Last week, a potential client called and told me they hadn’t been paid in several months. They were employed by a small start-up that couldn’t now afford to pay its employees. The employer was still operating, and wasn’t bankrupt… yet.
I told the caller to call the Ministry of Labour, not an employment lawyer. I advised them that their employer likely wouldn’t pay, even if we won.
Incidentally, today I read in The Star about Jonathan Ozols, who, like my caller, was owed wages from a failed, small employer. He complained to the Ministry of Labour, and, as it turns out, was finally paid by his former employer… four years later.
Jonathan Ozols’s story is the reason I tell people with unpaid wages claims against their impecunious (i.e. broke), small employers to go directly to the Ministry of Labour and to forget retaining an employment lawyer. This is despite the fact an employment lawyer could likely get an order to pay much more than the Ministry of Labour ever could.
An employment lawyer could easily win an unpaid wages claim – it is not a complicated issue, at all. At the same time, an employment lawyer, unlike the Ministry of Labour, could easily win a claim for common law pay in lieu of notice (i.e. constructive dismissal), too (the Ministry lacks the power to enforce common law damages).
However, you cannot milk a dry cow. If a small employer cannot even pay its wages, how could it possibly pay what it owes following a successful, yet expensive lawsuit leveled against it? Accordingly, it is more practical to get the Ministry of Labour to handle an unpaid wages complaint, for free, rather than waste money on a lawyer. The tradeoff between what a lawyer could get an employee versus what the Ministry of Labour could get the same employee is never worth it when the employer will likely ignore a court order to pay anyways. The stress, money and time it takes to litigate, plus having to pay more to go after the directors personally if the company fails to pay following a successful trial, is not merited in most cases.
I would only advise a potential client to retain a lawyer in case their small employer owes them unpaid wages, and appears unable to pay, if they had meaningful seniority and were highly paid, thus entitling them to significant damages worth rolling the dice for.
Jeff is a lawyer in Toronto who works for a technology startup. Jeff is a frequent lecturer on employment law and is the author of an employment law textbook and various trade journal articles. Jeff is interested in Canadian business, technology and law, and this blog is his platform to share his views and tips in those areas.