On April 4, 2019, the Quebec Court of Appeal rendered its judgment in the matter of 2915499 Canada Inc. v. Commission des normes, de l’équité, de la santé et de la sécurité au travail1, in which it had to decide the following question:
Do busboys working in the appellant’s restaurant come within the definition in the Regulation respecting labour standards of an “employee who receives gratuities or tips”?2
The Court allowed the appeal, thereby confirming a longstanding practice in the restaurant industry, which is that busboys and busgirls with whom the wait staff share their tips come within the definition of an “employee who receives gratuities or tips” in the Regulation respecting labour standards (the “Regulation”).
It should be noted that the Regulation prescribes a different minimum wage for employees who receive gratuities or tips than that for regular employees, who respectively earn $9.80 and $12.00 per hour and who respectively will earn, as of May 1, 2019, $10.05 and $12.50 per hour.
The trial decision
At trial3, Court of Québec Judge Christian Brunelle had to rule on an application made by Quebec’s labour standards board, the Commission des normes, de l’équité, de la santé et de la sécurité au travail (the “CNESST ”) on behalf of seven employees who claimed from their employer the amount of $5,050.58, which essentially represented the difference between the hourly rate they were paid – which was that applicable to employees who receive gratuities or tips – and the regular rate they claimed to be entitled to.
In his analysis, the judge examined section 50 of the Act respecting labour standards (the “Act”) as well as the definition of an “employee who receives gratuities or tips” in section 1 of the Regulation, in order to identify four criteria that allow an employee to be characterized as such. Thus, to be considered an “employee who receives gratuities or tips” the employee must (i) work in a restaurant, and (ii) ordinarily receive gratuities or tips that are (iii) paid to the employee directly or indirectly by customers, (iv) in exchange for a service4.
Basing his analysis pursuant to this paradigm, the judge concluded that, while busboys and busgirls obviously meet the first criterion, namely working in a restaurant, the other criteria were not met.
The judge took the view that a busboy or busgirl does not ordinarily receive tips, but rather a share of them paid to him or her by the wait staff. He stressed that this share is not paid to them directly by customers, and nor could it be considered as being paid by customers indirectly. Finally, the judge took the view that the concept of “service” as used in section 50 of the Act must be narrowly construed, such that it cannot apply to busboys and busgirls because customers generally do not give them tips.
The judge thus allowed the CNESST’s application and ordered the employer to pay it the amount of $4,202.82, i.e. the difference between the hourly rate for employees who receive gratuities or tips and the rate for regular employees. The employer appealed this decision.
Decision of the Court of Appeal
In its decision of April 4, 2019 the Court of Appeal came to the opposite conclusion, and decided that the busboys were in fact “employees who receive gratuities or tips”. The Court found that the trial judge had interpreted this term too narrowly.
In its analysis, the Court considered the four criteria used by the trial judge for characterizing an employee as one who “receives gratuities or tips”, and pointed out that it was not necessary for an employee to receive tips directly from customers in order to conclude that he or she is someone who ordinarily receives tips. It also pointed out that the sharing of tips among employees was an indirect way of being paid them, which respects the provisions of section 50 of the Act.
The Court consequently concluded that a busboy or busgirl who performs a service for customers and receives a share of the tips received by waiters pursuant to a tip-sharing arrangement between them meets the definition in the Regulation of an “employee who receives gratuities or tips”. An employer is thus fully justified in paying such an employee the minimum wage specified in section 4 of the Regulation, i.e. $9.80 per hour (or $10.05 per hour as of May 1, 2019).
With this decision, the Court of Appeal has confirmed a well-established practice in the restaurant industry, that of paying busboys and busgirls who receive a share of the tips received by waiters the minimum wage for employees who receive gratuities or tips.
While the Court sees no problem with this way of distributing tips, it is nonetheless worth recalling that the employer must not intervene in the agreement among its employees for tip-sharing, as the Act clearly prohibits any type of employer interference in this regard. Thus, any tip-sharing agreement must result from the consent of the employees who are entitled to them, which of course means the wait staff … but also the busboys and busgirls!
This decision could have had a major impact on restaurateurs in Quebec, given the difficult business environment they have been facing for some years now.
So this is a breath of fresh air that will give them some courage to face the next big challenge on the menu: the labour shortage!
1 2019 QCCA 609
2 Ibid., para. 1
3 2017 QCCQ 51
4 Ibid., para. 62