Ontario employers cashing in on temporary workers

If Toronto temp worker Angel Reyes could make one request of the company he’s served for more than half a decade, still earning only minimum wage, still no benefits, still no pension, it would be simple: “Hire me.” Second in a four-part series.

Thestar.com
May 10, 2015
By Sara Mojtehedzadeh

For more than five years, 61-year-old Angel Reyes has woken up five days a week at 3 a.m. and braced himself for eight hours of hauling garbage at a Toronto recycling plant.

The university-educated refugee is the longest-serving worker on the floor, hired through a temp agency more than half a decade ago.

Half a decade and, technically, still a temp.

Half a decade earning minimum wage, never having seen a raise.

Half a decade, and still paid less per hour than his permanent colleagues for doing the same job.

Half a decade, and still no benefits.

Half a decade, and still no obligation for his employer to hire him permanently.

“If hell exists, that is hell,” says Reyes, a father of three who came to Canada in 1993 after he was kidnapped and imprisoned in El Salvador for - ironically - lobbying for workers’ rights.

Under Ontario’s antiquated Employment Standards Act, which is currently under review, there is no limit on how long a company can employ a worker as temporary before giving him or her a permanent job.

There is nothing to stop employers from paying temp workers less than their permanent counterparts, nothing to prevent them from hiring their entire workforce on a “temporary” basis if they so choose.

“If the employer knows that they can hire you and they don’t have to give you benefits, they don’t have to give you a pension, they can hire you for a lot less, there’s no incentive for them to hire permanently. Why would they?” says Deena Ladd, who heads the Toronto-based labour rights group the Workers’ Action Centre.

“The biggest issue is the lack of respect and dignity in (temporary) work. Nobody is seeing them for who they are and the work that they’re doing. They are completely invisible.”

In Toronto, their ranks are growing, with temporary workers outpacing permanent ones at twice the rate, their wages significantly lower.

Over the past decade, there has been a 33 per cent increase in the number of temporary workers in Toronto, to more than 340,000 in 2014 from 256,000 in 2004, according to Statistics Canada. Industries such as food manufacturing, transportation and health care saw some of the biggest jumps.

By contrast, the number of permanent employees increased by just 12 per cent over the same period.

Not all temporary workers are hired through agencies; many are hired directly on fixed-term contracts. Statistics Canada figures don’t differentiate between temp agency workers and direct hires.

Still, Ontario’s temp agency industry is flourishing. The province’s employment services sector earned $5.7 billion in revenue in 2012, a near 72-per-cent jump from 2002. Temporary agencies account for an estimated 60 per cent of that industry’s total revenue.

Temp agencies are responsible for paying a worker their wages, which they bill the company for, and also take care of statutory entitlements such as Canada Pension Plan, injury pay and vacation pay. The agencies charge their client companies a fee for each assignment to cover all of these costs.

The hourly rate paid to the temp agency for an assignment can be as much as double the worker’s wage. Temp agencies are not required under the Employment Standards Act to tell workers how much they are charging the company per hour to employ them.

Toronto resident Antoinette Schokman-De Zilva, 66, a retired former executive assistant who worked numerous placements through temp agencies, says she was shocked to discover on one assignment that the company was paying the temp agency almost double her hourly wage.

“If I’m paid $20 an hour, they’re charging $45 from the company,” she says.

For some employers, temp agencies help match them with high-level, specialized workers.

But for many others, using temp agencies is part of what the action centre’s Ladd calls a “cheap wage strategy” to keep costs low and responsibilities, such as health benefits and pensions, to a minimum.

Figures provided to the Star by Statistics Canada show that the median wage of a temporary worker in Toronto is just $15 an hour, while permanent employees make $22.40 - a pay gap of 33 per cent.

The gap is even wider for male temps in non-unionized workplaces, who make a median hourly wage of just $13.50. Their permanent counterparts make 40 per cent more, at $22.50 an hour.

Ontario has made some recent strides toward reform, such as giving workers the right to receive public holiday pay and one weeks’ termination notice. But other countries have done more to protect temporary workers from unequal pay and long-term temp work.

In the U.K., temp workers are entitled to receive the same pay as permanent workers in equivalent positions after three months on the job.

In Italy, temporary positions automatically become permanent after 36 months in the same assignment.

And in Australia, employers who hire temps must pay them a 15 to 25 per cent premium on their hourly wage in recognition that such workers rarely receive benefits.

But while Ontario’s Employment Standards Act mandates pay equity between men and women, there are no provisions to protect workers from pay discrimination based on their temporary employment status.

Reyes, for example, says permanent employees at his plant make more than him when they start, plus receive benefits, while he still earns minimum wage after more than five years on the job as a temp. The only time his salary increased was when the government raised the minimum wage to $11 an hour.

Even with his kids grown up and working, making ends meet is still often a stretch.

“Sometimes, it’s ‘Dad, I need some money.’ I try, but I take it from my food,” he says.

The repercussions of endless temp agency work for some of the province’s most vulnerable workers are more than financial.

A 2013 study by the Toronto-based Institute for Work and Health, which conducted interviews with more than 60 low-wage temp agency workers, industry experts and employers in Ontario, concluded that poor oversight and intense competition between agencies put temporary workers at greater risk of work injury than their permanent counterparts.

Ellen MacEachen, the report’s lead author, says workers told her they felt powerless to complain about poor work conditions because they knew they were replaceable and feared losing even poorly-paid jobs.

“Workers who have job insecurity will take care to protect their jobs, and that can often mean trying not to complain about anything,” she says.

Since the Workplace Safety and Insurance Act recognizes temp agencies as the sole employer of their workers, companies can also keep a clean WSIB record if temp agency workers are injured on the job.

“No one is looking out for them,” says the action centre’s Ladd. “You have a perfect environment for a complete deterioration of health and safety, wages, and working conditions.”

Mary McIninch, director of government relations at the Association of Canadian Search, Employment and Staffing Services, which represents more than 1,000 employment agencies including temps, says her members actively maintain a voluntary code of ethics. She describes them as “the most reputable, credible firms in the industry.”

The association has supported some government measures to give temp workers rights, McIninch says, but adds it would oppose reforms like pay parity.

She says “a strong majority” of her members place workers in highly paid positions, and that workers are compensated according to skill and experience.

“We have so many positive testimonials from new Canadians and students,” she told the Star, calling the example of Angel Reyes “not representative of the majority of workers in the industry.”

“I think if that were representative of even a strong minority, I doubt very much that as many individuals that we see - over 300,000 across the country - would continue to use our members’ services,” she adds.

But former temp worker Schokman-De Zilva, who immigrated to Toronto from Sri Lanka in 1989, says she only turned to agency jobs when permanent ones were not available, hoping they would lead to stable employment.

They never did.

“They just threw the contract in my face when I protested,” she says. “And that was it.”

Despite the recent government reforms, people like Reyes are still falling through the cracks.

For him, life at a drafty, dust-filled recycling plant may not be glamorous, but a job is a job.

He says if he could make one request of the company he’s served for half a decade, it would be simple.

“Hire me.”

Proposed solutions

A recent report by the Workers’ Action Centre makes a number of recommendations to tackle the widening disparity between permanent employees and temporary agency workers. These include:

Requiring companies to pay temps the same wages and benefits as permanent staff in equivalent positions.

Requiring temporary agencies to tell workers how much they are charging a company per hour for an assignment.

Instituting a six-month limit on temporary assignments, after which temps must be directly hired by the company.

Scrapping a provision that allows temp agencies to charge companies a fee if they give temps permanent jobs in the first six months of work.

Limiting how many workers in a single company can be temporary agency employees (no more than 20 per cent).