Owner says he mistook 'conversational' probe for routine until penalties hit
A British Columbia café operator who thought an employment standards investigation “seemed nonchalant and conversational” discovered too late that informal doesn't mean inconsequential, as an Employment Standards Tribunal member upheld $1,000 in penalties against the company for failing to keep payroll records and pay termination entitlements to an employee.
In a decision dated Jan. 22, 2026, tribunal member Alysha Bennett dismissed Broughton & Broughton Inc.'s appeal of a determination that found the company contravened the Employment Standards Act in its treatment of a minor employee who worked at the Lions Bay General Store and Café from March 31, 2022, to Nov. 18, 2023. The employer sold the business on Jan. 1, 2024, believing the new owner had assumed liability for the termination.
Craig Doherty, the company's director and owner, told investigators he no longer had access to payroll software or his former bookkeeper following the business sale, and was “given the erroneous impression that the investigation was routine and minor and did not suggest that there were any significant ramifications (financial or otherwise) outside of the core grounds in the complaint.”
Payroll records lacking
When investigators requested payroll records for the employee, Doherty explained he could no longer access the Square point-of-sale system or QuickBooks, and had lost contact with his bookkeeper. He declined to provide the bookkeeper's contact information.
The tribunal found this defence wanting. Bennett cited established precedent: “It is no defence that an employer's bookkeeper did not keep its payroll records in compliance with the employer's section 28 obligations. It is always the employer's responsibility to ensure that it complies with those obligations.”
Doherty argued on appeal that he could have made further attempts to access the records had he known the financial consequences, claiming he might have revived his cancelled QuickBooks subscription. Bennett rejected this, noting the investigating delegate made numerous requests for the records and that “Broughton had an obligation to participate fully in the investigation, and the Director was entitled to rely on the information Mr. Doherty provided.”
Termination obligations
Doherty's position throughout the investigation was that the employee's "seasonal and casual employment ceased in connection with the change in ownership of [Broughton's] business.” He believed the new owner, Lynne Jacobs, was responsible for any termination obligations.
The tribunal disagreed, finding the employee was entitled to compensation for length of service and that Broughton, not the successor owner, was liable. Bennett noted that “the burden of demonstrating that liability for length of service has been discharged is on the employer.”
The employee worked their final shift on Nov. 18, 2023. Doherty didn't dispute this but said he wasn't involved in scheduling after Nov. 15, 2023. He never suggested the employee resigned or was dismissed for cause. The tribunal concluded the employment was terminated, triggering Broughton's obligations under the Act's compensation provisions.
Mandatory admin penalties
Doherty argued the $500 penalties for each contravention were “inequitable” and “disproportionate to the employee's award,” and that “penalties should only be allowed to stand if they punish extra-legislative behaviour and/or influence future extra-legislative behaviour.” He asked the tribunal to exercise discretion to waive them.
No such discretion exists. Bennett stated plainly: “Once the Adjudicating Delegate determined that Broughton had contravened sections 28 and 63 of the ESA, the assessment of administrative penalties became mandatory. Despite Mr. Doherty's assertion otherwise, the Director does not have the discretion to waive an administrative penalty.”
The tribunal noted that “under the present penalty provisions, administrative penalties bear no relation to the amount actually owing to an employee as a result of an employer's contraventions, and may be far in excess of that amount.” For employers facing financial difficulties, Bennett was clear: “an employer's financial difficulties do not diminish their obligation to meet the minimum standards of compensation set out in the ESA.”
