In the matter of Commission des normes du travail v. Compagnie
d'assurances Standard Life du Canada1, the Court of
Québec had to decide whether an employer could file a
counterclaim against an employee in proceedings in which
Quebec's Labour Standards Commission2 (the
"Commission") was suing the employer on behalf of the
employee. It should be noted that the majority of the Court' of
Québec's previous decisions were to the effect that it
could not, despite the fact that the Court of Appeal had previously
suggested that an employer could do so.
The facts are as follows. Following the termination of her
employment, the employee filed a complaint before the Commission
because the employer refused to pay her $2,301 for unpaid vacation
days. The employer maintained that it owed her nothing, as the
employee had received salary advances of more than $5,000 and had
signed an undertaking to repay that amount, which she had not
fulfilled. The employer accordingly set off the amount due by the
employee from the amount it owed her, resulting in a balance in its
favour of $2,589.93, for which it filed a counterclaimed against
The Commission filed a motion to dismiss the counterclaim filed
by the employer on the grounds that (i) the Labour Standards Act,
(ii) the majority of the case law from the Court of Québec
did not permit employer's to file counterclaims against their
former employees in cases like the present one and (iii) the
employee's undertaking to repay the salary advances did not
allow the employer to exercise its right of set off. In addition to
the foregoing, the Commission maintained that it was not possible
for the employer to claim the excess amount it was owed by the
employee in a counterclaim, as the principal action was instituted
by the Commission, a separate party, and not by the employee. As
the employee was not party to the proceedings it argued that a
counterclaim was not possible.
The Court of Québec rejected the Commission's
arguments and allowed the employer to make its defence and
counterclaim against the employee in a single proceeding. It held
that the defence of set off is a principle recognized by the
courts, and because the employer was entitled to invoke against the
Commission any ground of defence it had against the employee, it
could file a counterclaim for the excess amount it was owed by the
employee for salary advances that had not been repaid by same.
The Court of Québec also pointed out that it was bound to
respect the principle of proportionality set forth in the Code of
Civil Procedure. Given the small amount at stake, the Court felt
that it would be inappropriate to oblige the employer to institute
a separate proceeding against the employee in order to claim the
excess amount it was owed and that it would be preferable to have
all the litigious issues between the parties dealt with in a single
It is thus distinctly possible that, pursuant to the action
instituted by the Commission against the employer, it will
ultimately be the employee who is ordered to pay damages and
interest to the employer.
1 2014 QCCQ 4523
2 The Commission des normes du travail
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.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).