Employment & Labour

Recourse for employees who aren’t paid on time

By AdvocateDaily.com Staff

Toronto employment lawyer Mackenzie Irwin says employees who aren’t being paid on time have a number of options to remedy the situation.

Although suing the employer is one possible approach, Irwin, associate with MacDonald & Associates, suggests it’s an option that should only be considered if the employee is open to ending the employment relationship and has no expectations of returning to that job.

“However, filing a claim and suing an employer while still employed is definitely not my first piece of advice,” she tells AdvocateDaily.com.

The Employment Standards Act (ESA) requires employers to set up a regular pay schedule with a regular payday. When that is not followed or if earnings are missing, an employee can seek compensation for that pay period.

Irwin suggests beginning with a friendly discussion with the employer to maintain a spirit of trust in which both employer and employee work toward a common goal.

Suing the employer, especially when the employee continues to work there, won’t foster a great foundation for a positive ongoing relationship, she adds.

“If you’ve not been paid, set up a meeting and approach it in a respectful way,” Irwin says. “Make sure you’re prepared for the meeting by documenting all the missing wages, and when they should have been paid, not only tracking the amounts but also the expected payday, noting exactly what day was missed and how long it was outstanding.

“This is really important.”

If a solution isn’t achieved at the initial stages, the documentation will prove useful later if the employee resorts to some of the other options, Irwin says.

An employee who isn’t being compensated according to their employment agreement can file an ESA claim with the Ontario Ministry of Labour, although in most cases, it must be filed within two years of when the wages were due, she says.

That could result in an officer issuing an order for the employer to pay the unpaid wages. The legislation protects the employee from any reprisals for asserting their rights through the Ministry of Labour or the Human Rights Tribunal, Irwin adds.

Another possible approach is to file a human rights complaint, although she points out that these claims must be based on one of the prescribed grounds of discrimination, such as age, gender, race, sexual orientation or disability. Irwin says the tribunal can award for all the lost wages right up to the time of the decision, whether or not you’re still working with the employer.

She points to an article in the Financial Post demonstrating that “lost wages” under the framework of the Human Rights Code is not limited in the same way as wrongful dismissal damages.

“The Ontario Human Rights Tribunal has the power to order different remedies than the traditional court system, like wage loss recovery or reinstatement,” Irwin says. “It’s a little more flexible in the kinds of resolutions they can award, but the claim has to be tied to discrimination.”

The third option Irwin sees most frequently at MacDonald & Associates is a lawsuit, typically based on the argument of constructive dismissal. She says that courts have found that if an employer has established a pattern of failing to pay or paying late, it can amount to constructive dismissal.

“But the first move would be to speak to a lawyer before you resign from your employment,” Irwin says. “The courts have found that a pattern of late payments may constitute a unilateral change in the fundamental terms of the employment contract.

“The most practical approach is to foster the employment relationship because it could very well be an oversight or an issue that can be easily fixed,” she says.

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