The BC Employment Standards Branch has begun court proceedings against a local forest company to collect nearly $50,000 in unpaid overtime and holiday pay owed to former employees, including six Mexican migrant workers.
The branch, which is part of what used to be called the Ministry of Labour, filed a writ of seizure and sale on September 12 in BC Supreme Court, ordering a sheriff to liquidate Meadow Creek Cedar’s assets to pay off its debt.
The company has also been fined $1,000 for two breaches of the Employment Standards Act.
According to court documents, the case began on November 12, 2010 when the branch’s Nelson office received a complaint from a Meadow Creek Cedar employee about non-payment of overtime.
The following February, the company was informed it was being investigated over issues dealing with statutory holidays and overtime, and asked to provide payroll records for all employees covering the previous six months.
The company complied and investigator Ed Wall spoke with mill manager Rowland McCulloch “numerous” times and owner Dale Kooner three times.
In July 2011, he sent his preliminary findings to Meadow Creek Cedar, indicating back wages were owed to 64 of 85 employees. He also warned Kooner of his personal liability and of potential fines.
McCulloch responded by making a number of handwritten changes to the letter and sending it back. The company was told it needed to support its changes with evidence, which it promised to do. Kooner also said his accountant would be in touch. But nothing further was heard from the company.
Wall was left to make his decision based on the company’s employee records — as well as information provided by workers themselves.
“Where Meadow Creek Cedar’s records are clearly shown to lack credibility, I have sought records elsewhere,” he wrote. “In all other cases I have accepted Meadow Creek Cedar’s records at face value.”
Wall learned six temporary foreign workers from Mexico had been employed at the Lardeau Valley sawmill and requested their daily hours.
The company, however, argued the workers were provided on contract by an affiliated company, Can-Pacific Farms of Surrey. But no evidence of such a contract was provided.
McCulloch explained the men were hired to pick blueberries, but because the crop was late, and the men wanted to work, they were sent to the mill, where they cleaned and worked on machines, and bundled and stacked lumber.
The company provided a spreadsheet showing each worked eight hours or less per day, no more than five days per week. But the Mexican workers produced daily records and wage statements from Can-Pacific that revealed “significant inconsistencies.”
In one case, Meadow Creek Cedar claimed a worker put in 78 hours during a pay period, yet the Can-Pacific wage statement showed 152.5 hours, and the worker’s own record 157 hours.
In another example, a worker was credited by Meadow Creek with 80 hours, by Can-Pacific with 101 hours, and by his own accounting with 163.
Although for the most part Wall accepted Meadow Creek Cedar’s records, “In the case of the Mexican workers, the records provided by Meadow Creek were clearly not credible.”
He took the hours the workers provided as the best available record and also rejected the company’s claim that nobody worked holidays.
“The records provided by Meadow Creek Cedar revealed numerous instances where [overtime] thresholds were surpassed without the payment of overtime,” he wrote.
Wall determined the 64 workers were owed between $5 and $4,400 each in back pay, and cumulatively more than $49,000. The Mexican workers in particular were owed a combined $11,000.
The decision, released on March 7 of this year, included a $1,000 fine for two breaches of the Employment Standards Act, bringing the total bill to more than $50,000.
NOT SHORT ON CHUTZPAH
Meadow Creek Cedar unsuccessfully appealed the decision to the Employment Standards Tribunal.
In his ruling of June 19, adjudicator Kenneth W. Thornicroft observed the company checked off every box on the form relating to grounds for appeal, but failed to provide specifics.
Instead, their submission was a “global challenge” based on assertions that all employees received their earned wages, that Wall was “fixated on ‘harassing’ the company” and that employees were determined to shut down the company.
Thornicroft noted: “Why the employees would embark on such a path, particularly when that would appear to be contrary to their own self-interest is not adequately explained.”
He said the company argued Employment Standards should not have investigated a confidential complaint and in any case not extended its probe to 64 employees.
“These arguments are plainly untenable based on the clear language of the act,” Thornicroft wrote, pointing out employees have the right to confidentiality.
He also found, despite the company’s claim to the contrary, that the request for six months’ worth of payroll records was “entirely proper.”
As far as the Mexican workers, Meadow Creek said Employment Standards “acted beyond the law” in awarding them back wages.
“Although Meadow Creek’s argument on this point is wholly devoid of any legal merit, it certainly does not fall short on chutzpah,” Thornicroft wrote.
The company acknowledged the Mexicans worked at the mill, but since they were not legally allowed to do so, argued it couldn’t be held legally responsible for their unpaid wages.
Thornicroft wrote: “In essence, Meadow Creek admits to having wrongfully employed these workers but then says that its own illegality gives it a complete defence. The argument is plainly absurd.”
He added that while he had “no doubt” government officials who administer programs that bring seasonal workers to Canada might have some “pointed questions” for Kooner, the mere fact the workers were not originally brought here to work for Meadow Creek Cedar didn’t prevent them from claiming unpaid wages.
Thornicroft further dismissed suggestions of bias. In his submission, Kooner wrote that Wall “wanted to harass the appellant by imposing a determination so that appellant closes operations.”
Elsewhere in the submission, Thornicroft said the company made the “wholly unfounded (and probably defamatory) assertion” that Wall’s decision was motivated by trying to impress a supervisor.
“There is no place for such spurious allegations,” he wrote, adding there was “absolutely no evidence” to suggest Wall was predisposed against the company or in any conflict of interest.
“I think it important to note that in very large measure [Wall’s] conclusions regarding Meadow Creek’s unpaid wage liabilities were based on Meadow Creek’s own payroll records,” he said.
He also noted the fact not all employees were found to have back pay owing was evidence Wall carefully reviewed the records and made individual assessments.
Meadow Creek further argued it should have had a complaint hearing where it could cross-examine employees, but Thornicroft said given the unpaid wage entitlements were mostly based on the company’s own records, it would have been “rather futile.” And while in some instances it might have helped the company, it also might have been a “complete waste of time and resources.”
(By legislation, employers do not have an absolute right to an in-person hearing.)
Thronicroft dismissed the appeal, and the judgment for $51,000 including interest was certified on July 12. When no payment was forthcoming two months later, collection action began.