A guest post by Sheldon McRae, Student-at-Law
If your employer has failed to pay you for overtime, is there a limitation period that may prohibit you from recovering what you’re owed? If so, can it be varied?
In Scheffler v Mourits Trucking Ltd , 2023 ABKB 139 Justice John S. Little of the Alberta Court of King’s Bench determined that a plaintiff could claim unpaid overtime wages in a civil suit, despite portions of their claim being statutorily barred from recovery by a limitation period in Alberta’s Employment Standards Code.
Facts
The plaintiff, Mr. Scheffler, was a truck driver for the defendant, Mouritz Trucking Ltd. Mr. Scheffler had worked 719 hours of overtime, as calculated under the Alberta Employment Standards Code, but was only paid at his regular rate of $21.00/h for these hours. His overtime rate was $31.50/h. In this manner, Mr. Scheffler was owed $7,549.50 (719 hours x $10.50 = $7,549.50) of unpaid overtime.
The defendant did not dispute the amount of overtime owing to the plaintiff, it did however argue that portions of the amount claimed were not payable, as the Alberta Employment Standards Code had a limitation period on claims of unpaid overtime.
Section 90(3) of the Alberta Code limits claims of unpaid overtime to the earlier of six months prior to a claim made under the statute, or six months from the date the employee was terminated. In this manner, the defendant argued that any overtime pay owed to the plaintiff for longer than six months was not recoverable.
Decision of the Alberta Court of King’s Bench
In his decision, Justice Little rejected the arguments made by the defendant. Breaking with previous decisions, that found overtime pay to be a remedy only available under statute, and that barred claims of unpaid overtime outside the six-month limitation period, (Kenney v Browning-Ferris Industries Ltd., 1988 CanLII 3548 (ABQB); Riviera Hotel (1991) Corporation v Samborsky, 2006 ABQB 222) Justice Little allowed recovery of the $7,549.00 owed to Mr. Scheffler.
The reasons provided by Justice Little for breaking with previous decisions of the Alberta Court of Queen’s Bench were based on two primary considerations: equity and the wording of the Alberta’s Employment Standards Code.
First, Justice Little noted the inequity of barring recovery when he stated that “while the Code establishes the right to overtime, 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” (para 21), in this manner noting the potential unfairness to a claimant who pursues a remedy against an employer through a civil action rather than through a tribunal process under the Code.
Secondly, Justice Little referred to the wording of the Code itself, noting that section 90(1) of the Code states that the limitations period in section 90 refer to "[a]n order made under this Division", acknowledging that this limited the six-month limitation period to decisions of the tribunal under the Code (para 23).
Commentary from Sheldon McRae, Student-At-Law
The precedential and practical value of this case are limited in Ontario, however it does have persuasive value in cases where a limitation period may impede an employee from recovering the overtime pay they are owed.
Practically speaking, an employee is less likely to be time-barred from making a claim for unpaid overtime wages in Ontario. This is because the limitation period for making such a claim is two-years in Ontario under section 111(1) of the Ontario Employment Standards Act, 2000 as opposed to the six-months allowed under Alberta’s statute. The longer limitation period in Ontario gives claimants more time to make a claim under the ESA. In this manner, the threat of having a portion of a claim barred from recovery is less likely in Ontario, as the limitation period is longer than in Alberta, however it can still happen.
In cases where an employee is potentially barred from recovering a portion of their claim due to a limitation period, Scheffler v Mourits Trucking Ltd. is a good example of how the principles of equity and statutory interpretation can be used to potentially vary limitations periods. While it is important to contact a lawyer as soon as possible in cases where an employment claim can be made, in order avoid missing limitation periods, it is possible (in some circumstances) to work around a limitation period in some instances.
Commentary from Sean Bawden
The issue of the limitation period for overtime claims has been a hot one in Ontario.
As previously noted on this blog in the post How Much Time Do You Have to Sue for Unpaid Overtime?, the question of how much time one has within which to start a civil claim for unpaid wages, including unpaid overtime is actually more complicated than it sounds.
In Fresco v. Canadian Imperial Bank of Commerce, 2022 ONCA 115 (CanLII), the Court of Appeal for Ontario refused to allow an employer’s appeal in a proposed class action case on the basis that the applicable limitation period had expired.
The basis for the court’s decision was the application of the “reliance on superior knowledge and expertise” doctrine to the question of when an employee ought to reasonably have known that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it.
What the Scheffler case appears to signal (subject to further appeal in Alberta) is that employment standards legislation may not occupy the whole of the field for certain employment rights and employees, who elect to avail of the civil process, may have access to greater rights than those afforded by statute.
If I had to highlight a single passage from the Scheffler it would be that at paragraph 21 where Justice Little writes, “I conclude, however, that while the Code establishes the right to overtime, 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.”
What that means for employees who believe they are owed a considerable amount of overtime pay, vacation pay, etc. is that you need to speak with an experienced employment lawyer before you take any final decisions about to whom you are going to complain about unpaid wages. The “Labour Board” can be a helpful resource, but its jurisdiction may be more limited than what is possible in court.
Contact Me
Before you unintentionally limit your potential recovery contact me.
Sean Bawden is Experience. At Work.
I am an experienced employment lawyer and wrongful dismissal lawyer practicing with Kelly Santini LLP, which is based in Ottawa. I have appeared in courtrooms all across Ontario from Stratford, to L’Orignal, to Thunder Bay.
For 2.5 years I was in-house legal counsel providing employment law advice to one of Canada’s largest corporations and appeared in labour courts and tribunals literally the world over.
I am also been a part-time professor at Algonquin College teaching Employment Law. I have previously also taught Trial Advocacy for Paralegals and Small Claims Court Practice.
I can be reached by email at sbawden@kellysantini.com or by phone at 613.238.6321 x233.
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As always, everyone’s situation is different. The above is not intended to be legal advice for any particular situation. It is always prudent to seek professional legal advice before making any decisions with respect to your own case.
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