A recent court ruling sends a clear message to directors: violate the Employment Standards Act, 2000 obligations and you may be sent to prison.
Between March, 2007 and October, 2009, 61 employees from six companies operated by the same director filed claims under the Act for unpaid wages. Following an investigation, the Ministry issued 113 orders to pay amounts totaling over $125,000. None of the orders were paid. In October, 2011, the director and the companies pled guilty to failing to comply with the orders.
On November 1, 2012, the Ontario Court of Justice sentenced a director to 90 days in jail for repeatedly failing to pay employee wages pursuant to the Employment Standards Act, 2000.The director and his six companies were also fined $280,000.00 plus a 25% victim surcharge required pursuant to the Provincial Offences Act. The director and the companies were also ordered to pay the outstanding wages.
Pursuant to the Employment Standards Act, 2000, directors and officers of Ontario corporations can be personally liable for up to 6 months of unpaid wages.
This case serves as a stark reminder to directors to ensure that all wages are paid to employees.