Workers call for tougher labour laws to end wage theft

Posted by admin on Sep 5th, 2011

Laurie Monsebraaten, The Star, 5 Sep. 2011

Kelsang had been out of work for two months and was desperate when she accepted a job last February at Babaz, a west-end Toronto fast-food restaurant that specializes in Middle Eastern food. She agreed to work for $10 an hour chopping vegetables, making falafels and operating the cash, even though she knew she would be earning less than Ontario’s $10.25 minimum wage. But the Tibetan immigrant who has lived and worked in Canada for more than a decade was shocked when her first pay was delivered to her in cash — without any paperwork showing payroll deductions — and amounted to just $450. She was owed at least $700.

“When I asked when I would be getting the remaining amount, my manager said I would get it next time,” says Kelsang, who doesn’t want her full name used for fear of reprisals from future employers. “But next time, it was the same.”

By May, after she had borrowed from her sister to pay the rent and given up her cell phone, Kelsang says she was owed more than $4,000 and could no longer afford to work there.

At the end of her last week of work, she says Babaz’s owner George Kottas gave her $600 and said he would pay the rest of the money he owed if she returned the following Monday.

He never showed up, she says.

Kelsang is one of at least 20 former Babaz employees in Toronto and London who have complained to Ontario’s Ministry of Labour about unpaid wages, overtime, vacation and public holiday pay since 2008.

They are among thousands of Ontario workers who are victims of “wage theft,” says the Workers’ Action Centre.

The non-profit, worker-based organization, says Monday’s annual Labour Day celebrations, two days before the official start of the provincial election campaign, are an opportunity for workers to press politicians to strengthen Ontario’s outdated Employment Standards Act to protect workers from wage theft and other workplace violations.

They want better scrutiny of employers and stiffer penalties for those who break the rules.

“At a time of economic uncertainty, employers are taking advantage of immigrants, newcomers, temp, casual and contract workers,” says the centre’s Deena Ladd.

“Politicians say they are standing up for working families,” she said. “We want to see how they are helping Ontario’s most vulnerable workers who are being pushed into poverty through workplace violations.”

Last year, Ontario workers were entitled to $21.4 million in unpaid wages against solvent companies and almost $43 million in unpaid wages against bankrupt or insolvent employers, according to labour ministry documents. The ministry collected $14.8 million, or 69 per cent of wages owed by solvent companies.

In the Babaz case, a labour ministry spokesperson said employment standards officers have issued 10 orders to pay wages against the company since January 2010. At least three of the claims totaling more than $8,500 name Kottas as the employer. None of the orders have been paid and seven have gone to collection agencies.

In an interview, Kottas, who says he has lost $1 million and is declaring bankruptcy, denied responsibility for the unpaid wages.

“I never owned any of the stores. I just own the name,” he said.

“The franchisees have not paid their employees. I don’t know why everybody is coming after me,” Kottas said. He insists he is not “the bad guy” and is trying to pay Kelsang the money she is owed.

“I guess because I’m the franchisor and the stores are all closed and everybody walked away, I’m the only person left standing,” he said.

Ladd at the action centre says too many employers set up franchises and force workers to become independent contractors so they don’t have to adhere to basic employment standards, she said.

“These are huge loopholes in the legislation that need to be closed.

Ontario’s Employment Standards Act sets out the province’s minimum workplace regulations and is the only protection against abuse for low-paid, vulnerable workers. Since the act is more than 40 years old, Ladd says it never contemplated the complex work environment that includes temporary employment agencies, sub-contractors, franchises and live-in caregiving.

A survey of 520 low-wage Ontario workers released earlier this year found about one-third were victims of wage theft.

The report urged Ontario’s labour ministry to proactively target employers in high-violation industries such as hospitality, cleaning, retail and construction, which attract newcomers, young workers, visible minorities and other vulnerable workers.

Kelsang, who filed a claim for unpaid wages in June against Babaz, has found another job and is studying business at George Brown College to improve her employment prospects.

She hopes she will one day get back the wages she is owed.

“No one can afford to work for free.”

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