Determining who falls under the legal definition of "manager" involves a complex analysis of facts and can affect the outcome of claims with respect to overtime pay entitlements and the right to file a complaint under the Canada Labour Code1. Recently, in Canadian Imperial Bank of Commerce v. Torre2, the Federal Court held that an employee who was a branch manager was not actually a manager at law, but was an employee under the Canada Labour Code. This conclusion meant that that person could file a complaint under the Canada Labour Code, under which only employees (and not managers) can complain of unjust dismissal. Although the outcome in Torre could certainly be challenged, the decision serves as a reminder of the factors that should be considered in determining whether a manager is, in fact, a manager or whether he or she is simply an employee.3 Since the word "manager" is not defined in subsection 167(3) of the Canada Labour Code, case law has enumerated a number of relevant factors to be considered to determine in which cases an employee holds or does not hold a position of manager. The following is a list of the factors and key points to consider which are derived directly from the Torre case:
THE FUNDAMENTAL TEST
1. The fundamental test involves determining whether the person in question has significant autonomy, discretion, and authority in the conduct of the business. It is important to note that there is no need for absolute autonomy and one must always analyze the context, as well as the main tasks, roles and duties of the person. Certain contextual factors will also play an important role, such as the size of the organization, its business activities and the duties of the person in the context of the business activities.
OTHER FACTORS TO CONSIDER: SUBSTANCE OVER FORM...
2. The emphasis is on the nature of the work performed rather than on the title of the position.
3. To be considered a manager at law, one must perform administrative duties rather than simple operational duties.
4. The legal definition of "manager" can include people at the upper or lower end of the management chain, depending again on the degree of independence and autonomy that the person in question may have, and the importance of the management functions. Remember: there is no need for absolute autonomy.
5. To be considered a manager at law, the person must be in a position of control.
A clear distinction typically can be made between a supervisor and a manager; however, that distinction may not always be easy to make in practice. For example, in Torre, the branch manager was found to play more of a supervisory role, as (1) her work was structured and restricted by policies and directives issued by the employer; (2) she was required to consult the employer's labour relations and human resources department before dismissing employees; (3) she did not have decision-making power regarding the budget of her branch; and (4) she neither selected the initial candidates for all hiring interviews nor did she decide on the number of employees required for the branch.
A PERSON IS NOT A MANAGER AT LAW IF...
6. That person is merely a conduit between the employees and a higher body who is the actual decision-maker.
7. That person makes recommendations to a higher body that approves or disapproves his/her recommendations.
A PERSON IS MOST LIKELY A MANAGER AT LAW IF...
8. That person has the power to hire, discipline and dismiss employees, and effectively exercises that power.
9. That person can and does prepare budgets within the organization.
10. That person can vary staff assignments within the organization.
What can an employer conclude from the Torre case and the guidelines offered by it? The answer is simple: a manager by title is not necessarily a manager under the Canada Labour Code. It is quite clear that every situation will be decided on a case-by-case basis. Adjudicators will not stop at job titles or descriptions; the person's actual roles and responsibilities within the organization are important. Ensuring that your managers by title are considered managers at law can be difficult, but the distinction is important in order to avoid the application of the Canada Labour Code to such employees.
Footnotes
1 The Canada Labour Code sets out minimum employment standards, and a unique unjust dismissal regime that applies only to federally regulated employers.
2 2010 FC 105.
3 The test set out in this article pertains only to the factors considered whether an employee is a manager for the purposes of the Canada Labour Code. Other tests will be applied for the purposes of determining managerial status under provincial employment standards legislation.
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