You and your Employer

Priority of Claims

What is the Employment Standards Act?

The Employment Standards Act is the law that contains basic rules about employing people and working. Both employees and employers have rights and

responsibilities under the Act.

Does the Act cover all employees in Ontario?

Most employees are covered by the provincial legislation. However, employees working in industries that fall under Federal jurisdiction, such as, Post office, Banks, Railways, Radio stations, Airlines, Television stations etc. are not covered. 

If you are currently employed with the company, you may be able to file a claim with a request that your name not be disclosed. The Act protects you when you are exercising your rights under it.

Section 14(1) of the Act states:

Despite any other Act, wages shall have priority over and be paid before the claims and rights of all other unsecured creditors of the employer, to the extent of $10,000 per employee.

This section prevails over other provincial Acts to the extent that they that they purport to grant a different level of priority for the employee’s wages, or to grant priority over wages to some competing claims.

In matters of insolvency, this section gives wages as defined in section 1 priority over all unsecured creditors of the employer (including the Crown) to the extent of $10,000 for each employee.

However, this section does not give priority over the claims of secured creditors of the employer such as trade creditors or suppliers. A secured creditor is one with an interest in the debtor’s property to secure payment or performance of an obligation.

This section does not, by itself, create any lien or charge upon an employer’s assets as do the “deemed trust” provision for vacation pay contained in section 40 of the Act.

It should also be noted that because “wages” under the Employment Standards Act, 2000 includes vacation pay, the amount of vacation pay deemed to be held in trust under section 40(1) will be included in the $10,000 amount that is given priority under section 14(1).  However, the deemed trust status under section 40(1) confers a greater priority over other creditors with respect to the vacation pay component of the $10,000 than the priority afforded under section 14(1).

Section 14(2) of the Act states:

Subsection (1) does not apply with respect to a distribution under the Bankruptcy and Insolvency Act (Canada) or other legislation enacted by the Parliament of Canada respecting bankruptcy or insolvency.

This section clarifies that the provincial guarantee of wages under section 14(1) does not extend to the Federal Legislation concerning bankruptcy and insolvency as it is presently enacted or in future if the Canadian Parliament so chooses.

If you or the employer disagrees with the investigating officer’s decision, both parties have a right to appeal to Ontario Labour Relations Board within 30 days of the officer’s decision. The Board appoints a referee to hear the appeal. It does not cost the employee to request an appeal but the employer may be required to deposit monies in trust with the Ministry of Labour if it is found to be owing. The referee decision is final and binding on both parties.    

In the past, the Ministry was very aggressive in defending the rights of an employee and would send a legal counsel to represent the employee at the Board’s hearing to deal with the matter. It rarely does so now. Obviously, the employer has advantage over the employee in these circumstances. The question arises, should the employee also engage the services of a professional? It is my view, employee’s may not engage such services at the officer’s level hearing but may do so at the at the referee level hearing, particularly, if the issues are complex.

It is important that if a hearing has been scheduled, the employee must attend such a hearing to present evidence to support its position or to contest the employer’s evidence, otherwise, the officer or the referee may rely on the evidence of the employer to render a decision.   

This information is provided for guidance only and should not be considered as a legal advice.

If you have further questions regarding your entitlements under the Act, please send your questions by e-mail at [email protected] or by fax at (905) 331-1805.

Written Authorization to Deduct Wages

What is the Employment Standards Act?

The Employment Standards Act is the law that contains basic rules about employing people and working. Both employees and employers have rights and responsibilities under the Act.

Does the Act cover all employees in Ontario?

Most employees are covered by the provincial legislation. However, employees working in industries that fall under Federal jurisdiction, such as, Post office, Banks, Railways, Radio stations, Airlines, Television stations etc. are not covered. 

If you are currently employed with the company, you may be able to file a claim with a request that your name not be disclosed. The Act protects you when you are exercising your rights under it.

Section 13(2) of the Act states:

An employer may withhold or make a deduction from the employee’s wages or cause the employee to return them if a statute of Ontario or Canada or a Court order authorizes it.

Section 13(3) of the Act states:

An employer may withhold or make a deduction from an employee’s wages or cause the employee to return them with the employee’s written authorization.

Section 13(4) of the Act states:

Subsections (2) and (3) do not apply if the statute, order or written authorization from the employee requires the employer to remit the withheld or deducted wages to a third person and the employer fails to do so.

Subsection (4) clarifies that if the employer makes deductions from wages or withheld wages in accordance with subsections (2) and (3) and fails to forward the wages so deducted or withheld, the employer would be considered to have made those deductions improperly and the employee would be entitled to deducted or withheld wages.

This situation may occur if the employer makes deductions for Income Tax, CPP or EI but fails to remit those deductions to Canada Revenue Agency. If this were to happen, it would be a contravention of subsection 13(4) of the Act and the employee would be entitled to the deducted amount in a claim against the employer.       

Section 13(5) of the Act states:

Subsection (3) does not apply if,

(a)     the employee’s authorization does not refer to a specific amount or provide a formula from which a specific amount may be calculated;

(b)     the employee’s wages were withheld, deducted or required to be returned,

(i)     because of faulty work,

(ii)    because the employer had a cash shortage, lost property or had property stolen and a person other than the employee had access to the cash or property or

(iii)   under any prescribed conditions; or

©   the employee’s wages were required to be returned and those wages were the subject of an order under the Act.

Subsection (5) clarifies that if deductions are to be valid, the written authorization must specify the exact amount to be deducted or at least provide some mechanism to calculate the exact amount.

It further clarifies that the employer cannot made deductions from the employee’s wages if the employer considers the work to be faulty or cannot withhold wages from the employee if there is a cash shortage or the employer’s property is stolen or lost if someone else also had access to the cash or the property. The employer also cannot withhold wages if the Ministry defines those conditions. Finally, the employer is also prohibited from making deductions if those deductions were the result of the Order issued by the Ministry against the employer.

If you or the employer disagrees with the investigating officer’s decision, both parties have a right to appeal to Ontario Labour Relations Board within 30 days of the officer’s decision. The Board appoints a referee to hear the appeal. It does not cost the employee to request an appeal but the employer may be required to deposit monies in trust with the Ministry of Labour if it is found to be owing. The referee decision is final and binding on both parties.    

In the past, the Ministry was very aggressive in defending the rights of an employee and would send a legal counsel to represent the employee at the Board’s hearing to deal with the matter. It rarely does so now. Obviously, the employer has advantage over the employee in these circumstances. The question arises, should the employee also engage the services of a professional? It is my view, employee’s may not engage such services at the officer’s level hearing but may do so at the at the referee level hearing, particularly, if the issues are complex.

It is important that if a hearing has been scheduled, the employee must attend such a hearing to present evidence to support its position or to contest the employer’s evidence, otherwise, the officer or the referee may rely on the evidence of the employer to render a decision.   

This information is provided for guidance only and should not be considered as a legal advice.

If you have further questions regarding your entitlements under the Act, please send your questions by e-mail at [email protected] or by fax at (905) 331-1805.

Deductions From Wages

What is the Employment Standards Act?

The Employment Standards Act is the law that contains basic rules about employing people and working. Both employees and employers have rights and responsibilities under the Act.

Does the Act cover all employees in Ontario?

Most employees are covered by the provincial legislation. However, employees working in industries that fall under Federal jurisdiction, such as, Post office, Banks, Railways, Radio stations, Airlines, Television stations etc. are not covered. 

If you are currently employed with the company, you may be able to file a claim with a request that your name not be disclosed. The Act protects you when you are exercising your rights under it.

Section 13(1) of the Act states:

An employer shall not withhold wages payable to an employee, make a deduction from an employee’s wages or cause the employee to return his or her wages to the employer unless authorized to do so under this section.

This section clarifies that the employer is prohibited from the following:

• withholding wages that an employee has earned;
• making a deduction from an employee’s wages;
• causing the employee to return his or wages to the employer, except where the employer is permitted to do so under this section.

The purpose of this section is simply to protect the employee’s wages and not allow the employer to arbitrarily withhold wages or make unauthorized deductions from his or her wages that the employee has earned or to force the employee to return his or wages for some perceived reasons. However, the employer is permitted to make deductions if the statute allows it or if the court requires it. The employer may also make deductions if the employee provides a written authorization to the employer that a certain fixed amount or based on agreed upon criteria can be deducted from his or her wages. The emphasis is on written authorization and agreed upon amount. Also, the employee agrees into this on a free will and was not forced to agree as a condition of his or her employment.

If the agreement between the employer and the employee is not voluntary or not in writing, the agreement is null and void. This means the employer made the deduction without the consent of the employee.

Section 13(2) of the Act states:

An employer may withhold or make a deduction from the employee’s wages or cause the employee to return them if a statute of Ontario or Canada or a Court order authorizes it.

This section clarifies under what conditions the employer is permitted to make the deductions from the employee’s wages. This specifies if the Ontario or Canada statute allows it, the employer can make the deduction. This also permits the employer to withhold wages if the court directs it to do so. The employer is not required to have authorization under these circumstances.

 Section 13(3) of the Act states:

An employer may withhold or make a deduction from an employee’s wages or cause the employee to return them with the employee’s written authorization.

This clarifies that if the employee gives written authorization to the employer, the employer can make the deduction. The authorization must be for the fixed amount or some other criteria that agreed by the parties. The authorization cannot be general for the employer to make the deduction.

If you or the employer disagrees with the investigating officer’s decision, both parties have a right to appeal to Ontario Labour Relations Board within 30 days of the officer’s decision. The Board appoints a referee to hear the appeal. It does not cost the employee to request an appeal but the employer may be required to deposit monies in trust with the Ministry of Labour if it is found to be owing. The referee decision is final and binding on both parties.    

In the past, the Ministry was very aggressive in defending the rights of an employee and would send a legal counsel to represent the employee at the Board’s hearing to deal with the matter. It rarely does so now. Obviously, the employer has advantage over the employee in these circumstances. The question arises, should the employee also engage the services of a professional? It is my view, employee’s may not engage such services at the officer’s level hearing but may do so at the at the referee level hearing, particularly, if the issues are complex.

It is important that if a hearing has been scheduled, the employee must attend such a hearing to present evidence to support its position or to contest the employer’s evidence, otherwise, the officer or the referee may rely on the evidence of the employer to render a decision.   

This information is provided for guidance only and should not be considered as a legal advice.

If you have further questions regarding your entitlements under the Act, please send your questions by e-mail at [email protected] or by fax at (905) 331-1805.

Statement Regarding Wages on Termination

What is the Employment Standards Act?

The Employment Standards Act is the law that contains basic rules about employing people and working. Both employees and employers have rights and responsibilities under the Act.

Does the Act cover all employees in Ontario?

Most employees are covered by the provincial legislation. However, employees working in industries that fall under Federal jurisdiction, such as, Post office, Banks, Railways, Radio stations, Airlines, Television stations etc. are not covered. 

If you are currently employed with the company, you may be able to file a claim with a request that your name not be disclosed. The Act protects you when you are exercising your rights under it.

Section 12.1 of the Act states:

On or before the day on which the employer is required to pay wages under subsection 11(5), the employer shall provide the employee with a written statement setting out,

     (a)     the gross amount of any termination pay or severance pay being
               paid to the employee;

     (b)     the gross amount of any vacation pays being paid to the employee;

     (c)     unless the information is provided to the employee in some other
              manner, how the amounts referred to in clauses (a) and (b) were
              calculated;

     (d)     the pay period for which any wages other than wages described in
              clauses (a) and (b) are being paid;

     (e)     the wage rate, if there is one; 

     (f)     the gross amount of any wages referred to the clause (d) and
              unless, the information is provided to the employee in some
              other manner, how that amount was calculated;

     (g)     the amount and purpose of each deduction from wages;

     (h)     any amount with respect to room or board that is deemed to have
              been paid to the employee under subsection 23(2); and

     (i)      the net amount of wages being paid to the employee. 

This section clarifies what information an employer must provide to the employee when he or she is terminated. This information should be provided on or before the employer is required to pay wages to the employee under section 11(5) of the Act. It also requires the employer to provide details of how the gross amount for termination pay, severance pay, vacation pay and any other wages in addition to those amounts was calculated, unless the information is provided in some other way by the employer.

If you or the employer disagrees with the investigating officer’s decision, both parties have a right to appeal to Ontario Labour Relations Board within 30 days of the officer’s decision. The Board appoints a referee to hear the appeal. It does not cost the employee to request an appeal but the employer may be required to deposit monies in trust with the Ministry of Labour if it is found to be owing. The referee decision is final and binding on both parties.    

In the past, the Ministry was very aggressive in defending the rights of an employee and would send a legal counsel to represent the employee at the Board’s hearing to deal with the matter. It rarely does so now. Obviously, the employer has advantage over the employee in these circumstances. The question arises, should the employee also engage the services of a professional? It is my view, employee’s may not engage such services at the officer’s level hearing but may do so at the at the referee level hearing, particularly, if the issues are complex.

It is important that if a hearing has been scheduled, the employee must attend such a hearing to present evidence to support its position or to contest the employer’s evidence, otherwise, the officer or the referee may rely on the evidence of the employer to render a decision.   

This information is provided for guidance only and should not be considered as a legal advice.

If you have further questions regarding your entitlements under the Act, please send your questions by e-mail at [email protected] or by fax at (905) 331-1805.

Statement Regarding Wages

What is the Employment Standards Act?

The Employment Standards Act is the law that contains basic rules about employing people and working. Both employees and employers have rights and
responsibilities under the Act.

Does the Act cover all employees in Ontario?

Most employees are covered by the provincial legislation. However, employees working in industries that fall under Federal jurisdiction, such as, Post office, Banks, Railways, Radio stations, Airlines, Television stations etc. are not covered. 

If you are currently employed with the company, you may be able to file a claim with a request that your name not be disclosed. The Act protects you when you are exercising your rights under it.

Section 12(1) of the Act states:

On or before an employee’s pay day, the employer shall give to the employee a written statement setting out,

            (a)    the pay period for which wages are being paid;

            (b)    the wage rate, if there is one;

            (c)    the gross amount of wages and, unless the information
                    is provided to the employee in some other manner, how
                    that amount was calculated;

            (d)    the amount and purpose of each deduction from wages; 

            (e)    any amount with respect to room or board that is deemed to
                    have been paid to the employee under subsection 23(2); and

            (f)    the net amount of wages being paid to the employee.

This section requires that the employer must provide a written statement to the employee on his or her pay day detailing the time period for which wages are being paid, hourly rate if applicable; if not, what other method was used to calculate his or her wages, the gross amount for that period, details of deductions if made and the purpose of such deductions such as, CPP, EI etc.; if room or board is provided to the employee, the amount charged for room or board if it is included in the calculation of gross wages and finally the net amount being paid.

The employer is required to provide such a written statement on each pay day even if the information provided does not change or even if the employee is aware of some of information contained in the statement.

The employer is permitted to provide such a statement electronically if the employee is able to and knowledgeable to receive information in this fashion. If the employee works at a location different from the employer’s business; for example, the employee may have been sent to the client by the temporary help agency, the employer would have complied with the requirement of section 12 if the employee is provided with an access to the computer and printer at the client’s place of business.

Section 12(3) of the Act states:

The statement may be provided to the employee by electronic mail rather than in writing if the employee has access to a means of making a paper copy of the statement.

This section permits the employer to provide statement of wages by means other than written statement provided the employee has access to computer and printer at the work place so that he or she can make a copy of the information provided.

Under some circumstances, the employee may not be able to retrieve this information, if so; the employer must then provide a written statement as required under section 12.
  
If you or the employer disagrees with the investigating officer’s decision, both parties have a right to appeal to Ontario Labour Relations Board within 30 days of the officer’s decision. The Board appoints a referee to hear the appeal. It does not cost the employee to request an appeal but the employer may be required to deposit monies in trust with the Ministry of Labour if it is found to be owing. The referee decision is final and binding on both parties.   

In the past, the Ministry was very aggressive in defending the rights of an employee and would send a legal counsel to represent the employee at the Board’s hearing to deal with the matter. It rarely does so now. Obviously, the employer has advantage over the employee in these circumstances. The question arises, should the employee also engage the services of a professional? It is my view, employee’s may not engage such services at the officer’s level hearing but may do so at the at the referee level hearing, particularly, if the issues are complex.

It is important that if a hearing has been scheduled, the employee must attend such a hearing to present evidence to support its position or to contest the employer’s evidence, otherwise, the officer or the referee may rely on the evidence of the employer to render a decision.   

This information is provided for guidance only and should not be considered as a legal advice.

If you have further questions regarding your entitlements under the Act, please send your questions by e-mail at [email protected] or by fax at (905) 331-1805.

Payment of Wages When Employment Ends

What is the Employment Standards Act?

The Employment Standards Act is the law that contains basic rules about employing people and working. Both employees and employers have rights and
responsibilities under the Act.

 

 Does the Act cover all employees in Ontario?

Most employees are covered by the provincial legislation. However, employees working in industries that fall under Federal jurisdiction, such as, Post office, Banks, Railways, Radio stations, Airlines, Television stations etc. are not covered. 

If you are currently employed with the company, you may be able to file a claim with a request that your name not be disclosed. The Act protects you when you are exercising your rights under it.

Section 11(5) of the Act states:

If an employee’s employment ends, the employer shall pay any wages to which the employee is entitled to the employee not later than the later of,

    (a)    seven days after the employment ends; and

    (b)    the day that would have been the employee’s next pay day.

This requires that when the employee’s employment ends, he or she must be paid all wages, including termination pay, severance pay, vacation pay, and public holiday pay, regular wages etc. to be paid within 7 days. In other words, any wage entitlements owing to an employee whose employment has ended must be paid out no later than 7 days after his or her employment has ended with the employer. This provision provides a choice to the employer when to pay wages but also sets a deadline. The flexibility of when to pay allows the employer to use its regular system of payment of wages, that is, pay day if the employer has a computerized payroll system rather than having to cut a manual cheque to make the final payment to the employee.

Note: Pay day referred to in paragraph (b) is not necessarily the pay day that covers the period to the date of termination, but is rather the very next pay day to fall after the employment ends.

 

 Example:

- Employee’s employment is terminated on January 22.

- Employee is paid on a semi-monthly basis. The employee would be paid on Jan 31 for wages earned in the period Jan. 1 to Jan. 15 and paid wages earned in the period Jan. 16 to Jan. 31 on Feb. 15, that is, pay period that would have included Jan. 22 would be Feb. 15.

- The employee is entitled to payment of any outstanding wages on the date the later of:                            

         - 7 days after the termination date – Jan. 29 (7 days after Jan. 22) and
         - the next pay day – Jan. 31.

- The employee will be entitled to all outstanding wages on Jan 31 (not Feb. 15)

It does not relieve the employer in any way of its obligations to pay wages earned in any given pay period on the regular pay day for that period.

Example:

- Pay day for the pay period is Oct. 2.

- Employee is terminated on Sept. 30 (i.e., after the pay period is completed but prior to the pay day for that pay period).

Under section 11(1), the employer still must pay his or her wages earned till Sept. 25 on Oct. 2.

If you or the employer disagrees with the investigating officer’s decision, both parties have a right to appeal to Ontario Labour Relations Board within 30 days of the officer’s decision. The Board appoints a referee to hear the appeal. It does not cost the employee to request an appeal but the employer may be required to deposit monies in trust with the Ministry of Labour if it is found to be owing. The referee decision is final and binding on both parties.   

In the past, the Ministry was very aggressive in defending the rights of an employee and would send a legal counsel to represent the employee at the Board’s hearing to deal with the matter. It rarely does so now. Obviously, the employer has advantage over the employee in these circumstances. The question arises, should the employee also engage the services of a professional? It is my view, employee’s may not engage such services at the officer’s level hearing but may do so at the at the referee level hearing, particularly, if the issues are complex.

It is important that if a hearing has been scheduled, the employee must attend such a hearing to present evidence to support its position or to contest the employer’s evidence, otherwise, the officer or the referee may rely on the evidence of the employer to render a decision.   

This information is provided for guidance only and should not be considered as a legal advice.

If you have further questions regarding your entitlements under the Act, please send your questions by e-mail at [email protected] or by fax at (905) 331-1805.

Manner of Payment Wages

What is the Employment Standards Act?

The Employment Standards Act is the law that contains basic rules about employing people and working. Both employees and employers have rights and responsibilities under the Act.

Does the Act cover all employees in Ontario?

Most employees are covered by the provincial legislation. However, employees working in industries that fall under Federal jurisdiction, such as, Post office, Banks, Railways, Radio stations, Airlines, Television stations etc. are not covered. 

If you are currently employed with the company, you may be able to file a claim with a request that your name not be disclosed. The Act protects you when you are exercising your rights under it.

Section 11(2) of the Act states:

An employer shall pay an employee’s wages,

(a)        by cash;

(b)       by cheque payable only to the employee; or

©         in accordance with subsection (4).

This section clarifies how the employee’s wages are to be paid. The employer can either pay by cash or cheque payable to employee or by direct deposit to the employee’s account.

Allowances for room and board are defined as wages in the Act and are considered virtually equivalent to cash wages. The maximum amount for room and board that the employer can charge is specified in the Act. If the employer is taking in to account charges for the allowable amount for room and board, it must ensure that the total payment of room and board plus other payments must comply with at least the minimum wage requirement of the Act.

The contract of employment can include non wage forms of compensation, for example, food, bus or subway tickets or merchandise to an agreed value provided the minimum wage standards are met. However, provision of these benefits would be considered as a greater benefit and are not to replace the payment by cash or cheque for wages. In other words, provision of non wage benefit is between the employer and the employee and do not become statutory under the Act.

Section 11(3) of the Act states:

If payment is made by cash or cheque, the employer shall ensure that the cash or cheque is given to the employee at his or her workplace or at some other place agreeable to the employee.

This section requires that the payment of wages must be given to the employee at his workplace or at a place requested by the employee. It is the employee who decides where he or she wishes to receive his or her wages and not the employer. If the payment of wages is not made at the workplace, the employer must require in writing where the wages have to be made.

Section 11(4) of the Act states:

An employer may pay an employee’s wages by direct deposit into an account of a financial institution if,

(a)    the account is in the employee’s name;

(b)   no person other than the employee or a person authorized by the employee has access to the account; and

©      unless the employee agrees otherwise, an office or facility of the financial institution is located within a reasonable distance from the location where the employee usually works

This section clarifies that the employer can pay wages in a manner different from cash or cheque and the requirement for making payment.

If you or the employer disagrees with the investigating officer’s decision, both parties have a right to appeal to Ontario Labour Relations Board within 30 days of the officer’s decision. The Board appoints a referee to hear the appeal. It does not cost the employee to request an appeal but the employer may be required to deposit monies in trust with the Ministry of Labour if it is found to be owing. The referee decision is final and binding on both parties.    

In the past, the Ministry was very aggressive in defending the rights of an employee and would send a legal counsel to represent the employee at the Board’s hearing to deal with the matter. It rarely does so now. Obviously, the employer has advantage over the employee in these circumstances. The question arises, should the employee also engage the services of a professional? It is my view, employee’s may not engage such services at the officer’s level hearing but may do so at the at the referee level hearing, particularly, if the issues are complex.

It is important that if a hearing has been scheduled, the employee must attend such a hearing to present evidence to support its position or to contest the employer’s evidence, otherwise, the officer or the referee may rely on the evidence of the employer to render a decision.   

This information is provided for guidance only and should not be considered as a legal advice.

If you have further questions regarding your entitlements under the Act, please send your questions by e-mail at [email protected] or by fax at (905) 331-1805.

Payment of Wages

What is the Employment Standards Act? 

The Employment Standards Act is the law that contains basic rules about employing people and working. Both employees and employers have rights and responsibilities under the Act.

Does the Act cover all employees in Ontario?

Most employees are covered by the provincial legislation. However, employees working in industries that fall under Federal jurisdiction, such as, Post office, Banks, Railways, Radio stations, Airlines, Television stations etc. are not covered. 

If you are member of the trade union and your contract of employment is governed by the collective agreement, you may not be covered by the Act.

If you are currently employed with the company, you may be able to file a claim with a request that your name not be disclosed. The Act protects you when you are exercising your rights under it.

Section 11(1) of the Act states:

An employer shall establish a recurring pay period and a recurring pay day and shall pay all wages earned during each pay period, other than accruing vacation pay, no later than the pay day for that period.

The provision of this section requires the employer to establish a regular pay period and a pay day. It also requires the employer to pay all wages earned during this pay period on the pay day established except perhaps vacation pay. Of course, the employer can also pay vacation pay earned during this pay period at the same time other wages are being paid. However, it must be shown separately that the vacation pay is being paid.

The employer may establish regular pay day as weekly, bi-weekly, semi-monthly, monthly or any specified period. The employer may also establish different pay period and different pay day for different employees, that is, the employer may have a different pay period and pay day for employees who earn regular salary and those who earn commissions.

The employer is free to establish a new pay period and pay day. However, if the change affects the employee significantly regarding his wages or other terms of the contract of employment, the employee may claim constructive dismissal and thus termination under the Act. To avoid this possibility, the employer may wish to give proper notice before the change is implemented. 

 
The Act provides that if a contract of employment provides greater benefit than required under the Act, the greater provision of the contract would apply rather than the minimum standards required in the Act. For example, if the contract of employment provides that the employee will be paid overtime while the employee is exempted for overtime under the Act, the employee would be entitled to overtime and the provisions of the contract would be enforced. If the employer fails to pay overtime to this employee, the Ministry would consider non-payment of overtime as unpaid wages. Also, the Act requires the employer to pay overtime after 44 hours/week; however, the employer may pay overtime after say 40 hours/week as provided in the contract, the employer cannot refuse to pay overtime after 40 hours/week, simply because the Act specifies 44 hours/week. If the employer contravenes the terms of employment contract, the employer would be considered to have violated the Act. 

The employer must ensure that the terms of employment and the provisions of the Act are not breached. The onus is on the employer to prove that all these requirements have been met.      

If you or the employer disagrees with the investigating officer’s decision, both parties have a right to appeal to Ontario Labour Relations Board within 30 days of the officer’s decision. The Board appoints a referee to hear the appeal. It does not cost the employee to request an appeal but the employer may be required to deposit monies in trust with the Ministry of Labour if it is found to be owing. The referee decision is final and binding on both parties.   

In the past, the Ministry was very aggressive in defending the rights of an employee and would send a legal counsel to represent the employee at the Board’s hearing to deal with the matter. It rarely does so now. Obviously, the employer has advantage over the employee in these circumstances. The question arises, should the employee also engage the services of a professional? It is my view, employee’s may not engage such services at the officer’s level hearing but may do so at the referee level hearing, particularly, if the issues are complex.

It is important that if a hearing has been scheduled, the employee must attend such a hearing to present evidence to support its position or to contest the employer’s evidence, otherwise, the officer or the referee may rely on the evidence of the employer to render a decision.   

This information is provided for guidance only and should not be considered as a legal advice.

If you have further questions regarding your entitlements under the Act, please send your questions by e-mail at [email protected] or by fax at (905) 331-1805.

Exception to Continuity of Employment (New Provider)

What is the Employment Standards Act?

The Employment Standards Act is the law that contains basic rules about employing people and working. Both employees and employers have rights and
responsibilities under the Act.

Does the Act cover all employees in Ontario?

Most employees are covered by the provincial legislation. However, employees working in industries that fall under Federal jurisdiction, such as, Post office, Banks, Railways, Radio stations, Airlines, Television stations etc. are not covered. 

If you are member of the trade union and your contract of employment is governed by the collective agreement, you may not be covered by the Act.

If you are currently employed with the company, you may be able to file a claim with a request that your name not be disclosed. The Act protects you when you are exercising your rights under it.

Section 10(2) and 10 (3) of the Act state:

The employment of the employee shall be deemed not to have been terminated or severed for the purpose of this Act and his or her employment with the replaced provider shall be deemed to have been employment with the new provider for the purpose of any subsequent calculation of the employee’s length or period of employment.

Subsection (2) does not apply if the day on which the new provider hires the employee is more than 13 weeks after the earlier of his or her last day of employment with the replaced provider and the day on which the new provider began servicing the premises.

This means that if 13 weeks have passed between the last day of work with the replaced provider and starting with a new service provider, there is no continuity of employment and any entitlement to termination or severance pay would fall on the replaced provider. In other words, if the new provider hires the employee of the replaced provider and 13 weeks have passed before the employee starts his or her job with the new provider, there is no continuity of employment. The replaced provider owes the employee his or her termination or severance pay.

Example:

• Employer A loses contract for the building services to Employer B.

• Changeover date is June 14 2010.

• A’s employee is laid off one week before the changeover date (June 7). Temporary lay-off for notice of termination purposes ends September 6 (13 weeks after lay- off began and 12 weeks after the changeover date). Under the Act, the employee is deemed to be terminated on first day of lay-off (June 7).

• However, the employee’s last day of work is considered to be September 6, for the purpose of Section 10.

• Employer B hires the employee on or before September 13, that is, within 13 weeks after June 14, the changeover date.

• Employer B subsequently terminates the employee. Under section 10 (2), the employee was deemed not to have been terminated by employer A and the employee’s employment with employer A is now added to the employee’s employment with employer B.

Therefore, any entitlement under the Act would be based on the combined period of employment with both employers A and B and the employer B would be held responsible to provide that even though the employee’s employment ended with employer A on September 6 and his termination date was deemed to be June 7.       

If you or the employer disagrees with the investigating officer’s decision, both parties have a right to appeal to Ontario Labour Relations Board within 30 days of the officer’s decision. The Board appoints a referee to hear the appeal. It does not cost the employee to request an appeal but the employer may be required to deposit monies in trust with the Ministry of Labour if it is found to be owing. The referee decision is final and binding on both parties.   

In the past, the Ministry was very aggressive in defending the rights of an employee and would send a legal counsel to represent the employee at the Board’s hearing to deal with the matter. It rarely does so now. Obviously, the employer has advantage over the employee in these circumstances. The question arises, should the employee also engage the services of a professional? It is my view, employee’s may not engage such services at the officer’s level hearing but may do so at the at the referee level hearing, particularly, if the issues are complex.

It is important that if a hearing has been scheduled, the employee must attend such a hearing to present evidence to support its position or to contest the employer’s evidence, otherwise, the officer or the referee may rely on the evidence of the employer to render a decision.   

This information is provided for guidance only and should not be considered as a legal advice.

If you have further questions regarding your entitlements under the Act, please send your questions by e-mail at [email protected] or by fax at (905) 331-1805.

 

Continuity of Employment (No Termination or Severance)

What is the Employment Standards Act?

The Employment Standards Act is the law that contains basic rules about employing people and working. Both employees and employers have rights and
responsibilities under the Act.

 

 Does the Act cover all employees in Ontario?

Most employees are covered by the provincial legislation. However, employees working in industries that fall under Federal jurisdiction, such as, Post office, Banks, Railways, Radio stations, Airlines, Television stations etc. are not covered. 

If you are member of the trade union and your contract of employment is governed by the collective agreement, you may not be covered by the Act.

If you are currently employed with the company, you may be able to file a claim with a request that your name not be disclosed. The Act protects you when you are exercising your rights under it.

Section 10(2) of the Act states:

The employment of the employee shall be deemed not to have been terminated or severed for the purpose of this Act and his or her employment with the replaced provider shall be deemed to have been employment with the new provider for the purpose of any subsequent calculation of the employee’s length or period of employment.

This clarifies that there would be a continuity of employment of an employee if there is a change of service provider and if the new service provider hires him or her within 13 weeks of change.  If this happens, the employee would not be considered to have been terminated by the replaced service provider under the Act. Since the employee is not considered to have been terminated by the replaced service provider, he or she is therefore, not entitled to termination notice or pay in lieu of termination notice or severance pay under the Act. The employee does not lose his or her period of employment with the replaced service provider but it is simply added to his or her period of employment with the new service provider.

In other words, if a service provider is replaced and the employee is retained by the new service provider within 13 weeks of change, the employee’s combined period of employment would be considered when calculating his or her entitlements under the Act such as:

1.     Vacation - Employees are entitled to at least two weeks vacation with pay uponcompletion of 12 month period of employment.

 

 2.     Pregnancy Leave - Employees may be entitled to pregnancy leave if they have been employed for at least 13 weeks preceding the expected date of birth.

3.     Parental Leave - Employees may be entitled to parental leave if they have been employed for at least 13 weeks prior to starting the leave.

4.     Written notice of termination or pay in lieu - Employees may be entitled to written notice or pay in lieu if they have been employed for at least 3 months. The notice or pay could range from one to eight weeks depending on length of service.  

5.     Severance Pay - Employees may be entitled to severance pay if they have been employed for at least 5 years. The severance pay could range one to twenty six weeks.

Note: Regardless of whether the new service provider hires the employee of replaced service provider, the vacation pay is the responsibility of the replaced service provider.

If you or the employer disagrees with the investigating officer’s decision, both parties have a right to appeal to Ontario Labour Relations Board within 30 days of the officer’s decision. The Board appoints a referee to hear the appeal. It does not cost the employee to request an appeal but the employer may be required to deposit monies in trust with the Ministry of Labour if it is found to be owing. The referee decision is final and binding on both parties.   

In the past, the Ministry was very aggressive in defending the rights of an employee and would send a legal counsel to represent the employee at the Board’s hearing to deal with the matter. It rarely does so now. Obviously, the employer has advantage over the employee in these circumstances. The question arises, should the employee also engage the services of a professional? It is my view, employee’s may not engage such services at the officer’s level hearing but may do so at the at the referee level hearing, particularly, if the issues are complex.

It is important that if a hearing has been scheduled, the employee must attend such a hearing to present evidence to support its position or to contest the employer’s evidence, otherwise, the officer or the referee may rely on the evidence of the employer to render a decision.   

This information is provided for guidance only and should not be considered as a legal advice.

If you have further questions regarding your entitlements under the Act, please send your questions by e-mail at [email protected] or by fax at (905) 331-1805.