Canadian Employment Law Today

September 8, 2021

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: Employers are obligated to pay em- ployees for overtime hours actually worked. The obligation lies solely with the employer to communicate and prohibit employees from working overtime hours if the employer does not intend to pay employees for this time. This issue is further complicated by remote work as it is increasingly difficult to monitor when employees are working. If appropriate policies and recordkeeping systems are in place and an employee still submits unauthorized overtime hours, that employee can be subject to appro - priate progressive discipline. However, this can- not include withholding payment for the over- time hours even where they are in violation of the employer's policies. Employment standards legislation sets out the hours per week after which overtime pay is owed. There are exemptions for specific subsets of employees and industries. In Alberta and British Columbia, if the em - ployer has a clear policy prohibiting unauthor- ized overtime or requiring pre-approval, it is possible to avoid paying employees for unau- thorized overtime. However, courts have con- sistently held that employers must do more than tell employees not to work overtime hours through policies. Rather, employers must act to make certain that employees do not work un- approved overtime. Where policies are enforced inconsistently or are inconsistent with other terms of the employment contract, employers will not be able to rely on their policies in deny- ing payment of unauthorized overtime. There are a number of labour cases where em- ployees have been denied recovery for overtime in excess of that which was authorized by the employer on the basis that management had the right and discretion to manage overtime ob- ligations and did so. The employees, knowing that these hours were not permitted, unilater- ally chose to work overtime anyways: see Cooper Tool Group Ltd. v. U.S.W.A., Local 6497; North- west Territories (Minister of Personnel) v. Union of Northern Workers (1996); and Nova Scotia (At- torney General) v. P.A.N.S. While the concept of remote work is at the forefront of every employer's mind during this time, the issue of having to pay out unauthor - ized overtime work is not entirely new. In fact, this issue was the basis for numerous class ac- tions prior to the onset of the COVID-19 pan- demic. The most famous of which was the Ontario Superior Court decision of Fresco v. Canadian Imperial Bank of Commerce, which was released in December of 2020 after 12 years of litigation. In Fresco, CIBC's policies required employ - ees to obtain pre-approval prior to incurring overtime or, under extenuating circumstances, to obtain post-approval as soon as possible for overtime hours. The decision found that CIBC's overtime policies and recordkeeping systems contravened the Canada Labour Code, which governs banks and other industries that fall un - der federal authority. More specifically, CIBC's policy did not explicitly prevent overtime hours and the code provided that overtime hours had to be compensated whenever they were re- quired or permitted. By prescribing otherwise, CIBC's overtime policy was overly restrictive. The court found that CIBC failed to pay 31,000 customer service employees for all of the over- time hours required or permitted to be worked — further compounded by CIBC's failure to ad- equately track the overtime hours worked by its employees. The following practical considerations are also important: • Employers should review their employ- ment contracts and respective employment standards obligations with their employees to ensure that employees are aware of the requisite rest periods and overtime limita- tions to help avoid violations. • Employers should review their policies and recordkeeping systems to ensure that all hours are being tracked accurately and regularly and that employees are well trained on these requirements. • Employers should consider implement - ing a work-from-home guideline that explicitly outlines the expectations around working (and reporting) overtime hours or working outside of regularly defined business hours. • If employers are concerned about overtime hours, they could consider implementing averaging agreements whereby an employ - ee's hours of work may be averaged over a specific period of time for the purpose of determining overtime eligibility. Each prov- ince has different requirements regarding overtime averaging agreements, and these requirements should be reviewed as part of any assessment undertaken on whether these types of arrangements could be ben - eficial to a specific organization. For more information, see: • Delta Enterprises, Re, 2005 CarswellBC 4342 (B.C. Emp. Stds. Trib.). • Cooper Tool Group Ltd. v. U.S.W.A., Local 6497, [1975] O.L.A.A. No. 40 (Ont. Arb.). • Northwest Territories (Minister of Personnel) v. Union of Northern Workers (1996), 52 L.A.C. (4th) 353 (N.W.T. Arb.). • Nova Scotia (Attorney General) v. P.A.N.S., [1993] N.S.L.A.A. No. 8 (N.S. Arb.). • Fresco v. Canadian Imperial Bank of Com - merce, 2020 ONSC 75, 2020 ONSC 4288 (Ont. S.C.J.). Canadian HR Reporter, 2021 2 | | September 8, 2021 September 8, 2021 COMPANY'S on page 7 » Answer: Employers can terminate an employ- ee who is on medical leave without cause, but there are notable risks that can lead to expen- sive litigation. While eliminating a position for business purposes is a valid reason to terminate employment, there is a chance that the employ- ee will consider this termination to be related to their medical leave and commence a wrongful dismissal claim or a human rights complaint. Should the employee pursue legal action, it will be up to the employer to demonstrate that the position was eliminated for business pur - poses alone. Employers should keep in mind that if even part of their decision to terminate was based on the employee's medical leave, that is sufficient to establish prima facie discrimina- tion under the human rights legislation. For example, employers should consider how they selected this employee for termina- tion. Employers should ensure that all employ- ees have the same opportunity to be retained. If the employer selected employees for retention based on who showed more initiative, took on more work, and demonstrated greater interest, they should be mindful of the employee on leave who may not have had the same oppor - tunity to exhibit those attributes. However, if the position is eliminated for Termination of employee on medical leave Question: If an employee's position is eliminated for business purposes while they are on medical leave, can the employ- er simply terminate their employment without cause? BUSINESS on page 6 » Ask an Expert Have a question for our experts? Email MCLENNAN ROSS, CALGARY with Tim Mitchell Unauthorized overtime Question: Does an employer have to provide overtime pay to a remote employee who presents a log of unauthorized overtime hours and work email exchanges that occurred outside of regular hours?

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