In Canada, when taking legal actions, parties must bring a claim within a certain amount of time, otherwise their claim may be considered statute-barred. The relevant time period for an action is referred to as a limitation period. However, not everyone is aware of the specific time limit in which they must commence legal proceedings and when the “clock” for a limitation period starts running.

In a recent decision from the Alberta Court of King’s Bench, the application of a limitation period was considered in the employment law context. Specifically, the Court was asked to determine whether an employee was entitled to overtime pay he did not receive, despite the limitation period having expired. This decision resulted from an appeal by the employer after a judgment was made against them. This decision provides guidance for employees and employers with respect to pursuing unpaid overtime hours and the application of limitation periods in similar circumstances.

Employer appeals summary judgment

In Scheffler v Mourits Trucking Ltd., the employer brought the appeal stemming from a decision issued on January 11, 2022. The Applications judge who heard the original matter ruled in favour of the employee, granting him $22,648.50 in damages resulting from unpaid overtime hours plus costs.

The employer was a truck driver who earned an hourly wage of $21. In his application, he claimed that he had worked 719 hours of overtime as defined in the Alberta Employment Standards Code, however, instead of receiving payment to reflect overtime, he was paid his regular wages.

Employee paid normal salary for overtime hours contrary to Employment Standards Code

According to the Employment Standards Code, the employee should have been paid at a rate of $31.50 for each overtime hour, which would have amounted to $22,648.50, which had previously been awarded to him. The Applications judge recognized that the parties could have contracted out of the provisions under the Employment Standards Code, however, no such agreement was in place.

The employer made several arguments against paying the overtime wages pursuant to the Employee Standards Code. Included in these arguments was the employer’s assertion that the overtime provisions in Alberta’s Employee Standards Code did not apply as the employee’s work occasionally took him out of province. Therefore, the employer argued that the employee was paid by way of a bonus instead of overtime pay. The Applications judge did not give any weight to these arguments; however, on appeal, the employer also argued that the employee had missed his chance to seek overtime pay, noting that his application was made more than six months after his termination from the company.

Overtime entitlements created by the Employment Standards Code

The employer told the Court that the Employee Standards Code limits a claim of overtime pay to six months preceding the termination of an employee. The Court referenced a 1988 decision in which it previously held that an employee “is limited to his rights under the Employment Standards Act and cannot enforce his statutory rights in the courts.” The Court’s reasoning then was that the statute (the Employment Standards Code) preserved existing civil remedies such as the right to severance pay, but overtime entitlements were created by the Code.

In a 2006 decision, the Court had ruled that there was no common law entitlement to overtime. Further, an employee who sued an employer for overtime pay in Provincial Court should only be entitled to six-months of overtime pay since there was a six month maximum for making such a claim in the Employment Standards Code. This line of reasoning was upheld as recently as 2018, in which the Provincial Court held that the Employment Standards Code was the only source of entitlement to overtime.

Court finds in favour of employee

The Court went on to note that although the Employment Standards Code establishes the right to overtime, it would not be equitable to constrain an employee to the six month period it prescribes when an employee uses “conventional litigation” to seek a remedy. The Court wrote that “the remedies and their restrictions prescribed under the Code apply only when an employee engages the resources and collection mechanism available under the Code.”

The Court ultimately found in favour of the employee. However, it reduced the employee’s damages award from $22,648.50 to $7,549.50.

Contact the Employment Law Team at DBH Law to ensure your interests are pursued in as strong a fashion as possible

The experienced employment lawyers at DBH Law understand the nuances associated with employment-related disputes, particularly in relation to termination of employment and wrongful dismissal claims. In order to help mitigate the risk of future disputes, our team advises and assist employers and employees on matters relating to employment agreements and overtime agreements. However, in the event of a litigious dispute, we provide clients with trustworthy representation in early dispute resolution and at trial when necessary. We believe in building and fostering strong, long-term relationships with our clients and ensure that every client has a sound understanding of their legal rights, entitlements, and obligations under the applicable laws. We help clients manage their risks and reach their employment-related goals. To schedule a consultation with a member of our employment law team, contact us online or by phone at 403-252-9937.