The Employment Standards Tribunal (EST) has denied a request by Vancouver’s Dayton Boots Company to reconsider a decision that found the company owes nearly half a million dollars in wages to workers who were previously compensated with Dayton Boots store gift cards.
The case began in October 2020 when two individuals filed confidential complaints with the BC Employment Standards Branch alleging that Dayton Boots withheld 50 percent of employees’ wages and offset the deductions with gift cards.
The investigation looked at employment records provided by Dayton Boots and found payroll records beginning in June 2020 that showed payroll deductions labeled “other deductions,” then “Dayton Card” and finally “Dayton Gift Card.”
According to tribunal documents, company owner Eric Hutchingame initially explained that Dayton Boots employees “were required to wear the store’s products while at work, so Dayton Boots developed a way for the employer to pay for the cost of the employees’ clothing by incorporating them.” into their wage structure.”
The company also claimed that employees verbally agreed to be paid $600 per week in salary plus $600 per week in merchandise credit.
During the investigation and subsequent appeal, the company also argued that the gift cards were never intended as wages; that the gift cards were paid for; that the payrolls were in error and the employees should never have received the gross amount shown; and that it would be unreasonable to require Dayton Boots to pay the amounts listed as deducted because many employees did not work a full 40-hour week, according to the documents.
Wages must be paid in Canadian currency
An EST delegate decision found against Dayton Boots and Hutchingame that they violated several sections of the Employment Standards Act (ESA), including section 20, which requires wages to be paid in Canadian currency, and section 21, which says employers cannot withhold deductions or require payment any part of an employee’s wages for any purpose.
The decision calculated that the 71 employees are owed $610,417.68 in wages plus interest. It said Hutchingame, as the sole director of Dayton Boots, was personally liable for about $556,000 of that amount.
Both Dayton Boots and Hutchingame appealed the decision.
In April 2022, the appeals tribunal rejected all but one of their arguments – agreeing that some employees who lived outside the province did not fall under the jurisdiction of the ESA and therefore their wages should not be included in the calculation.
The appeal decision ordered a recalculation that excluded out-of-province employees, reduced the debtor company’s wages to $484,995.33 and adjusted Hutchingame’s liability to $446,472.04.
Dayton Boots and Hutchingame then sought reconsideration of the decision on appeal, arguing that new evidence was intended to show that 36 of the 71 individuals initially awarded wages were in fact “brand ambassadors” and not actual Dayton Boots employees performing actual work .
The three-judge panel said the new evidence did not meet the test for reconsideration because Dayton Boots and Hutchingame themselves claimed 71 employees and provided evidence to support that fact when they presented the employment records of 71 to the court.
“The applicants have repeatedly claimed, and even confirmed, that individuals, including brand ambassadors, were their employees,” the panel said in upholding the recalculation decision.
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