An Ontario court has sentenced a rogue employer-director named Steven Blondin to 90 days in jail for repeated violations of the Employment Standards Act. He was also ordered to pay fines amounting to $280,000. Here is the MOL’s News Release announcing the decision.
The Minister of Labour is quoted in the release, and the Ministry is promoting the decision as evidence of their tough on Bad Employers approach. The decision was verbal, so I don’t yet have a written decision.
A couple of years ago, I wrote that I thought the power to imprison rogue employers who repeatedly violate the ESA was under-utilized. I floated one idea for reform back then. Here it is:
The power to imprison rogue employers already exists,in Section 132 of the ESA. Unfortunately, it isn’t used nearly enough, I think because we treat ‘white collar crime’ too leniently in this country. I would use criminal sanctions more often to punish employers who flagrantly violate employment legislation. I’m not talking about the employer that makes a mistake. We are talking about the serial violators who know what their doing, but continue violating the Act because they’ve learned that there aren’t any serious penalties for doing so. The victims are employees and competitors, who comply with the law.
I would go further and restrict those convicted of violating the ESA from registering new companies or from acting as an officer of a corporation now or in the future. Their name should be registered with the Companies Branch so that they are flagged whenever their name appears as a principal on an incorporation filing or business registration. This bar could be lifted once all outstanding amounts have been paid, and after a period of time has passed, but even then, these people should be subject to special inspections and reporting requirements, because they have demonstrated they are high risk employers. Acting as a principal of a business is a great responsibility, and people who demonstrate a pattern of law-breaking behaviour have no business running businesses or serving as Directors. Serial ESA violators should carry with them the stain of being a terrible, irresponsible employer.
Also, I would require employers convicted for ESA violations (which would include all those companies listed on the government’s Bad Employer Sunshine list ) to disclose to all future job applicants that the company has been convicted previously of violating employee protections legislation. Or at least their names should be listed on a government website so that potential employees know the risk associated with working for these people. That would give the employees the opportunity to look elsewhere, to take precautions, or to ‘bargain’ a higher wage rate to offset the added risks. To use the language of our Neoclassicalist’ friends, this is information that is relevant to the market, but there is no market incentive for employers to disclose it. Therefore, this is a textbook example of the need for information disclosure legislation to correct information asymmetries in labour markets. We allow employers to ask employees to disclose if they have been convicted of a criminal offence so employers can refuse to hire them. The theory is that an employer has a right to that information so it can decide if it wants to hire someone convicted of a crime. We should also require employers to disclose when they have been found guilty of violating employee protection legislation. That’s only fair, right?
Blondin apparently had over 100 orders to pay issued against him for unpaid wages over a period of years. He operated 6 different companies north of Toronto. Consider how my proposals would work for going forward.
Firstly, Blondin would no longer be able to register a company or act as an officer of a corporation in Ontario. As the law sits now, he could register a new business once he’s out of jail and start his scam all over again. Is that a good system? Secondly, the 6 companies he operated, if they still exist, would be required to inform every new job applicant that the company has been convicted in the past of ESA violations. Failure to disclose this information should itself be an offence, subject to high fines and possible imprisonment under the ESA. Or, at least, Blondin’s name should be posted prominently on a government sunshine list website as having been convicted of ripping off employees repeatedly.
What do you think about that model?
Would it have any impact on the problem of the serial ESA violator? Why or why not?
What are the problems or deficiencies with the model? Can you think of a reason why the model might not stop the Blondins of the world from still screwing workers in future endeavours?