Soft-Moc Inc.’s minimum-wage and holiday-pay dispute must return to the Prince Edward Island Employment Standards Board after a judge found that the board had not adequately justified how it reviewed an inspector’s decision and had misread key statutory definitions.
Justice Gregory A. Cann ordered reconsideration in Soft-Moc Inc. v. PEI Employment Standards Board, et al., 2026 PESC 19, released July 24, 2026, by the Supreme Court of Prince Edward Island. He did not grant the employer’s requested declaration that it had fulfilled its minimum-wage and holiday-pay obligations.
The decision sends both issues back to the board without fixing a replacement amount owing or endorsing Soft-Moc’s compensation arrangements generally.
Commissions and the minimum-wage calculation
The dispute arose from a pay structure that combined sales commissions with a base hourly rate below the prescribed minimum wage. An inspector concluded that commissions could not be counted toward the minimum-wage obligation and determined that the company owed employees $35,158.74 in gross wages and vacation pay, plus $5,570 in gross holiday pay.
The board upheld those determinations. Soft-Moc then sought judicial review, asking either for a declaration of compliance or for the matter to be reconsidered. The inspector’s figures were the disputed amounts underlying that review, not new monetary awards made by the court.
Two different review questions
Cann applied the reasonableness standard when reviewing the board’s decision. But that did not answer a separate question: what standard the board itself should use when hearing a statutory appeal from an inspector.
The board had selected reasonableness for its internal appeal without explaining how that choice followed from the Employment Standards Act. Section 30 required interpretation, including consideration of the board’s duties to hold a hearing, permit evidence and submissions, decide whether the Act had been breached and determine any amount owing.
The problem was not a statutory analysis that the court simply disagreed with, Cann found. The necessary analysis was missing.
Soft-Moc argued that the board should have held a fresh hearing. The judge did not impose that approach or prescribe a particular internal standard of review. He returned the question to the board to resolve through reasoned statutory interpretation. That defect alone required reconsideration of both minimum wage and holiday pay.
The definition of wages could not be ignored
Cann also addressed the minimum-wage interpretation to assist the board on reconsideration. The Act defines minimum wage by reference to wages, and its definition of wages expressly includes commissions. The board’s approach failed to incorporate that definition.
The judge acknowledged the board’s concern for fair treatment of employees. But interpreting legislation according to a preferred policy outcome could not replace attention to the words the legislature enacted.
He distinguished the minimum-wage question from other possible concerns about the compensation system, such as whether employees were adequately informed or whether the arrangement met other rules governing commissions. Those matters were not decided.
Nor did the court find that only one interpretation of the minimum-wage provisions was possible. Reconsideration, rather than a declaration clearing the employer, was the appropriate remedy.
Cann also cautioned the board about both the substance and appearance of impartiality after its oral submissions supported a particular outcome and board members and staff attended the hearing. Their attendance was lawful, and the employer had not objected. The judge declined to require a differently composed panel for the rehearing.
No costs were ordered against the board or the other respondents.
