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Deadbeat Employer Gets Jail Time

Another deadbeat employer has been sentenced to 90 days in jail by an Ontario Court for stealing his employee’s wages, according to a witness who was in the court room.  There are no written reasons yet.  The MOL will probably post a notice soon.

This time it is a guy named Peter Check, who hired students to work as lifeguards during summer school breaks, and then didn’t pay them. Here is a Toronto Star piece from 2010 peter checkdescribing the offences.  After each season, Check would disband the company and disappear or claim bankruptcy for the company.  Next season, he would open up a new business under a different name and rip off a new batch of employees all over again.  The Ministry of Labour tried to place writs on Check’s property, but most of the property, including his house, were placed in his wife’s name.  In total, he owed nearly $70,000 in unpaid wages.

In Court yesterday, the judge sentenced Check to 90 days in jail, plus ordered him to pay the wages owing, and a $15,000 fine, according to someone who was in the courtroom at the time the sentence was read into the record.  I will post the MOL notice, and written decision once they are available.

I’ve written before about how the power exists to imprison wage stealing employers, yet that power isn’t used very often.  Here is a decision in regards to another wage thief, Steven Blondin, who last year was also sentenced to a 90 day jail term.  The key there was that, despite many opportunities to comply with the order of restitution (to pay the employees the amounts owed), the defendant had failed to do so.  People only get jailed for ESA offences when they demonstrate that they do not accept responsibility and they make no effort to comply with orders to pay.

The power to jail ESA violators in Section 132 of the Employment Standards Act.  Maybe we are witnessing a movement towards a greater willingness to use this power? I’ve said before that legislation should prohibit people who have been convicted under the ESA should be denied the right to register a business or create a corporation or act as a principle of a business.

Issue for Discussion

Do you agree with imprisoning ESA violators? Is this too harsh?

What other tools should exist to discourage and punish repeat wage thieves?

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6 Responses to Deadbeat Employer Gets Jail Time

  1. Fernando Reis Reply

    April 9, 2013 at 2:31 pm

    Disgusting. I agree that these individuals should face jail time both as a punishment for what they have done (in effect stealing) and as a deterrent for other potential violators. We could have a system that imposes escalating fines with a termination date. Upon reaching the termination date, the maximim fine is payable and jail time (subject to due process, of course) is a possibility. The UFCW actually had an employer jailed for repeatedly failing to make contributions to the benefit plans and not submitting union dues. I have also negotiated settlements where if the employer fails to meet a payment deadline they incurr a premium (sort of a fine). Also, I have asked for arbitrators to impose quia timet orders, a form of equitable relief which can be enforced in court through contempt proceedings.

    • Chris Davidson Reply

      April 9, 2013 at 8:39 pm

      Mr Reis,

      The situation involving the employer that repeatedly failed to make contributions and submit union dues – it is realted to the OLRB decision United Food and Commercial Workers International Union (UFCW Canada) Local 102 v. Quality Hotel and Conference Centre Niagara Falls, Ontario, 2013 CanLII 14707 (ON LRB), http://canlii.ca/t/fwng9
      I’d be interested to know of any other decisions relating to that case.

      • Fernando Reis Reply

        April 10, 2013 at 4:07 pm

        No; it was UFCW but Local 175 and the Employer was the Rainy Lake Hotel in Fort Frances, Ontario.

  2. Sheila Wilkinson Reply

    April 12, 2013 at 4:53 pm

    Hi Fernando – I thought that a quia timet order was a form of injunctive relief. Can you explain how you use this remedy in practice?

  3. Fernando Reis Reply

    April 15, 2013 at 1:26 am

    Hi Sheila:

    The example I gave pertained to a grievance arbitration between my union (UFCW) and a particular employer who had been delinquent on a regular basis in remitting union dues to the union (even though the employer had deducted the amounts from the pay of employees)and making contributions to the benefit and pension plans. The union had for a number of years brought grievances to arbitration. We had to argue the matters (our onus, of course) and wait for a decision that could take up to 30 days. Then, we would chase the employer to try to obtain payment and would have to go back before the arbitrator to seek enforcement. Only after a this second “visit” to the arbitrator could we seek enforcement of the decision in court. We were finally fed up and went a step further and asked the arbitrator for the equitable remedy of a quia timet order. Quite literally “we feared” (reasonably)that this employer would continue to fail to make the contributions. We were granted the quia timet order and could proceed directly to court. I guess the lesson is that you still have to demonstrate that the facts of a case merit this equitable remedy; you don’t get it for one or necesarily multiple violations – a pattern has to be shown and a compelling argument made.

  4. Fernando Reis Reply

    April 15, 2013 at 1:54 pm

    Hi Sheila:

    Here are some labour arbitration cases on point (just the citations):

    24 L.A.C. 201; 35 D.L.R.(3d)501; 31 L.A.C.(3d)97; 38 L.A.C. (4th) 250 and 189 L.A.C. (4th) 314.

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