2018 NUCJ 12, 2018 NUCJ 12

Nunavunmi Maligaliuqtiit NUNAVUT COURT OF JUSTICE Cour de justice du Nunavut Citation: Walker & Capeling v. Enokhok Development Ltd., 2018 NUCJ 12 Date: 20180426 Docket: 21-17-061, 21-17-062 Registry: Iqaluit Plaintiffs: Elizabeta Walker and Paul Capeling -and- Defendant: Enokhok Development Ltd. ________________________________________________________________________ Before: The Honourable Madam Justice Susan Cooper Counsel (Plaintiffs): Self-represented Counsel (Defendant): Self-represented Location Heard: Iqaluit, Nunavut Date Heard: February 16, 2018 Matters: Small Claims action REASONS FOR JUDGMENT (NOTE: This document may have been edited for publication)

I. INTRODUCTION [ 1 ] This is a Small Claims action arising from the termination of employment contracts each Plaintiff had with the Defendant’s company. Although the Plaintiffs commenced separate actions against the Defendant, the issues were the same in each action and, with the agreement of the parties, they were heard together. The Defendant also filed a counter-claim against each of the Plaintiffs. II. BACKGROUND [ 2 ] Enokhok owns three properties in Cambridge Bay. These include commercial premises, residential premises, and a hotel. Some of the residential premises are operated as part of the hotel.

Together all of the premises have a total of 10 rooms for guests. [ 3 ] In August of 2015 Walker and Capeling, who are a couple, each signed identical Employment Agreements with Enokhok. The Agreement was for a term of two years, commencing September 1, 2015 and ending August 31, 2017. Walker and Capeling were hired to essentially run the three properties in Cambridge Bay. [ 4 ] In the summer of 2016 Walker and Capeling took two months of unpaid leave so that they could travel to Europe and arrange for the move of Walker's mother to Canada. While they were out of the country they were involved in a car accident.

On August 9, 2016, they contacted Enokhok to request an advance on their wages so that they could deal with the consequences of the car accident. They felt comfortable doing this as they had seen advances provided to other employees. [ 5 ] The request for an advance was denied. Further, Enokhok emailed Capeling and advised him that the Employment Agreements were being terminated. No reason was given for the termination of the contracts, so the termination was “without cause”. Enokhok advised that the Employment Agreements would terminate 30 days after their return to Cambridge Bay.

Walker and Capeling were scheduled to return to Cambridge Bay on October 7, 2016, so their employment was to end on November 8, 2016. Although the evidence is not clear, it appears that they did not work until November 7. Enokhok advises that they were both given 30 days’ notice of termination and paid out for an additional 30 days. III.

POSITIONS OF THE PARTIES [ 6 ] Walker and Capeling argue that the termination provisions in the Employment Agreements should be of no force or effect as representations were made to them prior to their unpaid leave that they were doing a good job and had secure positions to return to. [ 7 ] Enokhok argues that the terms of the Employment Agreement were not only followed, but that Walker and Capeling’s termination packages were more generous than provided for as they received both 30 days’ notice of termination and 30 days’ termination pay. At trial, Enokhok abandoned its counter-claim. IV.

ANALYSIS [ 8 ] As indicated, the terms of the Employment Agreements were identical. The relevant parts of the Agreements are:

2.2 Hours of Work – As required to fulfill responsibilities recognizing that the Employee is employed primarily in a managerial capacity. 2.3 The Employees hereby acknowledge that they are management employees and no overtime entitlement shall accrue or be paid withrespect to their employment duties. … 3.1 This Agreement may be terminated without cause by either party by providing Thirty (30) days written notice to the other party. Iftermination is by the Employee the Employee shall be responsible for the cost of the airfare to return to Edmonton.

In case oftermination by the Employer, the Employer shall be responsible for airfare cost to Edmonton.

Any freight or extra baggagecost is the Employee's responsibility. 3.2 The Employer may waive the giving of notice by the Employee and the Employer may, at its sole option, provide pay in lieu ofnotice to the Employee of thirty (30) days. 3.3 The Employee hereby acknowledges and agrees that the Thirty (30) day notice or pay in lieu of notice by the Employer is in fullsatisfaction of the Employer's obligations to the Employee for all severance pay, damages, claims, costs of every kind including allprovisions of the Labour Standards Act RSNWT (Nu) 1988, c. L-1. [9] The Labour Standards Act, RSNWT (Nu) 1988, c.

L-1, sets the minimum standards of employment in relation to hours of work,wages, vacations and statutory holidays, parental, compassionate, and reservist leave. It applies to all employees, with certain exceptions. [10] In particular, section 2(2) of the Act states:

Part I [relating to hours of work] does not apply to or in respect of employees who are employed primarily in a managerial capacity. [11] The Act further provides: 3.

(1) This Act applies notwithstanding any other law or any custom, contract or arrangement, whether made before, on or after July 1,1968, but nothing in this Act shall be construed as affecting any rights or benefits of an employee under any law, custom, contract orarrangement that are more favourable to the employee than his or her rights or benefits under this Act. [12] The effect of this provision is to prohibit parties from contracting out of the minimum standards of employment provided for in theAct.

In circumstances where the parties have agreed to terms of employment that are better than those provided for in the Act, the termsof the agreement will be enforced. In circumstances where the parties have agreed to terms of employment that are worse than thoseprovided for in the Act, the terms of the agreement that do not meet the minimum standards provided for in the Act will not be enforcedand the standards provided for in the Act will apply. [13]

Section 3.3 of the Employment Agreement purports to contract out of provisions of the Labour Standards Act. To the extent that itdoes so, it is null and void and cannot be enforced. [14] The Employment Agreements are emphatic that Walker and Capeling are in managerial positions. However, saying it is so doesnot make it so. The Court must look at the nature of the work performed to determine if it is primarily work of a managerial nature(Kasba Lake Lodge Limited v Kobayashi, (NWT LSB), Inuvialuit Development Corporation v Johnpillai, (NWT LSB). [15] Those employed in a management position will normally have a role in setting policy and direction for the organization. They will

have the authority to make commitments on behalf of the organization, including financial commitments. They will have considerable independence in decision-making. They will normally supervise others and have the authority to hire, discipline, and terminate employees. [ 16 ] An employee may have some of these responsibilities and may still not be considered as holding a managerial position.

One must consider the totality of the duties and determine the primary role and responsibilities of the employee. [ 17 ] The evidence is that Walker was responsible for maintaining the hotel aspect of the operations, including housekeeping and preparing meals for guests. At no time did she supervise employees. It seems clear that she essentially cooked and cleaned the rooms. [ 18 ] Capeling was responsible for maintaining the properties. [ 19 ] At times, Capeling may have supervised staff but never more than two or three people at a time.

The evidence is that there was high staff turnover and often Walker and Capeling were the people doing everything that needed to be done. [ 20 ] It was necessary to have someone on-call after hours and on weekends in the event of frozen pipes, furnace issues, or other similar malfunctions that can quickly develop into emergencies in a harsh climate. The evidence was that Capeling was largely the person performing that duty.

Walker would frequently assist him. [ 21 ] Capeling testified that he spent many evenings and weekends plunging toilets, thawing pipes, and doing what needed to be done to keep the buildings operational. If there were times he was not called upon after hours to perform some task, he was still on-call and had to be prepared to respond, should a service call come in. [ 22 ] Walker and Capeling reported directly to the General Manager who resided in Edmonton and came up to Cambridge Bay seven or eight times over an 11 month period. [ 23 ] Some of the emails filed in the matter are telling.

In one email exchange, Capeling is reporting to the General Manager about bookings for the hotel, problems with the satellite and steps taken to address them, work done on a roof to prevent leaking, and siding being installed on a unit. The email concludes with Capeling asking if he can install vinyl or laminate flooring in the hallway of the offices to make it easier to clean. His request is denied. The same email also suggests that the General Manager is dealing directly with contractors to get renovation work done.

A different email indicates that tenants are contacting the General Manager directly to request repairs. [ 24 ] All of these emails are inconsistent with Capeling having been in a managerial position.

An employee who does not have the authority to decide whether or not to lay flooring in a hallway is not an employee who has the authority to commit the organization in any way and most certainly is not an employee who is involved in setting policy and overall direction for the organization. [ 25 ] Walker and Capeling may have had some independent decision-making authority and at times supervised others, but these responsibilities did not elevate their positions to managerial positions nor were they the primary functions carried out. [ 26 ] I find that Capeling and Walker were not employed in a managerial capacity.

If Capeling and Walker were not employed in a managerial capacity, then

Part 1 of the Labour Standards Act applies. V. APPLICATION OF THE LABOUR STANDARDS ACT [ 27 ] The Labour Standards Act , ss. 4 and 5 set out the maximum hours of work for an employee.

Section 4 provides that standard work hours are eight hours per day, 40 hours per week.

Section 5 provides that the standard hours of work can be increased to a maximum of 10 hours per day, 60 hours per week.

[ 28 ] Neither Walker nor Capeling submitted time sheets. When they first started they did maintain reports as to work done by them but this practice quickly ended. Other than testimony that they were on-call “24/7” and were frequently called out, there is little information available to determine the amount of overtime owed to Walker and Capeling. VI. CONCLUSION [ 29 ] The evidence does establish that Walker and Capeling commenced work on September 1, 2015. They left Cambridge Bay on July 27, 2016 for their unpaid leave.

This is a period of 11 months. [ 30 ] Each received annual remuneration pursuant to the Employment Agreement of $45,000, which is $865.39 per week or $21.64 per hour, based on a 40-hour work week. [ 31 ] The total number of weeks worked is 47. [ 32 ] Based on the evidence I have heard, I am setting the average number of overtime hours worked per week at four hours, for each of Walker and Capeling. If anything, I expect that this is on the low end. [ 33 ] They are entitled to overtime pay for those hours at a rate of 1.5 times their standard rate of pay.

The overtime pay is $32.46 per hour. [ 34 ] The amount owing to each of Walker and Capeling is $6,102.48. This amount, less statutory deductions, will be payable to them forthwith. Dated at the City of Iqaluit this 26th day of April, 2018 ___________________ Justice S. Cooper Nunavut Court of Justice