Ex-manager awarded payment for overtime

The Court felt the employer made it too difficult to take time off in lieu of pay

Matthew Nagel began his employment in April 1994 as a labourer with Del-Air Systems, a steel fabricator. He was promoted to the position of production manager on May 1, 1997. He was responsible for managing the work of two supervisors and 20 to 30 hourly employees each shift.

As a manager Mr. Nagel was not entitled to receive extra wages for overtime work in accordance with company policy. However he was entitled to receive paid time off equal to extra time worked. Del-Air did not keep track of extra hours worked by its managers. It relied upon its managers to keep track of their overtime hours and to take off time in lieu of extra wages.

On Sept. 26, 1998, Mr. Nagel wrote to Del-Air’s chief operating officer (to whom he reported) stating that he believed his salary should be increased in view of his increased responsibilities. The letter did not make reference to the fact that he had been accumulating overtime hours for which he expected compensation, nor did it suggest that he was unable to take off time as compensation for those hours. Del-Air’s response was to increase Mr. Nagel’s monthly salary from $2,900 to $3,200 per month.

In 1999 Del-Air was having financial problems causing it to terminate the employment of a number of its employees including managers. On Sept. 22, 1999, Mr. Nagel was informed that he was one of the employees to be terminated effective Oct. 22, 1999, at which time he was paid the equivalent of 7.7 weeks of salary in lieu of additional notice of termination. Thus Mr. Nagel received a total working notice and pay in lieu of notice equivalent to 11.7 weeks salary.

In March 1999, while employed with Del-Air, Mr. Nagel applied to be a police officer in Calgary. His application was accepted and he started employment as a police officer effective March 1, 2000. He did not seek additional employment when he was terminated from Del-Air in September 1999.

Mr. Nagel brought an action against Del-Air for wrongful dismissal claiming that the notice or payment in lieu of notice that he received was not reasonable notice. In addition to damages for the wrongful dismissal, Mr. Nagel sought payment for 457.7 hours of overtime worked but not paid.

On the issue of reasonable notice, the Court considered the following factors: Mr. Nagel was 29 years old at the time of his dismissal; he had been employed by Del-Air for 5.2 years; and he had significant managerial duties and responsibilities and earned an annual wage of $38,400.

Based on these factors, the Court held that Mr. Nagel was entitled to reasonable notice of termination equal to 26 weeks or six months. Having already received working notice and payment in lieu of notice totaling 11.7 weeks, he was entitled to damages based upon an additional 14.3 weeks of notice.

On the issue of overtime, the Court considered the fact that the overtime provisions of the Labour Standards Act do not apply to workers who carry out functions of a managerial character. Mr. Nagel had no statutory right to overtime nor was there an implied right to overtime in common law.

The position of Del-Air was that Mr. Nagel was entitled to come and go from the workplace as he wished and that his duties and responsibilities would not normally require that he put in any time in excess of the standard eight hours per day. If he did accumulate overtime it was incumbent upon Mr. Nagel to take time off in lieu of overtime while he was employed.

Mr. Nagel took the position that he was too busy to take time off and that he was entitled to wait until his employment was terminated to be paid in cash for whatever time he says were overtime hours. The Court did not accept that argument. The fact that the employer kept no such records of overtime hours and relied upon the worker to take time off indicates that Del-Air never contemplated paying additional wages for those hours at some future date.

However the Court did not completely disregard Mr. Nagel’s claim that his added duties and responsibilities in the months prior to his dismissal made it difficult to take enough paid time off. Mr. Nagel was required to take on additional managerial duties during his last few months. The Court awarded a payment of 30 per cent of the total overtime hours claimed.

In summary Mr. Nagel was awarded payment of damages equal to additional notice of 14.3 weeks plus wages for 30 per cent of the overtime hours claimed.

For more information:

Nagel v. Del-Air Systems, 2001 SKQB 562.

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