In Patel v Build Rite Homes Ltd., 2026 ABESAB 8, the Alberta Labour Relations Board, acting as AB Employment Standards Appeal Body (“ABESAB”) found that a worker was an employee (not a contractor) and was owed substantial compensation for unpaid hours, overtime, vacation pay and holiday pay under the Employment Standards Code.
This case should serve as an important lesson for employers in keeping records of hours worked by their workers, whether they think the workers will end up being considered contractors or employees.
Facts
The following were some of the pertinent facts found by the ABESAB:
- Vatsal Patel worked for Build Rite Homes Ltd.
- Patel is an immigrant. Build Rite had obtained a Labour Market Impact Assessment (LMIA) which allowed Mr. Patel to come to Canada as an “Office Administrator” for them
- He worked for them for about a year. He was doing admin work, cleaning, collecting rent, and some other labour work
- Patel eventually quit. He made an employment standards complaint, alleging he was underpaid hours and did not receive overtime or vacation pay
- The ESC complaint was partially successful, but the officer’s calculation of his hours was significantly lower than he claimed for. He appealed to the ABESAB (the summary you are reading)
- Build Rite considered Mr. Patel to be an employee for the first few working months, but said he was a subcontractor after that. As a result, they did not keep a record of hours worked for the period relevant to the complaint (last 6 months employment). They also did not keep a record of tasks assigned to him. At the hearing, they produced a record of hours they claimed Mr. Patel worked, which was created from memory, records of activity on jobsites, and assumptions about how long certain jobs would normally take
- Patel produced a handwritten record of hours, which he had constructed partially from memory, partly from photographs he had taken at worksites, and partly from WhatsApp messages between himself and the owner. He had never provided the record to Build Rite while working for them. He also had another worker as corroborating witness for the hours on a particularly big job they did together
- Patel’s hours calculation was significantly higher than Build Rite’s
- There was evidence in messages of Mr. Patel asking for more money several times, and Build Rite indicating it would try to get him more
- There was evidence of Mr. Patel asking repeatedly for his T4. Build Rite indicated it was coming at one point, but Mr. Patel kept asking for it for some time after this. Build Rite claimed in the hearing that it had provided him with a T4 at a point that was prior to several of these messages from Mr. Patel requesting the T4. Patel claimed in the hearing he had never received his T4
- At the hearing, Build Rite alleged Mr. Patel was a subcontractor who was only entitled to piecework. Alternatively, Build Rite alleged Mr. Patel had already been paid for hours worked
Analysis / Conclusion
Vice Chair Armstrong noted that credibility was a central issue in this case, because the evidence of the employer and employee were so different on important factual issues. Ultimately, the Vice Chair found that where evidence between the employee and employer conflicted, he was accepting the evidence of the employee. He did this based on examples of where the employer’s evidence was not “in accordance with the preponderance of probabilities”:
- One of the employer owners’ evidence was that Mr. Patel was provided a T4. However, Mr. Patel kept asking for it after that and the employer did not say “you already received it” or “its coming” after that point, which made the employer’s evidence not credible
- The other employer owners’ evidence was that they had a CPHR designation and had knowledge of the steps an employer should take when employment ends. However, they did not issue a Record of Employment (ROE) when Mr. Patel allegedly switched from employee to subcontractor. Their explanation for not issuing this was that Mr. Patel might need time to switch to an open work permit, but did not explain why this would interfere with issuing an ROE.
The Vice Chair concluded that Mr. Patel was an employee and not a subcontractor. Some of the key factors suggesting an employment relationship included that Mr. Patel called in sick on several occasions, did not have his own tools, did not hire helpers, did not have financial risk or opportunity to profit.
The ABESAB determined that Mr. Patel’s holiday pay and vacation pay were to be calculated based on the normal rules for most of his employment, but based on “construction employee” rules for a period of about 3 months when he was engaged “primarily in construction”. The ABESAB cited Tips Staffing v Irish, 2023 CanLII 67896 (AB ESAB) as authority for interpreting the definition of “construction employee” in Section 44 of the ESC Regulations.
The ABESAB concluded that the wages, overtime and vacation pay owed to Mr. Patel were to be calculated based solely on records Mr. Patel provided. The overall damages calculation was not included in the decision, but it was clearly a substantial success for Mr. Patel.
My Take
This decision should serve as a fairly harsh lesson for employers throughout Alberta. Failure to keep contemporaneous records of hours worked by employees can lead to serious financial consequences.
I would also point out something about the importance of honesty for witnesses. Adjudicators faced with different versions of events are sometimes forced to choose one party as being more credible than the other. Some disputed evidence can be chalked up to different perspectives or incomplete knowledge. Also, losing on some piecemeal credibility contests will not necessarily result in a lost case. However, a general finding that you lack credibility is devastating to any defence. Adjudicators often avoid making a general finding to cover all disputed evidence, but where any evidence appears to be blatantly dishonest it can effectively discredit all other disputed evidence. This will usually result in a loss.
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