2016 NUCJ 17, 2016 NUCJ 17

Nunavunmi Maligaliuqtiit NUNAVUT COURT OF JUSTICE Cour de justice du Nunavut Citation: Murray v. Pressick, English, and English, 2016 NUCJ 17 Date: 20160720 Docket: 08-14-161 Registry: Iqaluit Appellant: Stephen Murray (By Design Contracting) -and- Respondents: Leonard Pressick, Scott English, and Shawn English ________________________________________________________________________ Before: The Honourable Madam Justice Cooper Counsel (Appellant): Glen Rutland Counsel (Respondents): Self-Represented Location Heard: Iqaluit, Nunavut Date Heard: April 13, 2016 Matters: Labour Standards Act, R.S.N.W.T. 1988, c.

L-1 (Nunavut) REASONS FOR JUDGMENT (NOTE: This document may have been edited for publication)

I. INTRODUCTION [ 1 ] This is an appeal from a decision of the Labour Standards Board [ Board] in which the Board confirmed amounts owning to the respondents for unpaid wages. II. BACKGROUND [ 2 ] The appellant is a small contractor located in Ontario who does work in Nunavut. In 2011, he had a contract in Nunavut. The appellant contracted with each of the respondents to complete work on the project for which each respondent was to receive $40,000. It was expected that the work would take 16 weeks to complete.

However, regardless of the time required to complete the work, the amount of compensation was to be $40,000. Two of the respondents left the job early without having completed the work. [ 3 ] During the course of the work, the appellant was advised by the project coordinator, apparently erroneously, that he had to provide time sheets for the respondents so that the project could be in compliance with the Nunavummi Nangminiqaqtunik Ikajuuti p olicy [NNI].

The purpose of this was to be able to track the number of hours worked by non-Inuit and Inuit workers. [ 4 ] In accordance with the advice received, the appellant issued payroll information for the respondents.

However, the essential terms of their agreement, that being the compensation to be received for the work, remained unchanged. [ 5 ] What did change with the issuance of payroll information was that the appellant was required to remit taxes, Canadian Pension Plan [CPP] , and Employment Insurance [EI] premiums on behalf of the respondents. [ 6 ] The issue of whether the respondents were independent contractors or employees arose when one of the respondents applied for EI benefits. [ 7 ] The respondents filed complaints with the Labour Standards Compliance Office as there was a dispute over their pay.

While one of the respondents claims a specific amount owing, the other two complainants do not. All three of the respondents participated in the hearing of this appeal and it is clear that they are unsure as to how much they might be owed, how many hours they worked, etc. This is likely due to the passage of time and the fact that the nature of the agreement when the project commenced did not require them to track such information. [ 8 ] Once the complaints were made, the main contractor withheld money owing to the appellant for the project.

That money has been held back for over 4 years, awaiting a resolution of the complaints. [ 9 ] The Labour Standards Officer [LSO] determined that wages were owing to each of the three respondents. He issued Certificates pursuant to s. 53(1) of the Labour Standards Act, R.S.N.W.T. 1988, c. L-1 (Nunavut) [the Act] , setting out the wages owing. The Certificate also states that pursuant to

section 62 of the Act, the appellant, as a corporate director, is liable for 2 months of the wages owing.

[ 10 ] The issue as to whether the respondents were employees or independent contractors was resolved by a decision of the Tax Court which held that they were employees. The Labour Standards Board applied this ruling in confirming the decision of the Labour Standards Officer . The grounds of appeal set out by the appellant do not challenge this approach. [ 11 ] The result is that the terms of what everyone agreed would be a contractual relationship were now being modified to fit into an employer-employee relationship, while at the same time trying to honour the terms of the initial agreement.

It is akin to trying to fit a square peg into a round hole. What should be a fairly straight forward math issue has become the subject of two appeals - one to the Labour Standards Board and one to this court. III. THE RECORD [ 12 ] The Court was provided with a copy of “the Record”, as is required by the Rules of the Supreme Court of the Northwest Territories , NWT Reg (Nu) 010-96 [Rules of Court]. A “Book of Record” was first filed on June 17, 2014. A larger binder of material also titled “Book of Record” was filed on November 26, 2014.

It appears that the Book of Record filed on November 26, 2014, contains all of the materials that were filed earlier, along with additional material. A “Book of Record, Volume 2” was filed on June 10, 2015. [ 13 ] The materials consist of a large volume of documents. The Table of Contents does little to assist in navigating the materials. Many of the materials are not identified and it is not possible to determine who prepared them. The manner in which the Record [1] was presented did little to assist the court. IV.

STANDARD OF REVIEW [ 14 ] This appeal is brought pursuant to s. 53(4) of the Act , which provides for an appeal to the Nunavut Court of Justice on any point of law raised before the Board . [ 15 ] In my view, the standard of review to be applied in this matter is one of correctness. The Act does not have a privative clause; on the contrary, it specifically provides for a right of appeal on questions of law. The Board consists of part-time members who come from a variety of backgrounds. The Board does not have particular expertise in matters falling within its jurisdiction.

All of these factors support a determination that the standard of review is correctness. V. GROUNDS OF APPEAL [ 16 ] The appellant sets out the grounds of appeal as follows: • Did the Board err when it confirmed the Certificates as it failed to include all remuneration paid to the respondents? • Did the Board err when it confirmed the Certificates in that the Labour Standards Officer did not provide reasons for calculating wages in the manner he did and the Board compounded the error by also not providing reasons. • Did the hearing before the Board fail to comply with the principles of procedural fairness?

VI. ANALYSIS A. Did the Board err in failing to include all remuneration paid to the respondents when it calculated wages? [ 17 ] The decision of the Labour Standards Board , confirming the decision of the Labour Standards Officer , accepts that the amount of compensation to be received was $40,000, over a 16 week period. In calculating the wages owed to the respondents, the Labour Standards Officer simply divided $40,000 by 16 (being the number of weeks the work was to take) and then calculated a daily pay based on a 6 day work week.

It is clear that the Labour Standards Officer attempted to give effect to the agreement between the parties as to what their compensation was to be, none of which is in dispute. [ 18 ] It appears from the Record in this matter that the Labour Standards Office r had two options as to how he could calculate the money that had been paid to the respondents. He could use the payments reflected on the payroll records or he could use the cheques and deposit slips. The Labour Standards Officer decided to use the payroll records.

He did not explain why he chose this approach. [ 19 ] However, a review of the actual cheques issued to the respondents indicates that they received more money than the payroll records reflect. This is not disputed by the respondents. [ 20 ] The Labour Standards Act , in

section 1 , provides the following: “wages” includes every form of remuneration for work performed but does not include tips and other gratuities.” [ 21 ] The Labour Standards Act does not define “remuneration”. However, it is defined in other legislation that also deals with the workplace. [ 22 ] The Workers’ Compensation Act , SNu 2007,c. 15, provides: Worker's remuneration 57.

(1) For the purposes of this Act, a worker's remuneration is the amount of all income earned through the performance of work, including all salaries, wages , fees, commissions, bonuses and tips. [ 23 ] The Payroll Tax Act , S.N.W.T. 1993, c. 11 (Nunavut), provides: " remuneration " includes all payments and the value of all benefits and allowances received or deemed to be received by an individual that, by reason of subsection 5(1) or

section 6 or 7 of the Income Tax Act (Canada) , are required to be included in the income of the individual for the purposes of that Act and, without limiting the foregoing, includes salaries and wages and the value of bonuses, taxable allowances and commissions and other similar amounts fixed by reference to the volume of sales made or contracts negotiated, but does not include (

a) a pension, annuity or superannuation benefit paid by an employer to a former employee after retirement of the employee, or (

b) any amount that may be deducted under paragraph 8(1) (

c) or subsection 110(2) of the Income Tax Act (Canada) [2] [ 24 ] The Oxford reference dictionary defines remuneration as pay or reward for a service rendered [3] . [ 25 ] In my view, the money received by the respondents as advances must be included in the definition of “wages” for the purposes of

calculating wages owing to them. [ 26 ] This is in keeping with the commonly understood meaning of the word. It also provides some consistency in approach between related legislation. Further, to do otherwise is to provide the respondents with money that no one contemplated - essentially providing the respondents with a windfall. [ 27 ] If I am wrong on this issue, I find that money provided to the respondents and not reflected in the payroll record should be credited towards the amounts owing pursuant to the Certificate issued by the Labour Standards Officer . B.

Did the Board err in calculating the number of days worked? [ 28 ] As previously stated, it was anticipated that the project would take approximately 16 weeks to complete, however, the respondents were to be paid the same regardless of whether the project was completed sooner or took longer. [ 29 ] The Labour Standards Officer calculated the number of days each respondent worked based on records provided by the general contractor.

The appellant disputes that the respondents worked all of those days and further submits that since the project took 17 weeks rather than 16, the daily rate of pay should be calculated based on 17 weeks. [ 30 ] The difficulty facing the Labour Standards Officer was the same difficulty facing this Court, in that no one really kept records. There is no reason to favour one method of calculating days worked over another. [ 31 ] I do not find that the Labour Standards Office r or the Board , in confirming this aspect of his decision, erred. C.

Remaining grounds of appeal [ 32 ] Given my findings on the first two grounds of appeal, as I have framed them, it is unnecessary for me to answer the remaining two grounds regarding the lack of reasons and the lack of procedural fairness. VII. CONCLUSION [ 33 ] In my view, given the delay in this matter, this is not an appropriate case to be returned to the Board . There is money that has been held back that needs to be paid out and this matter concluded. [ 34 ] The daily wage of $416.67 is confirmed.

The number of days worked by each respondent, as calculated by the Labour Standards Officer , is confirmed. [ 35 ] All of the money paid to the respondents, including statutory deductions and remittances made on their behalf, should be included in the calculation of wages. [ 36 ] It is difficult to assess the amounts that were actually paid to or on behalf of the respondents. [ 37 ] The differences in the calculations for the money paid vary as follows:

LSO (based on payroll records) Appellant (based on para 13 of Factum) Cheques Leonard Pressick $11,315.20 $25,148.97 $22,001.31 Shawn English $11,315.20 $22,065.20 $18,917.54 Scott English $22,630.40 $35,630.40 $29,335.08 [ 38 ] The appellant is to submit a statement, with supporting documentation, to the Labour Standards Compliance Office setting out the money paid to each of the respondents and statutory deductions and remittances made on their behalf within 45 days of the issuance of this decision.

The Labour Standards Compliance Office is to forward the statements and supporting documents to each of the respondents within 5 days of receiving them. [ 39 ] The Certificates are to be amended in accordance with the statements and supporting documents submitted by the appellant. [ 40 ] By Design Contracting is not incorporated, therefore, accordingly, it does not have directors.

Section 62 of the Labour Standards Act , which states that corporate directors are personally liable for two months of wages owed, it not applicable. Accordingly, paragraph 2 of the Certificates should be struck. Dated at the City of Iqaluit this 20th day of July, 2016 ___________________ Justice S. Cooper Nunavut Court of Justice