Arbitrator can’t hear manager’s wrongful dismissal claim under <i>Canada Labour Code</i>

Todd v. Consolidated Fastfrate Inc., (2004), 2004 CarswellNat 3252, 34 C.C.E.L. (3d) 310 (Can. Adjud. app. under Can. Lab. Code). Danny Todd was the operations manager for Consolidated Fastfrate Inc., a warehousing and trucking operation in Calgary.

In early 2003 the Calgary branch manager was advised that Todd had approved up to $30,000 in overtime pay to a union mechanic who never punched in and out of the shop. There had not been any adequate efforts to ensure the mechanic had actually worked the hours.

Todd said he met with the branch manager, who told him he could not go unpunished and effective immediately he was going to be demoted to an operations coordinator. Todd said he told the manager he would, “have to think about it and decide whether I can do this,” and did not tell the branch manager it was fine to sign him up in the co-ordinator position.

The next day he visited his physician who took him off work for stress and depression. The physician recommended he take a month off work. In the next few days Todd met with and e-mailed the branch manager to talk about the situation. He asked for a description of all the duties he would be performing and whether his salary would remain the same.

Todd received an e-mail response to those questions but with no confirmation of the salary. The e-mail asked Todd to, “please review this and get back to me.”

Todd replied that, “I am not fit to return to work at this time. Hopefully within one month I will be able to return.”

Two days later Todd was terminated on the basis he had not exercised due diligence and skill in the performance of his duties as operations manager.

He filed a grievance under the Canada Labour Code; but Consolidated Fastfrate applied for a declaration that the adjudicator had no jurisdiction to hear the matter, as Todd was a managerial level employee at the time of his dismissal.

Section 167(3) of the code states that its unjust dismissal provisions do not apply to or in respect of employees who are managers.

The adjudicator hearing the declaration application noted there was no doubt Todd was a manager before the issue came to a head – the issue was what was Todd’s position at the material time of his termination.

The company claimed the demotion constituted only a proposal because there had been no clear acceptance. Since Todd never consented to the demotion, he must be considered to have still retained his dispatch manager’s position, it argued.

Todd said he had no doubt in his mind he had been demoted at the first meeting — though he needed some time to consider the offer, he did not think it was in anyone’s mind that he would not be taking the job and he went on sick leave with the intention of returning in the demoted position when able to do so.

The adjudicator ruled in the company’s favour. The parties had never moved beyond the proposed demotion and Todd’s response to it was to say he would be considering his options before accepting it, it ruled. This acceptance was never forthcoming in followup communication between them. Thus the demotion never crystallized since Todd never accepted it by word or by deed.

The adjudicator ruled itself without jurisdiction to consider the matter, and that Todd would need to pursue a remedy, if he chose to do so, in another forum.

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