Part XXIV - Collection

The intent of this Part is to facilitate the collection of money owed under the Employment Standards Act, 2000.

Section 125 - Third party demand

Third party demand – s. 125(1)

Subsection 125(1) was amended by the Strengthening and Improving Government Act, 2015 effective December 3, 2015.

Section 125 is the source of the authority to issue third party demands to persons the Director of Employment Standards believes or suspects owe money to, or are holding money, or will within 365 days owe or hold money for an employer, corporate director, or another person who is liable to make a payment under the Employment Standards Act, 2000. This includes the power to issue third party demands to persons owing money to or holding money for an employer, corporate director, or another person who owes money in respect of a notice of contravention under ESA Part XXII, s. 113.

Subsection 125(1) sets out the conditions that must be met before a third party demand may be issued. The conditions are as follows:

1. The Director must believe or suspect that a person owes money to, or is holding money for, or will within 365 days owe money to or hold money for an employer, a corporate director or other person (such as a client of a temporary help agency); and
2. The employer, corporate director, or other person must be liable to make a payment under the Employment Standards Act, 2000.

Therefore, the Director has the discretion to issue a third party demand on the basis of a reasonable belief that a person owes money to or is holding money or will, within the next 365 days, owe or hold money for another person who is liable to make a payment under the Employment Standards Act, 2000.

An employer, corporate director, or other person is liable to make a payment under the Employment Standards Act, 2000 where:

1. 1. An order to pay is issued to it under ss. 74.14, 74.16, 74.17, 103, 104, 106 or s. 107 as the case may be, or a notice of contravention is issued under s. 113.

Generally, no third party demand would be issued unless the employer, corporate director, or other person does not comply with the order or notice and does not apply for a review of the order or notice within 30 days of service, and no settlement of the order has been effected under s. 112, s. 120 or s. 129. However, in extraordinary circumstances and with the manager’s approval a third party demand may also be issued after the order/notice has been issued but before the 30-day appeal period has expired. Because a review application may ultimately be filed in such cases, any money collected within 30 days after the order/notice is issued is held in trust for a reasonable period of time after the expiry of the appeal period.

1. 2. An order to pay is issued or amended by the Board under s. 119 or 121, or a notice of contravention is affirmed or amended under s. 122, and the employer, corporate director, or other person does not comply with the order or notice as required by the Board.

If the above criteria are met and a third party demand is issued, the demand will indicate that the money the third party owes to the employer, corporate director or other person is, in whole or in part, to be paid to the Director of Employment Standards, in trust, for payment of monies owed under the Employment Standards Act, 2000. For example, a third party demand may be issued to a bank where money is held in an account of a person who owes money under the Employment Standards Act, 2000.

The power to issue third party demands for payment has been delegated under ESA Part XXI, s. 88. For further information see Delegation of Powers. In addition, under ESA Part XXIV, s. 127, the Director of Employment Standards has given to the Ministry of Finance, the Ministry’s authorized collector, authorization to exercise this power on the Director’s behalf for purposes of those orders and notices assigned to them.

Same, duration – s. 125(1.1)

This subsection provides that a demand issued under s. 125(1) remains in force for 365 days from the date the notice of the demand is served.

Client of temporary help agency - s. 125(2)

Subsection 125(2) indicates that s. 125(1) applies where a client of a temporary help agency owes money to, or is holding money for, a temporary help agency. For a discussion of the definition of the term “client" when used in relation to a temporary help agency, see ESA Part I, s. 1(1).

Service - s. 125(3)

This provision states that the Director must serve the notice of the third party demand on the person to whom the demand is being made, in accordance with ESA Part XXI, s. 95.

The power with respect to service of a third party demand has been delegated under ESA Part XXI, s. 88. For further information see Delegation of Powers. In addition, under ESA Part XXIV, s. 127, the Director of Employment Standards has authorized collectors to exercise this power, for the purposes of recovering monies owing in respect of those files assigned to them for collection.

Discharge - s. 125(4)

Subsection 125(4) was introduced by the Employment Standards Amendment Act (Temporary Help Agencies), 2009 effective November 6, 2009 to replace the former s. 125(3).

Subsection 125(4) provides that a third party is automatically relieved of liability, upon compliance with a demand under this provision, to the extent of the payment. (No receipt is required to discharge the liability.) The liability may relate to an amount owed to or held for an employer, director or other person who is liable to make a payment under the Employment Standards Act, 2000.

For example, if a bank owes $1,000 to an employer who is liable to pay the Ministry $700 on behalf of an employee entitled under the Act, the Ministry can serve a third party demand on the bank for the $700. Where the bank pays the Ministry the $700 pursuant to the demand, the bank is immediately relieved of its obligation to pay that amount to the employer. However, the bank would still be obliged to pay the employer the remaining $300.

Liability - s. 125(5)

1. the amount paid to the employer, director or other person; and
2. the amount of the demand.

This provision was introduced by the Employment Standards Amendment Act (Temporary Help Agencies), 2009 effective November 6, 2009 to replace the former s. 125(4).

Subsection 125(5) sets out the consequences of failure to comply with a third party demand. If a third party who has received a demand under s. 125 pays money to the employer, corporate director, or other person who is liable to make a payment under the Employment Standards Act, 2000 before complying with the demand, the third party will be required to pay to the Director the lesser of:

• The amount paid out to the employer or corporate director; or
• The amount originally demanded.

Section 125.1 – Security for amounts owing

Section 125.1 is a new provision added by the s. 74.14. The Fair Workplaces, Better Jobs Act, 2017, S.O. 2017 c. 22, effective January 1, 2018.

This new provision is an additional tool to assist in the collection of outstanding orders and penalties under the Employment Standards Act, 2000. Section 125.1 allows the Director to accept security in any form satisfactory to the Director for the payment of amounts owing under the Employment Standards Act, 2000. The Director of Employment Standards, in accordance with ESA Part XXIV, s. 127, may authorize a collector to exercise this power.

Section 125.2 – Warrant

Section 125.2 is a new provision added by the Fair Workplaces, Better Jobs Act, 2017, S.O. 2017 c. 22, effective January 1, 2018.

This new provision is an additional tool to assist in the collection of outstanding orders and penalties under the Employment Standards Act, 2000. It enables the Director to issue a warrant to a sheriff to enforce payment of an order to pay and the costs and expenses of the sheriff. A Director’s warrant has the same force and effect as a Writ of Seizure and Sale issued by a Superior Court of Justice Registrar under rule 60 of R.R.O. 1990, Regulation 194 Rules of Civil Procedure and is filed with the relevant sheriff (enforcement office). The Director of Employment Standards, in accordance with ESA Part XXIV, s. 127, may authorize a collector to exercise this power.

Section 125.3 – Lien on real and personal property

Section 125.3 is a new provision added by the Fair Workplaces, Better Jobs Act, 2017, S.O. 2017 c. XX, effective January 1, 2018.

This new provision is an additional tool to assist in the collection of outstanding orders and penalties under the Employment Standards Act, 2000.

It allows the Director to register a real property lien directly on title for identifiable real property. It also allows the Director to register a Personal Property Security Act, R.S.O. 1990, c. P.10 lien and charge on personal property for amounts owing on an order to pay and any applicable interest. The Director of Employment Standards, in accordance with ESA Part XXIV, s. 127, may authorize a collector to exercise these powers.

Section 126 - Filing of order

Filing of order - s. 126(1)

This provision permits the Director of Employment Standards to certify a copy of an order as a true copy and to file a certified true copy of an order to pay in court.

The effect of the section is to enable an order to pay money under the Employment Standards Act, 2000 to be enforced through the Ontario courts. The provision grants to the Director a status comparable to that of a judgment creditor, thereby making available such creditors' remedies as writs of seizure and sale, garnishments, and directions to enforce by sheriffs or bailiffs.

This section is the basis of a large part of the collection process under the Act. Once the certified copy of the order to pay is filed, it can be enforced like a judgment of the court, which means that the Rules of Civil Procedure respecting the enforcement of judgments apply.

Section 126(1) states that the order to pay may be filed in a "court of competent jurisdiction". There are two aspects to the concept of competent jurisdiction. Courts are subject to both monetary and geographical limits. If the order is for $25,000 or less, the order to pay money may be filed with the Small Claims Court located in the geographic area or areas where the employer resides or carries on business. If the amount exceeds the Small Claims Court threshold, then the Superior Court of Justice is the proper level of court in which to file the certified copy of the order; the certified copy may be filed with the Superior Court in any geographical area of the province. A writ of seizure and sale must be filed with the office of the Sheriff or Small Claims Court bailiff in the jurisdiction where the employer or director has assets, in order that enforcement may be carried out.

The Director’s power to certify a copy of an order as a true copy and to file a certified copy of an order to pay money has been delegated under s. 88 of the Act. See Delegation of Powers for further information. In addition, under s. 127, the Director of Employment Standards has authorized collectors to exercise this power, for the purposes of recovering monies owing in respect of those files assigned to them for collection.

Advice to person against whom order was made - s. 126(2)

Under s. 126(2), where a certified true copy of an order to pay is filed, the Director of Employment Standards is required to serve a copy of the order on the employer or corporate director, so that the affected parties are notified of the collection action against them.

This non-discretionary power has been delegated under s. 88 of the Act. See Delegation of Powers for further information. In addition, under s. 127, the Director of Employment Standards has authorized collectors to exercise this power for the purposes of recovering monies owing in respect of those files assigned to them for collection.

Certificate enforceable - s. 126(3)

Section 126(3) states that once filed with a court of competent jurisdiction, a certified copy of an order to pay is enforceable in the same manner as a judgment or order of the court.

This authority has been delegated under s. 88 of the Act. See Delegation of Powers for further information. In addition, under s. 127, the Director of Employment Standards has authorized collectors to exercise this power for the purposes of recovering monies.

Notices of contravention - s. 126(4)

Section 126(4) establishes that, as with orders to pay, the Director, or his or her delegate, may certify a copy of a notice of contravention as a true copy and file a certified true copy of a notice of contravention with a court of competent jurisdiction, in accordance with s. 126(1). Where this is done, an advisory letter must be served in accordance with s. 126(2). The notice of contravention, once filed, may be enforced as an order of the court in accordance with s. 126(3).

The Director’s power to certify a copy of a notice of contravention as a true copy and to file a certified copy of the notice has been delegated under s. 88 of the Act. See Delegation of Powers for further information. In addition, under s. 127, the Director of Employment Standards has authorized collectors to exercise this power, for the purposes of recovering monies owing in respect of those files assigned to them for collection.

Section 127 - Director may authorize collector

Director may authorize collector – s. 127(1)

Subsection 127(1) permits the Director to authorize collectors to collect amounts owing under the Employment Standards Act, 2000, whether for employees or for the Minister of Finance for amounts owed to the former Employee Wage Protection Program or with respect to a notice of contravention, or to the Director for administrative costs. The Director’s authorization also extends to the collection, in Ontario, of amounts owed under legislation of reciprocating states to which ESA Part XXIV, s. 130 applies.

Subsection 127(1) must be read in conjunction with the definition of "collector" in ESA Part I, s. 1(1). Collector means a person (other than an employment standards officer) who is authorized by the Director of Employment Standards to collect amounts owing under the Employment Standards Act, 2000.

Same - s. 127(2)

Subsection 127(2) identifies the powers that the Director of Employment Standards may authorize a collector to exercise. Any of the following powers, as the Director specifies in an authorization under s. 127(1), may be exercised in collecting amounts owing under the Employment Standards Act, 2000:

Powers of the director of employment standards

• Section 125: Power to issue third party demands
• Section 125.1: Power to accept security for amounts owing under the Employment Standards Act, 2000
• Section 125.2: Power to issue a Warrant directed to the sheriff, to enforce payment of the following amounts:
  • The amount the order requires the person to pay, including any applicable interest
  • The costs and expenses of the sheriff
• Section 125.3: Powers to register a lien in the proper land registry office in an attempt to enforce an order and obtain outstanding amounts owing under the Employment Standards Act, 2000 and/or register a lien and charge on personal property under the Personal Property Security Act, R.S.O. 1990, c. P.10.
• Section 126: Power to file a certified copy of an order or notice of contravention in court
• Section 130: Power to file a certified copy of an order issued from a reciprocating jurisdiction and to recover costs of enforcing the order
• Subsection 135(3): Power to enforce an order of the court by filing a copy of it in a court of competent jurisdiction

Powers of the Ontario Labour Relations Board under the SPPA

• Section 19 of the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22 ("SPPA"): Power to file a certified copy of the Board’s decision in court

For reference, s. 19 of the SPPA states:

Therefore, if given this power by the Director of Employment Standards, the collector may file a certified copy of an order, notice of contravention or a decision of the Board in court and direct the sheriff or bailiff to take enforcement measures, such as seizure and sale of assets.

Costs of collection – s. 127(3)

Subsection 127(3) states that the Director of Employment Standards may authorize the collector to collect a reasonable fee or reasonable disbursements, or both, from the persons from whom the collector is seeking to collect amounts owing under the Employment Standards Act, 2000, despite clause 22(a) of the Collection and Debt Settlement Services Act, R.S.O. 1990, c. C.14.

Clause 22(a) of the Collection and Debt Settlement Services Act states that no collection agency or collector shall "collect or attempt to collect, on its own behalf or for a person for whom it acts, any money in addition to the amount owing by the debtor.”

It is necessary for s. 127(3) to create an exception to the prohibition in s. 22(a) of the Collection and Debt Settlement Services Act for fees authorized under s. 127(3), since those fees are deemed, under s. 128 (2), to be added to the amount of the order, and must be collected from the person owing the money under the Employment Standards Act, 2000.

This provision must be read in conjunction with ESA Part XXII, s. 112(6)(b) and ESA Part XXIII, s. 120(6)(b)(ii) which limit the recovery of collector’s fees and disbursements to a proportion that is the same as the proportion of the amount of wages, fees or compensation ordered to be paid that the employee is entitled to receive as a result of a settlement under s. 112 or s. 120.

Same - s. 127(4)

Subsection 127(4) provides that the Director may impose conditions on the authorization of a collector and may determine what constitutes a reasonable fee or disbursements in the circumstances.

This provision must be read in conjunction with ESA Part XXII, s. 112(6)(b) and ESA Part XXIII, s. 120(6)(b)(ii) which limit the recovery of collector’s fees and disbursements to a proportion that is the same as the proportion of the amount of wages, fees or compensation ordered to be paid that the employee is entitled to receive as a result of a settlement under s. 112 or s. 120.

Exception re: Disbursements - s. 127(5)

Subsection 127(5) means that the Director of Employment Standards may not authorize a collector who is required to register under the Collection and Debt Settlement Services Act to collect disbursements, although the Director may authorize such a collector to collect fees. The difference between fees and disbursements is that the latter consist of expenses that the collector has incurred, (photocopying, gas, long distance charges), whereas the former represent the payment for the collector’s services, whether a flat fee, a commission or some other consideration.

Subsection 4(1) of the Collection and Debt Settlement Services Act states:

In s. 1(1) of the Collection and Debt Settlement Services Act, "collection agency" and "collector" are defined as follows:

Generally, a collector working for a collection agency must be registered under the Collection and Debt Settlement Services Act and therefore, the Director of Employment Standards may not authorize such a collector to collect disbursements.

Note that s. 2 of the Collection and Debt Settlement Services Act states that, subject to the regulations, the Act (and hence the requirement for registration) does not apply to certain persons who might be involved in collections work, such as, for example, lawyers and banks; thus, if the collector falls within s. 2, the Director could authorize that collector to collect both fees and disbursements.

Disclosure – s. 127(6) and (7)

Subsections 127(6) and (7) allow the Director to disclose information collected under the authority of the Act or the regulations to a collector for the purpose of collecting an amount payable under the Employment Standards Act, 2000.

Any disclosure of personal information made by the Director under s. 127(6) is deemed to be in compliance with clause 42(1)(d) of the Freedom of Information and Protection and Privacy Act, R.S.O. 1990, c. F.31 (“FIPPA”).

Clause 42(1)(d) of FIPPA states:

Section 128 - Collector’s powers

Collector’s powers - s. 128(1)

Subsection 128(1) permits the collector to exercise the powers specified by the Director of Employment Standards. It must be read in conjunction with ESA Part XXIV, s. 127(2), which enumerates the enforcement powers that the Director may delegate to a collector in an authorization provided under ESA Part XXIV, s. 127(1).

Fees and disbursements part of order - s. 128(2)

Subsection 128(2) provides that the authorized fees and disbursements of the collector will be deemed to be part an order or notice of contravention that has been assigned to a collector. This means that the employer, corporate director or person who owes the money under the Employment Standards Act, 2000 will be responsible for the costs of collection. It also means that the same mechanisms under the Employment Standards Act, 2000 used to enforce and collect an order for wages or compensation (including administrative costs) and penalties assessed under a notice of contravention, can also be used to enforce and collect the collector’s authorized fees and disbursements.

Distribution of money collected re: Wages or compensation - s. 128(3)

Subsection 128(3) sets out how the collector must disburse the money collected. It only applies where the collector has collected the full amount owing to all persons under the order or notice of contravention, including the person in favour of whom the order was written, the Director (in regard to administrative costs), the collector (in regards to fees and disbursements) and the Minister of Finance (in regard to a notice of contravention). Interest on money collected will be allocated according to the corresponding principal amount, except for interest on the collection fees and disbursements collected, which will be allocated according to the terms of the contract or other agreement between the Director and the collector. Where less than the full amount is collected, the provisions of s. 128(4) apply instead.

The Director’s power to provide a collector with written consent to pay directly to a person the wages or compensation they are entitled to has been delegated under ESA Part XXI, s. 88. See Delegation of Powers for further information.

Apportionment - s. 128(4)

Subsection 128(4) states what happens when the amount collected is less than the full amount of the order including administrative costs and the collector’s fee. In this situation, the money is to be distributed to each person including the Director of Employment Standards and the collector in proportion to the amount they are owed.

Disclosure by collector – s. 128 (5) and (6)

Subsections 128(5) and (6) allow the collector to disclose information collected under the authority of the Employment Standards Act, 2000 or the regulations to the Director if the information was collected for the purposes of collecting an amount payable under the Employment Standards Act, 2000.

Any disclosure of personal information made by the Director under s. 128(6) is deemed to be in compliance with clause 42(1)(d) of the Freedom of Information and Protection and Privacy Act, R.S.O. 1990, c. F.31 (“FIPPA”).

Clause 42(1)(d) of FIPPA states:

Section 129 - Settlement by collector

Settlement by collector - s. 129(1)

Section 129(1) states that a collector appointed by the Director may effect a settlement of the amount owing under the Employment Standards Act, 2000 if the creditor (generally the employee) agrees in writing to the settlement. The provision also states that in the case of a notice of contravention, the collector may effect a settlement of the amount owing under the Act if the Director agrees in writing to the settlement.

This provision should be read together with subsection 129(2), which restricts the authority of the collector to effect a settlement where the person to whom the money is owed would receive less than 75 per cent of the money to which he or she is entitled.

The Director’s power to agree in writing to a settlement in the case of a notice of contravention has been delegated under s. 88 of the Act. See Delegation of Powers for further information.

Restriction - s. 129(2)

This provision is substantially the same as s. 73.0.3(2) of the former Employment Standards Act.

Section 129(2) states that the written approval of the Director is required if the collector is to effect a settlement under which the person to whom the money is owed would receive less than 75 per cent (or such other percentage as may be prescribed by regulation) of the money to which he or she is entitled. At the time of writing, no other percentage had been prescribed.

The Director’s power under this provision has been delegated under s. 88 of the Act. See Delegation of Powers for further information.

Orders void where settlement - s. 129(3)

Section 129(3) was amended by the Employment Standards Amendment Act (Temporary Help Agencies), 2009, S.O. 2009, c. 9, effective November 6, 2009 to include a reference to orders issued under Part XVIII.1.

This provision was introduced by the Employment Standards Act, 2000. It is similar in part to s. 73.0.3(3) and s. 73.0.3(5) of the former Employment Standards Act and codifies the common law as well as Program policy under the former Act.

Section 129(3) states that the order, upon which the settlement is based, becomes void when the person against owing under the settlement must be paid to the collector and the collector must then pay the money out in accordance with s. 128(3) andwhom the order was made does what they have agreed to do in the settlement. Section 129(3) also incorporates the common law and Program policy by stating that a settlement that is entered into as a result of fraud or coercion will not be binding.

A question concerning the voiding of an order under this section may arise where the order pertains to the entitlements of several individuals, and a settlement is achieved respecting one or more but not all of the individuals. Program policy is that in these circumstances, only the portion of the order that relates to the individual covered by the settlement would be void.

Notice of contravention - s. 129(4)

This provision was introduced by the Employment Standards Act, 2000.

Section 129(4) states that a notice of contravention, upon which a settlement (made with the agreement of the Director, s. 129(1)(b)) is based, becomes void when the person against whom the notice was made does what they have agreed to do in the settlement.

Payment - s. 129(5)

This provision is similar to ss. 73.03(3) and (4) of the former Employment Standards Act.

Section 129(5) states that when a settlement is made, any money s. 128(4).

Section 130 - Definitions

Definitions - s. 130(1)

Section 130(1) defines the two key terms used in the reciprocal enforcement provisions. Both definitions are "inclusive". This means that they are not exhaustive, and other terms similar to those listed will also fit the definitions.

In this instance, the word "order" will include any order to pay money issued under employment standards legislation in another state. It may also include a judgment or certificate.

The term "state" is also given a broad meaning: it may be taken to include any jurisdiction outside of Ontario, since another province or territory of Canada or any foreign state or part of a foreign state would be included in the definition. The definition of "state" must be read in conjunction with s. 130(2) and s. 2 of O. Reg. 289/01, which lists those states that are reciprocating states for the purposes of reciprocal enforcement under the Act. This list in s. 2 of O. Reg. 289/01 was amended by O. Reg. 475/06 filed on October 6, 2006 to include Newfoundland and Labrador, and by O. Reg. 295/11, effective July 1, 2011, to include Quebec. All Canadian provinces and territories are now reciprocating states.

Reciprocating states - s. 130(2)

Section 130(2) provides that those states prescribed by regulation may make use of the reciprocal enforcement of orders provisions in the Act.

Section 2 of O. Reg. 289/01 prescribes the reciprocating states as follows:

With the addition of Quebec, added to O. Reg. 289/01 by O. Reg. 295/11, all Canadian provinces and territories are now reciprocating states.

Application for enforcement - s. 130(3)

Section 130(3) permits a reciprocating state to apply to the Director for enforcement in Ontario of an order issued by the reciprocating state.

Copy of order - s. 130(4)

This provision is virtually identical to s. 73.1(4) the former Employment Standards Act.

Section 130(4) states that an application for reciprocal enforcement must be accompanied by a certified true copy of the order. Clauses 130(4)(a) and (b) designate who may certify the copy of the order: either the court where the original was filed or the responsible authority (if the employment standards legislation of the other state does not have provision for filing an order with a court).

Enforcement - s. 130(5)

This provision is virtually identical to subsection 73.1(5) of the former Employment Standards Act.

Section 130(5) is a parallel provision to ss. 126, which allows for the filing of an order with a court of competent jurisdiction for enforcement purposes.

Section 130(5) provides the power to enforce an order of a reciprocating state through the Ontario courts. Pursuant to s. 130(1), an "order" may include a judgement as well as an order issued under a provision similar to s. 126(1) of the Employment Standards Act, 2000. It permits the Director to file a certified copy of the order in a court of "competent jurisdiction". Once filed, the order is enforceable as a judgment or order of the court. The effect of this section is that an order of a reciprocating state will be enforceable in the same manner as an order issued under the Employment Standards Act, 2000.

The Director’s power under this section has been delegated under s. 88 of the Act. See Delegation of Powers for further information.

Costs - s. 130(6)

This provision is substantially the same as s. 73.1(6) of the former Employment Standards Act.

Section 130(6) permits the recovery of the costs of enforcing the order as if it were an order of the court in which it is filed.

The Director’s power under this provision has been delegated under s. 88 of the Act. See Delegation of Powers for further information.