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Courts usurping role of employment standards tribunal
Mon, 2007-10-29 09:47 — Robert Smithson
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The traditional, and only, avenue for enforcement of employment standards rights in B.C. used to be a statutory complaint submitted via the Employment Standards Branch. The Employment Standards Tribunal’s monopoly on adjudicating claims for items such as overtime pay now seems to have come to an end.
Until very recently, B.C.’s courts had refused to hear and decide claims which arise out of the provisions of the Employment Standards Act. The courts took the view that a statutory claim could only be pursued through the complaint procedure set out in the Act.
B.C.’s judges have now adopted a more open-minded approach to employees pursuing statutory claims in court. The new approach, enunciated last year in B.C.’s Macaraeg decision, is to treat the contents of the Act as implied terms of the contract of employment.
By way of the common law, judges have long imposed terms of employment by implying them into the relationship. The best example is the implied entitlement to reasonable working notice of termination.
Implied terms of employment can be superseded by a provision in a binding employment contract. But, if there is no contract in place, or if the contract fails to address the particular topic, the implied term governs.
The problem, from the employees’ perspective, was that there were no implied terms addressing the great bulk of what is contained in the Act. Entitlements such as overtime pay, vacation pay, statutory holidays, and many others were simply unknown to the common law.
The Macaraeg decision, changing all that, is no simple aberration. It seems to have been embraced by B.C.’s judges and is on its way to becoming a staple of the law of employment in this province. It was applied again by the B.C. Supreme Court in a case involving a claim for overtime pay.
Holland worked for Tymoschuk Agencies Ltd. and, two years after the termination of his employment, launched an action in court claiming over 1,500 hours of overtime pay. The Court accepted the Macaraeg premise that the minimal employment benefits conferred by the Act are to be treated as implied terms of the employment contract.
In effect, the statutory basis for Holland’s claim for overtime pay was treated as a term of his employment relationship which could be enforced in court. Holland was awarded the full amount of his claim based on the provisions of the Act which were in force at the time (even though some of those provisions were no longer in force when his action reached trial).
This latter point is perhaps the most significant feature, to date, of the courts’ enforcement of employment standards provisions. They do not feel restricted by certain of the limitations set out in the Act. They appear, for instance, willing to ignore the expressed time limits for commencing a claim and the limits on how far into the past a claim for unpaid amounts can extend.
As a result, the courts will be an attractive avenue for individuals whose claims extend far into the past. Those claims are often worth comparatively little when subjected to the short time limitations (for both commencing a claim and for calculating the amount of the award) set out in the Act which are observed by the Employment Standards Tribunal.
In Holland’s case, he did not commence his action in court for payment of overtime until approximately 4 years after his employment with Tymoschuk ceased. The statutory time limit found in the Act required such a claim to be advanced within 6 months of the termination of the employment. The Court (unlike the Employment Standards Tribunal) did not find this to be an obstacle.
In addition, the Court confirmed that the resulting award of overtime pay, having been pursued by way of a civil action, was not limited in scale by the restrictions set out in the Act. Although the Act presently limits the time period for which a remedy may be claimed to six months, the Court confirmed that no such restriction will limit a claim for overtime pay advanced by way of a civil action.
The problem with allowing statutory claims to proceed by way of civil action is that the statutory scheme and the rules of court are not neat match. The issues in Holland about the conflicting time limitations for filing a claim and calculating the remedy are just one example.
Here’s one more that will be a challenge for employers – in the civil realm, a claim for contractual damages may be launched up to 6 years from the occurrence of the events in question. But the Act only requires employers to retain payroll records for 2 years. So, there is the very real prospect that employers will be faced with claims for which they will no longer have records by which they might defend themselves. Will B.C.’s legislature step in to modify the Act to resolve some of these inequities? Only time will tell.
Despite the advantages to employees in pursuing their claims by way of civil action, I don’t think it’s likely the courts will be faced with a flood of employment standards claims. Generally speaking, civil litigation is far too expensive to make it worth pursuing a statutory claim in court.
However, when those claims are piggybacked onto another claim that would definitely be pursued in court (such as a claim for wrongful dismissal), or they are pursued by way of a class action, they will provide plaintiffs with another potentially lucrative basis for claiming damages.
Robert Smithson is a partner at Pushor Mitchell LLP in Kelowna practicing exclusively in the area of labour and employment law. For more information about his practice, log on to http://www.pushormitchell.com/.
