Women 'face of the business' but owners had no documentation of paying her
A worker who was heavily involved in starting up and running a pet grooming business owned by her common law partner and his family was an employee and is entitled to four years’ worth of unpaid wages and overtime, the Ontario Superior Court of Justice has ruled.
The worker was a stay-at-home mother on social assistance for several years after dropping out of high school when she started a dog breeding business in her home in Toronto. According to the worker, the business did well and made a lot of money. However, all of the money was given to her common-law partner, who was the father of her children.
When the worker’s partner saw how much money could be made from the pet business, he incorporated a pet supply retailer and pet grooming service provider called Pet Social. Pet Social was incorporated in October 2011 with her partner’s two brothers as the co-owners. The three brothers were directors and one served as treasurer.
According to the worker, she understood that she was also one of the company’s owners and she was involved in its conception and launch, along with managing its operations. She searched for a realtor to find a location for Pet Social and also managed the retail part of the store. She said she was the public face of the company and worked between 13 and 16 hours a day, seven days a week.
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Worker was face of the business
The worker didn’t sign an employment contract and she didn’t record her hours, as she saw herself as a business owner performing managerial duties. Pet Social did well and received media attention. It soon opened up a second location and the worker co-ordinated a public relations event with Toronto Animal Serivces. She also did media interviews and a television commercial, presenting herself as the owner of Pet Social. The local business improvement association listed her as a business owner.
In Pet Social’s second year of being open, the worker still worked seven days a week but fewer hours each day. Her mother worked at the store as a pet stylist on commission, although she was mostly paid in dog food and cash. According to the worker’s mother, the worker was always referred to as the owner and manager, while the brothers were never present.
The worker was also involved in negotiations for contract and part-time employees and a groomer, as she said that the brothers were not interested in dogs and didn’t understand the nature of the dog grooming business. These employees were hired after the first year to help lighten the worker’s workload.
According to the worker, she was never paid for working at Pet Social. Her partner was controlling and didn’t allow her to have money, while the brother who was the treasurer told her that it was degrading for a woman to ask for money. She was told that it should be enough that her partner took care of her financial needs and paid her bills.
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Legal action for compensation
The worker ended her relationship with her partner in November 2015 due to physical and sexual assaults against her. The partner later went to jail for another matter.
The worker launched a court action for damages for compensation for her investment in Pet Social and the labour she performed for the business. She claimed that she only complied with working for no pay because of her abusive relationship with her common law partner.
The court noted that the Ontario Employment Standards Act, 2000 (ESA) defines “employee” as “a person, including an officer of a corporation, who performs work for an employer for wages.” The ESA also requires employers to establish a pay period and provide pay statements.
The court also found that the worker may have been an owner of Pet Social in her own mind, but she didn’t have any real control over the business. Her partner and his brothers started up the business and, although the money she made from her dog breeding business was given to her partner, there was no evidence to show how much of it was invested into Pet Social, said the court in finding that the worker was an employee of Pet Social that performed managerial duties.
Ontario employers failed to pay $9 million in workers’ wages in the 2021-22 fiscal year, according to the Ontario Ministry of Labour.
No documents showing wages were paid
The brothers who owned Pet Social did not provide any documents to prove that the worker received any wages while working for Pet Social. As a result, the court found that the company did not establish a pay period or pay her regular earnings, statutory holiday pay, vacation pay, or overtime pay – all in violation of the ESA.
The court found that the worker was entitled to wages for the four years she worked for Pet Social. It calculated her entitlement based on 40 hours a week at minimum wage, plus vacation pay, and then added $10,000 per year to reflect the fact that she had a managerial role, noting that the brothers did not challenge her claim that she was “the face of the business.”
The court also found that the worker was entitled to overtime pay, which it estimated to be 15 hours per week in the first year of the business and 10 hours per week after Pet Social hired some employees.
The worker claimed aggravated and punitive damages, but the court noted that such damages are contract damages in the context of wrongful dismissal cases. In this case, the worker wasn’t terminated but, in her own words, she “escaped” a bad situation. Aggravated and punitive damages were not applicable to this situation, said the court.
Pet Social’s directors were ordered to pay the worker four years’ worth of unpaid wages and overtime – for the period from October 2011 to November 2015 - totalling $130,291.20. See Seepersaud-Singh v. Pet Social, 2023 ONSC 4174.
