Ontario Superior Court dismisses bid to quash unpaid wage orders issued by the Ministry of Labour

The court rejected the employer's claim that the workers were subcontracted, not employees

Ontario Superior Court dismisses bid to quash unpaid wage orders issued by the Ministry of Labour

The Ontario Superior Court of Justice has dismissed a judicial review application brought by Temporary Personnel Solutions (TPS) seeking to quash orders for approximately $2.8 million in unpaid wages.

The Ministry of Labour issued the orders, holding TPS responsible for unpaid wages of workers claimed to be subcontracted employees. TPS, a temporary help agency established in 2016, argued that the workers were employees of subcontracted agencies, not TPS. However, the employment standards officers (ESOs) determined that TPS was the employer of these workers and issued orders for TPS to pay the unpaid wages. TPS contended that the Ministry of Labour did not pursue the subcontractors for non-payment of wages, which TPS claimed was a procedural breach.

The Ontario Labour Relations Board upheld the order, finding that TPS was the employer and failed to demonstrate that the workers were paid. TPS’s subsequent judicial review application to the Divisional Court was also dismissed.

TPS argued that the ESOs' orders were procedurally unfair and unreasonable. TPS sought direct judicial review, citing exceptional circumstances due to its claimed inability to pay the amounts owing to appeal the orders through the Board.

The Director of Employment Standards opposed the application, arguing that it was barred by issue estoppel and abuse of process. The director also asserted that TPS had an adequate alternative remedy through the board's review process and that the ESOs' decisions were reasonable and procedurally fair.

The Superior Court found that TPS did not establish its inability to access the board review due to impecuniosity. The court noted that TPS’s financial circumstances did not meet the high evidentiary threshold required to bypass the statutory appeal process. TPS did not provide sufficient details about its shareholders' and associated businesses' finances or assets, nor did it demonstrate that it could not raise the required funds.

The court emphasized that the statutory scheme under the Employment Standards Act provides an accessible and expeditious process for resolving employment standards disputes. As an expert tribunal, the board is best positioned to review such orders de novo and provide a full remedy. The requirement to pay amounts into trust to access a board review ensures that employers do not postpone paying wages owed, aligning with the act's purpose of protecting vulnerable employees.

Ultimately, the court dismissed TPS’s application for judicial review, stating that a board review under s.116 of the act is a more suitable and appropriate remedy.

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