Voluntary resolution
Last updated on February 6, 2024Voluntary resolution is part of the investigation process. While conducting an investigation, the investigator may be able to advise the parties whether wages are owing based on the information received. If the parties agree on an amount, they may resolve the dispute by way of a settlement agreement.
The Director of Employment Standards only has authority to resolve matters under the Employment Standards Act. Issues outside the jurisdiction of Employment Standards cannot be added to a settlement agreement.
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Overview
There are generally two parties to a settlement agreement: the complainant and the respondent. Both parties need to agree to the terms of the settlement agreement for it to be valid. The investigator assists the parties in coming to an agreement.
Voluntary resolution is often a faster method for resolving disputes. It can meet the parties’ needs without an extensive process or an imposed legal decision.
- Parties can resolve issues quickly
- Complainants can receive wages faster
- Parties are empowered to come to their own fair and reasonable resolution
At any time during an investigation, a complainant and a respondent can reach an agreement resolving all or some aspects of a complaint.
Settlement agreements do not need to be signed to be enforceable.
Once parties agree to resolve their dispute by way of a settlement agreement, the investigator will send a draft agreement for the parties by email. They will have the opportunity to fully review the terms of the settlement agreement and ask the investigator any questions.
If a party does not have access to email, the investigator will speak to them by phone and communicate the terms of the agreement.
Once they have fully reviewed and understood the settlement agreement, they can tell the investigator whether they consent to the terms of the agreement. If they consent, their response will serve as evidence that they reviewed, understood and consented to the terms of the settlement agreement. Consent is final and the settlement agreement will be fully enforceable at this point.
If one or more parties don’t want to voluntarily resolve the complaint, the investigation will continue and Employment Standards will issue a formal decision called a determination. If the decision maker finds that a respondent has contravened the Employment Standards Act or Temporary Foreign Worker Protection Act, they are required to impose mandatory administrative penalties.
Terms of a settlement agreement
The Director of Employment Standards only has authority to resolve matters under the Employment Standards Act. Issues outside the jurisdiction of Employment Standards cannot be added to a settlement agreement.
Wages will always be discussed as gross wages. If any deductions are made, the respondent must provide a wage statement with the payment. The wage statement must clearly show the amount of the deduction and the purpose.
The parties must agree on when the wages will be paid. Payment is typically completed within one month.
The parties must agree on how the wages will be paid:
- Electronically
- Cheque or money order
Enforcement and liability
Settlement agreements are binding legal documents. Once parties agree to the settlement agreement, they are bound to its terms.
- The respondent must pay the settlement amount
- The complainant must accept the settlement amount as full and final resolution of their complaint
If the respondent fails to pay the entirety of the settlement amount, the Director of Employment Standards may enforce the settlement agreement in the Supreme Court of British Columbia.
There is no right of appeal for a settlement agreement. Once the parties agree, they cannot later dispute the settlement amount.
Under section 96 of the Employment Standards Act, a person who was a director or officer of a corporation at the time wages were earned or should have been paid is personally liable for up to two months’ wages for each employee.
However, when a director or officer signs a settlement agreement, they become personally liable for the entire settlement amount, regardless of whether this amount is greater than two months’ wages. This is because settlement is a voluntary process. If a director or officer voluntarily agrees to be held personally liable for the settlement amount, that agreement takes precedence over their personal liability under the Act.
A director or officer who voluntarily agrees to the settlement agreement cannot later dispute the settlement amount on any grounds, including on the basis of section 96 of the Act.
What you can do
If you're having issues at work, find out what you can do:
References from the Employment Standards Act and Regulation
Employment Standards Act