PAY EQUITY HEARINGS TRIBUNAL
3072-09-PE Saydat Hospitality Inc., operating as Comfort Inn Motel (Welland), Applicant v. 2059419 Ontario Inc., Beverly Pottle, Lynda Raby, Rose Smith, Marion Fisher, Janice Reed, Barbara Kurica, Marija Raic, Amanda St. George (Culp), Elizabeth Dolomont, Hazel Scott, Respondents.
BEFORE: Caroline Rowan, Vice-Chair, Paul LeMay and Pauline R. Seville, Members.
APPEARANCES: Darrell N. Hawreliak appeared for the applicant; no one appeared for the respondents.
DECISION OF THE TRIBUNAL: November 2, 2010
This is an application filed by Saydat Hospitality operating as Comfort Inn Motel (Welland) (“Saydat”) seeking a variance to the Order of Beverly J. Dalys, Review Officer, dated December 17, 2009 as amended by Order dated January 4, 2010 (referred to collectively as the “Order”). Pursuant to section 24(3) of the Pay Equity Act, R.S.O. 1990, Chapter P.7 (the “Act”), the Review Officer ordered 2059419 Ontario Inc. (“9419”) and Saydat to jointly and severally pay the amounts set out therein in respect of pay equity adjustments owed to some fourteen (14) former employees of 9419 (the “Former Employees of 9419”) for the period from January 1, 2005 to March 19, 2008.
At the hearing in this matter held on October 21, 2010, the applicant sought a variance to the Order removing Saydat as a respondent and confirming that Saydat is not required to make the payments required by the Order. In essence, the applicant disputes the Review Officer’s finding that it is jointly and severally liable with 9419 for the pay equity adjustments owed to the Former Employees of 9419. As none of the respondents attended the hearing despite having been given notice of it, the applicant’s request was unopposed.
The facts relevant to the request for variance were not in dispute and were stipulated by the applicant at the hearing. Many of the relevant facts are also set out in the application material and the various orders of the Review Officer, Bev Dalys, relating to the Comfort Inn Motel (Welland). They may be briefly summarized as follows.
The business known as Comfort Inn Motel (Welland) is a motel business which has been in operation since approximately 1985. It has been operated by Saydat since March 19, 2008 when Saydat purchased the assets, but none of the liabilities, of the previous operator of the motel, 9419. None of the Former Employees of 9419, who are the subject of the Order, have ever been employed by Saydat.
The Order followed the filing of an application for review services with the Pay Equity Office by a group of employees of 9419 on August 8, 2005. That application ultimately led to an order between a Group of Employees v. Comfort Inn Motel (File No. 05.16347) dated February 14, 2007 (the “February 2007 Order”) issued by Review Officer, Bev Dalys, which ordered the Comfort Inn Motel (Welland) to take certain steps set out therein to establish compensation practices which provide for pay equity. In the February 2007 Order, the Review Officer noted that the Comfort Inn Motel (Welland) has consistently employed approximately 15 people since it started operations in approximately 1985. The applicant similarly confirmed at the hearing in this matter that the number of employees employed in the business known as the Comfort Inn Motel (Welland) has remained consistently in the range of 15 people throughout its operations.
The Pay Equity Office subsequently applied to the Tribunal for enforcement of the February 2007 Order on or about August 10, 2007, after the first in a series of deadlines for action were not met. Although 9419 responded to that application by filing its own application with the Tribunal asking that the February 2007 Order be set aside, the Tribunal ultimately dismissed the application filed by 9419 as abandoned by decision dated June 11, 2009. By that time, 9419 had discontinued operating the business known as Comfort Inn Motel (Welland) effective March 19, 2008 when it sold the assets of the business to Saydat.
The Order which is the subject of the present application calculates the amounts of the retroactivity pay equity adjustments owed to the Former Employees of 9419 for the period from January 1, 2005 until March 19, 2008, the date 9419 sold its assets to Saydat and discontinued operating the business. The Order also places joint and several liability on 9419 and Saydat for the retroactive pay equity adjustments found owing to the Former Employees of 9419.
In its application for review, Saydat disputes the Review Officer’s finding that it should be held jointly and severally liable for the pay equity obligations of 9419 to the Former Employees of 9419. In support of its position, Saydat submits that the Act does not specifically provide for the liability of a “successor employer”, but it does address a sale of a business under subsection 13.1(1) contained in Part II of the Act. According to the applicant, that provision does not apply in the circumstances of this case, since Saydat is not an employer defined in section 11 to whom Part II of the Act applies. The applicant also submits that subsection 13.1(1) of the Act does not, in any event, apply in the circumstances of this case, since that provision purports to apply only where “an employer who is bound by a pay equity plan sells a business”. The applicant points out that none of the employers who have operated the business known as Comfort Inn Motel (Welland) from time to time have ever been bound by a pay equity plan.
The provisions of the Act relevant to the Review Officer’s finding that Saydat as the purchaser of the business is jointly and severally liable for the pay equity obligations owed to the Former Employees of 9419 are contained in Part II of the Act entitled “Implementation: Public Sector and Large Private Sector Employers” and read as follows:
- (1) This Part applies to all employers in the public sector, all employers in the private sector who, on the effective date, employ 100 or more employees and those employers in the private sector who post a notice under section 20.
(2) This Part does not apply to an employer who does not have employees on the effective date.
(3) Despite subsection (2), sections 13.1, 14.1 and 14.2 apply to public sector employers that did not have employees on the effective date but that had employees on July 1, 1993.
13.1 (1) If an employer who is bound by a pay equity plan sells a business, the purchaser shall make any compensation adjustments that were to be made under the plan in respect of those positions in the business that are maintained by the purchaser and shall do so on the date on which the adjustments were to be made under the plan.
(2) If, because of the sale, the seller’s plan or the purchaser’s plan is no longer appropriate, the seller or the purchaser, as the case may be, shall,
(a) in the case of employees represented by a bargaining agent, enter into negotiations with a view to agreeing on a new plan; and
(b) in the case of employees not represented by a bargaining agent, prepare a new plan.
(3) Clause 14(2)(a), subsections 14.1(1) to (6) and 14.2(1) and (2) apply with necessary modifications, to the negotiation or preparation of a new plan.
(4) [Repealed 1997, c. 21, s.4(1).]
(4.1) The section applies with respect to an occurrence described in section 3 to 10 of the Public Sector Labour Relations Transition Act, 1997. For the purposes of this section, the occurrence shall be deemed to be the sale of a business, each of the predecessor employers shall be deemed to be a seller and the successor employer shall be deemed to be the purchaser.
(5) In this section,
“business” includes a part or parts thereof;
“sells” includes leases, transfers and any other manner of disposition.
13.2 Section 13.1 applies with respect to an event to which the Public Sector Labour Relations Transition, 1997 applies in accordance with the Local Health System Integration Act, 2006.
The Review Officer, apparently relying on section 13.1 of the Act, ordered that Saydat as the purchaser of the business known as Comfort Inn Motel (Welland) is jointly and severally liable for the pay equity adjustments owed to the Former Employees of 9419. The successor obligations imposed under section 13.1 of Part II of the Act however only apply to employers described in section 11 thereof. Under the terms of section 11 of the Act, Part II of the Act applies to “all employers in the public sector, an employer in the private sector who, on the effective date, employ 100 or more employees and those employers in the private sector who post a notice under section 20 [now repealed]”. The provision does not therefore apply to the business known as Comfort Inn Motel (Welland), which is a small private sector employer, which did not according to the uncontradicted facts before us ever post a notice under the now repealed section 20 of the Act.
As noted in the February, 2007 Order and confirmed at the hearing in this matter, the business known as Comfort Inn Motel (Welland) has been operated by different corporate entities since 1985 and has consistently employed in the range of 15 employees. According to the undisputed facts, it has always been a small private sector employer with under 100 employees and has never posted a notice under the now repealed section 20 of the Act. In the circumstances, it is not an employer to whom the sale of business provision in section 13.1 under Part II of the Act applies. There is accordingly no statutory basis for finding that Saydat as the purchaser of the business previously operated by 9419 is jointly and severally liable for the pay equity obligations of the predecessor to the Former Employees of 9419, whom it has never employed.
For all these reasons, the Tribunal finds it appropriate to vary the Order in the manner requested by the applicant by removing all references to the joint and several liability of Saydat Hospitality for the amounts owing to the Former Employees of 9419. The Order is accordingly hereby amended to read as follows:
Pursuant to subsection 24(3) of the Pay Equity Act, I order 2059419 Ontario Inc. to pay the following amounts to employees of 2059419 for the period January 1, 2005 to March, 2008:
Employee Amount
Pottle, Beverly $4,537.38
Reid, Janice $5,320.92
Smith, Rose $2,415.18
Raby, Lynda $6,720.11
Fisher, Marion $3,077.39
Raic, Marija $3,753.74
Buliung, Sarah $655.39
Shilson, Connie $57.30
Paiement, Amanda $25.73
Brown, Lindsay $91.48
Dolomont, Elizabeth $12,583.49
Augustine, Amanda $11,469.33
Pursuant to subsection 24(3) of the Pay Equity Act, I order 2059419 Ontario Inc. to pay the following amounts to Hazel Scott, for the period January 1, 2005 to December 31, 2006, the amount of $8738.54;
I further order 2059419 Ontario Inc. to pay the following amounts to Amanda Culp (formerly Amanda St. George), for the period of January 1, 2005 to August 26, 2006, the amount of $11,511.34.
Dated at Toronto this 2nd day of November, 2010.
“Caroline Rowan”
Caroline Rowan, Vice-Chair
“Paul LeMay”
Paul LeMay, Member
“Pauline R. Seville ”
Pauline R. Seville, Member