A recent decision on a case serves as a reminder to employers to treat overpayments as enforceable debts and comply strictly with deduction rules.
Recently, an Alberta arbitrator ruled that a municipal employee must repay a $27,335.44 wage overpayment, even though the employer violated statutory and collective agreement limits on when it could make payroll deductions.
In The Canadian Union of Public Employees, Local 1505 v Regional Municipality of Wood Buffalo —released Jan. 18, 2026—Arbitrator Mia Norrie found that the Regional Municipality of Wood Buffalo (RMWB) is entitled to recover a one‑time overpayment made to landscape architect Pankaj Harsora, but breached the collective agreement and Alberta’s Employment Standards Code in how it attempted to claw the money back.
The case was heard virtually on Dec. 10, 2025, under the Alberta Grievance Arbitration Awards system.
Overpayment and initial employer response
Harsora, a landscape architect in the Project Management & Facility Services Department, earns an annual salary of $141,414.40 plus benefits with the RMWB. An administrative error in pay period 15 of 2023 resulted in an overpayment of $27,335.44 on a single paycheque.
“There is no dispute about the fact that the monies were paid to the Grievor in error and he was not entitled to them,” Norrie wrote. “The Union has conceded that the amount was received and there was no legal justification for the Grievor receiving these funds.”
The municipality identified the error in January 2024 and, on Jan. 18, 2024, notified CUPE Local 1505 and Harsora by email, outlining repayment options and offering to meet. The meeting was postponed three times in 2024, at the request of the union and the grievor. In August 2024, with no repayment arrangement in place, the employer began unilateral deductions of $555.44 bi‑weekly, later reduced to $277.72 bi‑weekly following a Nov. 15, 2024 meeting.
A recent auditor general’s report into Health P.E.I. found that managers received thousands of dollars in payments that did not meet policy requirements, and that rules governing job reclassification were not followed.
Payroll deductions after 6 months
CUPE Local 1505 filed a grievance on Aug. 13, 2024, arguing that Article 14.13 of the collective agreement and section 12 of the Employment Standards Code strictly limited recovery via payroll deduction to six months from the date of overpayment. Because deductions only began in August 2024—more than six months after the 2023 error and after the employer discovered it in January 2024—the union said the deductions were illegal and the employer had “no recourse” to recover the funds.
The employer conceded that the deductions commenced outside the six‑month time limit and were therefore not permitted under either the collective agreement or section 12. However, it argued that those limits applied only to the use of payroll deductions as a “self‑help” mechanism, not to the underlying debt created by the overpayment.
It relied on principles of unjust enrichment and prior Alberta awards, and asked the arbitrator to authorise continued deductions until the full amount was repaid.
Union’s analysis ‘absurdity’
Norrie accepted the employer’s analysis.
“There is no question that the language of Article 14 of the Collective Agreement and s. 12 of the Employment Standards Code both serve to limit an Employer’s ability to deduct from an employee’s paycheque to within a six‑month period,” she wrote. “This in no way suggests that this time limit somehow eliminates any indebtedness.”
To interpret the provisions as the union proposed “would result in an absurdity,” Norrie found. “This would mean that any employee who simply refuses to meet or agree to a repayment would only have to wait six months and escape their obligation to repay and be entitled to keep the money. This argument offends every consideration of fairness.”
The arbitrator held that the doctrine of unjust enrichment applied: “The Grievor received monies to which he was not entitled and has no legal defence to suggest he should be able to retain it.”
Breach on deductions, but debt still payable
At the same time, Norrie concluded that the RMWB’s deductions—which began on Aug. 9, 2024—were contrary to both the collective agreement and the Code.
“I do however also find that the Employer improperly deducted the monies from the Grievor,” she wrote, noting that the grievor’s refusal to co‑operate “did not entitle [the Employer] to improperly deduct monies from the Grievor’s paycheque.”
Norrie dismissed the union’s grievance but crafted a remedy that both recognises the breach and confirms the employer’s right to recovery. She declared that Harsora received an overpayment of $27,335.44 and that the RMWB is entitled to recover that sum; that the employer breached the collective agreement by failing to pay all wages due when it made the deductions; and that any damages flowing from that breach are offset by the employer’s entitlement to repayment.
The employer is permitted to continue deducting $277.72 bi‑weekly from Harsora’s pay until the full overpayment has been recovered.