The Nova Scotia Labour Board has dismissed Search Minerals Inc.’s bid to halt a wage claim filed by its former CEO, affirming that the province’s Labour Standards Code applies to senior executives working remotely from Nova Scotia.
The Board ruled that the CEO, T.B., was an employee of Search Minerals and that the Labour Standards Officer had jurisdiction to entertain his complaint for unpaid wages totalling $174,000.
T.B., an experienced mining executive residing in Head of St. Margaret’s Bay, N.S., was appointed CEO of Search Minerals on May 5, 2023. Despite an employment agreement outlining a $36,000 signing bonus and a monthly salary of $30,000, T.B. alleged he never received compensation for his work and resigned on June 23, 2023.
Employer’s arguments
Search Minerals, a publicly traded company incorporated in British Columbia with operations in Newfoundland and Labrador, argued that T.B. was not an employee but an employer, and that the Labour Standards Code did not apply due to insufficient connection to Nova Scotia.
The company contended that T.B.’s employment was contingent upon receiving $500,000 in funding from a significant shareholder, InCoR, which never materialized. It also argued that the employment agreement was never properly authorized or signed by the company.
However, the Board found no evidence supporting the alleged contingency. “One need look no further than the Employment Agreement itself, drafted by Search, which contains no reference to this alleged contingency,” the decision stated.
Employment agreement not signed by employer
The Board noted that the employment agreement was presented to T.B. by Search’s legal counsel and that T.B. was asked to sign it. On May 6, 2023, T.B. signed the agreement. “It appears that no one on behalf of Search ever signed it,” the Board observed.
Despite the lack of a company signature, the Board determined that a contract of employment had been formed. “By various measures, a contract of employment came into being,” the ruling stated. The Board highlighted that Search had publicly announced T.B.’s appointment as CEO in a news release on May 8, 2023, and that T.B. began fulfilling his duties immediately thereafter.
“Between T.B.’s signing of the Employment Agreement on May 6, 2023, and his resignation on June 23, 2023, Search’s Directors repeatedly affirmed his position, both internally and externally,” the Board noted. “Perhaps more materially, T.B. liaised with the Board and otherwise put in the work as CEO, all from his residence in Nova Scotia.”
The Board rejected Search’s argument that T.B. was not an employee because he was effectively acting as the employer. “This argument fails because T.B. was clearly answerable to the Board of Directors,” the decision stated. “While this employment was in a senior position, and he had a lot of autonomy, it cannot be said that he operated independently.”
Jurisdictional issues
Addressing the applicability of the Nova Scotia Labour Standards Code, the Board found that there was a sufficient connection to the province. “With the full knowledge of Search, over the duration of his employment, T.B. lived and worked from Nova Scotia,” the ruling stated. “All of the alleged breaches of his rights, including the failure to pay his salary and the alleged constructive dismissal, occurred while he was in Nova Scotia.”
Search argued that the Code did not apply, citing that it is registered in British Columbia and operates in Newfoundland and Labrador. However, the Board referenced section 4(1) of the Labour Standards Code, which states that the Act applies to all matters within the legislative jurisdiction of the province.
The Board also cited a precedent from the case Brushett v Sun Life Assurance Company of Canada, where it was determined that the Code applies if there is a sufficient connection to Nova Scotia, even if the employer is located outside the province.
“The fact that her employer is located outside of Nova Scotia does not affect the relationship it has with the employment of the Complainant, and its responsibilities to respect her minimum standards under the Code,” the Board quoted from the Brushett decision.
Search further argued that the doctrine of forum non conveniens should apply, suggesting that T.B. should seek remedy in Newfoundland and Labrador, where related litigation is ongoing. The Board dismissed this argument, stating that the Director of Labour Standards does not have the residual power to decline jurisdiction based on forum non conveniens.
“The Director of Labour Standards is not a common law court that has the residual power to decline to exercise its jurisdiction,” the ruling stated.
The Board concluded that T.B.’s complaint falls under the Nova Scotia Labour Standards Code and should proceed on its merits. “In result, the Appellant’s arguments fail and the matter will proceed on the merits,” the decision read.
The Board’s decision means that T.B.’s wage claim of $174,000 will now be heard on its merits under the Nova Scotia Labour Standards Code. Search Minerals may still present defences during the merits hearing, but the preliminary challenge to jurisdiction has been rejected.
For more information, see Search Minerals Inc. v Burlingame, 2024 NSLB 134 (CanLII).
