Two recent decisions in the Alberta Courts have defined the
limit for the enforcement of the Employment Standards Code on
employers who carry on business operations outside the Province of
The employers in these cases were Neft Services Ltd. and Flint
Canada Inc. Both had their head offices in Calgary and hired
employees to work as construction workers abroad. Their contracts
of employment provided for 28 consecutive days' rotation at the
worksites, followed by 28 consecutive days' off in Canada, with
transportation back and forth at the expense of the companies. The
employees, many or all of whom were residents of other provinces,
were paid a flat rate of pay per diem, plus an allowance of 30% of
base salary as a remote workplace allowance, plus reasonable
accommodation and meals. There was no provision in the contracts of
employment for general holiday pay or vacation pay.
Nevertheless, several employees of Neft and Flint claimed that
they were entitled to vacation pay and general holiday pay under
the Employment Standards Code. In both cases, the Umpire, who is
the person authorized under the Employment Standards Code to
consider the complaint, ruled that the employees were entitled to
On further review by the Courts, the Umpire's decision was
upheld for the Neft employees because their contracts of employment
contained a clause which specifically provided for the application
of Alberta laws to them:
"This contract shall be construed and enforced in
accordance with and governed by the laws or the Province of
Alberta. Each of the parties here to irrevocably attorns to the
jurisdiction of the courts of the Province of Alberta and agrees
that those courts shall have exclusive jurisdiction over any action
or proceedings taken respecting this agreement".
Therefore, the Employment Standards Code was an Alberta law
which applied to the Neft employees.
There was no such clause in the Flint contract of employment. As
a result, in the case of the Flint employees, the Court reversed
the decision of the Umpire and denied their claim. The Court
decided that the Flint employees were not engaged in Alberta
employment, despite the fact that
Flint had its head office in Alberta and
Calgary was the point of departure and return for their
rotations. He found no reason 2. to lay down a principle that
hiring is deemed to take place where the employer is resident. The
Employment Standards Code cannot confer rights or establish a
procedure for obtaining them in an extra-provincial employment
context absent an express provision that Alberta law applies.
In summary, a well-drafted clause in an employment contract
expressly specifying that Alberta laws will apply to the contract,
carries the advantage for both employer and employee of clarifying
where any disputes involving legal process must be resolved.
It also involves the risk for employers that non-contractual
entitlements will be available pursuant to the Employment Standards
Code to employees engaged by Alberta employers to work out of the
province, even if they have no other real connection to Alberta
except for their employer's location.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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