Ontario’s new-car dealers are the latest group to take exception to proposed revisions to the province’s labour laws, saying one suggested change in particular would make owning an auto dealership franchise “less attractive.”
The Automotive Parts Manufacturers’ Association has already expressed concern over proposed changes to minimum wage, union certification and temporary employment.
Now, the Trillium Automobile Dealers Association (TADA), which represents more than 1,000 franchised new-car dealers in Ontario, has written Labour Minister Kevin Flynn to express “deep concern” over another proposed change.
According to Flynn’s Changing Workplaces Review, when it comes to what the government calls “joint employers” it has become increasingly difficult to determine whether multiple entities, such as an OEM and its franchisee are, in fact, joint employers of sales staff, for example.
Flynn is toying with the “joint employer” changes because “the Ontario Labour Relations Board has wrestled with the issue of determining the true employer” of some people.
Separate business entities
TADA is worried the Labour Relations Act and Ontario Labour Relations Board may view the OEM and dealer as “joint employers” and therefore co-managers of the dealerships. Under a joint employer provision, the government could view both entities as being responsible for a dealer’s employees.
The association says automobile dealers are entrepreneurs and their dealerships separate business entities, which have formed a contract with the manufacturer to retail and service automobiles.
“Making auto manufacturers a joint-employer of dealership employees would be a fundamental and negative disruption to the current franchise model and cause much uncertainty for both manufacturers and local dealers,” the letter reads. “Such a move would run contrary to the very reason why franchisors and franchisees exist.”
Flynn’s report states that, generally speaking, “some franchisors may exert more control or less control over the business of a franchisee and over terms and conditions of employment.”
TADA says changes to a system that “has served the auto manufacturers, dealers and consumers well over the past 100 years” would create “uncertainty and confusion.”
TADA worries that hiring dealership employees would become a liability for the auto manufacturer, too.
“The focus for dealers ought to be on hiring and mentoring the best people suited for their business, not having to receive approval for hiring an employee which the auto manufacturer will not direct, supervise, etc.”
TADA wants its members to be exempt from any “joint employer” provisions.
“Let automakers design and build vehicles. Let dealers hire staff to sell and service vehicles in the local market,” the letter states. “We urge the Ontario Government not to implement a joint-employer provision for Ontario’s auto sector.”
But the government says it will determine joint employers “on a case-by-case basis.”
“Where there is more than one potential employer for a group of employees under the Labour Relations Act, the Ontario Labour Relations Board will determine which employer is the ‘true employer’ on a case-by-case basis, weighing various factors to determine which choice appears to be consistent with the statutory and labour relations framework.”
David Adams, president of the Global Automakers of Canada, said that “there is obviously a business relationship” between the OEMs and dealers “but the franchisees are really independent businesses.”
Adams said he and his 15 members are aware of Flynn’s report but “haven’t had a chance to take a deep dive into it.”