Q & A: Straight Answers to Hard Asked Questions
Recommendations and advice from your Risk experts.
Question from Rose L., Property Manager in Toronto, Ontario
Q: Our Board asked me to get our security company to change their uniforms to our community logo and take off the Security patch to help us brand our building better. The security company advised that they cannot but couldn’t explain why. I went online and couldn’t find anything about it either. Can you help me understand this?
A: Yes – we can help with this. The Ontario Ministry of the Solicitor General oversees security guards. They prescribe very detailed directions to all security companies in Ontario to have two things on all uniforms: 1) The security company name; and 2) the word “SECURITY’ in all caps directly under the name of the security company. All uniforms must comply with this direction. There are many other restrictions. Information can be found on the government website at www.ontario.ca/page/ministry-solicitor-general
Question from Karl L-S., Board Member in Toronto, Ontario
Q: Your articles are very interesting reading. I am on a Board that has mixed feelings about taking our service providers in-house, mostly to save the Harmonized Sales Tax (HST) on services. I believe that this is a way to keep costs low. The property manager is not a big fan of this. She referred me to you, stating that you may be able to tell us why.
The following analysis is provided to all condominiums for their information to caution against in-house staffing models.
Not unique to condominiums in Ontario and around the world, many residential condominiums in Ontario have been using an in-house staff model. Some employees have worked in communities since the building was built.
The main reasons for having in-house staffing are cost benefits and familiarity of employees. However, this is offset with the negative aspects of this type of employment model to the corporation, which are significant since condominium corporations are directly and solely responsible for all risk. All of it.
With ever-increasing stringent regulatory controls, organizations struggle in vain to keep up with changing regulations regarding their in-house staffing requirements. They are very often subjected to unrealized consequences of the in-house employment model.
While there are both advantages and disadvantages of the in-house and the outsourced staffing models, this is also dependent on the age of the business cycle of the corporation if in-house is the preferred model. At the beginning of a business cycle (new buildings), there are distinct financial benefits of the in-house model in that HST is not included. During an aging business timeline, however, the benefits of the HST exclusion are substantially offset by the tenure of in-house employees and the requirements of the corporation to pay regulatory (ESA) and Common Law termination pay.
All organizations are susceptible to this detriment, and the payouts required for terminating longer-term employees can be substantial. There has been a consistent move away from in-house service providers in favour of outsourced. The primary reason is that when you have in-house services, and in particular, security, the corporation is directly and solely responsible for all training, accreditations, and safety requirements.
The corporation must become an ‘Agency License’ holder under the Ontario Ministry of the Solicitor General in order to hire security guards. Property management companies struggle to keep up with changing legislation, regulations, uniforms, and licensing requirements. They are not accredited to perform regulatory training, nor do they have the time to conduct this activity. Such training must be outsourced which is costly. Ministry regulatory inspections are unannounced, and when gaps are found, the consequences can be severe to the corporation.
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