Potential CHL Employment Lawsuit

November 7, 2014

employment

By Kyle Nagy – Thompson Rivers University 3L JD Student

On Friday October 17, a statement of claim was filed against the Canadian Hockey League (CHL) by former players seeking $180 million of outstanding wages, holiday, overtime and vacation pay, and employer payroll contributions. Thousands of young players were given as little as $30 per week for training, practices, games, and travelling that often totalled full-time hours. The claim alleges the CHL violated provincial minimum wage laws. The CHL is the umbrella organization of the Western (WHL), Ontario (OHL) and Quebec (QMJHL) major junior hockey leagues and contains players ages 15-20.

The heart of the issue is whether CHL hockey players are employees of their teams, independent contractors, or interns. The statement of claim states that CHL players are employees and therefore teams must pay the players in accordance with provincial minimum wage laws. However, the CHL has long argued that its players are amateur student athletes and independent contractors, or the equivalent of interns training for professional positions. If the CHL is correct, they would be exempt from provincial minimum wage laws. If the courts deem the players independent contractors or interns, teams can continue to pay the players the $30-$50 per week they currently receive.

The CHL has taken strides in recent years to improve its scholarships for players and increased funding put in place for billeting, mental health and mentoring programs. This is commendable, but the players do not think it is nearly sufficient. The statement of claim alleges teams are “unjustly enriched” with “hundreds of millions of dollars in revenues annually” based on the services provided by the young athletes on the ice.

The argument that the CHL and its member teams receive little benefit from their players is dubious at best. The Quebec Remparts, London Knights, and Calgary Hitmen, the three teams that led their respective CHL leagues in attendance last year, averaged between 7,500 and 10,000 fans per game. These leagues are for-profit organizations that have lucrative television and internet packages with marketing arrangements with some of the biggest corporations in Canada.

Under British Columbia’s Employment Standards Act (the “Act”), an “internship” is on-the-job training offered by an employer to provide a person with practical experience. If the duties performed by interns fall within the definition of “work” contained in the Act, the intern falls within the definition of “employee” for the purposes of the Act. Once someone is considered an “employee”, they must be paid at least the current BC minimum of $10.25 per hour.

Duties performed by interns will be considered work for the purposes of the Act when their training is a) directed by the employer (or on the employer’s behalf), and b) related to performing the employment duties the employee has been hired to do. Employers are required to pay for the training an employee needs in order to learn how to do their job at the employer’s business.

When determining whether players are employees or independent contractors, and therefore not subject to protection under provincial employment legislation, the central question is whether the person who has been engaged to perform the services is performing them as a person in business on his own account. In 671122 Ontario Ltd. v. Sagaz Industries Canada Ltd., Justice Major of the Supreme Court of Canada stated that the court will also consider a number of factors. These include the level of control the employer has over the work’s activities, whether the worker provides his or her own equipment, whether the worker hires his or her own helpers, the degree of financial risk taken by the worker, the degree of responsibility for investment and management held by the worker, and the worker’s opportunity for profit in the performance of his or her tasks. Each of these factors appears to point towards CHL players being employees rather than independent contractors. The players have very little independence.

Pending the approval of the class-action lawsuit by a judge, this will be the first time this issue has been litigated in Canada. One case from 2000, however, gives insight into how the courts view the CHL-player relationship. In McCrimmon Holdings Ltd. v. Minister of National Revenue, the Tax Court of Canada found that a CHL team was an employer and players employees for the purposes of employment insurance. The court stated that while the league’s emphasis on supporting player education is admirable, the teams are still commercial organizations carrying on business for profit.

Considering the Employment Standards Act’s characterization of internship and work, the Sagaz factors, and the Tax Court case, the players appear to have the upper hand at the outset of this potential lawsuit.

 

 

 

 

 

Advertisements
, , , ,

Follow us:

Subscribe to our RSS feed and social profiles to receive updates.

No comments yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: