This Ontario restaurant chain owes over $35K in unpaid wages. Workers, vendors now ask: What can be done? 15 June 2022 04:04 AM: Danielle Hudspeth was just a hungry customer eager to fill her stomach when she visited Hogtown Smoke in Hamilton's Stoney Creek area earlier this year. 

The 22-year-old left the restaurant with an offer to work as a server later that week, on St. Patrick's Day. 

After just one day on the job, Hudspeth said, she didn't return because she didn't receive the compensation she was owed.

She's not alone in her complaints against the business. According to Ontario Ministry of Labour data obtained by CBC Hamilton, Hogtown Smoke has a history of owing employees money.

Hudspeth said ahead of starting work at Hogtown Smoke, she signed forms that included her banking information before completing the busy six- to seven-hour shift.

"I served almost all of the tables that night, six or seven of them," Hudspeth told CBC Hamliton.

However, she said, the front-of-house manager refused to give her any of the tips she earned.

Hudspeth showed CBC Hamilton a text from the manager that reads: "I'm not obligated to give you any money on your first training shift. I thought I would split my tips with you because you did a good job ... but since you're not going to pursue employment, I've also decided that I'm going to keep my money thanks anyway."

A picture of Danielle Hudspeth.
Danielle Hudspeth, 22, says she never received any money for working her first and only shift at Hogtown Smoke on St. Patrick's Day. The Ministry of Labour and employment lawyers say if true, it’s illegal. (Bobby Hristova/CBC)

That experience turned her off working there. Hudspeth said it's now been months and she hasn't received her earnings from that evening shift.

The barbecue chain had numerous locations across the Greater Toronto Area, but the Stoney Creek location is the only one still open.

CBC News set up an interview with Scott Fraser, who according to his dad, Laird Fraser, is "driving [Hogtown Smoke's] brand/concept with a local marketing company," but Scott didn't show up for the interview or reply to multiple messages.

Laird, the restaurant's treasurer according to his LinkedIn profile, blames the pandemic for financial issues.

He told CBC News in an email Sunday "the Stoney Creek location is fully compliant with the Ontario Employment Standards Act including its section on tips and gratuities." He said "there are no outstanding claims that we have any knowledge of" at that location, and all of its locations, past and present, are their own corporate entities.

However, data from the province shows, in past locations, the company has a history of not paying people before 2020, and it still owes over $35,000 in unpaid wages, vacation pay, termination pay and tips.

The Ministry of Labour and employment lawyers have raised concerns about the allegations by Hudpseth and other former Hogtown Smoke employees. Employment lawyers in Hamilton also say this situation is becoming more common, but employees have ways to fight not being paid.

Manager unaware trainees entitled to tips

Nicole Marley, who first identified herself as a front-of-house manager but later said she was just a bartender, worked with Hudspeth that day in March. Marley said she doesn't deal with payroll, but corroborated much of what the 22-year-old said about that St. Patrick's Day shift.

"I [compensated] her a bunch of drinks … I gave her a bunch of brisket to take home with her, but as for tips, she took all of my tables. It was her training shift … I'm not obligated to give [tips]," Marley said in an interview.

"She was taking money out of my pocket and I thought I was being generous … I gave her my tables to train, to learn."

Marley acknowledged at times while she was bartending, Hudspeth did some work on her own. Marley also said in her 20 years in the service industry, she had never been told trainees were entitled to tips.

A picture of the dining space at Hogtown Smoke's Stoney Creek location.
Hogtown Smoke treasurer Laird Fraser said the business used to have numerous locations, but blames the pandemic for all but one of them shuttering. (Bobby Hristova/CBC)

The Ministry of Labour said, as per the Ontario Employment Standards Act, employers generally can't withhold employees' tips, make deductions to tips or make them return tips to the employer unless they're required by law or administer a tip pool (a collection of employees' tips shared with some or all employees).

Ministry spokesperson Harry Godfrey offered a scathing comment after hearing about Hudspeth's experience and said the ministry would investigate.

"The behaviour of this employer, if true, is entirely unacceptable," reads a mid-April email from Godfrey.

"Any worker who believes their employer is illegally withholding their wages or tips should contact our ministry so we can investigate."

However, the ministry later said there was no active investigation because Hudspeth never filed a formal complaint.

Ex-employee, vendors voice concerns

Neil Griffin, 42, was a server at the Hamilton location, where he said he worked for two months in late 2021. 

He said he wasn't paid on time and didn't get the proper amount. He also noted confusion over how the owners paid out tips.

"I got my hourly [pay] but none of my tips."

Griffin said he was eventually asked to leave the job after asking about his tips.

He said management later paid him back some of the money, but he never complained to the Ministry of Labour.

A picture of Neil Griffin.
Neil Griffin, 42, said that during his two months working at Hogtown Smoke, he wasn’t paid on time or given the proper amount, and noted confusion over how the owners disbursed tips. (Bobby Hristova/CBC)

Laird Fraser said in an email he couldn't comment on specific allegations from former employees on the advice of his lawyer, but added "as far as we know," no one has complained to the Ministry of Labour about pay issues at the Stoney Creek location.

At least two vendors also accuse Hogtown of not paying them for their services over the years.

Lynn Siegal, the key account manager for Hilite Fine Foods Inc., shared invoices with CBC Hamilton that appear to show Hogtown Smoke owes $5,949.14 from one order in 2016 and two from early 2020, before the pandemic was officially declared.

The Hogtown Smoke locations Hilite Fine Foods serviced were all in Toronto and are now closed.

"We dealt with them at several of their locations and it was always a nightmare, trying to get paid from them," said Siegal.

"It was a huge drain on our staff resources to have to deal with this on every delivery."

A picture of the bar at Hogtown Smoke's Stoney Creek location.
Hogtown Smoke used to have numerous restaurants in the Greater Toronto Area, but now there’s only one, in Hamilton. (Bobby Hristova/CBC)

Karen Gorter, owner of Brant County Firewood, said she supplied the Stoney Creek location with firewood late last year.

She said she was paid for a load of wood in November. The next month, she delivered another load to the Stoney Creek location worth $734.50, according to an invoice shared with CBC Hamilton.

Gorter said she received a gift card on Christmas Eve from the business after asking for one to make up for not paying.

"I really wasn't concerned about payment at this point," she said.

But it's been months now, and she's still waiting for the money despite sending numerous messages to management (CBC has seen the messages). Laird Fraser didn't respond to specific allegations, but again blamed pandemic-era closures and restrictions, despite some of the complaints came before the pandemic.

"Any supplier impacted is of course encouraged to make a claim with the insolvency professionals handling these files," he wrote in an email.

Hogtown Smoke owes over $35K as of April

According to the Ministry of Labour data, the business's history of owing employees money started before the pandemic.

Employment summary claims from 2018 to 2020 show the province ordered Hogtown Smoke to pay $19,911.83 for unpaid wages, vacation pay, public holiday pay and termination pay.

The business paid for those claims: Four came from a location on Colbourne Street and one was from a Queen Street location, all in Toronto.

The business now owes even more money, according to four claims made since January 2020.

The data shows Hogtown Smoke owes $35,644.39 in unpaid wages, vacation pay, termination pay and tips. One claim also includes money owed for a deduction in wages.

The money is with the Ministry of Finance in collections because it hasn't been paid.

All four claims were related to the former Toronto locations. 

CBC Hamilton obtained a Ministry of Labour decision letter from one of the outstanding claims.

The letter says former employee Jennifer Rundell said since she started working for the restaurant chain in late 2019, she was "paid late almost every time" and "was never paid out for tips."

"I was late on paying rent twice due to this," she wrote in her complaint, adding she was laid off on March 16 due to the pandemic.

In her case, Hogtown Smoke was ordered to pay $2,307.83, and the director was ordered to pay $736.86 for unpaid wages, unpaid tips and unpaid termination pay.

"None of our Toronto locations survived the pandemic economic impact. It's unfortunately just that simple," Fraser said, adding that unpaid rent led to landlords ending leases to some buildings and closing the locations.

"The resulting claims … are part of the insolvency process handled by professionals."

Fraser noted the delay in paying the claims is because they have to be "crystalized" first.

"The insolvency professionals handling these files assure us that this is common practice under this scenario, especially when business failure results from an external source such as a pandemic."

Province may need better enforcement: lawyers

The Ministry of Labour said it can prosecute businesses under the Provincial Offences Act and have third parties take action on assets, including bank accounts, property, or accounts receivable of the employer or director of a company.

Griffin said the orders to pay up don't go far enough.

"I don't think these people should be running a business … they should be closed."

Ned Nolan is an employment lawyer with Nolan, Ciarlo LLP in Hamilton, and said he was not familiar with the case involving Hogtown Smoke before speaking to CBC.

Nolan said he knows of no cases of the Ministry of Labour closing down a business for owing money under the Employment Services Act.

"Unfortunately for employees, it can be hard to collect money from someone who doesn't want to pay you."

He said most cases where employees aren't paid don't come before lawyers because it can be expensive to pursue legal action, so it's difficult to determine how many and how often employees aren't getting paid.

A picture of Ned Nolan.
Ned Nolan, an employment lawyer with Nolan, Ciarlo LLP in Hamilton, says, 'Unfortunately for employees, it can be hard to collect money from someone who doesn't want to pay you.' (Bobby Hristova/CBC)

According to the Ministry of Labour, the number of employee claims have fallen during the pandemic. In 2018, there were 22,434 claims; In 2020, there were 11,200, and a year later, there were only 8,788.

But Roberto Henriquez, a lawyer with the Hamilton-based firm McMahon Molyneaux Henriquez who isn't connected to the Hogtown Smoke case, said he's hearing stories about employees not getting paid more often.

Henriquez said in the current business climate, where more people are working part time and juggling jobs, it's easier for businesses to get away with not paying staff because they can rely on staff not complaining to the province or getting a lawyer.

"They put individuals in difficult situations … these pressures have allowed for different organizations to proliferate, whether it's the service industry, cleaning industries," he said.

"It's behaviours largely preying on individuals who don't have the opportunity or desire to raise these complaints."

Nolan said the Ministry of Labour's enforcement system has teeth, pointing to a 2015 provincial review that tried to toughen up enforcement, but it's still a "very frustrating process" trying to get money back.

A picture of Roberto Henriquez.
Roberto Henriquez, a lawyer with Hamilton-based McMahon Molyneaux Henriquez, says he's hearing stories about employees not getting paid more often. (Bobby Hristova/CBC)

Henriquez said directors of businesses should have to pay out of their own pocket more often to try to combat unpaid orders.

"There are various strategies that have been proposed with respect to enforcement … whether or not the will is there at this stage remains to be seen."

Nolan said another solution is an insurance fund paid by employers that could be used when an employee isn't paid. 

"One [potential] glimmer of hope is a potential rebirth of unionization in the modern-day workforce … unions are designed to solve the type of power imbalance we're talking about," he said.

"If a workplace where there's unpaid amounts and disputes with the employer …  had the support of a union to pursue those grievances, essentially for free, I think we would see more fairness in the workplace."

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