Q: How will the recommendations in the final report from the special advisors to Ontario’s Changing Workplaces Review affect franchising in the province?
A: The final report, which was released on May 23, 2017, recommends a process that would force enhanced collective bargaining rights for employees of franchisees of the same franchisor, but rejects the concept of a ‘joint employer’ in franchise systems, pointing out a new legislative test in this regard would be controversial and unclear in its application. More pertinent, however, is the new bill introduced by Ontario’s government in response to the report.
Cause for concern
Back in February 2015, when the review was initiated, its stated objectives were to (a) consider issues affecting workplaces and (b) assess how Ontario’s current labour and employment law framework addresses current trends and issues, with a special focus on the Labour Relations Act and Employment Standards Act.
An interim report released in July 2016 caused enormous concern in the franchising community over the possibility the final report would recommend making franchisors and their franchisees ‘joint employers’ of the franchisees’ employees. Such a recommendation could result, for example, in employees of multiple franchise units being considered to have a single employer in the franchisor, allowing for single union certification and bargaining on behalf of those employees. As mentioned, however, the final report rejected this concept, instead suggesting the issue should continue to be considered on a factual basis by using established legal principles, rather than creating a new one.
Addressing collective bargaining
The final report states “structural weakness in the current legislation” has resulted in employees of franchisees not having the opportunity to bargain collectively in a meaningful way. To address this issue, the report recommends the following requirements:
- Bargaining units of different franchisees of the same franchisor, with the same union in the same geographic area, would be required to bargain together centrally.
- An ‘employer bargaining agency,’ made up of representatives of the franchisees as employers, would represent the franchisees at the bargaining table with the union.
- Unless the franchisor were also an employer within the affected geographic area, it would not have a seat at the bargaining table.
- The Ontario Labour Relations Board (OLRB) would be given the authority to require the formation of an employer bargaining agency and set its terms,
- The franchisees’ obligation to bargain centrally would remain so long as the union held bargaining rights.
- Multiple locations owned by the same franchisee could be consolidated as a single bargaining unit by the OLRB in appropriate circumstances. That franchisee would also participate in central bargaining.
- Any strike or ratification vote would involve all bargaining units, not individual bargaining units.
- The OLRB would have the authority, if requested by an involved party, to direct the terms of a collective agreement between a franchisee and a union to be extended to apply, with or without modifications, to a newly certified bargaining unit involving the same union and a different franchisee within the same franchise system.