A former clothing store manager won a major a legal victory Thursday when the Supreme Court of Canada denied a retail chain's application to appeal an order requiring it to make restitution for unpaid overtime.
Nygard International Ltd. was directed to pay the legal costs of its former employee, Sharon Michalowski, in addition to the more than $10,000 in overtime that the Manitoba Labour Board had ordered it to pay.
However, the window of opportunity for other managers in Manitoba to follow suit is about to be shut by the provincial government, which - effective April 30 - will exempt managers from overtime-pay provisions.
This overtime exemption brings Manitoba in line with labour law standards in other Canadian jurisdictions, and reduces the possibility that employers will be hit with a flood of overtime claims from managers in the wake of the Supreme Court of Canada's decision in the Nygard case, a representative of the Manitoba Chamber of Commerce said Thursday.
Concerned about the broader implications of the case, Manitoba employers persuaded the government that managers should not be entitled to overtime pay because of their level of responsibility and, generally, higher levels of pay.
Ms. Michalowski, for her part, believes that the outcome of her fight will provide ammunition to managers across Canada as they challenge employer expectations that they work "unlimited hours" simply because their titles exclude them from labour standards protection.
"It's going to make it so much easier for people not to get ripped off," Ms. Michalowski said in an interview from Winnipeg-based Gags Unlimited, a retail-wholesale company where she now works as a manager selling balloons and other party supplies.
Nygard had contended that, because Ms. Michalowski was a manager, she was expected to work "all hours required to be worked" in return for her $42,000-a-year salary. Ms. Michalowski countered that the long and unpredictable hours made it difficult to care for her two sons and ailing father. She said when she joined the company in 2001 she never agreed to sign her life away.
After Ms. Michalowski left the company in 2003, she filed a complaint with the Manitoba Labour Board, which upheld her claim for unpaid overtime. The Manitoba Court of Appeal later upheld that claim, which Nygard sought leave to appeal at the Supreme Court of Canada.
When the Manitoba Court of Appeal issued its ruling late last year, Winnipeg lawyer Garth Smorang, who represented Ms. Michalowski, said the decision would serve as "a wakeup call to both employers and employees as to their rights."
Other employment lawyers said at the time that the Nygard case, and a series of high-profile class-action suits for unpaid overtime in the United States, were likely to have a spillover effect across Canada.
"I really think that just because you're a manager doesn't mean you can work unlimited hours. You will be compensated for your overtime," Ms. Michalowski said Thursday.
Outside of Manitoba, managers have long been exempt from overtime-pay provisions.
However, employment lawyers have been warning their corporate clients that they could be vulnerable to lawsuits if they do not ensure that all employees - including their managers - get the extra pay, or extra time off, they feel they are entitled to after logging long hours.
"The bottom line is that, with all these class actions in the U.S., Canadian employees are going to start catching on to the fact that there are multimillion-dollar settlements in the U.S. . . .and that would probably encourage some people to try in Canada," Toronto-based employment lawyer, Adrian Miedema, said last December after the Manitoba Court of Appeal upheld Ms. Michalowski's overtime claim.
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