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EMPLOYMENT LAW
Jan 13, 2014

By any other name

Managers can be expected to pull extra duty sometimes without extra pay – if they’re actually a manager
    

By Jeffrey R. Smith

Most jobs have specific duties and employees know what is expected of them — responsibilities, assignments, hours of work — but these can sometimes change in the short-term.

It could be a shortage of resources, an uptick in work to be done or maybe it’s an industry that has ebbs and flows in work. When a change in the amount of hours needed to work to get the job done comes along, employers must be aware of their legal obligations.

In every Canadian jurisdiction, employment standards legislation specifies what is permissible when employees are required to work more hours. There is a maximum number of hours per week for employees to work — 44 hours in Ontario, for example — after which employees must be paid extra. Generally, overtime hours are paid at 1.5 times the normal hourly rate or, if the employee agrees, she can take 1.5 hours of time off for each overtime hour worked. If an employee works uneven hours from week to week, the hours can be averaged out over a couple of weeks to determine if she’s working extra hours.

There are certain jobs that are exempted from the overtime pay requirement — jobs that often require longer hours and are compensated accordingly, for example — as well as employees with managerial responsibilities. However, when it comes to managers, it’s not the job title that determines overtime exemption, but rather the reality of their circumstances.

Sometimes employers try to get out of paying overtime pay to certain employees by giving them a manager title. But this doesn’t fly if those employees don’t actually have managerial duties — or spend at least one-half their time on non-managerial duties. An example of this (1484174 Alberta Ltd. and Coles, Re, 2013 CarswellNat 4313 (Can. Labour Code Adj.)) happened with an Alberta courier company, which ended up having to pay a dismissed employee more than $10,000 extra in overtime pay, which it failed to pay him because it said he was a manager.

The employee was a dispatcher and sales representative who spent most of his time assigning calls to the company’s independent drivers. He worked about 50 hours per week, but the employer told him his pay was “all-inclusive” when he was hired. The employer argued he supervised and assigned work to the drivers, so it considered him a manager.

However, an employment standards officer and, after the employer appealed, an adjudicator found the employee worked within the assignment parameters the employer established and had no real power over hiring and firing or the pay structure. He was instructed to bring any important issues to the owners, who would make the final decisions. He didn’t run the business on his own and the type of decisions he could make were restricted by the employer. Though the employer called him a managerial employee, the truth was he didn’t have real managerial power, said the adjudicator.

A managerial employee generally has some power to make important decisions on her own and supervises some employees and their work. If this isn’t the case, it may not matter if “manager” is on her door. Overtime pay isn’t required for managerial work, but the employer better make sure that extra work is actually managerial work.

Jeffrey R. Smith is the editor of Canadian Employment Law Today, a publication that looks at workplace law from a business perspective. He can be reached at jeffrey.r.smith@thomsonreuters.com or visit www.employmentlawtoday.com for more information.

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