Go Directly to Jail - Directors & Unpaid Wages

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The liability of officers and directors of corporations for unpaid wages to employees is not a new concept. The Employment Standards Act, 2000 (ESA) in Ontario also provides for fines that can certainly drive the intended message home to directors. But jail sentences?

Such was the case with Steve Blondin, who was sentenced to 90 days in jail for a number of violations of the ESA. Mr. Blondin, who operated a number of companies in the Toronto region, faced separate orders to make good for unpaid wages to 61 employees. When he failed to comply with the orders, the Ministry of Labour prosecuted the relevant corporations and Mr. Blondin personally. Following guilty pleas, the order in the Ontario Court of Justice proceedings was that the defendants pay all outstanding wages to the employees and pay a fine of $280,000, both of which are common outcomes.  In addition to those payment requirements, Mr. Blondin was sentenced to 90 days in jail.

This case illustrates breadth of the prosecutorial powers and remedies available to the Ministry of Labour if employers fail to comply with orders made under the ESA. While jail sentences are rare, a director of a company who authorizes or permits the contravention of the ESA can be fined up to $50,000 per offence, and be sentenced to imprisonment for up to 12 months, or both. The severity of such sentences underscores the importance of not ignoring ESA orders for compliance, and obtaining prompt legal advice on such issues, including any appeal rights.

Joe Masterson is an employment and labour lawyer in our London office.  His practice focuses on representing management clients in employment related litigation with an emphasis on wrongful dismissal, Human Rights and Employment Standards disputes. See Joe's professional biography for more information about his work in this area of law or contact him at 519.640.6310 or jmasterson@lerners.ca.

Topics:  Board of Directors, Canada, Corporate Governance, Corporate Officers, Criminal Prosecution, Employment Standards Act, Unpaid Wages, Wages

Published In: Business Organization Updates, Civil Remedies Updates, Criminal Law Updates, Labor & Employment Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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