Tag: Failure to Pay

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.”