Canadian HR Reporter Weekly

3 Canadian HR Reporter, a Thomson Reuters business 2018 August 22, 2018 of these folks don't really have that level of knowledge in terms of what the rules are," said Chong. "Even though you have a third-party service provider processing your payroll, it falls back on the employer to ensure that if employees are entitled to overtime, they're being paid overtime; if they're entitled to vacation, they're being paid vacation (and) leave of absence — things of that nature." So, how do some employers get away with not paying employees for so long? "In general, there's this underlying power imbalance between employers and employees. Oftentimes, employees that aren't getting paid, they might continue working in the hopes that they will get paid," said Miriam Anbar, associate employment lawyer at Rodney Employment Law in Toronto. "e employees who are impacted by the failure to pay wages, they're often vulnerable employees. And, in this case, the employees involved were cleaning crew, and it was employees in the food-service industry and many of them didn't speak English as a first language — they're the vulnerable sector of employees." Employees not being paid properly is probably more widespread than many might believe, said Sultan. "ere's no statistic to prove this, but I think the violation rate is probably pretty high," she said. "What that means is that most employees are left with what is often a less-than-appealing choice to make, which is: Do they leave their employer under bad circumstances? Or do they just move on, maintain a good relationship and not really enforce their rights?" "at's the dilemma... and I think that's probably one of the one of the reasons why the Ministry of Labour needs to take a more proactive approach because they kind of have to be the guardians of it," said Sultan. Non-compliance not a good idea e previous Liberal government in Ontario implement- ed an overhaul of the province's employment standards last year, and the Pun ruling sends the message the min- istry is ready to enforce the laws more enthusiastically, said the experts. "(With) the jailing of an individual, I wouldn't say it's anything particularly new under the law, but I would say that it's probably more accurately reflective of the new spirit of enforceability that probably came along with the recent changes to the Employment Standards Act, because one of the criticisms was that there just was not enough enforceability and or enforcement of the act itself," said Sultan. "ere was just a general sense that employers needed to be held more accountable for their actions, because part of the issue is that a lot of employees don't know that they have the right to pursue the rights they do; but, secondly, even when employers are scrutinized for having violated something under the act, whether it be wages or overtime, employers may get an order against them, let's say to pay, but they can either appeal the order or they can... ignore the order." e ministry has also implemented new rules to publicize bad actors, said Anbar. "e ministry can actually publish on the internet a detailed account of what companies have been issued (as) a penalty," she said. "ere's a list of convictions online (and this can) damage their reputation by simply being publicly humiliated online, with respect to their conviction. So that's something to be mindful of as well as an employer." "Where employers get in trouble is when either a claim is not resolved and it gets to the point where an order to pay has been issued by the ministry. And then the company either ignores the order to pay or doesn't take it seriously. And then there's non-compliance and that's where the matter can escalate and, ultimately, result in jail time or fines and the publication of their convictions — and that's where owners and directors may get involved as well," said Anbar. "Companies definitely need to consider the consequences of non-compliance especially in light of cases like this one." e ministry received 68 complaints before prosecuting the case. Pun was originally ordered by the ministry to pay the employees more than $457,000 in June 2015, but the order was ignored. e practice of ignoring ministry orders may be coming to a close, according to Anbar, especially considering the ministry promised last year to hire 175 new employment standards officers. "ere's been this sort of attitude that the ministry can't really successfully collect on their orders to pay and so these cases really demonstrate that they can escalate and take more serious action if they can't recover payment," she said. "It's definitely a wake-up call for employers." It's probably more accurately reflective of the new spirit of enforceability... with the recent changes." Credit: Fred Thornhill (Reuters) Employers should review policies and processes so they're not in a situation where they're being levied fines and penalties, or facing jail time, according to Annie Chong, manager of the payroll consulting group at Thomson Reuters.

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