Overtime - rules can be strict

Most people are aware that if you work more than 44 hours in a week, you are entitled to be paid time and a half for each hour in excess of 44. There are many exceptions to this rule. Many professionals are not entitled to overtime including lawyers (oh boo hoo). There is also an exception for supervisory employees. In Ontario, overtime does not apply to people whose work is supervisory or managerial in character and who perform non-supervisory or non-managerial tasks on an irregular or exceptional basis. Employment Standards Acts across the country have very similarly worded exclusions.  

A man we will call Gordon worked as a sous-chef in Calgary for a popular restaurant. One of his responsibilities was interviewing prospective employees although he did not make the final hiring decision. Gordon did the food ordering and dealt with wholesalers. As one of the senior kitchen staff, Gordon would set tasks and priorities for the other staff on a daily basis. Of course Gordon also did a lot of hands on cooking.

When Gordon made a claim for unpaid overtime through the Alberta Ministry of Labour, the employer said that these critical responsibilities made Gordon the supervisor and he was not entitled to time and a half pay after working more than 44 hours in a week.

Gordon had a different story. Gordon didn’t have keys to the restaurant because the owner gave evidence that he only let people he trusted have keys. The only person who could decide if somebody was hired or not was the owner. Although Gordon could recommend a hiring, so could anyone.

On the one occasion when Gordon tried to discipline another staff member, it was quickly made clear to him in no uncertain terms that he ought not to be disciplining anyone in the restaurant.

It is always amazing that no matter what the stakes, some people cannot put their ego aside. When the owner of the restaurant was giving evidence in this case, he made the following four statements:  1. I am like God in my restaurant; 2. Nobody else makes decisions; 3. I don’t need people to help me run the restaurant; 4. I am everything in the restaurant.

Although the owner had what he perceived to be his moment in the sun and a temporary stage to let his ego reign, his complete lack of humility probably cinched the case for Gordon. He was found not to be a supervisory employee and entitled to overtime.

Every Employment Standards Act in this country puts a responsibility on the employer to keep track of, and record, all hours worked by employees, whether they are entitled to overtime or not.

Since the restaurant did not think Gordon was entitled to overtime and paid him a straight salary, they never required him to punch in or out. They had no records of how much Gordon worked. Gordon claimed to have kept track of his hours starting after he complained that he was working excessive hours and nobody cared.

When an employer fails to keep track of employee’s hours and an overtime claim is made, the employer is left at the mercy of the employee. In Gordon’s case, the Employment Standards Act officer discounted the hours submitted by Gordon because he thought they were exaggerated to some extent but a significant award of overtime pay plus the vacation pay owing on that amount was  still made.

In its last stand against this claim, the employer claimed that a $10,000.00 bonus that Gordon had received while he worked for the restaurant was compensation for extra hours worked.

It argued that the owner of the restaurant, being the lovely guy that he was, decided to reward his employee for the extra hours even though there was no legal entitlement. That would make some sense.

The problem is that every employer who has ever paid any gratuitous bonus argues that that amount was in compensation for unpaid vacation pay or overtime or statutory holiday pay.

However, the rules are very strict. If it does not appear on a pay stub recorded specifically as being paid on account of one of those entitlements, the employer is out of luck.   I have been in the position of trying to defend good employers who treat their employees well who have been caught by this “technicality”. They honestly believed that the employee was not entitled to overtime or that they had calculated statutory holiday pay correctly. While ignorance of the law is never an excuse, their intent was good. These same employers have paid employees who were off sick even though they didn’t have to and occasionally provided gratuitous bonuses. Then they have to let somebody go because of a slowdown in business or the employees own misconduct and suddenly the gratitude is gone. They are suddenly facing one of these claims and I have to tell them that all the good things they have done in the past count for nothing.

I always tell them, however, never to stop doing the good things. Many employees over many years will, in fact, appreciate that they are a good employer and they will make such a complaint. The employer is creating a workplace in which everyone likes to work. Becoming cynical and mean-spirited with their employees because of one unfair claim every ten years is not only unfair, it constitutes shooting themselves in the foot.

As published in the Hamilton Spectator, December 28, 2009 Ed Canning practices labour and employment law representing both employers and employees with Ross & McBride LLP.