Canadian Employment Law Today

November 18, 2020

Focuses on human resources law from a business perspective, featuring news and cases from the courts, in-depth articles on legal trends and insights from top employment lawyers across Canada.

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Answer: Many employers require employees to obtain approval before working overtime. This requirement may be found in employer rules, policies or practices, as well as in em - ployment contracts or collective agreements. However, the mere existence of a require- ment that overtime must be preapproved be- fore it is worked will not necessarily relieve an employer of the obligation to pay for over- time that was not approved. Employers who don't monitor and enforce their preapproval requirements carefully and consistently may find themselves liable for unexpected over- time payments. In Fresco v. CIBC, a group of non-union employees brought the largest class action for unpaid overtime in Canada. The em- ployer's policy was that all overtime must be authorized. The Ontario Superior Court of Justice ruled that "if the employer knows or ought to know that the employee is working overtime but fails to take reasonable steps to prevent the employee from working then overtime must be compensated." Section 174 of the Canada Labour Code — which stipulates that overtime must be compen - sated whenever it is "required or permitted" — applied in this case. The court determined that the policy did not extinguish the em- ployer's liability because it had "required or permitted" the overtime by allowing or fail- ing to prevent it. Similarly, the B.C. Employment Standards Act requires an employer to pay overtime wages if the employer "requires, or directly or indirectly allows" an employee to work more than a prescribed number of daily or weekly hours. If an employer sits back and does noth - ing while an employee works unauthorized overtime hours, it will not be able to rely on its preapproval policy to avoid responsibility for payment. Rather, employment standards adjudicators have found that employers must address unauthorized overtime with enforcement and discipline, rather than by withholding wages. In Delta Enterprises, Re, for example, the B.C. Employment Standards Tribunal con - sidered whether the employer was required to compensate the complainant for overtime that had been worked against the employer's direction. The tribunal found that since the employer knew the employee was working overtime but took no action, the employee was entitled to wages. A reconsideration panel upheld the original decision and not - ed that if an employer does not want its em- ployees working overtime, it must do more than tell them not to work. It must ensure that they do not work unapproved hours. In unionized workplaces, employers have generally been more successful in resisting grievances seeking payment for unauthor- ized overtime, if the collective agreement specifically states that overtime will not be paid unless it has been preapproved. The re- sult may be different, however, if the collec- tive agreement requirement has not been en- forced consistently or if the employee had a reasonable excuse for working the overtime. In the arbitration case of Five Hills Health Region and HSAS (Entitlement to Pay for Working Late), Re, for example, the collec - tive agreement stated: "Wherever possible, all overtime must be authorized by the em- ployer, and except in emergency situations, such overtime must be authorized in writing in advance." The arbitrator decided that the employees, who were physical therapists, were entitled to compensation for working overtime to complete an essential compo - nent of their job, even though it had not been authorized in writing in advance. The arbitrator stated: "They were faced with a Hobson's choice — work overtime even though they were led to believe they would not be paid or leave on time and neglect their professional responsibilities." In Insurance Corp. of British Columbia and COPE, Local 378 (Unpaid Overtime Claim), Re, the union filed a grievance claiming pay for overtime hours worked by its members. The collective agreement stated that employees would receive overtime pay for time worked in excess of their regular working hours. The employer argued that it was not liable to pay for the alleged overtime because it had not been approved, and it presented evidence showing it had sent out emails and other re - minders stating that all overtime must be pre- approved. The arbitrator ruled that under the KVP principles, the employer could not rely on its policy because it was inconsistent with the collective agreement, and it had not been en - forced consistently. The arbitrator found that the employer had knowingly permitted em- ployees to work overtime and had benefited as a result. The grievance was accordingly upheld. The takeaway for employers is to ensure that their policies and collective agreement provisions requiring pre-approval for over - time are clear and consistently enforced. For more information, see: • Fresco v. CIBC, 2020 ONSC 75 (Ont. S.C.J.). • Delta Enterprises, Re, 2005 CarswellBC 4342 (B.C. Emp. Standards Trib.). • Five Hills Health Region and HSAS (Entitle - ment to Pay for Working Late), Re, [2016] S.L.A.A. No. 17 (Sask. Arb.). • Insurance Corp of British Columbia and COPE, Local 378 (Unpaid Overtime Claim), Re, [2012] B.C.C.A.A.A. No. 112 (B.C. Arb.). Have a question for our experts? Email Ask an Expert HARRIS AND COMPANY, VANCOUVER with Colin Gibson Liability for unauthorized overtime Question: If company policy is that overtime must be pre-approved, is the employer liable for overtime that an employee chooses to work without obtaining approval first? Canadian HR Reporter, 2020 2 | | November 18, 2020 November 18, 2020 Employment law blog Canadian Employment Law Today invites you to check out its employment law blog, where editor Jeffrey R. Smith discusses recent cases and developments in employment law. The blog features such topics as benefits for dismissed employees, health and safety for employees working from home, and sick notes. You can view the blog at If an employer sits back and does nothing while an employee works unauthorized overtime hours, it will not be able to rely on its preapproval policy.

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