Chao vs Gotham Registry

Case Study

[Course title]
 Summary

Gotham agency provides workers to the organization and some regular clients in their peak
days and regular working time frames as well. This case study is about a situation where a
client hospital needed nurse to fill out their work requirement during their peak times of
the year. Gotham agency adopted a policy regarding the overwork of nurses that they must
seek an approval from the agency regarding any overwork in the hospital assigned by them
to the management. They will not involve into any activity of overtime before taking
appropriate approval by the Gotham agency. This policy was being implemented in no true
sense as there were some serious implementation flaws by the Gotham agency so matter
regarding compensation of overtime payments does arise in the court which gives the
historical decision in this regard.

Different arguments were presented by the Gotham agency forcing on a point that they are
not liable for the payment of overtime of nurses due to various factors. They have identified
that they do not have the access to the client’s hospital where they can ensure the working
of extra hours by the nurses. They have also discussed their policy in this regard which
clearly states that any overtime without the approval of the agency will not be liable of the
overtime payments to the employees. They have presented some arguments of different
cases such as Reich vs Department of Conservation as well as Lindow vs United States.

Court ruled out all the arguments of the Gotham agency by making them responsible for the
overtime payments of the nurses with consultation of the hospital management in a way
that they have not enforced their policy accordingly in true spirit. All the previous case
quoted by the agency does not have the same situational circumstances which pointed out
by the court with arguments. On the other hand, court also rules out the legal point that
overtime of nurses is not valid, but the employees are fully responsible to pay it in full.

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 Question No. 01:

What was the legal issue in this case? What did the court decide?

Answer
Gotham Registry was an agency that used to provide the on calling nurses that are required
by different hospitals depending upon their need. They provided a passageway for a
contract between the nurses and the medical institutions. According to Gotham’s policy it
was stated that all the nurses and such professional members that will be deployed in
different hospitals should get a prior and early notification to the agency before having and
serving any overtime there. This was clearly depicted to the employees and it was made
clear that all the wages that are referred to the hours that are included in overtime won’t
fall under the responsibility of the company itself, if the company hasn’t been informed
earlier about it. The nurses sue the agency in the court when there payment of overtime
wasn’t made to them. The court had to decided that whether the agency is accountable and
responsible for the payment of the nurses of the overtime they worked in the hospitals
before the pre-authorization or not. The Gotham Registry gave many different stances to
prove that they are not responsible for the payments. The court decided and gave its
verdict that Gotham is responsible and accountable for the payments of the nurses on
account of that overtime done by them irrespective of the authorization or not.

Question No. 02:

Why did it ultimately not matter that the staffing agency had a policy requiring prior
approval of overtime work? That the agency was not in the workplace and had no
prior notification of the disputed overtime work?

Answer:

According to the Article 67 of the UAE Labour Laws, It was made clear that all the
employees that work and spend overtime in different organizations and institutions must
be given an extra of 25% of remuneration according to the real salary. Gotham Registry

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didn’t give an expansion and increase of the overtime work that would be done by the
nurses. Whereas the trend of the working group was clearly indicating that the trend of
taking an amount from the overtime was being followed. As the Gotham was already being
aware through the notification about the overtime, the agency made the hospitals to give
them extra relief and compensation for the overtime that was done by the nurses. With this
respect the court gave its verdict and considered it as “permitted”. When the argument
itself lies at wrong side then it doesn’t matter that whether the prior notice was given by
the nurses or not. This declined the argument and made the statement itself permitted.
This gave a legal cover to the stance that was adopted by the nurses and hence, the agency
was considered liable for the payments. Gotham Registry should have communicated and
should have talk with the respective hospitals where there nurses were deployed and
should have confirmed that at what time and at what extent the nurses would be working
in the hospital. They should have a full confirmation in this regard. The company must have
maintained a record about the schedule of the nurses that they’ll be following for a week or
a month. This responsibility lies on the behalf of the company which should be entertaining
the nurses at its best. With respect to Article 54 of the Labour Act, it’s clear that the
company is responsible to maintain records regarding work time, overtime and wages. At
this part the Gotham Registry has failed.