Nunavut court orders business to pay overtime to employees

Court finds employees did not work as managers, so qualified for overtime


Cambridge Bay-based Enokhok Developments Ltd. has been ordered to pay out overtime to two former employees. (PHOTO BY JANE GEORGE)

Cambridge Bay-based Enokhok Developments Ltd. has been ordered to pay out overtime to two former employees. (PHOTO BY JANE GEORGE)

A Cambridge Bay-based business has been ordered by a Nunavut judge to pay out thousands of dollars in overtime to two employees whose employment was terminated mid-contract.

In an April 26 decision, Nunavut Court Justice Susan Cooper ruled that Enokhok Development Ltd. should pay $6,102 to each of two Cambridge Bay-based employees who worked for the company over an 11-month period.

Enokhok owns three properties in Cambridge Bay, including the Enokhok Inn and Suites hotel, a residential property and another commercial building.

In August 2015, Enokhok hired Elisabeta Walker and Paul Capeling, a couple, to maintain and operate the three properties. They each signed a two-year agreement to run from September 2015 to August 2017.

Eleven months into the contract, in the summer of 2016, the couple took two months of unpaid leave to travel to Europe and arrange for Walker’s mother to move to Canada.

But while they were out of the country, the couple was involved in a car accident. In August 2016, Walker and Capeling contacted Enokhok to request an advance on their wages to help pay for some of the costs associated with the accident—something they testified that they’d seen the company do before.

Enokhok denied their request. Enokhok also emailed the couple to say that their employment agreements were being terminated that fall, without providing an explanation.

Enokhok said the two employees were given 30 days’ notice of termination and paid out an additional 30 days.

Walker and Capeling initially filed separate claims against Enokhok for unpaid overtime wages, but later agreed to be heard together as the issues were the same.

Both argued that they were told prior to taking the unpaid leave that they had secure positions to return to.

But Enokhok claimed to have followed the terms of their employment agreements and offered them more generous termination packages than required.

The case turned on Walker and Capeling’s capacity as employees—whether or not they were considered to be in management roles.

Their employment agreements referred to them as “management employees,” in which case, no overtime would be paid to them.

The Labour Standards Act sets out minimum standards related to hours of work, though it does not apply to management roles.

“The employment agreements are emphatic that Walker and Capeling are in managerial positions,” Cooper wrote in the judgement.

“However, saying it is so does not make it so. The court must look at the nature of work performed to determine is it primarily work of a managerial nature.”

While Walker was responsible for maintaining the hotel aspect of operations, including housekeeping and preparing meals for guests, she did not supervise employees.

Capeling was responsible for maintaining the properties. At times, he may have supervised staff but never more than a couple of people at a time.

The couple reported directly to an Edmonton-based general manager, who visited Cambridge Bay seven or eight times over an 11-month period.

Capeling testified that he often responded to after-hours calls for emergency repair work at the buildings, like plunging toilets or thawing pipes.

Emails between Capeling and the general manager show that Capeling was denied a request to install new vinyl or laminate flooring in one of the buildings’ offices.

That suggests Capeling was not in a managerial role, Cooper found, as he did not have the authority to decide on a renovation.

Capeling and Walker did not work standard hours; based on their testimony they were on call 24 hours a day.

In all, Walker and Capeling worked for a period of 11 months, from September 2015 until July 2016, when they left on their unpaid leave.

“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,” Cooper wrote in the decision. “If anything, I expect that this is on the low end.”

Walker and Capeling were entitled to overtime pay for those hours at the rate of 1.5 times their standard rate of pay, which worked out to $32.46 an hour over a 47-week period, or $6,102.48 each.

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