Connect

Legal News

Employer Can Stop Paying Overtime in Absence of Estoppel
September 18, 2006

In setting aside an arbitrator’s award, the BC Labour Relations Board recently decided that West Fraser Mills is entitled to discontinue its practice of paying overtime to tradesmen who are on call for shutdowns during break periods.

In the award under review, Arbitrator Steeves concluded that West Fraser had a long standing practice of paying overtime to tradesmen who were on call for shutdowns during break periods although it was not obligated to do so under the collective agreement. He concluded that the employer was estopped from changing its practice because it had made an unequivocal representation that the payments would continue. The employer had made this representation, Arbitrator Steeves said, because it had not paid the overtime by mistake and it had not attempted to address the practice during collective bargaining.

The Board disagreed, ruling that the fact the employer did not pay the overtime by mistake was not sufficient to constitute an unequivocal representation that the payments would continue. The Board found as well that the employer’s failure to address the practice during collective bargaining could not be taken as a representation that the overtime payments would continue indefinitely.

This decision may be useful to employers who wish to reconsider the continued payment of gratuitous benefits not otherwise required under a collective agreement.

West Fraser Mills Ltd. (100 Mile Lumber Division) and United Steelworkers of America, Local No. 1-425 BCLRB No. B199/2006.