THE EMPLOYERS' EDGE
Rarely-Used Penalty Invoked to Land Company Director in Jail for Unpaid Wages
If the Ministry of Labour gives you an Order, you had better comply. That’s the message employers should be taking from the example of Steven Blondin, the Director of six Ontario companies that were not properly paying their employees.
Between March 2007 and October 2009, 61 employees from the six companies operated by Mr. Blondin filed complaints with the Employment Standards branch of the Ministry of Labour, claiming that they were not receiving their wages. The Ministry of Labour investigated the complaints and found that in each and every case, the employers had failed to pay proper wages to the employees. Under the Employment Standards Act, 2000, the law that governs provincially-regulated employers in Ontario, a director of a company can be held personally liable for violations of the law, including failing to pay wages. Accordingly, 113 orders were issued by an employment standards officer between February 2008 and April 2010, requiring the six companies and Blondin, as Director, to pay over $125,000 in unpaid wages.
In a terribly ill-advised move, Blondin ignored the orders. As a result, Blondin and his companies were charged with the offences of failing to comply with the Ministry’s orders, and at the Ontario Court of Justice, pled guilty. Under the Employment Standards Act, any individual who is guilty of an offence under the Act may be subject to fines of up to $50,000 per offence, and up to 12 months in prison. In Blondin’s case, he was ordered to pay the wages owing to his employees, plus the mandatory 25% victim surcharge under Ontario’s Provincial Offences Act. Further, he was fined a total of $280,000 and sentenced to serve nine months in prison.
The moral of the story for employers is not that a violation of the Employment Standards Act will result in jail time – in fact this penalty has not been previously imposed on a director in a number of years. What employers do need to understand however is that if you are found to have violated the Act and receive orders from an employment standards officer, you have recourse that does not include ignoring the orders. Ontario’s Minister of Labour Linda Jeffrey offered the following comment on Blondin’s penalties: “This sentence serves as a warning to those who believe they are above the law. Our government is committed to ensuring that all Ontarians are treated fairly at work, and we will continue to help ensure that Ontarians know their rights and responsibilities.”
It would take exceptional circumstances to receive a prison sentence for a violation under the Act. In a typical case, an employer can appeal an employment standards officer’s order(s), or even structure a resolution with the Ministry of Labour or employees who have filed complaints. In all cases, an employer should take diligent steps to respond to an order from the Ministry of Labour. The lawyers at CCP are experienced in filing appeals to Ministry of Labour orders and structuring advantageous resolutions, which our clients tend to find preferable to serving jail time.
Please Note: This blog has been prepared as an informational service for our clients and other interested parties. It is not intended to constitute legal advice, a complete statement of the law or opinion on any subject. Although we endeavour to ensure the accuracy of the content, no one should act upon the information provided without a thorough examination of the law after the facts of a specific situation are fully considered.