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Part III of the Canada Labour Code (Labour
Standards)
Following are questions and answers about wage recovery and
payment orders, based on Part III of the Canada Labour Code.
They will be of interest to employees and employers in industries
under federal jurisdiction. Pamphlet 1 of this series describes the
types of businesses covered by the Code. It is available
from any Labour Program office of Human Resources Development Canada
and on the HRDC website.
1. What is the wage recovery system?
The administrative wage recovery system effectively replaces
criminal prosecution and referral to Small Claims Court in cases of
non-payment of wages or other amounts to which the employee is
entitled under Part III of the Code. It streamlines
procedures for the collection of the employee's unpaid wages or
other amounts owing.
2. What action does the inspector take?
In the first instance, inspectors attempt to obtain voluntary
compliance with the provisions of the Code. They
investigate to determine whether a complaint is founded. If the
complaint is founded, the inspector attempts to have the employer
voluntarily pay the wages or other amounts owing.
When an inspector concludes that a complaint of non-payment of
wages or other amounts is unfounded, the inspector shall so notify
the complainant in writing.
3. Can an inspector's notice of unfounded complaint be
appealed?
Yes. A complainant, who has received a notice of unfounded
complaint issued by an inspector, may appeal the inspector's
decision to the Minister within 15 days after service of the notice.
4. How are cases of non-payment of wages handled?
Inspectors have the power to issue a written payment order to an
employer or director who fails to pay wages or other amounts owing
under Part III of the Canada Labour Code.
5. To what extent are directors liable?
When wage recovery from a corporation is impossible or unlikely,
directors may be held liable for amounts due during their
incumbency. Corporate directors are jointly and severally liable for
employee's wages and other amounts to which the employees are
entitled such as severance and termination pay, up to a limit
equivalent to six months' wages.
6. Can an inspector's payment order be appealed?
The employer or the director to whom a payment order has been
issued may appeal the payment order within 15 days.
The employer or director may not appeal a payment order unless
the employer or director (subject to a maximum amount) pays to the
Minister the amount indicated in the payment order.
7. Who will hear the appeal?
The Minister will appoint a referee from a designated list, on a
case-by-case basis, to hear an appeal of a payment order or notice
of unfounded complaint. The referee has the power to summon
witnesses, administer oaths, receive evidence, determine the
procedure to be followed, etc. The referee will confirm, rescind or
vary the payment order or notice of unfounded complaint. The referee
could also award costs. The referee's order is final.
8. Does a payment order become a judgment?
The order of the referee or, if there is no appeal, the payment
order of the inspector may be registered in Federal Court and
proceedings taken as a court judgment.
9. What is a third party claim procedure?
A third party claim is made against a debtor of an employer, up
to the amount stated in the payment order. The debtor is required to
pay the amount to the Minister within 15 days. The issuance of a
written order to debtor may be made by a regional director of the
Department.
For information only. For interpretation and application
purposes, please refer to Part III of the Canada Labour Code
(Labour Standards), the Canada Labour Standards Regulations,
and relevant amendments.
Additional copies of this publication can be obtained
from:
Public Enquiries Centre
Human Resources Development Canada
140 Promenade du Portage, Phase IV, Level 0
Gatineau, Quebec
K1A 0J9
Fax (819) 953-7260
www.hrdc-drhc.gc.ca
�Her Majesty the Queen in Right of Canada, 2002
Cat. No. MP43-345/11-2002
ISBN 0-662-66814-6
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