Dispute over manager status goes off the rails

This edition of You Make the Call involves a dispute over a dismissed railway company employee’s status as a manager and entitlement to make an unjust dismissal claim under the Canada Labour Code.

Steven Johnston was a supervisor of facility management (FM) for Canadian National Railway (CN), a railroad and trucking company carrying freight across Canada and the U.S. with about 25,000 employees. He was promoted into the position from a unionized electrician job. The FM supervisor position was a grade 9 position on a 12-level ascending scale and was the first level of “out-of-scope” (excluded from the collective bargaining unit) positions. Its job description indicated it was a lower-level management position with employees who report to it, while the position itself reported to a higher-level manager.

As an FM supervisor, Johnston was responsible for the repair and maintenance of all the buildings and the yard in his territory, scheduling, safety and supervision of six employees, planning of activities in the yards, supervising work by external contractors, approving overtime, dealing with maintenance requests, interacting with senior management, managing his cost centre budget and making business cases to hire new employees. He also could investigate and discipline employees for misconduct. If he wanted to discharge an employee, he could consult CNR’s labour relations department and could terminate “as long as there weren’t obvious reasons why he shouldn’t,” according to Johnston’s boss, the manager of facility maintenance for CNR’s Western Region.

The FM supervisor position was paid by salary — unionized employees were paid hourly — and was subject to a total compensation portfolio given to all management employees.

CN terminated Johnston’s employment on June 26, 2018. He filed an unjust dismissal complaint, arguing that he didn’t have true power to act independently as most things he did required approval from higher up. CN filed a preliminary objection, countering that his role involved making decisions and managing employees and facilities, so he wasn’t entitled to make such a complaint under the code, which didn’t apply to employees who were managers.

You Make the Call
Was Johnston a manager?
OR
Was he an employee entitled to claim unjust dismissal?

If you said Johnston was an employee and was entitled to file a claim for unjust dismissal, you’re right. The adjudicator noted that there are factors established in past jurisprudence to determine who was a manager. The guidelines to consider are:

• The authority to make final decisions in matters of consequence to the employer
• The power to act independently and autonomously on their own discretion
• The employee’s actual duties are more important than their job title
• The power to actually formulate company policy in important matters
• The power to hire, fire and discipline subordinate employees
• People who supervise other staff are not managers without other elements of authority
• The power to spend the employer’s money for services
• The size and structure of the organization

The adjudicator found that CN is a large company with many employees and a complex structure —there were 12 levels of management, of which Johnston was the fourth-lowest at grade 9. In addition, the FM supervisor position was the first “out-of-scope” position, meaning there were no supervisory employees between it and the unionized employees he supervised. This suggested the position was “more operational than administrative,” said the adjudicator.

The adjudicator also found that CN used the word “management” for all out-of-scope employees, so neither that nor the fact Johnston received the complete compensation package were a good indication of management responsibilities. The job description indicated that a large chunk of responsibilities involved co-ordinating projects, performing maintenance and interacting with senior management —also hinting at the operational focus of the FM supervisor position, as this involved responding to requests and getting approval from upper management

There was no evidence that Johnston had the autonomy to make final decisions of any consequence — instead, he made sure things were organized and moving along, the adjudicator said. Although he could discipline employees and suggest possible hires and fires, he couldn’t do any of it without approval.

The adjudicator added that, while Johnston oversaw overtime, vacations and time entries, these were controlled by the collective agreement and were more supervisory than managerial responsibilities.

“Johnston’s work… was independent in the sense that when he was asked to do something he didn’t have someone standing over his shoulder while he obtained quotes and put together business cases, but he was not independent in the sense contemplated by the case law as indicia of an independent management decision-maker,” said the adjudicator.

The adjudicator found that Johnston was not a manager but was more of a “first level out-of-scope supervisor.” CN’s application was dismissed and Johnston’s unjust dismissal claim was allowed to proceed.

For more information, see:

• Johnston and Canadian National Railway, Re, 2020 CarswellNat 1097 (Can. Lab. Code Adj.).