Potential Changes To Employment Legislation May Mean Increased Liability For Franchisors

The Ontario Changing Workplaces Review's final report is expected to be delivered in the next few weeks and, if some of the ideas contained in its interim report become law, franchisors may find themselves liable as employers of their franchisees' employees, regardless of the franchisor's actual level of control over the workplace.

The Review began as a Government of Ontario initiative in early 2015, with the Review's terms of reference directing two Special Advisors to provide recommendations on how to amend Ontario's Employment Standards Act, 2000 and Labour Relations Act, 1995 to address "the changing nature of [Ontario's] workforce, the workplace and economy".

Currently in Ontario, franchisors are not generally responsible for ensuring that their franchisees comply with minimum employment standards. Rather, franchisees are typically considered the "employer" for employment law purposes. In some circumstances, a franchisor may be found to be a "joint