Williams HR Law LLP

JAIL TIME FOR EMPLOYER IS ANOTHER INDICATION OF CULTURE CHANGE IN EMPLOYMENT STANDARDS ENFORCEMENT

July 26, 2017

[vc_row][vc_column width=”1/4″][vc_single_image image=”2797″ img_size=”large”][/vc_column][vc_column width=”3/4″][vc_column_text]Last month, a Mississauga employer was sentenced by the court to thirty (30) days of jail time and fined $20,000 after failing to comply with an order issued by the Ministry of Labour (the “Ministry”) to pay over $140,000 of unpaid wages to forty-three (43) of his staff employees, along with administrative fees to the Ministry. The amounts owed ranged from $700 to $12,000 for each claimant. The Ministry’s order to pay was originally issued on March 31, 2015. Peter David Sinisa Sesek, the employer, ran two children’s programs, WISE Summer Camp in Mississauga and Academic Montessori in Brampton, both of which no longer operate.

Under current legislation, a person who contravenes the Employment Standards Act, 2000 (the “ESA” or the “Act”), or its regulations or fails to comply with an order under the Act may be:

  1. Fined up to $50,000 and/or sentenced up to twelve (12) months of jail as an individual;
  2. Fined up to $100,000 for a corporation’s first offence;
  3. Fined up to $250,000 for the second offence of a previously-convicted corporation; or
  4. Fined up to $500,000 for a corporation with multiple previous convictions.

While the ESA already provides for the penalty of imprisonment, the courts have typically used their power to prosecute employers with jail time sparingly.

The sentence imposed on Mr. Sesek was handed out on June 6, 2017, and comes just five (5) days after the Ontario government proposed changes to employment and labour legislation by introducing Bill 148, the Fair Workplaces, Better Jobs Act, 2017, on June 1, 2017 (“Bill 148”). Given the timing of the court sentence, this is indicative of the environment of change from the provincial government’s determination to make efforts to ensure that employers comply with employment standards legislation at the workplace. The Ministry has indicated its belief that some employers view the current workplace landscape as one in which many ESA contraventions either go unnoticed or are insufficiently punished with manageable fines, and therefore any such insufficient punishment will not deter future non-compliance, but rather is simply worth the cost of “doing business.” Whether the Ministry’s criticism is warranted or not, this belief has influenced the Ministry’s determination to update their efforts to enforce legal compliance.

To that effect, the Ministry has also pledged to add as many as 175 new employment standards officers in the near future to ensure that provincial employment standards are adhered. In addition, if Bill 148 passes, the Ministry will have the power to publish the names of anyone who contravenes a provision of the ESA, along with a description of the contravention, and the penalty given. This power afforded to the Ministry will extend digitally to publication on the internet.

This sentence of imprisonment also demonstrates the court’s willingness to impose punitive measures to convey to employers that compliance with provincial employment standards is meant to be resolved before such a matter reaches the court level. In the case of Mr. Sesek, the employer was expected to comply with an order to pay wages issued by the Ministry while the matter was still being handled by the employment standards officer.

Given the Ministry’s plans for increased capacity to carry out inspections by employment standards officers and the increased willingness of the courts to impose harsher sentences on employers who fail to both abide by provincial employment legislation and respect the authority of employment standards officers, employers should understand the risks involved in failing to comply with an order issued by the Ministry, and also the prudence in being proactive to comply with employment and labour legislation from the start to avoid a scenario where the Ministry would issue an order to the employer in the first place.

 

This blog is provided as information and a summary of workplace legal issues.

This information is not intended as legal advice.

[/vc_column_text][/vc_column][/vc_row]

Expertise