1723-98-ES Kazimierz Zaniewski, Applicant v. Provincial International Cranes; Konecranes Canada Inc. and Ministry of Labour, Responding Parties.
Employment Practices Branch File No. 51 076554
BEFORE: Marilyn Silverman, Vice‑Chair.
APPEARANCES: Kazimierz Zaniewski for the applicant; Kristin Taylor for Konecranes Canada Inc.; Heidi Ann Lazar-Meyn for the Ministry of Labour; no one appearing for the responding party.
DECISION OF THE BOARD; October 10, 2000
This is an appeal of a decision of an Employment Standards Officer dated July 13, 1998 refusing to issue an Order to Pay on behalf of the applicnt for unpaid wages and or termination pay.
At the time and date scheduled for hearing no one appeared on behalf of the responding employer, Provincial International Cranes (“Provincial”). The matter was scheduled to be heard at 9:30 a.m. on May 2, 2000. Notice of the hearing was properly given to Provincial well in advance of the hearing. The matter was delayed for a period of half an hour in case of a late arrival. Notwithstanding the delay, there was still no appearance by Provincial when the matter was to be heard. The hearing then proceeded in the absence of Provincial.
There was an appearance however by another company, Konecranes Canada Inc. (“Konecranes”) that had been given notice of the hearing at the request of the Ministry of Labour by decision of the Board dated December 13, 1999 (differently constituted). It appears that the reason that Konecranes had been given notice of the hearing was that it had purchased assets of Provincial by agreement dated September 14, 1998.
Konecranes is hereby added as a responding party.
The applicant, Mr. Zaniewski gave sworn evidence. He began his employment with a company called Detroit Hoist and Crane in April of 1986. In August of 1997 the ownership of the business changed from Detroit Hoist and Crane to Provincial and Mr. Zaniewski signed a document called an “offer of employment” with Provincial. That document provided him with a salary of $37,900 per year. That salary calculates at approximately $18.22 per hour ($37,900 per year divided by 52 weeks divided by 40 hours per week). That was initially reduced by Provincial in October 1997 to $16.00 per hour. Mr. Zaniewski complained to Provincial on a number of occasions. Mr. Zaniewski says that he was forced to resign from Provincial in May 1998 as a result of this change in salary. There was no break in his employment for any period between the change in ownership from Detroit Hoist and Crane to Provincial. Mr. Zaniewski protested this change but Provincial maintained the reduced salary.
The Ministry of Labour claims that Mr. Zaniewski is entitled to the difference in wages for the period October 1997 to May 1998 or alternatively to termination pay in lieu of notice for eight weeks under section 57 of the Act.
(1) No employer shall terminate the employment of an employee who has been employed for three months or more unless the employer gives,
(h) eight weeks notice in writing to the employee if his or her period of employment is eight years or more,
and such notice has expired.
The Ministry of Labour asserts the position that the two companies were related for the purposes of section 12 of the Act. Section 12 provides as follows:
(1) Where, before or after this Act comes into force, associated or related activities, businesses, works, trades, occupations, professions, projects or undertakings are or were carried on by or through more than one corporation, individual, firm, syndicate or association, or any combination thereof, and a person is or was an employee of any of such corporations, individuals, firms, syndicates or associations, or any combination thereof, such corporations, individuals, firms, syndicates or associations, or any combination thereof, shall be treated as one employer for the purposes of this Act, if the intent or effect of the arrangement is to defeat, either directly or indirectly, the true intent and purpose of this Act.
(2) The corporations, individuals, firms, syndicates or associations treated as one employer shall be jointly and severally liable for any contravention of this Act and the regulations.
There was absolutely no evidence presented either viva voce or documentary that suggests that there was any reason to suggest that Konecranes and Provincial were related employers. The Ministry of Labour did not challenge the position put forth by Konecranes counsel that there was no commonality of ownership, management or control between the two corporations. The Ministry did not challenge the position of Konecranes that the transaction was arms length. The Ministry did however assert that the effect of the arrangement was to defeat the purpose of the Act. There is no evidence to support this contention. In the circumstances of this case, this is not an arrangement that falls within section 12(1) of the Act.
The applicant has a valid claim against Provincial for termination pay. The reduction in salary amounted to a constructive dismissal as no notice was given of the significant reduction in wages. This is therefore a rmination of employment which gives rise to termination pay.
I cannot accept the submissions by the Ministry of Labour that Mr. Zaniewski is entitled to claim the difference in wages from October 1997 (the date his wages were reduced by Provincial) to May 1998 (the date he left employment). Mr. Zaniewski has no entitlement to continue working at the old (higher) rate. His election to continue for that period does not create a liability in the employer to pay the higher rate because the applicant had no residual right to that rate. The right he possessed was to claim constructive dismissal and if that claim were proven valid, to claim termination pay. In these circumstances the applicant made it clear that he was not accepting the reduction and he preserved the right to claim constructive dismissal.
DISPOSITION
The applicant however does have a valid claim against Provincial for 8 weeks pay in lieu of notice in the amount of $5,120.00 ($16.00 per hour x 40 hours 8 weeks) pursuant to section 57(14) and I so order payment by Provincial to the applicant in that amount.
The action is dismissed as against Konecranes.
“Marilyn Silverman”
for the Board