Canadian Employment Law Today

Emplo y ment Law Today Canad ad a ian www.employmentlawtoday.com How would you handle this case? Read the facts and see if the judge agrees YOU MAKE THE CALL 8 Published biweekly 22 times a year Subscription rate: $299 per year CUSTOMER SERVICE Tel: (416) 609-3800 (Toronto) (800) 387-5164 (outside Toronto) Fax: (416) 298-5082 (Toronto) (877) 750-9041 (outside Toronto) E-mail: Carswell.customerrelations @thomsonreuters.com Website: www.employmentlawtoday.com Thomson Reuters Canada Ltd. One Corporate Plaza 2075 Kennedy Road, Toronto, Ontario, Canada M1T 3V4 Director, Carswell Media: Karen Lorimer Publisher/Editor in Chief: Todd Humber Editor: Jeffrey R. Smith E-mail: Jeffrey.R.Smith@thomsonreuters.com ©2016 Thomson Reuters Canada Ltd. All rights reserved. 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GST #897176350 Employer withholds wages from worker who stole from client THIS EDITION of You Make the Call fea- tures a worker who was accused of stealing money from a client. e worker, Deven Pyke,was employed as a cleaner for Premiere Cleaning Solutions in the Halifax area. Hired in October 2013, Pyke worked for Premiere for just over two months until Jan.10, 2014, when a client for whom Pyke had cleaned complained it was missing $1,786. Pyke denied stealing the money, but he was subsequently charged with theft. Premiere reimbursed the client the amount of money that was missing and, be- fore Pyke made any plea or was subject to any court decision, terminated Pyke's employ- ment. e company also withheld a total of $896.56 from Pyke's last paycheque that in- cluded wages, holiday pay, and vacation pay as part of the client's reimbursement. Pyke applied to the Nova Scotia Director of Labour Standards to obtain the money Premiere withheld from his paycheque. e director found Premiere had unlawfully withheld Pyke's wages, fi nding the prov- ince's Labour Standards Code stipulated that "an employer shall not, directly or indi- rectly, withhold, deduct or require payment of all or part of the employee's wages for the purpose of paying a loss that occurs while the employee is working unless allowed by statue, court order or written authorization." Pyke had not given any such written autho- rization to withhold any of his pay and there were no existing court orders or laws allow- ing it. Premiere appealed the director's order to pay Pyke back, arguing that the code didn't apply in this situation. e company said the "loss" referred to in the code means that suff ered during the course of business and a loss that comes as a result of employee theft shouldn't apply, referring to a 2013 decision of the board — Ambersley v. Motion Com- munications Inc. — that found an employee who was guilty of fraud by creating false sales commissions was not entitled to her fi nal pay and vacation pay. In this decision, the board found that "the employer in this case is not seeking to recover a loss per se, but seeks to claw back money to which the employee was never entitled in the fi rst place, in cir- cumstances which the employment contract expressly contemplated." e company also argued it had "strong evidence" that Pyke was guilty of theft and it was entitled to at least hold the funds un- til a court decision was issued. If Pyke was convicted and sentenced to theft, Premiere intended to use the withheld pay towards reimbursing the client. If he was found not guilty, it would then release the money in a payment to Pyke. YOU MAKE THE CALL Was the worker entitled to receive his fi nal pay despite allegedly stealing money? OR Was the company entitled to withhold the worker's fi nal pay in order to pay back the worker's alleged theft? OR Was the company entitled to withhold the worker's fi nal pay in order to pay back the worker's alleged theft? IF YOU SAID the worker was entitled to receive his fi nal pay, you're right. e board noted an important distinction between this case and Ambersley — there was a written employment contract in the latter that al- lowed the employer to withhold money for a "failure to account for shortages." It was this written authorization that was in play, not the fact the losses in question were due to theft and not business losses, said the board. e board found that the code didn't give a "singular or limited meaning" to the word "loss," but rather "connotes a wide variety of potential circumstances." e board noted that losses caused by workers in the course of their work could involve "negligence, breach of contract, breach of fi duciary duty, discrimination, criminal activity and other types of wrongdoing." While defi ning the word as "business loss" was reasonable, the code didn't restrict the meaning to just that, said the board. e board also found the purpose of the code was to protect the right of employees to be paid for work performed, even if they cause their employers to suff er a loss. ere was nothing in the code indicating loss aris- ing from theft should be excluded, or par- ticularly loss arising from "a disputed allega- tion of theft," said the board. e board noted that employers who think they have suff ered a loss due to an em- ployee's actions have the legal right to seek restitution through legal action, but this right was separate from deducting employee wages. Premiere was ordered to pay Pyke the money it had withheld from his fi nal pay. On Jan. 14, 2015, Pyke pled guilty to theft and was ordered to pay to the provincial court $1,786 as restitution to Premiere's cli- ent. However, the board found this was a debt Pyke owed the client that didn't involve restitution to Premiere or authorization for the diversion of Pyke's wages. For more information see: •Pyke and Killorn, Re, 2015 CarswellNS 394 (N.S. Lab. Bd.). •Ambersley and Motion Communications Inc., Re, 2013 CarswellNS 1106 (N.S. Lab. Bd.).

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