Employment & Labour Law

The Perils of Remote Contract Work

January 31, 2024

person relaxing at home office desk representing remote contract workers

Over the last few years, there has been a seismic shift in the way many people work. The rise of remote work and contract-based work have become prominent features of the modern professional landscape, offering flexibility and opportunities for both employers and workers. However, as the digital era propels into new frontiers, it is crucial to highlight the challenges that accompany this evolution.

The allure of remote work is undeniable – freedom from the constraints of a traditional office space, the ability to work with clients from anywhere in the world, and the promise of a more balanced work-life dynamic. Yet, beneath the surface of this seemingly idyllic arrangement, there lies a complex tapestry of responsibilities and issues that can impact both workers and employers.

Parties Enter into Employment Agreement

The matter of 2204162 Alberta Ltd. (Skuxs Canada) v Cheng came before the Alberta Labour Relations Board following an appeal by 2204162 ALBERTA LTD., operating as Skuxs Canada (the “appellant”) of a decision made by an Employment Standards Officer directing the company to pay its former employee the sum of $2,098.68 in wages, $81.95 in vacation pay, and $213.06 in fees.

The appellant’s main office was located in Edmonton, Alberta, and it operated additional offices in the United States of America, China, and Pakistan. In its posting for the position, the appellant advertised the following:

“We are currently in need of an IT Support Specialist based in Edmonton, who’s responsibilities include:  The role is a Temporary, Contract-Based Role with possibility for full-time employment upon expiry of the contract.”

Upon hiring the employee (the “respondent”), the parties signed an employment contract, some of the key terms of which are outlined below:

  • The worker would be employed on a 5-week contract as IT Support Specialist from May 4th, 2021 to June 5th, 2021;
  • The 5-week contract is on a probationary period and the contract may be extended at the sole discretion of the Company;
  • The worker would earn a salary of $27.50/hour, paid bi-weekly with monthly performance reviews to be undertaken; and
  • Overtime pay was not available, however hours worked in excess of 40 hours per week were to be banked at a rate of 100% of hours worked and taken as time in lieu of payment.

Worker’s Contract Extended Beyond 5-week Period

After being hired and making connections with the other team members the respondent’s employment continued past the 5-week probationary period, although no written agreement was signed to reflect this extension. While working at the Edmonton office, the respondent worked an 8-hour day from 9:00 a.m. to 5:00 p.m., similar to her co-workers, and was paid based on 40-hours of work per week.

In August 2021, the respondent transitioned to working remotely from Taiwan, which the company was aware of and approved. In order to keep track of worker’s tasks and time, the appellant introduced the application called “Clockify” which was to be completed by employees indicating the tasks worked on and the time spent on the tasks each day. However, the respondent’s compliance with completing Clockify entries was inconsistent and there were instances where the entries were late for payroll purposes.

Employer Views Worker’s Recorded Hours as “Excessive”

Although the Respondent made herself available to colleagues for IT support during the usual office hours, despite a considerable difference in time zones, there was a discrepancy between the entries into Clockify and her actual time spent providing support to the company. As such, the appellant claimed that the respondent was being paid for more hours than were necessary to complete the tasks required of her. For the pay period of September 16-30, 2021, the appellant viewed the respondent’s recorded hours as excessive and paid the respondent for 48 hours of work, despite the respondent recording 88 hours of work.

On October 6, 2021, the respondent was advised that due to a lack of work her employment would be terminated October 8, 2021. The appellant indicated that it found the respondent’s hours recorded for the work described in Clockify “excessive” and the respondent’s compensation should be “based on an as needed basis for which she was to be paid $27.50 per hour.”

In response to this, the respondent indicated that she made herself available to provide services eight hours per day and that her availability was coordinated with her coworkers’ hours. However, neither party was able to provide evidence as to the anticipated time that the work described in Clockify would be expected to take. The appellant also failed to provide justification for the payment of hours which were paid to the respondent.

Employer’s Appeal Dismissed by Labour Relations Board

Since the appellant originally advertised that it was hiring for a full-time position, based on a 40-hour work week, and the employee had previously been paid based on a 40-hour work week, the Alberta Labour Relations Board determined that the respondent’s wages were payable based on a 40-hour week paid at the agreed rate of $27.50 per hour. Although the respondent was working remotely from a different country, the employment contract did not outline different terms for such an arrangement, nor was a revised contract signed following the extension of the initial probationary period. As such, the terms of the previous agreement continued.

Based on the definitions contained in the Employment Standards Code, the respondent was “providing a service to the appellant on the basis of being available to provide technical support eight hours per day and 40 hours per week.” It was acknowledged that while the tasks carried out by the respondent likely did not amount to 8 hours of work per day, she nevertheless made herself available to provide support for which she had been retained to do. As such, the Respondent was entitled to be compensated on an eight hour per day basis.

In accordance with upholding the order issued by the Employment Standards Officer, updated calculations were provided, which required the appellant to pay the respondent $2,145.00 in wages, with vacation pay of $85.80.

A Cautionary Tale About Employment Contracts and Understanding Responsibilities

In this case, the issue arose from a disagreement over what exactly the employee was being hired to do. There was some ambiguity due to the fact that the description in the employment contract between the parties was vague, which was subsequently complicated by the fact that the terms of the contract were substantially changed when the respondent began working remotely without entering into a revised written agreement.

Further, the Employment Standards Code was relied on by the respondent in order to receive wages that were being denied by her employer. The Employment Standards Code applies to most employer-employee relationships across Alberta and establishes certain standards for how employees are to be paid, including entitlement to overtime wages, vacation and holiday pay, and other protections.

This case also illustrates the importance of having a properly drafted employment contract and why employers must be aware of their responsibilities under the Employment Standards Code, otherwise they may become involved in costly litigation.

Contact the Calgary Employment Lawyers at DBB Law for Comprehensive Advice on Employment Contract Matters

DBB Law provides targeted legal advice to businesses and workers regarding various employment law matters, including employment contracts, workplace investigations, and terminations. Whether you are an employer looking to protect your business, or an employee who believes they have been wrongfully dismissed, the experienced employment lawyers at DBB Law can help. Contact our office by phone at 403-265-777 or reach out to us online to schedule a consultation with a member of our team.

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