Worker claims unpaid wages – but 'employer' was a fraudster

HR tried to warn people once it learned of scam

Worker claims unpaid wages – but 'employer' was a fraudster

A company is not responsible to pay a worker wages for work that the worker performed online for a fraudster who impersonated the company, the Ontario Labour Relations Board has ruled.

The worker was looking for employment in mid-2020 on the internet. He registered with job search sites and checked out online job boards. In late July, he received an email from someone who claimed to be a human resources representative for Cord3 Innovation, a cybersecurity company based in Ottawa.

The HR person asked the worker to apply specifically for a finance manager position with Cord3, so the worker researched the company online. He saw that Cord3 Innovation was a legitimate business and someone with the same name as the person who emailed him worked in its HR department, so he completed the application form.

On Aug. 5, the same person emailed him and formally offered the worker the position of “online manager finance.” The worker accepted and he was sent an employment agreement that identified the employer as “Cord3 company.” He signed the agreement and provided requested information such as his banking information.

The worker started working in the position, although his work was entirely online and he never met anyone representing Cord3. He spoke with a woman on the phone who identified herself as the same HR person with Cord3, but most of the communication was by email.

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Training on cryptocurrency

The worker was trained on using cryptocurrency, which he was told was used by the company clients to pay for their accounts. He was told there were several stages in the trial period, with the first stage accepting payment for the company’s services. He was told that he would have access to an online account and all instructions, and he would be trained gradually. His pay would be transferred through the Interac system.

The worker’s training included performing training tasks such as visiting locations were Bitcoin machines were located and using his personal bank account to receive “corporate money” and then exchange it for Bitcoin.

After a few weeks, in early September the HR representative stopped communicating with the worker. He tried emailing her, but the emails were blocked. He never received any payment for his training.

More than a year passed and the worker visited Cord3 Innovation’s location in person in November 2021. He met with Cord3 Innovation’s vice-president, business development and sales, and told him that he was seeking payment for the work he did in 2020. The vice-president told him that Cord3 Innovation had never hired him and he’d been scammed. They discussed involving the police, but the worker felt intimidated and left.

About one month later, the worker emailed Cord3 Innovation about his wage claim, but he received no response. He then filed a claim for unpaid wages with the Ontario Ministry of Labour, claiming that he was employed by Cord3 Innovation or a sister company called Cord3.

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Victim of fraud

Cord3 Innovation contended that it never employed the worker and he had been the victim of fraud. The company noted that it had been contacted by others who had received similar job offers, and the HR person had been made aware that someone had been impersonating her.

Cord3 Innovation indicated that it had never used the corporate names used by the people who contacted the worker, or the email addresses and domain names they had used. The email address of the person who contacted the worker was not the email address of the real HR person and the employment agreement was not the one used by the company.

Cord3 Innovation also did not deal in cryptocurrency, which was related to the core function of the worker’s job offer.

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Scam reported to police

In July 2020, the real HR person reported the scam to police and posted warnings on both the company’s website and her LinkedIn page. She also reported the scam to the Canadian Anti-Fraud Centre three times, the last after the worker contacted the company.

An employment standards officer refused to issue an order to pay to Cord3 Innovation, finding that the company had never employed the worker and therefore did not contravene the Ontario Employment Standards Act, 2000.

The worker applied for a review of the decision.

The board’s ESA appeals division found that the worker did not show that a company called Cord3 ever existed or employed him. Cord3 Innovation existed as a real company, but the evidence was clear that Cord3 Innovation never employed the worker. The worker was purportedly employed by scammers posing as Cord3, but such fraudulent representations didn’t bind the real company to any obligations, said the board.

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No direct with anyone

The board noted that the worker’s own evidence didn’t support his claim, as he had never met the HR person or anyone else with Cord3 either in-person or virtually. In addition, the employment agreement was on behalf of a different entity – Cord3 company – and sent from an email address that was not used by the company, said the board, adding that when the worker eventually went to Cord3 Innovation’s premises, he was told that he had been scammed.

The board also noted that scammers can easily use technology such as email and websites to impersonate a company, and it was up to the worker to confirm the identity of who he was communicating with. In fact, Cord3 Innovation indicated that several other people who received similar job offers contacted the real HR person and company to report the scam or check the legitimacy of the job offer.

The board determined that Cord3 Innovation never employed the worker and was not responsible for the scam – in fact, the company tried to warn people once it learned of the scam. As a result, the company wasn’t liable for the wage claim, said the board. See Tahseen Jaffri v. Cord3 Innovation Inc., 2023 CanLII 5369.

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