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Guide Interpretation

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Part I - Act respecting labour standards

CHAPTER V - Recourses

Civil recourses

Sections
98
99
100
101
102
103
104
105
106
107
107.1
108
109
110
111
112
113
114
115
116
117
118
119
119.1
120
121

Section 113

Recourse exercised by Commission

The Commission may take the appropriate action on behalf of the employee at the expiry of the time provided for in section 111.

The Commission may also exercise the recourses available to an employee against the directors of a legal person.

1979, c. 45, s. 113; 1990, c. 73, s. 50; 1992, c. 26, s. 14.

Interpretation

At the expiry of the twenty-day waiting period from the mailing of the putting in default to the employer and the notice to the employee as stipulated in section 111 ALS, the Commission can exercise the appropriate recourse on behalf of the employee, if the employer refuses or neglects to pay the amount claimed.

In addition to the other recourses provided under the Act, the Commission has the power to exercise the same recourses that an employee can exercise himself against the directors of a company or profit-oriented business corporation. The exercise of the recourse against the directors is subject to the sections of the Act applicable to each case, namely at the provincial level according to the Business Corporations Act "BCA" (c. S-31.1) and at the federal level, according to the Canada Business Corporations Act "C.B.C.A." (R.S.C. (1985), c. 44.).

In all cases, the responsibility of directors is limited to an amount equal to six months of wages (s. 96 BCA. and s. 119 C.B.C.A.). The wages include, in addition to overtime, vacation pay and other indemnities provided by law, except for the termination of employment indemnity. The restriction to six months of wages refers to the maximum amount and not a period fixed in time.

This responsibility will arise, both for the provincial and federal legislation, in the case of an employer company or corporation that is bankrupt under the Bankruptcy and Insolvency Act (R.S.C., c. B-3) or when the writ of execution is deemed unsatisfactory following a judgment.

Prescription of the recourse against directors

Paragraph 2 of section 113 ALS  stipulates that in the case of the recourse against the directors, the Commission exercises the recourse that the employee may exercise against them. The legal proceedings instituted by the Commission are not those stipulated in section 115 ALS which ensue from the Act respecting labour standards or one of its regulations. The exercise of this recourse against the directors is subject to the provisions of the Business Corporations Act in Quebec and the Canada Business Corporations Act.

On the subject of the prescription of the recourse against the directors of a corporation, the federal legislation stipulates that their responsibility is only committed if the proceedings are instituted during their term of office or in the two years following the end thereof.

With respect to provincial companies incorporated under the Business Corporations Act in Quebec, there is no prescriptive period for recourse against directors. In such cases reference can be made to Article 2925 of Civil Code of Québec, under the  terms of which the three-year prescriptive period for enforcing a personal right could apply.

As for provincial companies incorporated under the Companies Act, this latter legislation is silent on the prescriptive period for the recourse against directors. It is possible to refer to the Civil Code of Québec. The three-year prescription for the personal recourse under Article 2925 C.C.Q. is open to the Commission for the recourse against the directors of a company incorporated under the Companies Act.

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