Often when employers hire new employees, significant time and resources are devoted to training them. Employers benefit from this over time as their new employees continues to work for them. As such, it can be frustrating for employers when new employees quit soon after completing their training – but is there anything an employer can do about this?

In Smith v Physioclinic Limited (2016 NSLB 242 (CanLII), the employer attempted to proactively address this problem  by including a clause in the employment contract requiring the employee to pay back the compensation she received during her training if she left within three months of being hired.

The Decision

On September 26, 2016, the Nova Scotia Labour Board dismissed an appeal by the employer of a decision by the Director of Labour Standards finding that the employee was not bound by a term in the employment contract requiring her to pay back the employer the wages she received during her training period because she left employment within three months of being hired.

The Board concluded that the clause was contrary to section 5 of the Minimum Wage Order made pursuant to section 50 of the Labour Standards Code that “[n]o employer shall employ an employee at a rate of wages less than the minimum wage fixed in this Order or otherwise violate or fail to observe the provisions of this Order.” Therefore, the clause was unenforceable. Further, the Board noted such a clause is contrary to section 6 of the Code, which makes clear that the minimum conditions established under the Code cannot be reduced or negated by “any other law or any custom, contract or arrangement.”

For more information about employment law, please contact Nicola Watson.

 

#WorkLawWednesday: every second Wednesday, we answer general questions about employment and human rights law. This is not intended to be legal advice and should not be relied on as legal advice.