The Ruling in Scheffler v Mourits Trucking Ltd.
Employees who advance civil claims for unpaid overtime with the Alberta Courts may no longer be confined to the six-month period immediately preceding the date of the claim (as provided for in s.90(3) of the Alberta Employment Standards Code (the "Code"). Instead, employees may elect to pursue a civil claim seeking unpaid overtime for a period of up to two years preceding the date of the claim, as specified in section 3(1)(a) of the Alberta Limitations Act.
In Scheffler, a truck driver brought a civil claim against his employer for 719 hours of unpaid overtime. The plaintiff truck driver chose to commence an action in the Alberta Court of Kings' Bench instead of pursuing a complaint through Alberta Employment Standards. Had he filed a complaint under the Code, his remedy would have been limited to unpaid overtime in the six-month period immediately preceding his complaint (or in this case, the six-month period preceding the date his employment was terminated).
The employer argued that s.90(3) of the Code should govern and only any unpaid overtime worked in the six-month period preceding the filing of the claim should be considered. The Court rejected this argument and instead ruled that it would be inequitable to restrict an employee to only six months of unpaid overtime. The Court held that the six-month limitation period set out in section 90(3) of the Code only applies to complaints brought under the Code and has no application to employees who chose to pursue their claims outside the Code's complaint process. As a result, applying the standard two-year limitation period for claims, the Court held that it could award unpaid overtime for the two-year period preceding the filing of claim.
This decision stands in stark contrast to the authorities in British Columbia. In Macaraeg v. E Care Contact Centers Ltd., 2008 BCCA 182 (leave to appeal to the Supreme Court of Canada dismissed), the British Columbia Court of Appeal considered a similar issue and determined that the Employment Standards Act provided an adequate administrative scheme for enforcing rights, and as a result, no civil action for overtime claims was available. This decision was not considered by the Court in Scheffler.
Takeaways
Employers in Alberta should take note of this decision. Eligible employees are entitled to overtime pay for all overtime hours worked. Care should be taken to ensure that employees are accurately reporting overtime hours on a regular and ongoing basis. Employment contracts should require that any overtime be pre-approved before it is worked and that it be tracked and reported every pay period. Absent these contractual requirements and proactive management, overtime could quickly and quietly accrue, exposing employers to significant liabilities in the two-year period preceding a claim.
The authors would like to acknowledge the support and assistance of Sahil Gaur, articling student at law.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
