Failure to Pay an ESA Order Resulted in Jail Time and a $20,000 Fine By: Michelle Cook, Summer Law Student On June 6, 2017, a Mississauga employer received a jail sentence of 30 days plus an additional fine of $20,000 after failing to pay an order issued by a Ministry of Labour employment standards officer. The order required him to pay about $140,000 in outstanding wages to his 43 workers, many university students. While jail time is rare for Employment Standards Act (ESA) violations, this case shows that the courts are beginning to take a stronger punitive approach to large violators of workplace laws. This comes just after the Ministry of Labour has promised to ramp up enforcement last week, when Premier Kathleen Wynne and Labour Minister Kevin Flynn proposed updates to Ontario’s labour and employment laws, including increased fines for workplace violations. If the legislation is passed, it will add up to 175 employment standards inspectors, enabling inspectors to award damages and interest on unpaid wages. The ministry has failed in the collections process in previous years. Ranging from 2009 to 2015 more than one-third of stolen wages were never recovered, meaning that the victims of wage theft across Ontario have lost out on $28 million. However, since 2015, Ontario employers facing prosecution for workplace violations have risen by more than 40 per cent. Peter David Sinisa Sesek ran Academic Montessori in Brampton and WISE Summer Camp in Mississauga. In addition to the 30-day sentence and an order to pay $127,000 in outstanding wages to former employees – most of which were university students whose individual claims ranged from $700 to $12,000— he was also fined $20,000 for failing to comply with the ministry’s order to pay, which was issued in 2015. The outstanding wages dated all the way back to 2014. His sentence is very uncommon. Over the past two decades there have been fewer than 10 jail sentences for ignoring orders to pay, with the most recent sentence in 2016 only imprisoning the accused boss for one day. The maximum penalty for ignoring orders to pay is one year of imprisonment. In summary, Sesek was convicted under the Employment Standards Act as well as the Provincial Offences Act. Any person who fails to comply or is convicted under the ESA can be: Fined up to $50,000 or imprisonment of up to 12 months, or both; If a corporation, the fine may be up to $100,000; For a corporation with a previous conviction, the fine may be up to $250,000; and If there is more than one previous conviction the fine may be up to $500,000. Also noted in the court bulletin, the court imposes a 25 per cent victim fine surcharge, which is required by the Provincial Offences Act. The surcharge goes to a provincial government fund that assists victims of crime. The Changing Workplaces review has hinted that the maximum penalties for violations of workplace laws will be increasing in the future. Employers should be careful to make sure that they are in compliance with the law and that ESA orders are dealt with seriously and promptly. Devry Smith Frank LLP is a full service law firm that has an experienced group of lawyers within our employment and labour law groups. If you are in need of representation, please contact one of our lawyers today or call us directly at 416-449-1400. “This article is intended to inform and entertain. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Employment LawJune 29, 2017June 22, 2020
Minimum Wage Embedded In New Law By: Nicolas Di Nardo With the new minimum wage increase set to become $15 an hour in 2019, it would require the Progressive Conservatives to change labour laws in order to get rid of it. The new wage increase will take effect six months after the June 2018 election. The Liberals have embedded it in the new Fair Workplaces, Better Jobs Act which is still to be studied by all-parties this summer, which is expected to pass in the fall. For more information on the details of this Act, please read our previous posts: Is A $15 Minimum Wage, More Unionization and a Minimum 3 Week Vacation On the Horizon? Update: Ontario Liberals Announce Changes to Labour Law—And a $15 Minimum Wage The Act looks to increase minimum wage to $14 an hour on January 1st, and to $15 an hour on January 1, 2019. It is expected that the Liberals will campaign on this Act as well as the proposed pharmacare plan which is also going to launch on January 1st. Devry Smith Frank LLP is a full service law firm located in Don Mills. If you require representation or have any questions, please contact Devry Smith Frank LLP today. You may contact one of the many experienced lawyers on our website or call us directly at 416-449-1400. “This article is intended to inform and entertain. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Employment Law, Labour LawJune 26, 2017June 22, 2020
Income Earned by Wrongfully Dismissed Employees No Longer Automatically Deducted Under the Duty to Mitigate The duty of wrongfully dismissed employees to mitigate their damages is no longer as clear-cut as it once was. Notice periods are seen as an amount of time, or a level of compensation, to assist a dismissed employee to find comparable work. Previously, lawyers made the assumption that any income gained by an employee during an employment notice period was to be automatically deducted from the amount an employee would be entitled to, due to the fact that the employee successfully mitigated the damages that their previous employer was responsible for. However, in Brake v PJ-M2R Restaurant Inc, the Court of Appeal declined to lessen the wrongful dismissal damages an employee was entitled to because of income earned from other employment during the notice period. The employee, Esther Blake, was awarded more than $104,000 for a 20-month notice period due to wrongful dismissal. The defendant, PJ-M2R Restaurant Inc, is a holding company that owns franchised McDonald’s in the Ottawa area. Esther worked as a manager at one of the McDonald’s locations for 25 years until she was wrongfully dismissed. While working at McDonald’s, Esther also worked a part-time job at Sobey’s as a cashier. When Esther was dismissed from McDonald’s, she continued to work at Sobey’s as she did before but expanded her hours there as she was no longer working full-time at McDonald’s. The Court of Appeal declined to see the Sobey’s employment as income from mitigation as she would have continued to work there part-time regardless of her status at McDonald’s. Also of note is Court of Appeal Justice Kathryn Feldman’s concurring decision in this case. The lower court judge determined that $600 that Esther received from Home Depot during the notice period should also not be deducted as it was “so substantially inferior” to her managerial position at McDonald’s (para 24). While Justice Feldman did not use the same wording, she reiterated that employees are entitled to turn down jobs that are not comparable, without having the potential income from that job deducted for a failure to mitigate losses. Using that reasoning, an employee should not be penalized when they choose to accept the job that they were entitled to turn down. Justice Phillips of the Court of Appeal did not deduct this income either but stated it was due to the lack of clarity regarding the income. The clear implication of this case is that employment lawyers will need to prove not only the amount of income an employee earned during the notice period but the nature of the work that income came from. With a changing economy and the rise of non-standard work, it will be interesting to see how the Court of Appeal treats mitigation efforts as comparable standard employment becomes more elusive. Devry Smith Frank LLP is a full-service law firm that has experienced lawyers within our employee and employment law group. If you are in need of representation, please contact one of our lawyers today or call us directly at 416-449-1400. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Employment LawJune 22, 2017June 24, 2020
Hockey Union alleges the OHL broke Labour Laws By: Nicolas Di Nardo Back in 2014, a class-action lawsuit was filed against the Canadian Hockey League (CHL) over wages. It claimed the league was breaching minimum wage laws. In summary, they are seeking $180 million in outstanding wages, vacation, holiday and overtime pay and employer contributions for thousands of players between 2012 and 2014. It is still ongoing and has had some recent developments. Now, the CHLPA has filed with the Ontario Labour Relations Board. The Canadian Hockey League Players’ Association (CHLPA) attempted to unionize its major junior players within the Ontario Hockey League (OHL) promising minimum wage payment. This is a result of the OHL commissioner stating that the players are not entitled to minimum wage because they are defined as “amateur athletes”, however, union officials say that provincial labour laws should apply to for-profit hockey clubs, seeing as they generate profit from the work of their players. Currently, the players within the OHL do get paid, however, it is in the form of stipends (less than $500 a month) with benefits such as lodging, food and gear, but have never been paid in accordance with minimum wage legislation. There are a number of exhibits before the court, such as administrative memos to clubs advising them to not notify the CRA, and instructing teams to disregard the CRA’s classification of OHL players as employees. Additional exhibits also include a number of player contracts with changes to the language stating the relationship between players and their clubs. The current application to the labour board requests that the CHLPA become the bargaining agent for players in the OHL, or damages of $175,000 for union drive expenses. For more information on this, please click here to read the original article. Devry Smith Frank LLP is a full service law firm that has a very experienced group of lawyers within our employee and labour law groups. If you are in need of representation, please contact one of our lawyers today or call us directly at 416-449-1400. “This article is intended to inform and entertain. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Employment Law, Labour LawJune 21, 2017June 22, 2020
Update: Proposed Sick Notes Ban By: Nicolas Di Nardo The praise for the Liberal government’s proposed ban on sick notes continues. During the government’s announcement outlining the proposed changes to Ontario’s labour law, which was part of the Changing Workplaces Review, doctors’ notes was the least of everyone’s concern, but it received the most support and attention by groups and organizations that have been pushing for a ban on sick notes for some time. Almost a month of public speculation on proposed changes to the law, the changes to sick notes remains a hot one. Even some representatives within the Progressive Conservatives including PC MPP Monte McNaughton stated, “I actually think it’s quite fair,” which is a surprise as he is usually an outspoken critic of the Liberal administration. While many agree with Labour Minister Kevin Flynn’s opinion that sick notes are a waste of a physician’s time (the OMA has been calling for an end to sick notes for some time now), there are still some groups that believe this is not a step in the right direction. The Canadian Federation of Independent Businesses (CFIB) is one of them. The CFIB believes that people will abuse it, however, they do support the claim that it will limit the spread of germs and viruses to other people. With a note not required until passing 10 sick days under the new law, CFIB analyst Ryan Mallough would like sick days and doctors notes to remain “a flexible matter between employer and employee…[because] there is potential for abuse…[and] this is all part of the re-election campaign for the Liberals.” For more information on the developments of the Changing Workplaces Review, please refer to our previous blog posts: May 17, 2017: Is A $15 Minimum Wage, More Unionization And A Minimum 3 Week Vacation On The Horizon? June 1, 2017: Update: Ontario Liberals Announce Changes To Labour Law—And A $15 Minimum Wage June 9, 2017: Workplace Reform Showcase: Doctor’s Notes Devry Smith Frank LLP is a full service law firm located in Don Mills. If you require representation or have any questions, please contact Devry Smith Frank LLP today. You may contact one of the many experienced lawyers on our website or call us directly at 416-449-1400. “This article is intended to inform and entertain. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Employment Law, Labour LawJune 19, 2017June 22, 2020
General Electric Workers Exposed to Toxic Chemicals for Decades Between 1945 and 2000, General Electric’s factory in Peterborough was the epicentre for many work-related illnesses among employees and retirees, a study of chemical exposures at the plant reveals. This, however, is nothing new. The community has been saying this for quite some time, and the 173-page report confirms this. GE’s plant workers built household appliances all the way to diesel locomotive engines and fuel cells for nuclear reactors. The workers were exposed to more than 3,000 toxic chemicals in the process, some of which include 40 to be cancer-causing. Workers were exposed to these chemicals at levels hundreds of times higher than what is now considered safe, says the report. General Electric allowed workers in the past to handle the toxic substances without protective gear, which they were rarely offered. As they were paid by the piece and not by the hour in the 1980s, there was an incentive to cut corners. Seeing as about 500 lbs. of asbestos was used daily and workers did not have respiratory protection or proper ventilation, it is no wonder these employees have had trouble with their health after being exposed. The managers also knew the harm that these chemicals can cause to people without the proper protection, as early as the 1920s and 1930s. The lead was another huge component that circulated the plant. Workers used about 40,000 lbs. in a week to produce PVC pellets until the 1980s, and also experience daily exposure to: Solvents Welding Fumes Epoxy Resins PCBs Beryllium Uranium Daily exposure to the above without proper protection is extremely dangerous. However, around 2000 is when safety measures were being mandated, and since then, GE’s plant is a smaller operation, and spotless. The report will be used to support occupational disease claims that were previously denied by Ontario’s Workplace Safety and Insurance Board (the “WSIB”). Hundreds have filed compensation claims, and unfortunately, Ontario’s worker compensation system does not allow employees to sue their employer when they have been given the ability to claim benefits when they are injured or fall ill because of work. The WSIB has been given 660 compensation claims from GE workers since 2004, with 280 accepted, more than half withdrawn, abandoned or rejected because of insufficient evidence that the conditions were work-related. “Workers that suffered from working within the plant were forced, for many years, to provide proof of their working conditions, only to be told this is anecdotal,” said Sue James, whose father worked at the plant for 30 years and died of lung and spinal cancer, believed to have been caused by exposure to the chemicals used in GE’s plant. A former employee believes he developed colorectal cancer because he worked more than 22 years under asbestos-wrapped pipes, which would occasionally shed while he worked. This employee, Roger Fowler, was one of the former employees who worked on the report. With this investigation drawing some attention, the provincial labour ministry announced it will be setting up an occupational disease response team by the end of the year to focus on chemical exposure prevention and help sick workers file compensation claims. 11 retirees worked as advisers on this report. Together, this committee along with health researchers Bob and Dale DeMatteo, interviewed over 75 former workers to gather information on working conditions and production processes. The data collected from these workers was coupled with data from labour ministry inspection reports, joint health and safety committee minutes, company memos, industrial hygiene literature and other documents, gathered by the union. At Devry Smith Frank LLP we provide a full range of services to suit any need. If you are seeking information or representation for a similar situation, please contact the lawyers of our Health and Safety and Employment Law Teams today. If you require more information please call us today at 416-449-1400. “This article is intended to inform and entertain. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Employment Law, Human Rights LawMay 19, 2017June 23, 2020
Small Claims Court awards double the standard in costs for unreasonable behaviour As a plaintiff, losing your court case is bad. Having to pay thousands of dollars for the defendant’s legal fees is much worse. Part of the strategy in any litigation proceeding is weighing what your case is worth versus how much you might spend to prove that case. From a financial perspective, there is not much point proceeding to trial over a $1,000 loss if it will cost you $5,000 in legal fees by the end of trial. Many people believe that the loser in any court case automatically has to pay for the winner’s legal fees. This is partially true, but also misleading. In a typical court case, it is exceptionally rare to get 80-90% of your legal fees paid for, let alone 100%. The amount of the winner’s legal fees that must be paid for by the losing party is called a “costs award”. Considering how much you will incur in legal fees plus the cost of the other side’s legal fees is something about which any prudent lawyer would advise his client. In Small Claims Court, costs awards work differently. The Courts of Justice Act places a cap of 15% of the amount claimed (up to $25,000 which is the limit of the Small Claims Court), plus disbursements, such as travel expenses. In rare circumstances, the judge can award additional costs to penalize a party for unreasonable behaviour. For a more detailed breakdown on how Small Claims Court works, there is helpful information available from the Ministry of the Attorney General. Barton v Bowerman is one those rare circumstances where the judge awarded more than the 15% limit. The plaintiff was hired by the defendant to be an administrative assistant at their accounting firm, subject to a six month probation period. Within weeks of starting her new position, the plaintiff was fired. She sued the defendant for $25,000 claiming she was owed pay for the full six months of her probation. The court noted that the issue was not whether the plaintiff was wrongfully dismissed, but whether she was entitled to more pay in lieu of notice than the two weeks’ pay the defendant gave her. Given her six month probation period, she was not. In the costs decision, the judge awarded the defendant-employer $7,500.00 in costs plus $500.00 in disbursements. This is double the traditional 15% limit. In his written reasons, Deputy Judge Lyon Gilbert wrote the plaintiff wasted a full day of the court’s time exploring evidence regarding just cause for her dismissal even though the defendant stated she was fired without cause. The plaintiff also amended her claim to include claims under the Human Rights Code, but never gave any evidence to support these claims. The defendants also made an offer to settle one year before the trial which would have given the plaintiff a better result than was obtained at the trial. The plaintiff did not accept this offer. The plaintiff was also a sophisticated litigant: she had practiced as a paralegal and was represented by a retired litigation lawyer. All of these factors point to the conclusion that there was no reason for the plaintiff to have dragged out her issue as much as she did. You can read about the full costs award here. This decision highlights the importance of presenting a clear case for the court to consider. While you may want to advance every possible cause of action in your claim, without the proper evidence to back up your claim, this could create a very costly detriment. While there are several self-represented litigants who are able to successfully argue their claim in court, a lawyer may be able to argue a small claims file in less time and for less money than one might expect. If you would like to discuss your small claims file, a member of the Devry Smith Frank LLP team would be pleased to assist you. By Fauzan SiddiquiBlog, Employment LawOctober 3, 2016December 3, 2020
Off-Duty Conduct: Can you be Terminated over Tweets? Toronto Arbitrator Elaine Newman says you can. On November 12, 2014, the Ontario Labour Relations Board upheld the City of Toronto’s dismissal of Matt Bowman, a firefighter with 2.5 years of service, for inappropriate use off-duty use of his Twitter account. Bowman’s Twitter account included a picture of himself posing in a Toronto Fire Services (“TFS”) uniform. Three of his tweets, published in an article by the National Post, read: “Reject a woman and she will never let it go. One of the many defects of their kind. Also weak arms.” “I’d never let a woman kick my ass. If she tried something I’d be like hey! you get your bitch ass back in the kitchen and make me some pie!” “The way to a woman’s heart is through anal.” When the employer became aware of the offensive tweets, they suspended Bowman with pay pending an investigation. Bowman produced a letter of apology for his first interview with his employer and later completed a course in sensitivity training. During the course of the employer’s investigation, further offensive tweets were discovered. The tweets were found to be overtly racist or demeaning to women, ethnic minorities, homeless persons and persons with disabilities. The employer alleged that Bowman’s tweets violated the employer’s human rights and social media policies and guidelines and harmed the reputation of TFS. TFS had recently launched a program through which is intended to increase the recruitment of female firefighters and those that represent the diversity of Toronto’s population. In her analysis, Arbitrator Newman recited the test established in Re Millhaven Fibres Ltd. v. Atomic Workers Int’l Union, that provides that in order to uphold a dismissal on the basis of just cause arising out of off-duty conduct, there is an onus on the employer to prove that: the conduct of the employee harms the employer’s reputation or product; the employee’s behaviour renders the employee unable to perform his duties satisfactorily; the employee’s behaviour leads to refusal, reluctance or inability of the other employees to work with him; the employee has been guilty of a serious breach of the Criminal Code and thus rendering his conduct injurious to the general reputation of the employer and its employees; places difficulty in the way of the employer properly carrying out its function of efficiently managing its works and efficiently directing its working forces. Arbitrator Newman confirmed that the test requires an employer to prove any one of the above-noted criteria. Newman noted that, over the past 4 decades since the Millhaven test was devised, cultural awareness and sensitivity in Canada has grown, along with the diversification of its communities and workplaces. As such, she expanded the fourth branch of the Millhaven test above to include a serious breach of human rights policies or the Human Rights Code. The question to be asked is this: Would a reasonable and fair-minded member of the public, if apprised of all the facts, consider that Bowman’s continued employment would so damage the reputation of the employer so as to render that employment untenable? Arbitrator Newman considered Bowman’s apology and candour at length. She found that he was not forthcoming, disclosed information selectively and was not fulsome in many of his responses. She also found that he was not candid or cooperative during the employer’s investigation. Arbitrator Newman also considered the severity of Bowman’s conduct: she found that Bowman’s comments violated a number of fundamental workplace policies, that he promoted forms of discrimination intentionally among his followers and recklessly made this promotion available to the general public. She noted that his conduct was not an isolated incident, but that it was a course of conduct and took place over a period of about two years. Arbitrator Newman found that actual damage to the employer’s reputation was caused by the National Post articles and their fallout and found potential damage has been caused to the employer’s ability to carry out its work, which includes implementation of its diversity initiative. In determining that dismissal was the appropriate penalty, in this case, Arbitrator Newman stated, “[Bowman] does not absolutely accept the proposition that his comments were offensive. He has said, repeatedly in his evidence, that ‘he can see how someone might consider them offensive.’ His words ring hollow. They do not reflect a real appreciation of the degree to which his comments offend.” The Arbitrator held that Bowman’s conduct harmed the reputation of his employer and impaired his ability to fulfill the complete range of responsibilities of a firefighter. She stated, “The job involves more than attending at a fire, or attending as the first responder when someone calls 911 for a medical emergency. It involves more than performing life-saving interventions that he has learned and practiced. The other part of the job, the part that I am not convinced he can perform to satisfaction, is the part that requires him to conduct himself in a way that brings honour to the uniform. I have to wonder if a deaf person, a woman in labour, a homeless person, a member of a visible minority group, apprised of his comments, would welcome this man into their home in a time of need.” Arbitrator Newman’s Award may be found here. What should employers take from this decision? the importance of implementing and maintaining human rights and social media policies in the workplace off-duty breaches of employers’ human rights policies or the Human Rights Code may be found to harm the employer’s reputation and be grounds for just cause dismissal certain types of employees, for example, firefighters, nurses and police officers may be held to a higher standard than other employees whose work is less intimate and does not involve serving the public or being in a position of trust Be careful what you tweet! Contact a member of the Employment Law group at Devry Smith Frank LLP to develop and update your workplace policies, including human rights and social media policies. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Employment LawJuly 17, 2016June 16, 2020
Bankrupt Employer ≠ Helpless Employee It has long been recognized by the courts that there is a power imbalance between employers and employees. Given the nature of the employer-employee relationship, one may be able to see why an employee may feel as though they are at the mercy of their employer. Luckily, there are statutory safeguards to place employees on an even playing field with their employer. An employee will often rely on a employer to be paid for the work they perform, as well as any benefits to which they were entitled under the employment contract. After working for an employer for an extended period time, it is not unusual for an employee to become heavily dependent on the steady stream of income and benefits from their employer. It would be understandable then that an employee, who showed up to work one day to find that their employer has gone bankrupt, would panic, and feel vulnerable and distraught. Such a scenario may evoke memories of the recent news that Target would be bowing out of the Canadian marketplace. Target, however, has not gone bankrupt in Canada – it has filed for creditor protection under the Companies’ Creditors Arrangement Act (CCAA), which is perhaps a topic for another blog. That being said, their current situation in Canada acts as a good starting point to discuss what employees can do in the case that their employer goes bankrupt. This was also recently discussed in another article in The Lawyers Weekly which you can find here. Employees of a bankrupt employer are not entirely without the means to try to recover unpaid wages or termination and severance pay. One of the means an employee can use is the Wage Earner Protection Program (“WEPP”). According to Service Canada, the WEPP “compensates eligible workers for unpaid wages, vacation, severance and termination pay they are owed when their employer declares bankruptcy or becomes subject to a receivership under the Bankruptcy and Insolvency Act.” WEPP is therefore an extremely valuable resource for an employee faced with a bankrupt employer. Employees’ claims for unpaid wages, termination pay etc., are equivalent to that of unsecured creditors. In other words, employees would be closer to the end of the line of creditors hoping to get whatever assets (liquidated or not) the company had remaining. This could mean that by the time it was the employees’ turn to collect on their unpaid wages or termination pay etc., the company may not have anything left to give. WEPP, however, is not paid out of the assets of the bankrupt company, but rather directly from Service Canada. This gives employees some certainty that, if they meet all the necessary criteria set out by WEPP, they will be able to recover some of the money their bankrupt employer owes them. If found to be eligible for WEPP, it appears that an individual can receive a maximum payment equaling up to four weeks of insurable Employment Insurance earning which in 2015 is $3,807.68. Another place employees can look to for help when their employer is felled by bankruptcy is the Employment Standards Act, 2000 (“ESA”). Under section 81 of the ESA, directors of an employer can be liable for wages in a few instances, one of which is if, “the employer is insolvent, the employee has caused a claim for unpaid wages to be filed with the receiver appointed by a court with respect to the employer or with the employer’s trustee in bankruptcy and the claim has not been paid.” (s.81(1)(a)) This acts as a remedy for employees to seek compensation from directors in the case that after bankruptcy they have been unsuccessful in recovering unpaid wages. It is important to note that this remedy only applies to wages, and not termination or severance pay. In short, while a bankrupt employer may mean the end of your employment, you are not entirely helpless and if you choose to avail yourself of some of the avenues explained above, you have a chance of recovering at least some of what you are owed. By Fauzan SiddiquiBlog, Employment LawJune 9, 2015December 3, 2020
Seasonal Employees May Be Eligible For Severance Pay The holiday rush has ended and financial reports are in and layoff notices have been issued to some employees, so what about severance pay for seasonal employees? In Snow Valley Resorts (1987) Ltd. v. Barton and Director of Employment Standards, 2013 CanLII 8963 (ON LRB), the Ontario Labour Relations Board upheld an Employment Standards Officer’s decision that granted entitlement to severance pay to a seasonal employee. The Board also affirmed a notice of contravention and fine against the employer for failing to pay severance pay. Barton was employed from 1990 to 2011 by Snow Valley during the winter season. His contracts clearly stated that his employment was seasonal in nature and was for the current ski season only. Over 11 years, Barton worked a total of 80 months (6.7 years). Section 65(2) of the Employment Standards Act, 2000 provides: All time spent by the employee in the employer’s employ, whether or not continuous and whether or not active, shall be included in determining whether he or she is eligible for severance pay under subsection 64 (1) and in calculating his or her severance pay under subsection (1). In Ontario, if an employee has been employed for five years or more and the employer has a payroll of $2.5 million or more, then the employee is generally entitled to severance pay The Ontario Labour Relations Board found that Barton was entitled to severance even if his employment was seasonal in nature. Barton had worked non-continuously for more than 5 years. Under section 65(2), Barton was eligible for severance because all periods of employment were taken into account in determining if he had five or more years of service. In the end, he was not awarded the severance pay because he filed his ESA claim outside the six-month limitation period. With respect to termination pay, the Board did not award termination pay as it was found that Barton’s employment was seasonal. The Board found that seasonal employment is for a definite duration even if the contract of employment did not specify an end date. Under the ESA Regulation 288/01, employees employed for a definite duration or defined task are not eligible for termination pay. The same exemption does not exist for severance pay. Employers that hire seasonal employees or rehire employees with prior service need to be aware they may owe severance pay if the employee’s total service equals five years or more. An employee need not be full-time or a permanent employee to trigger severance entitlements under the ESA. Further, when a lay off lasts more than 13 weeks in a 20 week period under the ESA (or 35 weeks in a 52-week period if certain conditions are met), the employer will trigger a termination and severance pay if the employee is eligible. Snow Valley Resorts (1987) Ltd. v. Barton and Director of Employment Standards, 2013 CanLII 8963 (ON LRB)https://www.canlii.org/en/on/onlrb/doc/2013/2013canlii8963/2013canlii8963.html By Fauzan SiddiquiBlog, Employment LawFebruary 28, 2014November 24, 2020