Alberta employer loses nearly $4,000 over easily preventable HR mistakes

An Alberta company recently found this out the hard way after appealing an employment standards decision.

The company lost on every ground, and ended up costing them almost $4,000 in overtime, back pay, general holiday pay, termination pay and officer’s fees.

In this blog, our experts break down exactly where the employer went wrong, and what every business owner can learn from it. 

The termination that didn’t hold up

The employee worked for the company from January to April 2024, until he was fired for just cause. Firing for cause isn’t against the law, but you need to have airtight documentation, coherent evidence and credible records.

And in this case, the company’s evidence couldn’t support their decision. The Alberta Employment Standards Appeal Board found serious credibility issues with the company’s documentation, and once that fell apart, so did the employer’s entire defense.

🚩 #1: Discipline records that didn’t add up

To back up their firing for cause claim, the employer submitted four written warnings as proof of poor performance.

Ordinarily this is best practice, but in this case the records were deficient because:

• The employee’s name was spelled differently on each document.

• None of the warnings were signed by the employee.

• Two separate documents both claimed to be his “third warning.”

• One warning said he was late at 10:30 a.m. on March 30. But this was contradicted by company safety meeting notes that showed he was in a meeting from 8 AM to 10:30 AM the same day.

• Some parts of the records had the employee’s name and a few other words ‘whited’ out and rewritten after the termination.

What was even more damaging was that the supervisor who allegedly witnessed the employee’s acts of misconduct never testified, even though he still worked for the company.

This proves that documentation by itself isn’t enough when it comes to managing the employment relationship. If your paperwork is inconsistent, or worse, altered, you immediately lose credibility.

🚩 #2: A wage cut without proper notice

Another issue with this case was the company’s application of a pay cut for all shop workers. On March 30, they told staff their pay would go from $30 to $20 per hour and immediately applied the lower rate to a pay period that had already started.

Doing so was a violation of Alberta’s Employment Standards Code, which requires notice before the pay period begins.

The company had to repay the $10/hour difference, creating a ripple effect because overtime calculations were tied to hourly wages.

What started as a simple notice mistake turned into back pay, retroactive corrections and additional overtime liabilities.

🚩 #3: Overtime misclassification

When addressing issues with the employees’ overtime pay, the company argued that the employee was a truck driver and therefore subject to different overtime rules.

After investigations, the tribunal disagreed, noting his duties were entirely within the city so he was covered by standard overtime rules.

This is a great example of how misclassifying employees, even unintentionally, can result in expensive consequences for employers.

🚩 #4: The “Handshake Deal” deduction

The employer claimed there was a verbal agreement with the employee to deduct $60 per day for parking his RV trailer on company property. However, this agreement was never documented or authorized in writing.

In every step of the employment relationship, a handshake agreement isn’t enough. You must document and keep records of every agreement, modification or adjustment to an employee’s contract terms.

And even if there had been documentation, the tribunal made it clear it couldn’t be used as a set-off against amounts owed under the Code.

⚖️The final verdict

Because documentation, notice requirements and compliance steps weren’t handled properly, and there was an overwhelming amount of damning evidence against the employer, the tribunal ordered the company to pay:

• $2,320 overtime

• $190.46 in general holiday pay

• $966.15 in termination pay

• Plus, a 10% officer fee

The real lesson here for employers is that employment issues rarely are a single mistake.

In this case, there was a pattern of inconsistent records, verbal agreements not backed up by documentation, and improper notice.

And when your credibility comes into question, Tribunals look at consistency. Documentation always wins, and if your story doesn’t line up with your paperwork, you’re at a loss.

Could this have been avoided?

Dealing with employment relations issues is not only a drain on your business finances. Court cases take away time and energy that could’ve been better spent running your business and put a damper on team morale, motivation and productivity.

All of this could have been easily avoided if the company had structured documentation, compliant wage change process, proper overtime tracking and written agreements.

In other words, if the company had  proper, compliant systems in place, none of this would have happened.

BrightHR helps small and medium-sized businesses put systems in place before something goes wrong.

Businesses that use HRIS systems designed for small businesses can avoid issues like these entirely.

BrightHR helps employers stay compliant by tracking legislative requirements, documenting wage changes properly, and ensuring pay adjustments are applied to the correct pay period.

Our time tracking tool Blip helps prevent overtime miscalculations and employee management systems ensure all staff aren’t misclassified.

And if you need professionally drafted documents, BrightBase contains digital agreements to ensure special arrangements are properly authorized in writing.

You can also securely store documentation like disciplinary records in the cloud and ensure they’re digitally time-stamped, consistently formatted, securely stored, and electronically signed so there is no risk of altered documents, missing signatures, or conflicting versions.

If you’d like to learn more about how BrightHR supports businesses through our suite of people management tools and services, speak to one of our software specialists today!