Canada: Ministry Of Labour Targets Retail Sector

Last Updated: November 2 2013
Article by P.A. Neena Gupta

The Ontario Ministry of Labour (MOL) Employment Standards Branch will be blitzing the retail sector to determine whether there is compliance with requirements of the Employment Standards Act, 2000 (ESA). The blitz has already started and will end in December, 2013.

What does this mean for you?

An MOL inspector has an absolute right to inspect any business location and review books and records during normal business hours in order to determine compliance with the ESA.  The MOL inspector may:

  • Examine any records;
  • Require production of any records;
  • Remove and copy relevant records;
  • Order the production of records in a readable form (if kept electronically);
  • Question any person on matters relevant to the inspection.

The ESA is clear that it is illegal to hinder an inspection or refuse to answer questions that are relevant to the inspection.

Key areas of review include:

  • Proper posting of ESA poster in a prominent location. Please note that availability of this information on the company intranet is not enough. A free copy of the current version of the poster can be downloaded.
  • Proper record keeping (hours of work, eating breaks, overtime, scheduling, deductions). In multi-location retail operations, store staff need to be able to locate store records and advise the inspector how to contact head office to obtain any records not kept at the store level.
  • Provision of accurate wage statements to employees.
  • Compliance with hours of work, breaks, overtime, public holidays and vacation pay requirements.

Our sources have also suggested that particular focus will be paid on whether Store Managers and Assistant Store Managers are properly categorized for purposes of overtime pay.

The MOL does not rely on job title in determining eligibility for overtime. Retail managers who spend a significant amount of their time servicing customers are unlikely to be exempt from overtime pay requirements.1 The regulation makes it clear that a supervisor or manager may only perform non-managerial tasks on an "irregular" or "exceptional" basis.

ESA case law also suggest that "true" managers and supervisors typically have hiring, firing and supervisory responsibilities over personnel or significant authority over important aspects of an operation – such as finance, procurement or inventory.

If the MOL inspector finds a contravention, the inspector may issue a ticket (Notice of Offence) or an Order to Comply/Order to Pay. In almost all such cases, the MOL inspector will return at a later date to re-inspect the premises for compliance.

How can you prepare for a possible blitz?

Retailers should review their own locations for compliance. Make sure the correct version of the ESA poster is posted (see above).

All staff should be told (1) that an MOL Inspector may visit (2) the Inspector can be politely asked for identification (3) the Inspector has legal powers and (4) the Inspector should be introduced to, or given contact information for, the authorized Manager.  Staff should never say "no" to an MOL Inspector's request for help but they can and should steer the MOL Inspector towards a manager with authority and knowledge.  The manager should know whom and how to advise internally about the MOL Inspector's visit, e.g. a more senior Manager, owner, regional manager, director of operations. The manager should know where records are kept and what records are kept at a store level and what records may be kept at another location.

The MOL has issued some helpful information regarding the inspection process in its bulletin on What to Expect during an Employment Standards Inspection.

What if you are issued a ticket or Order with which you disagree?

It is definitely possible to challenge a ticket or Order to Comply/Order to Pay. It is important that you contact your lawyer as soon as possible if you want to fight an MOL ticket or Order, as there are tight deadlines. Above all, do not ignore the ticket or Order.

The MOL has the power to pursue criminal prosecutions where Orders are ignored. On April 8, 2013, Peter Check of Cambridge, Ontario was sentenced for ignoring multiple Orders to Pay in the aggregate amount of $63,000. The court sentenced him to 90 days in jail, fined him $15,000 and ordered him to pay the wages. This was a rare and newsworthy prosecution, but signals a very aggressive approach to enforcement when MOL Orders are ignored.


1. Baarda v. Plywood and Trim co. Ltd,. [2004] CanLii 16978 (ON LRB).

Edited by P A Neena Gupta

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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