Ontario Labour Relations Board
File No.: 4213-98-ES Employment Practices Branch File No.: 20033084
Between: Rentalex 1998 Inc. and Party World 1998 Inc., Applicant v. Aubrey McCrank et al and Ministry of Labour, Responding Parties.
Before: Pamela A. Chapman, Vice-Chair.
Appearances: Craig Bater, D. K. Gibson, Peter Jackson for the applicant; no one appearing for the respondents; Karen Northey for the Ministry of Labour.
Decision of the Board; September 14, 2000
Decision
1This is an application for review of the decision of an Employment Standards Officer, pursuant to section 68 of the Employment Standards Act as amended by the Workplace Democracy Act, 1998, S.O. 1998, c.8 (“the ESA”). The applicant (“the employer” or “Rentalex”) asks that the Board set aside the decision of the Officer issuing Order to Pay No. 48395, dated January 29, 1999, which required Rentalex to pay vacation pay to a number of employees. This dispute arises from the acquisition of a business known as Rentalex by two companies against which the Order to Pay was issued Rentalex (1998) and Party World (1998), after the former operation declared bankruptcy in December 1997. As it is not necessary given the evidence which is now before me to determine whether or not this acquisition constituted a sale of a business within the meaning of section 13 of the ESA I will not review in any detail the facts surrounding the bankruptcy, trusteeship, and commencement of operations by the present applicants. Suffice it to say that all of the employees of the former company were formally terminated by the trustee in bankruptcy in December 1997, that some of them nonetheless continued to perform duties at the business while it was operated by the trustee until January 1998, and that some employees came to be employed by the applicant once it purchased certain assets from the trustee in January 1998 and began operations similar in nature to those previously carried on by the bankrupt companies.
2After one employee of the bankrupt companies filed a claim with the Ministry of Labour for accrued but not yet paid vacation pay an Employment Standards Officer issued an Order to Pay, requiring Rentalex to pay vacation monies to approximately 60 employees. Their appeal of that order has a number of bases, including a claim that the sale of assets did not amount to a sale of a business. In addition, however, the employer asserts that some of the employees of the former company never worked for Rentalex, and that there were breaks in the continuous employment of others.
3The hearing of this matter on July 19, 2000 was scheduled to follow a meeting with a Labour Relations Officer appointed by the Board to assist the parties to resolve all issues in dispute. Several employees attended at the meeting and advised the officer that they believed that they had been paid all amounts owed to them and had no intention of attending at the hearing or pursuing any claim against the employer. When the hearing commenced no employees chose to participate.
4The employer called one witness, the president of Rentalex, who reviewed the list of employees which formed part of the Order to Pay. He testified that several of the employees on the list had never been employed by the company, and that others had left the employ of the bankrupt companies and gone to work for other employers before being hired at a later date by Rentalex. With respect to the employees on the list who have been or are presently employees of Rentalex, he testified that the company has now paid vacation pay to each of them, calculated based on what their entitlement would have been had they continued to work for the bankrupt companies. He gave sworn testimony, which was not challenged, that all amounts which the officer’s worksheets indicated were owing to employees of Rentalex have been paid and are not outstanding.
5This is an unusual case, as it began as a complaint by a single employee but led to an Order to Pay which relates to numerous employees who have had no involvement in the complaint. In the absence of any evidence to the contrary, I must accept the evidence of the employer that the amounts it was ordered to pay include vacation pay which is alleged to be owed to employees whom it has never employed, or whom had breaks in their continuous service. I am also satisfied that the company has complied fully with its obligation to pay vacation pay to all former employees of the bankrupt companies which it continued to employ, including amounts which accrued prior to the alleged sale.
6In these circumstances, there was no need for me to hear evidence regarding the alleged sale of a business, or to make a finding as to whether or not a sale occurred within the meaning of section 13 of the ESA, as the company has complied fully with what its obligations would be should it be found to be a successor.
Disposition
7The appeal is allowed and Order to Pay No. 48395 dated January 29, 1999 is hereby rescinded. I hereby order:
(i) that the wages paid to the “Director in trust” in relation to this matter be disbursed as follows:
To be paid to the employer $30485.57.
8The funds should be paid to the order of Gibson & Associates in trust, as the monies which were paid into trust came from the firm’s predecessor. The Ministry of Labour does not object to the administration fee being returned to the employer, and the direction above therefore includes the full amount of the funds paid into trust.
“Pamela A. Chapman”
for the Board