When Workers are Supplied by a Subcontractor or Personnel Company: a Forewarned Client Company is Forearmed | Knowledge

In CNESST c. PF Résolu Canada inc., 2022 QCCS 4888,^[1] the Remarkable Courtroom reminded organizations that use staff members equipped under a deal for solutions or a staff placement deal that they might be held solidarily liable for income owed to the workforce if there is a violation of the Labour Specifications Act (“LSA”) or its rules by the subcontractor or the staff agency.

This recent judgment is a single of the uncommon purposes of section 95 of the Labour Requirements Act^[2] that relates to solidary legal responsibility as among a consumer small business and its subcontractor in the case of a pecuniary claim built by the CNESST on behalf of workforce.

Situation Summary:

Gestion Danis et Frères (4036409 Canada inc.) (“Gestion Danis”) was acting as a subcontractor for Produits Forestiers Résolu inc. (“PF Résolu”) beneath a agreement for providers signed in 2013.

The non-unionized staff members of Gestion Danis labored on the identical timetable as the unionized workforce of the consumer business enterprise, PF Résolu. Below the collective agreement in influence at PF Résolu, the get the job done plan was staggered around two weeks: 48 hours for the 1st week and 36 hours for the 2nd week. The employees also received a compensated food break of a single hour for every day.

For the reason that of how the several hours of function had been staggered, no additional time was compensated. This intended that Gestion Danis workforce were paid each two months for a overall of 84 hours at the normal fee.

In response to an anonymous grievance, the CNESST carried out an investigation at Gestion Danis. The investigation disclosed that the overtime worked by the Gestion Danis personnel was not paid in accordance with the provisions of the LSA. As a final result, the CNESST claimed payment of $114,358.78, moreover the 20% “penalty” supplied in the LSA, on behalf of the 34 employees anxious.^[3]

Illegal staggering of several hours

The Remarkable Courtroom pointed out that staggering several hours on a basis other than weekly need to comply with the disorders set out in section 53 LSA. For non-unionized employees, the employer need to obtain the authorization of the CNESST and the regular of the operating hours ought to be equivalent to the conventional presented for in the legislation.

Gestion Danis applied the staggering of hrs delivered in the collective agreement, masking the unionized staff members of PF Résolu, to its individual non-unionized employees but did not request or get authorization from the CNESST in accordance with the provisions of the LSA.^[4]

With out that authorization, Gestion Danis was needed to shell out the additional time worked based mostly on the typical 40-hour operate week,^[5] not on the schedule supplied in the PF Résolu collective settlement. The Superior Court docket choose held that the amount owed for wages and once-a-year leave was $114,358.78, with curiosity.

Exemption from the 20% “penalty”

Nevertheless, the Superior Court exempted Gestion Danis from paying out the 20% of the quantity owed to the personnel below section 114 LSA.

The courts have held that awarding that total is discretionary. As a normal rule, it will not be awarded in which the employer proves very good faith and has offered an argument that, whilst faulty, was not unreasonable.^[6]

The judge pointed out that Gestion Danis cooperated in the investigation and that the quantities owed as time beyond regulation and unpaid annual leave already amounted to a sizeable sum for the employer.

As nicely, there was no question as to the good religion of Gestion Danis, which merely copied the routine of its customer enterprise, PF Résolu. The distinction is this, nevertheless: in contrast to Gestion Davis, the PF Résolu personnel ended up unionized and section 53 LSA enables the hours agreed to in a collective settlement to be staggered without the need of authorization from the CNESST.

Solidary liability of the consumer business

The Excellent Court stated that the to start with paragraph of section 95 of the LSA is obvious and unambiguous: when a subcontract is signed, the shopper enterprise becomes solidarily liable, with the subcontractor or its middleman, for the pecuniary obligations supplied in the LSA and the rules less than that Act.

Having signed a contract for providers with Gestion Danis, PF Résolu was solidarily liable for payment of the amounted owed to the CNESST.

Conclusion

This case highlights the significance of a consumer company verifying compliance by a subcontractor or personnel agency with the pecuniary obligations offered by the LSA and its regulations. It also points out that particular distinctions implement amongst unionized employees and non-unionized workforce that get in touch with for a a lot more thorough analysis of the phrases of employment provided to the personnel placed.

A thorough overview of the contracts for companies or personnel placement and of the conditions of employment provided to the employees positioned, no matter if ahead of the signature is signed, when it is renewed, or for the duration of its term, by executing an audit, could support to keep away from lawful troubles and include charges.

In addition, to assurance general performance of the pecuniary obligations supplied by the LSA and its rules by the subcontractor or personnel agency, a consumer organization could also involve that signing the contract for expert services or staff placement be matter to a withholding to be returned subsequent submission of a certification of compliance.

We would like to thank Ali Aziez for his help in writing this submit.