Management Lawyers

Director sentenced to jail time for failure to pay wages under the ESA

Published on November 19, 2012

In a recent decision, the Ontario Court of Justice sentenced the director of six Ontario companies, Steven Blondin, to 90 days in jail for failing to pay wages to employees.

Mr. Blodin is the owner and operator of six companies, Steven’s Inc., Axcea International Inc., Automotive Containment Solutions Inc., Automotive CSI Inc., Automotive CSI-Alliston Inc., and Automotive CSI – Newmarket Inc., all of which were found by an Employment Standards officer (the “ESO”) to owe wages to employees. In total, there were 61 employee complaints across the six companies for unpaid wages between March 2007 and October 2009. The ESO issued 116 orders in total, amounting to over $125,000 in unpaid wages. The companies failed to comply with the orders.

Mr. Blodin and the six companies entered guilty pleas. Mr. Blodin was sentenced to 90 days in jail and fines of $280,000, in addition to the wages owing.

The news release contained the following quotation from the decision:

This sentence serves as a warning to those who believe they are above the law. Our government is committed to ensuring that all Ontarians are treated fairly at work, and we will continue to help ensure that Ontarians know their rights and responsibilities.

Under the Employment Standards Act, a director of a corporation is guilty of an offence if they fail to comply with an order of an ESO to pay wages (s. 136). Under this provision, the director’s liability, however, is limited to a fine of not more than $50,000 and does not include jail time. However, under s.137, if a director permits or acquiesces in an offence, they can be liable for a fine or imprisonment.

This certainly is not a typical result. As indicated in the above quotation, it seems that Mr. Blodin has been used to set an example for other employers who fail to comply with orders from an ESO.  It goes without saying that employers should treat orders from an ESO seriously, if the employer decides not to pursue an appeal, they should not delay in complying with the order.

employment law,  employment standards