One of the common issues raised by departing employees is unpaid overtime. In the recent decision of Scheffler v Mourits Trucking Ltd, the Alberta Court of King's Bench ("ABKB") ruled that an employee was able to claim back two years for unpaid overtime.1 This decision contradicts previous court rulings in Alberta, which found that employees are normally limited to claiming only six months of unpaid overtime.2
BACKGROUND
Prior to his termination, Roger Scheffler ("Scheffler") was employed with Mourits Trucking Ltd. (the "Employer") as a truck driver and earned an hourly wage of $21. As the parties did not have a written agreement respecting overtime, the provisions of the Employment Standards Code (the "Code") applied, and Scheffler was entitled to time-and-a-half pay for any overtime hours. As Scheffler had only been paid his hourly wage for the 719 overtime hours he had worked, he brought a claim against the Employer for the remaining amounts.
The biggest issue before the ABKB was determining the period of time for which Scheffler could claim overtime wages.
The Code sets out limitation periods under section 90(1):3
90(1) An order under this Division may direct the payment of wages, overtime pay, vacation pay and general holiday pay, as applicable, earned during the assessment periods.
"Assessment periods" are defined as:
90(3)(b) "assessment period" means
(i) in the case of determining the payment of wages or overtime pay, or both, if no averaging arrangement applies, the period
(A) commencing 6 months before the earlier of
(I) the claim date, and
(II) the date the employee's employment is terminated, if applicable,
and
(B) ending on a date before the date of the order, as determined appropriate by the officer.
The key issue before the ABKB was determining whether Scheffler's overtime claim was limited to the six month period preceding his termination, or whether he could claim for amounts over this six month period.
Counsel for the Employer argued that, even though Scheffler was pursuing a civil claim, as opposed to a complaint through the Employment Standards branch, he was still limited to this six month limitation period.4
Justice J.S. Little of the ABKB disagreed, stating:
... it would be inequitable to constrain an employee's recovery to the six month limit under the Code when an employee uses conventional litigation instead of the Code. In my view, the remedies and their restrictions prescribed under the Code apply only when an employee engages the resources and collection mechanism available under the Code.5
Further, Justice J.S. Little also pointed to section 90(1) of the Code, which provides for "[a]n order under this Division." As Scheffler had proceeded with a civil claim instead of proceeding through the complaints procedure established in the Code, the Court found that this limitation period did not apply to his claim.
Accordingly, the Employer was ordered to pay $7,549.50 for unpaid overtime pay.6
WHAT THIS MEANS FOR EMPLOYERS
As a result of this decision, there are now conflicting court decisions in Alberta as to whether employees bringing civil claims for unpaid overtime, as opposed to proceeding under the employment standards regime, are subject to a six month or two year limitation period. It remains to be seen how the higher courts will resolve this conflict. In the meantime, to minimize the risks of having to pay costly awards in situations like these, employers should consider having comprehensive and enforceable overtime agreements in place, and tracking the overtime hours of their employees consistently.
Footnotes
1. Scheffler v Mourits Trucking Ltd., 2023 ABKB 139 [Scheffler].
2. See Kenney v. Browning-Ferris Industries Ltd., 1988 CanLII 3548 (ABQB); Riviera Hotel (1991) Corporation v. Samborsky, 2006 ABQB 222; Walker v Alberta Communication Cable Services Inc, 2018 ABPC 46.
3. Employment Standards Code, RSA 2000, c E-9.
4. Scheffler, supra note 1 at para 16.
5. Ibid at para 21.
6. Ibid at para 24.
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