New CIRB Decision Comments on Manager Exception to Unjust Dismissal

Definition of Constructive Dismissal

The Canadian Industrial Relations Board has released new decisions concerning the “managerial exception” found in section 167(3) of the Canada Labour Code – a provision which excludes “Managers” from the Code’s unjust dismissal regime. This decision follows the Board’s decision in Saunders v WestJet, which was the focus of an earlier blog post concerning the managerial exception.

This blog post will discuss one of the Board’s recent decisions: Jerry Peter v Ditidaht First Nation.

Background Facts

Mr. Peter worked as a housing manager with the Ditidaht First Nation, his employer. He had been in this position since October, 2007, and was terminated on July 18, 2019. On October 7, 2019, Mr. Peter filed a complaint of unjust dismissal. In response, his employer raised a preliminary objection: Mr. Peter was a manager, and therefore was prohibited from making this unjust dismissal complaint.

The Board was therefore tasked with determining whether or not Mr. Peter was a manager under the Code. Ultimately, they decided he was not a manager within the meaning of section 167(3) of the Code. How did they reach this decision?

Managerial Status and Unjust Dismissal

Section 167(3) of the Code provides: “Division XIV does not apply to or in respect of employees who are managers.” Division XIV contains the provisions dealing with unjust dismissals, and therefore employees who are managers are excluded from the unjust dismissal regime and cannot bring such complaints. However, the issue is that the word “manager” is not defined by the Code. The Board must interpret the meaning of the word based on jurisprudence. Fortunately, the Board already has interpreted the word “manager”: they did so in their Saunders decision.  In Saunders, the Board noted that a narrow interpretation of the managerial exclusion reflected Parliament’s intent and objective to exclude as few people as possible from the Code’s protection. They noted further that, generally speaking, the term “manager” is defined as an individual who is an administrator having the power of independent action, autonomy and discretion.

Was Mr. Peter a Manager?

With this interpretation in mind, the Board analyzed Mr. Peter’s role within his employer’s organization, looking specifically at the nature of the work and duties performed by Mr. Peter, rather than at his position title or rank. Although Mr. Peter worked as a housing “manager”, this is far from determinative.

Mr. Peter’s responsibilities and duties included, among other things:

  • assisting with manual labour;
  • working with the head contractor for maintenance and repairs;
  • providing contractors for maintenance and construction;
  • assessing and reporting on the conditions of the properties;
  • identifying and prioritizing maintenance and repair work; and
  • accounting and bookkeeping duties, such as authorizing purchase orders, monitoring accounts payable/receivable and replacing reserve funds.

The employer also argued that Mr. Peter had final decision-making authority regarding hiring, firing, disciplining and promoting employees. He had signing authority to enter into employment contracts. He was responsible for preparing budgets. It was therefore clear to the Board that Mr. Peter did have some administrative authority. However, the question is not whether there was an administrative component to his role, but whether or not he exercised the degree of independent action, autonomy and discretion necessary to be a manager under the Code.

In Saunders, the Board held that a manager under the Code must exercise a significant degree of autonomy and discretion in decision making regarding matters of policy and overall direction (i.e., not routine issues). This involves having the authority to do more than just make recommendations.

In deciding whether Mr. Peter was a manager, the Board must look at the totality of the evidence. Yes, Mr. Peter had employees reporting to him. He had the authority to hire and fire employees, to discipline and to approve leaves of absence.  He prepared the budget for the housing department. Nevertheless, a “substantial proportion” of his duties were operational tasks related to the maintenance, repair and rentals of the employer’s housing. These tasks cannot be said to be administrative.

Although Mr. Peter clearly had some managerial duties, the Board did not believe he exercised the “significant authority, independence and discretion in his functions that is required in order to be considered a manager under section 167(3) of the Code.” Therefore, the employer’s preliminary objection to the Board’s jurisdiction was dismissed.

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