Wynne government may make it harder for employers to hire part-time workers

The Wynne government may soon make important changes to Ontario's labour laws. While the government has not officially announced its plans, a recent article suggests it may make it harder to hire part-time workers and discourage employers from hiring workers as temporary contractors.

Put simply, such changes would hurt workers—primarily because they would result in a less flexible labour market, reducing the ability of Ontarians to prosper by taking full advantage of emerging opportunities and innovations.

A flexible labour market allows workers and employers to come to mutually beneficial arrangements and adapt swiftly to changes in the economy. Overly restrictive or prescriptive labour regulations, however, generally impede the ability of employers and workers to adjust to changing economic conditions such as a weakening economy or the introduction of new technologies that change how products are made or how services are delivered. A mark of a dynamic economy is one where employers and workers can quickly and easily respond to market changes.

For workers, a dynamic economy affords greater opportunities to find jobs that better match their preferences for compensation, working conditions and career prospects. This is particularly true in the Internet age that affords many workers, through platforms such as Uber and Airbnb, autonomy to decide where, when and how they work.

Someone may prefer to work as contractors or part-time employees if it means they can select their own hours—something that’s important to many workers. However, again, more restrictive government regulations would make it more difficult for workers and employers to come to mutually beneficial arrangements that allow such flexibility.

Which brings us back to Queen’s Park where the Wynne government may soon require employers to demonstrate why a position should be part-time and not full-time. This hurdle will make it harder for employers to provide part-time work for those who want it. And in reality, most part-time workers in Ontario work part time because they want to or because it best fits their circumstances.

In fact, according to Statistics Canada data, 69 per cent of part-time workers in Ontario work part time by preference or due to lifestyle choices—going to school, taking care of children, or some other reason. Only 27 per cent work part-time due to business conditions or because they can’t find full-time work. (The remaining four per cent work part time due to illness.) Therefore, making it more difficult for employers to offer part-time work is clearly not in the interest of the large number of workers who want these positions.

More broadly, however, research shows there are major benefits to workers in jurisdictions with less restrictive labour regulations including more job opportunities and faster-growing economies.

For instance, a study published by the International Monetary Fund (IMF) examined 97 countries from 1985 to 2008 and found that increased labour market flexibility leads to less unemployment. In particular, less stringent regulations related to both hiring and firing produced positive outcomes. In other words, workers ultimately benefit from less-stringent regulations through more job opportunities, something the Ontario government should note as it reviews labour regulations.

Another IMF study found that a flexible labour market can help hasten recovery from a financial crisis, especially for unemployment among young workers who are just joining the workforce and can be hardest hit by an economic downturn. Indeed, research generally finds young workers benefit most from a flexible labour market.

Notably, a move towards more restrictive labour regulations in Ontario will come on top of other economic policies—including higher taxes, increased government debt, rising electricity prices and carbon pricing—that have already made the province less competitive relative to competing jurisdictions including many Rust Belt states.

The unfortunate reality is that more restrictive labour regulations will contribute to a weaker economy and fewer job opportunities—outcomes clearly not in the best interest of workers in Ontario.