Remedies in Employment Law (9:VI)

From Clicklaw Wikibooks

A. The Employment Standards Branch

The Employment Standards Branch is the only forum an employee can go to if they have a complaint arising from a breach of the ESA. If the complaint is instead regarding a contractual issue, see section V.B: Small Claims Court.

The ESA established the Employment Standards Branch to deal with complaints and to disseminate information about the Act to both employees and employers. The Employment Standards Branch is responsible for informing employers and employees of their rights under the ESA, and for administrating all disputes arising under the Act. The Employment Standards Branch’s Industrial Relations Officers and Employment Standards Officers are trained to interpret the ESA and to assist both employers and employees with problems arising under the Act. Employees should be referred to the Employment Standards Branch if they have a complaint arising under the ESA.

In WG McMahon Canada Ltd v Mendonca (16 September 1999), BCEST Decision No 386/99, the Employment Standards Tribunal set forth the “make whole remedy”, which permits the employee to receive compensation instead of reinstatement. The employee is essentially “made whole” financially by way of a compensation order, such that the employee would be in the same economic position he or she would have been in had the infraction not occurred. This is an extraordinary remedy but one which allows for significant compensation. The above case can be located on the Employment Standards Tribunal website.

Although the ESA also allows for reinstatement as a possible remedy, there are no published decisions in which it has actually been ordered.

Provincially regulated employees may still be able to seek reinstatement under other statutes such as the Worker’s Compensation Act or the Human Rights Code if their situation qualifies.

1. Application and Limitation Periods

The ESA gives the Director of Employment Standards power to investigate complaints made under the Act. The complaint must be made in writing and within certain time limits. The Branch will deal only with complaints that have arisen within six months from the date of the complaint, if the complainant is still employed by the company. If the complainant is no longer employed with the defendant company, the complaint must be filed within six months of the termination date (s 74). When an employee is terminated after a temporary layoff, the last day of the temporary layoff is deemed to be their last day of employment for the purpose of calculating the six-month limitation period. If this six-month time period has elapsed, there may still be an action in Small Claims Court.

NOTE: Time during which an employee was not working because he or she was on sick leave, pregnancy leave, Workers’ Compensation benefits, etc. is nonetheless considered part of the term of employment.

2. Filing a Claim with the Employment Standards Branch

A complainant may file their complaint with the Employment Standards Branch in one of three ways:

  • filling in a form and mailing or delivering it to the nearest Employment Standards Branch;
  • filling in a form at the nearest Employment Standards Branch office; or
  • submitting an online complaint form.

The Director may refuse to investigate a complaint if it is not made in good faith or if there is insufficient evidence to support it. The complainant may request, in writing, that any identifying information gathered for the purpose of the investigation remain confidential. However, the Director may disclose information if disclosure is deemed necessary to the proceeding or in the public interest (s 75).

Most employment standards complaints are resolved through a process of education of the parties, mediation, and/or adjudication, but some are referred to investigation. The officer reviewing the case has the discretion to determine the approach taken. Breach of any section of the ESA may be a basis for an investigation. At the conclusion of an investigation, the Director will give their determination (their decision) based on the evidence given. The Director has the power to settle the claim in a variety of ways, including:

  • arranging payment to the complainant;
  • forcing compliance with the Act; or
  • requiring a remedy or cessation of the action (ss 78-79).

The Director also has the power to help parties settle a complaint and reach a binding settlement agreement that may be filed in Supreme Court for enforcement (s 78). Section 29 of the ES Regulation provides an augmented penalty provision that grants the Employment Standards Branch more power to enforce the Act. The penalty provision is also used to enforce the offences listed in section 125 of the ESA.

Penalties per offence are:

First Determination: $500
Second Determination: $2,500
Third Determination: $10,000

Under Part 11 of the ESA, an officer or director of a corporation is personally liable for up to two months’ unpaid wages per employee if the officer or director held office when the wages were earned or were payable – however, officers or directors of a corporation are not personally liable on bankruptcy of the corporation (s 96(2)). Also, directors and officers may be considered a common employer and be held jointly and severally liable (s 95). If the business is sold, transferred, or continued after bankruptcy, the subsequent business may be considered a successor business and “the employment of an employee is deemed ... to be continuous and uninterrupted” (s 97).

Under the ESA (s 80), employers’ liability for wages (including payments for length of service upon termination) can now include those wages that became payable within the twelve months prior to the date of the complaint, or within the twelve months prior to the date of the employee’s termination – whichever is earlier. However, because some benefits become payable long after they were earned, an employee may be able to recover those benefits that they earned more than twelve months prior to the date of the complaint or date on which they were terminated. For example, in some cases vacation pay is not payable until two years after it is earned; in these cases, an employee could potentially recover vacation pay that was earned over a longer period than the twelve month collection limitation period. Similarly, employees may be able to recover wages that were entered into a time bank more than twelve months prior to the date of the complaint.

NOTE: Employers cannot terminate, suspend, or discipline employees because they have filed, or may file, a complaint (s 83). The Branch can order an employee’s reinstatement for contravention of this section and for violations of s 8 and Part 6.

3. Appeals

Anyone who wishes to appeal a determination of the Director must make an application to the Employment Standards Tribunal, a separate body established under Part 12 of the Act, at the conclusion of an investigation (s 115). The request must be made within certain time limits, which depend on the manner in which the decision is served. If the decision is hand-served, faxed, or delivered electronically, an appeal must be filed within 21 days. If the decision is sent by registered mail, an appeal must be filed within 30 days. After reviewing the decision, the Adjudicator of the Employment Standards Tribunal may confirm it, alter it, or refer it back to an officer. The appeal is decided based on the correctness of the Director’s determination. (see Alsip v Top Rollshutters Inc. dba Talius, 2016 BCCA 252, and Howard v Benson Group Inc. (The Benson Group Inc.), 2016 ONCA 256).

Sections 112 and 114 of the ESA confine the grounds of appeal to the tribunal to situations where:

  • a) The Director erred in law: An error in law may encompass the interpretation of a particular statutory provision, or its application to the facts presented. It can also be used when the appellant feels the Director acted unreasonably, or without evidence.
  • b) The Director failed to observe the principles of natural justice in making the determination: This ground of appeal encompasses a wide variety of circumstances such as bias on the part of the decision maker, procedural unfairness (refusing an adjournment without good reason), or when the appellant feels generally they have not been given the right to be heard (a right codified in s 77 of the Act).
  • c) Evidence has become available that was not available at the time the Determination was made: The new evidence must be material, in the sense that if the Director had been given the chance to review it the determination in whole or in part would have been different.

Although the Act does not specifically allow a party to appeal the Director’s findings of fact, in certain cases the Director’s fact finding may be so flawed that it amounts to a legal error. Gemex Developments Corp v British Columbia (Assessor of Area #12– Coquitlam) (1998), 62 BCLR (3d) 354) defined an error of law as including instances where the Director was “acting on a view of the facts that could not reasonably have been entertained.” This test has been adopted in a number of tribunal decisions. Delsom Estate Ltd v British Columbia (Assessor of Area No 11 Richmond/Delta, [2000] BCJ No 331 (BCSC) restated the test as being “...that there is no evidence before the Board which supports the finding made, in the sense that it is inconsistent with and contradictory to the evidence” and is “perverse or inexplicable”. For a summary of the law relating to judicial reviews under the Employment Standards Tribunal, see Cariboo Gur Sikh Temple Society (1979) v British Columbia (Employment Standards Tribunal), 2016 BCSC 1622.

The tribunal may dismiss an appeal without a hearing if the requirements are not met, or if payment of a possible appeal fee, set up by regulation, has not been made. There are provisions for an appeal fee to be charged but there is currently no fee, nor are there plans to charge one.

If the employee is not satisfied with the decision of the Employment Standards Tribunal, they can seek judicial review of the decision; however, this must be done in BC Supreme Court. Employees should speak to a lawyer if they wish to pursue this possibility.

Provincial Small Claims Court

For information on how to proceed with a claim in Small Claims Court or the Civil Resolution Tribunal, see Chapter 20: Small Claims Court.

The Small Claims approach can often yield better results than claims filed with the Employment Standards Branch, particularly for cases involving termination of employment. For example, the ESA only requires an employer to pay one week’s wages per year of service notice to a maximum of 8 weeks for dismissal without just cause, whereas a common law award could extend to as much as 24 months’ wages. The Employment Standards Branch is also only able to award back-pay of up to twelve months, thus the claimant may wish to pursue a remedy in Small Claims Court if he or she is owed more than twelve months’ back pay, and you determine there is a contractual claim to these funds. It might be in the employee’s best interest to pursue certain claims through the Employment Standards Branch and others in Small Claims Court. However, keep in mind that civil court will not rule on a matter that is to be decided by the Branch.

Please note that employees may be preventing from directly enforcing rights under the ESA in civil court, and must instead use the Employment Standards Branch to enforce these rights (Macaraeg v E Care Contact Centres Ltd, 2008 BCCA 182). However, many of the interests protected by the ESA have parallel common law (contractual) remedies as well. A significant exception to this is overtime pay: employees have a contractual right to receive their normal hourly pay for all hours they work, but they can only make a claim at the Employment Standards Branch if they wish to receive 1.5 or 2 times their normal hourly rate for their overtime hours (an exception to this is if their employment contract specifically sets out that they will receive a higher rate for overtime pay, in which case this contractual right can be enforced in court). Each particular case should be reviewed fully before determining in which forum to proceed.

Also note that Small Claims Court only has jurisdiction for claims above $5,000 and up to $35,000. Employees with claims over $35,000 must either abandon the excess amount of the claim, or proceed to BC Supreme Court. Employees should consult a lawyer before proceeding in BC Supreme Court, as it can be quite complicated and costly. Employees with claims $5,000 or under may be required to pursue their claim through the Civil Resolution Tribunal.

When naming the defendant in Small Claims Court, the employee should sue the body with which the contract of employment was made, unless he or she is alleging fraud or induced breach of contract – in which case, consider joining the shareholders or directors of the company. The employee may have to sue the parent company and the subsidiary if the parent company does the hiring, paying, and terminating.

The BC Human Rights Tribunal

If an employee or potential employee has been discriminated against on the basis of one or more of the prohibited grounds, see Chapter 6: Human Rights, Section III.C: The Complaint Process for information on how to proceed with a complaint. If the employee was terminated from their position based on one of the prohibited grounds, they may be able to recover lost wages and compensation for injury to dignity, feeling, and self respect at the Human Rights Tribunal.

The employee also has the option to file a claim in Small Claims Court, the Civil Resolution Tribunal or BC Supreme Court for wrongful dismissal. See Section V.C: Termination of Employment for information on wrongful dismissal claims.

In most cases, the employee should choose one of these two options, based on which would provide the most compensation. For low-income employees who were employed for a short period of time, the Human Rights Tribunal can often provide greater compensation. However, in some cases where the employee has worked for the employer for a particularly long time before being terminated, or where the employer has demonstrated particularly egregious conduct, the employee may have better success in Small Claims Court or BC Supreme Court where they may be able to receive a larger severance award, and possibly punitive damages.

It is possible to have the employee’s job reinstated by making a claim under the Human Rights Code. This is a significant remedy in itself, and it can also be used to incentivize a former employer to make a fair settlement offer, as they often do not wish for the employee to return.

Limitation Periods

If a client wishes to file a complaint with the Employment Standards Branch, there is a six month limitation period from the last day of employment to file a claim (ESA s 74). Applications to the B.C. Human Rights Tribunal must be made within one year of the alleged contravention or the last day of employment (HRC s 22). In the courts, there was formerly a six-year limitation period for pure economic loss arising from breach of contract (wrongful dismissal would qualify); this limitation period continues to apply for any wrongful dismissal claims that arose before June 1, 2013. For wrongful dismissals occurring on or after June 1, 2013, the new Limitation Act applies, and there is a two-year limitation period (See Limitation Act, SBC 2012, c 13). Section 124 of the ESA sets a limitation period of two years for any court action arising from an offence under the Act.

Note that in cases where an employer has provided working notice of dismissal, the limitation period for wrongful dismissal claims likely start when working notice is provided, not on the last day of employment. See Bailey v. Milo-Food & Agricultural Infrastructure & Services Inc. 2017 ONCA 1004

© Copyright 2017, The Greater Vancouver Law Students' Legal Advice Society.

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