The Manitoba Labour Board has dismissed wage-order appeals by the companies operating Western Star All Suites Hotel and a corporate director, relying on credible employee evidence and drawing an adverse inference from missing employment records.
In its August 25, 2026 corrected decision, the board held 6692452 Manitoba Ltd., trading as Western Star All Suites Hotel, 1638185 Alberta Ltd. and director P.X. responsible for amounts owing to three workers identified as S.J., J.B. and G.R.
The individual wage awards were $85,520.98 for S.J., $22,119.53 for J.B. and $27,275.28 for G.R., each subject to statutory deductions. The board varied the underlying orders even as it dismissed the appeals.
Reconstructing hours without the required records
The dispute arose from four payment-of-wages orders issued on November 27, 2024: corporate and director orders concerning G.R., and corresponding orders concerning S.J. and J.B. G.R. had filed a complaint, while the director of employment standards initiated the investigation concerning the other two workers.
The appellants’ notices challenged the orders as they related to G.R. and S.J., without mentioning J.B. The board nevertheless addressed the amounts owing to all three workers in its reasons and varied the orders accordingly.
The investigating officer issued four production orders between June 18 and July 16, 2024, but most of the requested employment records were not supplied. At the seven-day virtual hearing, the appellants produced only two documents. The workers and the director of employment standards supplied timesheets, payroll information, bank records and text messages.
That gap mattered under section 135 of The Employment Standards Code. The board noted that the required employment records had to be retained for at least three years and that the wage periods in dispute fell within that period. Where missing, incomplete or unavailable records prevent an officer from determining wages, section 135(7) permits a reasonable and appropriate calculation that considers the employer’s past practices.
For G.R. and S.J., the officer considered 12 hours a day, seven days a week a reasonable assessment. She relied on employee accounts, text messages, her visits, staffing levels and the hotel’s size. She accepted J.B.’s timesheets as an accurate account of hours worked. The board found the investigation thorough and accepted the calculations, subject to specific adjustments.
Why the workers’ evidence carried more weight
The employers disputed the hours and duties described by the workers. Their witnesses also said the workers had been satisfied with their wages and working conditions. But the board found those accounts unsupported by documents and inconsistent with the workers’ evidence and the investigating officer’s evidence. Even witnesses called by the appellants confirmed that S.J. had worked at the hotel, contrary to the appellants’ initial position.
The board also considered the absence of people who could have explained the records and operations. A key management contact for all three workers was not called, and P.X. attended the hearing but did not testify. Documents included texts involving P.X., despite an initial appeal position that the director had no involvement in management or operational decisions.
Applying the adverse-inference principle, the board reasoned that a party’s failure to produce evidence naturally expected from it can support an inference that the evidence would be unfavourable or unhelpful. Here, it inferred that the missing records would have supported the workers’ accounts of their hours, tasks and wages.
Cross-examination presented another difficulty for the appellants. G.R. was not cross-examined, and S.J. and J.B. were questioned only briefly. Later testimony contradicting their accounts of hours and duties had not been put to them. Applying the fairness principle associated with Browne v. Dunn, the board scrutinized the weight of the employers’ evidence accordingly.
The credibility assessment was not based on demeanour alone. Drawing on Faryna v. Chorny, the board considered whether testimony fit the surrounding probabilities. It found four employer witnesses unreliable, citing problems including limited firsthand knowledge, inconsistency and apparently rehearsed testimony. A fifth employer witness was credible, but could not speak to work performed outside her own shifts.
The workers’ accounts, by contrast, were consistent with one another, the documents and the evidence of the two officers. Where the accounts conflicted, the board preferred the workers’ and officers’ evidence. It held P.X. liable for the unpaid wages under section 90, alongside the corporate appellants.
Evidence supported some amounts, but not every claim
For G.R., the board upheld $15,775.28 calculated at $26.50 an hour. It added $11,500 supported by bank records after G.R. alleged that the corporate director had required her to withdraw that amount. A separate claim that $7,000 had been wrongfully withheld was rejected. The resulting individual award was $27,275.28.
S.J.’s award used an hourly rate of $23.20. The corporate and director orders had differed because only one included Canada Day general holiday pay. The board aligned them at $85,520.98, including that holiday pay.
For J.B., the original $24,666.22 calculation used the applicable Manitoba minimum wage rates of $14.15 and $15.30. The board deducted $2,546.69 for work in Saskatchewan from December 3 to 18, 2023, leaving $22,119.53.
On that adjustment, the board accepted the director of employment standards’ position that Manitoba’s Code did not apply to the Saskatchewan period. It noted that another proceeding there concerned those wages, but did not have evidence about the wages considered in that proceeding.
The operative order required the two companies and P.X. to pay the director of the Employment Standards Branch forthwith, with statutory deductions from the listed wage amounts. It also specified two $1,000 administrative fees: one concerning S.J. and J.B., and one concerning G.R.
