Hon. J. L. ILSLEY (Minister of Finance):
Mr. Speaker, I desire to lay on the table order in council dated February 6, 1942, relating to a ceiling on salaries and to make a brief statement in explanation. I am tabling for comparison a copy of the original order.
This amending order is intended to clarify the application of the original order and to alter some details of its provisions in regard particularly to promotions, new appointments, and the payment of bonuses. I should like to draw attention to the fact that in clarifying the definition of salaried official, this amending order definitely places some employees under the wages and cost of living bonus order, thereby entitling them to the cost of living bonus from their employers.
All persons receiving salaries or wages of less than $175 a month are excluded from the
class of salaried official and made subject to the wages and cost of living bonus order. All those receiving $250 or more a month are considered to be salaried officials unless their duties or responsibilities show clearly that they are not above the rank of foreman or comparable rank, in which case they are subject to the wages order. The national war labour board, or its regional boards, are made responsible for determining the status of any employee or any class of employees in case of doubt or dispute. The national board has already issued a number of general interpretative rulings on this matter and will be issuing others in due course.
Another change is intended to remove the source of what is regarded as discrimination within many organizations where highly paid workmen or foremen are entitled to a cost of living bonus under the wages order while junior salaried officials earning no more, or even less, are prevented from receiving such a bonus by the provisions of the salaries order. The amending order permits an employer to pay a cost of living bonus to salaried officials earning no more than other employees of the same employer who are entitled to such bonus under the wages order. This special permission is not allowed to apply to officials receiving more than $4,200 per year, and the general limit of $3,000 on those permitted to receive the bonus remains applicable where the special circumstances are not present.
Other provisions of the amending order extend the control to salaries of those hired after the original order went into effect. An employer is not permitted to pay to a newly-appointed salaried official a rate of salary higher than the rate previously paid to another official performing substantially the same services, or if there is no such guide, the employer shall not pay a rate of salary higher than is reasonable and proper, having regard to the rates paid to salaried officials for similar services in like business. This provision is intended, among other things, to check the practice of employers trying to entice employees from one another by the promise of higher salaries.
To avert any danger of an employer paying a higher initial rate of salary than he otherwise would to a newly-hired or newly-promoted official because that rate must not be subsequently increased under the terms of the order, the amending order provides that an employer may, in accord with his established practice, and by arrangement, pay first a probationary or temporary rate of salary, to be followed by a higher rate, in cases of new appointments or promotions tailing place after the order went into effect.
There are a considerable number of minor changes in wording, and definitions. A specific limitation is put on directors' fees instead of relying upon the general restrictions on salaries being applied. The intent of the original order is made clear by explicitly stating that the amount of any cost of living bonus being paid when the order went into effect shall be considered as part of the rate of salary at that time. The definition of employers subject to the order is altered to exclude all public hospitals, and all religious, charitable and educational institutions not carried on for gain. Notification is required of promotions within three months, of the first payment of the increased salary, where it is not already required in advance. I will not attempt to go into further detail, as copies of the order are available to all those interested.
Perhaps I should add that in the administration of this order by the income tax division, it is possible to obtain a close check on what is happening to all salaries by an inspection both of employee's and employer's tax returns. There is one other minor change which it may be necessary to make for administrative reasons, in addition to these amendments, and this may involve another brief order shortly.
Subtopic: ORDER IN COUNCIL AMENDING ORIGINAL ORDER AS TO PROMOTIONS, NEW APPOINTMENTS AND BONUSES