The Era of Globalization in Canada: Employment Standards

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Globalization has brought incredible changes to the world economy, causing major shifts and deregulations in the society. According to the Levin Institute; State University of New York, “globalization is a process of interaction and integration among the people, companies, and governments of different nations” (Riddell, 2008, p. 224). International trade, coupled by investment, with the full backing of information technology has been the driving force behind globalization. According to Craig Riddell, globalization affects “the environment, culture, political systems, economic development and prosperity, and human physical well being in societies around the world” (Riddell, 2008). In Canada, Globalization has led to changes and creation of new policies that promote “both economic efficiency and the pursuit of equity goals” (Chaykowski, 2002, p. 3)

The creation of new economic policies by the government of Canada is an adjustment to accommodate changes brought by globalization. This adjustment involves “shifting resources from less valued to more highly valued uses; it promotes economic efficiency and therefore higher living standards” (Riddell, 2008, p. 224). One important government policy that particularly affects workers is employment standards. Employment standards are an integral part of the economy particularly in labour relations because they help in building relationships between employers and employees.

Employment standards policies have evolved dramatically in the past three decades influenced in part by the rise of neoliberalism and Keynesian in 1970s, and globalization. Some of the notable changes brought by these events include segmentation of the labour, market flexibility for employers and gendered segmentation. Although some aspects of economy have benefited from these changes, some Canadian workers have suffered from negative impacts (Chaykowski, 2002).Employment standards have caused changes in benefits and standards in the workplace, which have created massive job loss, decline jobs opportunities and less right for workers. This makes worker feel isolated in the workplace.

The goals and principles underlying employment standards prior to the 1970s and in particular in the Keynesian era are what the government believed will help with labour relationship. Today, the goals and principles of employment standards focus mainly on the relationships between trade unions and the state, industrial relations legislations, and other aspects of the statutory regulation of employment relationships, such as health and safety legislations. This is build on the universal belief that labour regulation “will seek to accommodate workers’ need for income and economic security and firms’ desire for flexibility in deploying labour within a public policy commitment to equity” (Fudge J, 2001, p. 332)

Employment policy also examines the state regulation of both unionized and non-unionized employment relationships through a study of employment standards legislation. In Canada, employment standards are mostly applied to almost all employers and employees, but mostly affect the non-unionized workers. These standards include minimum wages, hours of work overtime, leaves, mass termination notices, vacations, and paid leave. Employment standards are widely recognized as a key public policy tool for providing a minimum level of economic security for the most disadvantaged and vulnerable workers. A good examples is the Ontario Factories Act of 1884, which main purpose was to set the maximum hours of work for women and children at ten hours per day and 60 hours per week… In 1944, Hours of Work and Vacations with Pay Act reduced maximum hours of work to eight per day and 48 per week and introduced annual paid vacations, for both male and female workers (Thomas, 126).

In 1968, Ontario Employment Standards Act (ESA) was established. The purpose of the act was to set minimum standards legislation in order to create regulatory framework for wages, hours of work, overtime, and vacations with pay, for the majority of workers in the province. In his article, setting the minimum, the author Thomas M. note that the “Act also introduced overtime pay at a rate of time-and-one-half for work over 48 hours per week and on specific public holidays” (Thomas, 2004, p. 1). ESA helped in development of minimum standard legislation and new standards, including a legislated overtime premium. The Ontario Factories Act and Hours of Work, Vacations with Pay Act and Ontario Employment Standards Act (ESA) were established by the State to ensure flexibility for employers, establishing gendered segmentation and minimum standards.

To further illustrate the importance of employments standard policies within the government, Thomas notes the concern expressed by Canada Minster of Labour Dalton Bales during at a past meeting addressing the provincial legislature about the conditions of work of low-wage workers. According to the minister, “when it comes down to considering improvements in standards of employment, we must not only improve but also maintain a balance that will help us to keep industry and to attract new industries to the province” (Thomas, 2001). The government’s new labour codes were not meant to challenge economic rights but to achieve socially desirable goals of protecting vulnerable workers.

Employment standards have undergone major changes since the rise of neoliberalism in 1970s for many different reasons. According to author Panitch and Swartz’s “Neo-liberalism is the free capital flows, the ascendancy of financial capital, and the spread of commodification into every aspect of social life” (Panitch & L, 2003). Neoliberalism led to increased pressures on organized labour. According to economists, Neo-liberalism has caused the economy to decline affecting both the private and public sector. This is largely because the private sector has caused competition in the global economy, causing major changes in the workplace relationship between workers and employers. “These changes in the workplace included the lean workplace and contracting-out and part time work combined to produce a flexible workplace beset by job insecurity at the very time governments considerably reduced the eligibility for and funding of unemployment insurance and social assistance” (Panitch & L, 2003, p. 183)

The active involvement of government was to achieve goals such as full employment as a legal function. By active intervention, the government was aiming to correct “externalities caused by long and irregular working hours” (Panitch & L, 2003). The government observed and realized that “the forces of competition were such that no individual company had the incentive to reduce its hours. Moreover, there are individual workers who may, in fact, want to work excessive hours over short period” (Panitch & L, 2003). Collective and decisive rule had to be devised to protect workers against dangerous working conditions. In essence, this became the pedestal for persistence labour laws.

Although government involvement was meant to protect workers, there are those who feel, that these involvements have made workers accept part time employment for a very low pay and long hours of works. It has also created changes in public sector, and conflicted with the increased downsizing trend by federal and provincial governments. Panitch and Swart are quick to point out the irony noting that the “trend partly reflected a new free market ideology centred on the notion that the state’s role in the economy leads to inefficiency and waste, and partly old-fashioned business pressures to reduce the size of fiscal deficits” (Panitch & L, 2003, p. 201)

A country involvement in international crisis and standing in the world has been seen as a reason for government involvement in setting and enforcing employment standards. A pointing case is the United States post war crisis in mid 1970s, which created economic crises. America involvement and huge financing of Vietnam War, coupled by two international oil crises created economic boom which caused high inflation. This affected the labour force and government budget deficits. The U.S. had to devise way to curb the situation and this was only possible through establishment and enforcement of employment standards. The government therefore changed the employment policy in a bid to maintain full employment, provide economic stability and social security that differentiated the postwar state from its pre-war predecessor.

During the post war period, Canada’s economy performed very well. High rates of employment were achieved, leading to improved standards of living. This performance was largely contributed by dynamic in the labour market. This cyclical dynamics shifted workers in the sector where they were needed most. Those sectors that were experiencing declined production were relieved from the pressure caused by unemployment. This relocation of resources boosted the economy of Canada as a whole. However, with all these benefits, it important to realize the costs of adjustment are not evenly distributed and as such there are workers who suffer from labour market dynamics shifts (Riddell, 2008, p. 231)

Employment standards are important for everyone in the labor market force because they provide a level playing field. They give workers more bargaining power and opportunity to negotiate for improved working conditions. They also establish fair opportunities for employers by reducing unfair competition. According to Paul Malles, through his work Canadian Labor Standards in law, Canadian employment law try aim at meeting these goals by through the achievement of the following objectives “narrowing the gap between the wages and working conditions obtained by organized labor through collective action, and by unorganized labour; protect individual employees against undue exploitation; eliminate unfair competition between employers; and raise the living standards of the working poor” (Malles, 1976, p. x).

The Government objective is not limited to wages and working conditions alone. In 1970, Canada enacted legislation prohibiting gender based discrimination. This was meant to give women equal working privileges like men. It important to note that prior to enactment of this legislations, women were confined to low-paying jobs with little career advancement, despite the fact that they constituted majority of the workforce in informal labour market. The government had to force the labour market to adapt Gender Equity Legislation and entrench it in existing institutions of labour regulation.

The policy shift has created flexibility in labour market in both the organization and the use of labour in working time arrangements, wage and employment. However, this flexibility has impacted workers negatively. Employee working for governments and other government-funded organizations experienced contracted battles resulting in wage controls, layoffs, demands for concessions, back-to-work legislation, privatization, contracting-out, and imposed collective agreements. This has been caused by shift in employment standards policies in the public sector. According to Thomas “changing employment standards may also have implications for workplace productivity, particularly through increased levels of work-related stress, which can negatively affect productivity through job dissatisfaction, low morale, increased absenteeism, and antagonistic industrial relations” (Thomas, 2001, p. 124).

The author has also noted a rise in work-family conflicts as a result of long working hours. Another issue of concern is the fact that Employment Standard Act (ESA) is not “effective in dispute resolution procedure, noting in particular that reports of employment standards violations tend to be filed after the employment relationship has ended and that employees experience difficulties in the collection of unpaid earnings” (Thomas, 2001, p. 125). Vulnerable workers and women have also not been receiving enough support as promised in the act. The number of people losing jobs as a result of policy shift is more than workers benefiting from these changes. The shortcomings has been captured in Paul Malles paper; Canadian Labour Standards in Law, he says

“While the government and unions have agreed on the importance of training for workers, creating flexibility, which will likely have the effect of de-skilling many workers. Moreover, though the various statutes cover the large majority of the labour force, they still tend to deny equal protection to certain categories of workers, in particular domestic and agricultural labour. Thus domestic workers are, for example, excluded from vacation with pay provisions in the majority of jurisdictions” (Malles, 1976, p. 18)

In conclusion, globalization has brought many changes in the economy in the past three decades. This has created the need for reorganization and restructuring of government policy to capture these changes. One of the policies that have been hugely influenced by globalization is Employment Standards policy. Although there have been protracted effort by the government to influence and implement employment legislations that favour workers, many feel that its only big corporations that are benefiting. Employment standards have created flexibility that benefits only a small portion of workers, while ranking a lot of profits for corporations. Workers have resulted to forming and joining unions through which they try to push their agendas. Despite the shortcomings, workers can never be left at the mercy of employer without regulation. There is a need to protect them from poor working standards. There is also a need for continued policy re-evaluation in order to determine what is not benefiting workers and the needed policy changes.

Works Cited

Chaykowski, R. (2002). Globalization and Modernization of Canadian Labour Policy. Web.

Fairey, D. (2005). Eroding Worker Protections: British Columbia’s New ‘Flexible’ Employment Standards. Web.

Fudge J, V. L. (2001). By Whose Standards? Reregukating the Canadian Labour Market. Ecocomic and Industrial Democracy (pp. 327-356). London: Sage Publications.

Huberman, M. (2005). Are Canada’s Labour Standards Set in the Third World? Toronto: C.D. Howe Institute.

Human Resources and Skills Development Canada. (2008). Modernizing Part III of the Canada Labour Code. Web.

Malles, P. (1976). Canadian Labour Standards in Law, Agreement and Practice. Web.

Panitch, D., & L, S. (2003). Neo-Liberalism, Labour, and the Canadian State. Toronto: Garamond Press.

Riddell, C. (2008). Economic Change and Worker Displacement in Canada: Consequences and Policy Response. Web.

Thomas, M. (2001). Regulating Flexibility: The Case of Employment Standards Legislation in Ontario. Rethinking Institutions for Work and Employment. XXXVIIIth Annual CIRA Conference, (pp. 123-136). Quebec.

Thomas, M. (2004). Setting the Minimum: Ontario’s Employment Standards in the Post War Years; 1944-1968. Web.

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The Era of Globalization in Canada: Employment Standards

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