the immediately preceding calendar year. However, in the 2 or 3 calendar years before the last calendar year, the employer employed only 35 employees. It appears that the employer will not employ 50 or more employees for more than 6 months of the current calendar year. The officer would be justified in concluding that the employer does not meet the 50 employee threshold. The Quirk Principle may work in reverse, i.e. where an employer employed 60 employees in the years before the last calendar year and also thus far in the current year, but happened to employ only 35 employees for more than half of the last calendar year, the last calendar year can be seen as an aberration and not representative of the employer’s usual or regular situation. In that case, the ESB officer may conclude that the employer did meet the 50 employee threshold (Employment Standards Act 2000: Policy & Interpretation Manual, Vol. 1 Carswell) [4]For example, the employer employed 60 employees for several calendar years in a row and continued to do so for the first 9 months of the immediately preceding calendar year. Last October, however, the employer lost a customer who typically accounted for 40% of the employer’s annual sales and who has not returned, with the result that from October to December of the previous calendar year and so far this year, the employer was employing only 35 employees. In this situation, the officer could conclude that the employer does not meet the 50 employee threshold, despite the fact that the employer employed at least 50 employees for more than half of the immediately preceding calendar year. This principle also works in the reverse. (Employment Standards Act 2000 Policy & Interpretation Manual, ibid) [5] This is in contrast to the pregnancy/parental leave provisions which do not require the leave to be shared between the employees. [6] Ibid at 18-80 [7] If an employee was hired 13 weeks prior to her due date but became ill and was unable to attend work from the day after she started (or went on vacation or was laid-off during that 13 weeks), she is entitled to the leave. [8] Parent is defined in section 45 of the new Act to include “a person with whom a child is placed for adoption and a person who is in a relationship of some permanence with a parent of a child and who intends to treat the child as his or her own”. [9] Those employees who qualify for Employment insurance pregnancy and parental benefits are entitled to benefits for the entire 52 week leave. A parent who is only eligible to take parental leave would be able to collect Employment insurance parental benefits for a period of 35 weeks, due to the 2 week waiting period during which time the employee is not earning an income. An amendment to the Employment Insurance Act requires that only one parent serve the 2 week waiting period. Note, one parent may collect the employment insurance parental benefits wholly or they may be shared between both parents. Both parents are, however, entitled to take the entire parental leave from their respective workplaces regardless of whether they are able to collect Employment insurance benefits. [10] The ESA 2000 leave provisions can be referenced at Appendix “A”

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