This was the issue raised before the Court of Appeal recently in the decision 2915499 Canada Inc. v. Commission des normes, de l’équité, de la santé et de la sécurité du travail, 2019 QCCA 609.
The appellant operated a restaurant that used a system of sharing tips between waiters and bussers. As is the practice in several restaurants, at the end of work shifts, waiters remitted a portion of their tips to bussers based on sales volume ( 2% in this case). The restaurant owner paid bussers the minimum wage rate applicable to employees who receive gratuities or tips as provided by section 4 of the Regulation respecting Labour Standards. According to the owner, bussers meet the definition of an employee who receives gratuities or tips provided for under the Regulation, i.e. an employee who “ordinarily receives gratuities or tips”.
The Commission des normes, de l’équité, de la santé et de la sécurité du travail, however, was rather of the view that bussers do not fall within the definition of employee under the Regulation and filed a claim against the Owner, seeking an order that the employees be remunerated at the ordinary minimum wage.
At trial, the Court of Quebec judge ruled in favour of the Commission des normes, de l’équité, de la santé et de la sécurité du travail and determined that bussers do not meet the definition of « an employee who receives gratuities or tips » and that they have to be remunerated at the “ordinary” minimum wage in accordance with Section 3 of the Regulation.
The Court ruled that the notion of “an employee who receives gratuities or tips” is an exception to the status of a regular employee and should be narrowly construed. Furthermore, customers usually pay tips to waiters and not to bussers, who receive a pre-fixed amount that is entirely contingent upon the goodwill of waiters, based upon the tip-sharing system in place. According to the judge, this amount does not have the effect of converting the status of bussers into that of an “ employee who receives gratuities or tips”.
The restaurant owner filed an appeal before the Court of Appeal.
According to the Court of Appeal, the trial judge unduly restricted the notion of an “employee who receives gratuities or tips”. The Court explained that the notion of an “employee who receives gratuities or tips” is not an exception to the notion of “regular employee”, but rather two distinct categories covering different situations. Consequently, the trial judge was not justified in narrowly interpreting the notion of an “employee who receives gratuities or tips”.
Furthermore, the Court ruled that the trial judge should not have based his interpretation of an “employee who receives gratuities or tips” on the customer (the person usually paying the tip), as the definition at Section 1 of the Regulation is based on the employee (the person who usually receives gratuities or tips).
In this case, although the bussers indirectly received money through the system of tip-sharing, they remained nevertheless employees who receive gratuities or tips, as the evidence demonstrated that they provided a service to customers in the normal course of business, and on an ongoing basis, they received valuable consideration in exchange for providing that service.
The Court of Appeal ruled that it would be self-contradictory to exclude from the definition of “an employee who receives gratuities or tips” a person who renders a service to a customer and who usually receives de facto tips within the context of his employment, even if he only indirectly receives a share of the amount paid by the customer.
The Court concluded that the appellant was entitled to pay the minimum wage due to an employee who receives gratuities or tips and overturned the decision of the trial judge.