Civil Court Claims versus Employment Standards Claims in Alberta
In any framework where a statute provides entitlements and a process for recourse, it's important to work out the way that these entitlements interact with traditional rights and remedies that would otherwise be recognized by a court.
With employment standards legislation, it's really clear that the government isn't displacing other entitlements that employees might have, but just creating minimums. But the more difficult and varied question is about process: Can I pursue a statutory claim in court?
What if I pursue a similar claim to a statutory entitlement in court, like pay in lieu of notice as compared to statutory termination pay? Can I still go after the statutory entitlement? Or vice versa?
Some statutes are more explicit than others on this: In Ontario, for example, you can assert a claim for statutory entitlements in a court claim, leading to outcomes like Render, but you have to pick one: You can't pursue both the statutory process and the court process for similar entitlements.
In Alberta, it's been a little more grey, and it continues to evolve.
The History: From Kenney to Walker
In a 1988 decision, the Court of Queen's Bench considered an overtime claim by a garbage truck driver named Mr. Kenney (nope, I don't make these things up).
The Court concluded that the statute provided a "complete code for recovery for the breach of the statute", and that those remedies were the "sole remedies", meaning that you can't bring an employment standards claim to court. The Court further considered whether there's the basis for an overtime claim rooted in contract - i.e. that there's an implied term in the contract for overtime - and concluded that "there was no intention to imply" such an entitlement.
That reasoning was upheld a few years later in a judicial review from an arbitration decision, but was distinguished in other jurisdictions.
In 2002, however, the tide shifted against that, with courts in Gordon v. CAM and Beaulne v. Kaverit reviewing the effect of the new language of section 83, providing discretion to decline a complaint where "the employee is proceeding with another action in respect of the subject‑matter of the complaint or has sought and obtained recourse in respect of the subject‑matter of the complaint before a court, tribunal or arbitrator or by some other form of adjudication."
They concluded that this language contemplates the possibility of proceedings outside the statutory process, meaning that the Code was no longer a "complete code" in the same sense as in Kenney.
(Yes, this reasoning is pretty flimsy: If the jurisprudence established at the time that people could not make an employment standards complaint in Court, suggesting that the Legislature intended to change that proposition by adding that language...is absurd. The far more plausible interpretation is that the intention was to give the Board the discretion to decline overlapping complaints: Say, where an employee is suing in court for wrongful dismissal, and also bring an ES claim for statutory termination pay. But I have other concerns about the Kenney approach, anyways.)
There are distinctions between Gordon and Beaulne, however: Beaulne recognized - relying on jurisprudence from Ontario and Saskatchewan, and in stark contrast to Kenney - that ES legislation had the effect of imposing contractual terms by necessary implication, and that the court's remedial authority arose from contract law, remedying the breach of "Code-mandated contractual terms". Gordon had no such recognition, explicitly being a question of whether a claim for ES entitlements - as ES entitlements - could be adjudicated by the court.
Therefore, following these two decisions, the Court could hear complaints for breach of ES entitlements...but only within statutory limits.
In Riviera Hotel (1991) Corporation v. Samborsky in 2006, Justice Lee followed the reasoning in Gordon and Beaulne, but applied the 6-month limitation period that applies to certain statutory claims, rather than the 2-year limitation period that normally applies to court claims. (For reasons I'll go into more depth on below, I don't actually think this is consistent with Beaulne.)
This was referenced in obiter by the Provincial Court in 2018 in Walker v. Alberta Communication Cable Services Inc.
So up until now, we'd say that the current state of the law in Alberta is that you can assert statutory employment claims in court, but you couldn't circumvent statutory limitations periods by doing so.
This just changed, however.
A new decision out of the Court of King's Bench is an appeal from a summary judgment decision by Applications Judge Schlosser for payment of overtime wages.
The appeal is successful to the point that additional evidence was led as to quantum, showing that the plaintiff had been paid at his regular hourly rate for the overtime hours, instead of 'not paid for those hours at all', as the judgment had been premised upon. So his judgment was reduced to account for only the missing overtime premium.
But the employer raised a limitations argument, too, asserting that the claim should only cover a 6 month period, and Justice Little rejected this argument.
Explicitly disagreeing with the decision from Riviera Hotel, Justice Little concluded that the limitations period that applies to Code proceedings only applies to proceedings taken under the Code's processes, and not to conventional court proceedings.
On the face of the statute, it's a sound argument. That said, it might run against the SCC's guidance on horizontal stare decisis from R. v. Sullivan.
So...Does the Six Month Limit Just Not Matter Now?
There is a rationale for maintaining a six month limit for the statutory process, but not for the court process: The statutory process is a low-cost, inquisitorial process by which Ministry officers investigate the claim and make an order. It's an easier and cheaper process that often doesn't even require the guidance of a lawyer. These factors make it conducive to a shorter limitations period than what courts - with a more robust adversarial process - allow.
My Two Cents
I think this was a mess from the start, but maybe understandably so. The issue is less about whether the court should be able to enforce statutory rights, and more about the other question in Kenney: Implication of contractual terms.
Kenney was decided a year and a half after CP Hotels, the leading authority on 'implied terms'. It's a bit wild that it answered the 'implied term' question without referencing a recent authority by the SCC, and...the approach was wrong.
There's a category of 'implied terms' that does not turn on the intentions of the parties - to wit, "the implication of a term as a legal incident of a particular class or kind of contract", which is how we contemporarily get to terms like 'reasonable notice'.
So the question isn't whether the parties intended to make overtime pay a part of the contract; the question is whether the Code has the effect of creating a contractual term to that effect, which can be enforced by courts as an ordinary breach of contract claim.
With the benefit of an additional three and a half decades of case law, it's tough to see how to avoid the conclusion that ES legislation implies terms into contracts, because it serves to establish required consideration for labour performed under a contractual relationship.
Think about wages: They're a pretty essential component of any employment contract, right? A contract simply can't be silent on wages and still be a contract. So, even in an employment situation where wage rates aren't explicitly agreed upon, the entitlement is still implied in some fashion. That wage entitlement - owing under the contract - cannot be less than the applicable minimum wage. That's what ES legislation does - if the contractual term provided for less than minimum wage, it would be void.
So there's absolutely ZERO argument to be made that an employee might have a contractual claim for some wage rate less than the applicable minimums; any wage claim arising in contract has to be at least at the statutory minimum rate. It's irrational, overly complex, and inconsistent with the face value of the statute to suggest that statutory entitlements might accrue at some higher rate than contractual entitlements.
Similar logic applies to overtime. The decision in Kenney was framed as a Boolean question of 'overtime pay or not', when the real question under most non-exempt circumstances is more like Scheffler, in terms of "what's the overtime rate"? Finding that the overtime rate is the same as the regular hourly rate, as was the effective outcome in Kenney, would be a finding that the contract provides for overtime without the statutory premium, which term would be void for non-compliance.
Thus, I think Scheffler ultimately gets it right, but I get there in a very different way than Alberta's jurisprudence suggests: I don't think we usually need to ask whether or not the courts have the jurisdiction to hear statutory claims, and instead I think we should see statutory entitlements as forming part of the contract claims that courts can hear.
Beaulne had this right in the first place, treating the question as being about "Code-mandated contractual terms", and if these terms are integrated into the contract, then by virtue of being contractual terms, the same limitations apply to their breach as to any other breach of contract.
Why This Matters
Once you parse out these 'monetary entitlement' questions as being subject to contractual claims, I think it gets easier to say that other types of statutory proceedings fall outside the court's jurisdiction, and that the Gordon approach is wrong. ES legislation provides for certain procedural entitlements, record-keeping obligations, leave entitlements, anti-reprisal rights, etc., which the courts aren't particularly well-suited to enforce.
I mean, it's generally unclear where a court would draw remedial authority for a claim that arises only by virtue of the statute (and not, per Kenney, by contract), but I don't see why you could say that the court has jurisdiction to order payment of a non-contractual statutory entitlement but not, say, order an employer to issue Code-compliant pay statements, or to give employees a break after 5 hours. (On the 'implied contractual term' theory, failing to do these things still amounts to a breach of contract, but a remedy in breach of contract would require the employee to be able to establish compensable losses.)
In theory, one might imagine an employee pursuing an anti-reprisal complaint in a court - say, after being dismissed for insisting on statutory entitlements. While courts have been historically very reticent to reinstate employees, and I'm not aware of it ever having happened in Alberta, the implication of the Gordon approach would seem to be that it's an available remedy.
Moreover, the anti-reprisal framework opens up a different world of damage entitlements not ordinarily available in a court process, because the very mechanism of the 'wrong' is different. In a traditional wrongful dismissal, the premise is that the employer was entitled to dismiss, but should have provided more notice, and therefore has to provide additional pay in lieu. An anti-reprisal case is premised on the idea that the dismissal itself was unlawful, and therefore 'reasonable notice' is not an appropriate measure of damages: Subject to mitigation efforts, in theory, a person entitled to reinstatement should get full back pay over the period of unemployment.
So...saying that this is available in court would be...kind of a big deal.
That said, I should clarify that I'm not suggesting that the Court should be unable to consider improper motivations for the dismissal in the course of assessing whether the employer has breached contractual obligations such as the duty of good faith and fair dealing. Perfectly fair game, in my mind, for a plaintiff in a wrongful dismissal action to seek aggravated or punitive damages based on high-handed and reprehensible conduct which also happens to be a breach of statutory obligations.
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This post does not contain legal advice, but only general legal information. It does not create a solicitor-client relationship with any readers. If you have a legal issue or potential issue, please consult a lawyer.
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