Manitoba Labour Board
Suite 500, 5th Floor - 175 Hargrave Street, Winnipeg, Manitoba, Canada R3C 3R8
T 204 945-2089 F 204 945-1296
www.manitoba.ca/labour/labbrd
Case No. 70/15/ESC
File No. 118018
IN THE MATTER OF: THE EMPLOYMENT STANDARDS CODE
BETWEEN:
6300154 MANITOBA LTD.,
Employer,
- and D.P.,
Employee.
BEFORE:
K. L. Gibson, Vice-Chairperson
J. Witiuk, Board Member
R. Stecy, Board Member
This Decision/Order has been edited to protect the personal
information of individuals by removing personal identifiers.
SUBSTANTIVE ORDER
WHEREAS:
1.
On February 11, 2015, pursuant to section 95 of The Employment Standards Code
(“the Code”), the Director of the Employment Standards Division (“the Director”)
dismissed the complaint of the Employee for overtime, vacation wages and general
holiday wages (“the Order”).
2.
The Employee disputed the Order by way of correspondence submitted to the Director on
February 13, 2015. The Director referred the matter to the Manitoba Labour Board
(“the Board”) pursuant to section 110 of the Code.
3.
The Employee appealed the Order on the basis that as a result of being removed from his
managerial position by the Employer, the employment contract which stipulated an
annual salary for up to fifty (50) hours of work per week was no longer valid and
accordingly he is entitled to overtime for any hours worked beyond eight (8) in a day or
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forty (40) in a week. The Employee also disputed that he had been compensated for all
vacation wages owing for 2013, and for the period he worked in 2014.
4.
The Employer’s position was that the Employee remained a manager throughout his
tenure with the Employer and that alternatively the employment contract remained valid
and the annual salary provided for payment for all hours up to fifty (50) per week. The
Employer was of the view that the Employee had been compensated for all vacation
wages owing.
5.
On June 1, 2015, the Board conducted a hearing at which both parties appeared before
the Board and presented evidence and argument. The Employee was represented by a
representative.
6.
In addressing the issues before it, the Board had regard to the following statutory
provisions and principles:
a.
Pursuant to Section 2(4) of the Code, an employer is exempt from having to pay
overtime to certain employees. That section provides:
Exemption – standard hours of work and overtime
2(4) Division 2 (standard hours of work) and Division 3 (overtime) of Part 2 do
not apply to any of the following:
(a)
(b)
an employee who performs management functions primarily;
an employee who has substantial control over his or her hours of work and
whose annual regular wage is at least two times the Manitoba industrial
average wage, as defined by regulation.
b.
Section 2(4) of the Code has been interpreted and applied by the Board in Re
Legacy Hotels Corporation (c.o.b. Fairmont Winnipeg), [2008] M.L.B.D. No. 27
(“Legacy Hotels”).
c.
In Legacy Hotels the Board outlined the applicable principles at paragraphs 47
and 48. These are:
1.
The onus of proof lies with the party seeking to rely upon the Code’s
managerial exemption;
2.
Job titles and job descriptions may not accurately reflect an employee’s
true duties and responsibilities. The focus of the Board must be on what
the employee actually does;
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3.
Mere supervision of other employees is not determinative of managerial
status and the Board has consistently refused to conclude that individuals,
often referred to as “front line supervisors”, who merely coordinate, direct
and supervise the work of other employees with lesser experience, skill,
expertise or education, thereby perform management functions primarily;
4.
The importance of any alleged managerial functions performed as well as
the frequency with which the functions are performed ought to be
considered;
5.
Some managerial functions, for example, the power to hire and fire
employees, are considered to be of great importance, while other functions
like the imposition of minor admonitory discipline, authorization of leaves
and the conduct of performance appraisals are viewed as being relatively
less significant;
6.
The managerial exemption only applies where an employee performs
management functions primarily, and consequently the occasional
performance of some management functions does not itself justify the
exemption;
7.
Rather than focusing on the performance of one or two functions
traditionally associated with management authority in isolation, the broad
spectrum of duties and the degree to which they are performed should be
considered;
8.
Functions that are performed within the strict predetermined parameters
with little or no discretion are not ordinarily indicative of managerial
status, as opposed to functions performed with a high degree of
independent decision making authority;
9.
The degree to which an employee spends a substantial amount of time
performing the same duties as their non-managerial subordinates is a
factor to be considered in determining whether the employee performs
management functions primarily; and
10.
The ability to exercise independent decision-making authority so as to
exert substantial control over the economic lives of his or her subordinates
is an important indication that an employee performs management
functions.
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7.
Page 4
The Board, following consideration of material filed, evidence and argument presented
has determined that the following findings of fact are relevant to the disposition of this
appeal:
a.
The Employee was promoted by the Employer from a line cook to Kitchen
Manager at the Employer’s Sherbrook Street restaurant on November 19, 2012
pursuant to a written contract of employment. That contract provided an annual
salary of $38,000.00, which increased to $40,000.00 after a three month
probationary period. That annual salary was expressed to be based on an
expectation of a fifty (50) hour work week.
b.
The employment contract did not identify an hourly rate of pay associated with
the annual salary, however the Employee was told by his manager at the time he
entered into the November 2012 contract that his equivalent hourly rate was
$20.00 per hour. Using a standard work year of 2080 hours, the annual salary can
be expressed as an hourly rate of $19.53 per hour for purposes of calculation of
any amounts owing to the Employee.
c.
The employment contract does not directly speak to vacation entitlement or
vacation pay.
d.
As Kitchen Manager the Employee was expected to and did perform management
functions, such as hiring, discipline, employee evaluations, granting of wage
increases and authorization of overtime. The Employee also did ordering,
established budgets and attended management meetings.
e.
In mid-September of 2013 the Employee was the subject of a respectful
workplace complaint from a co-worker. As a result of this complaint and other
concerns the Employee was removed from his position as Kitchen Manager
effective September 15, 2013. Approximately ten (10) days later, the Employee
was transferred to the Employer’s Production Kitchen facility. There was no
interruption in or change to the Employee’s earnings or benefits as a result of the
transfer and no discussion between the parties about the employment contract or
expectations with respect to hours or remuneration.
f.
During his tenure at the Production Kitchen the Employee functioned as a
working supervisor and did not perform management functions. His working
hours were somewhat flexible but remained similar in magnitude to what they had
been when in the Kitchen Manager position. Spreadsheets containing the number
of hours worked by the Employee were provided to the Board by the Employee
and not disputed by either party for the purposes of the hearing.
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8.
Page 5
g.
The Employee resigned effective February 25, 2014. He was paid the amount of
$615.40 for vacation pay on his final paycheque and a further amount of $512.57
for vacation pay as a result of his complaint to Employment Standards.
h.
The Employee took two (2) days of vacation during the period of time from
January of 2013 until his resignation in 2014.
In the context of the material facts recited above, the Board has DETERMINED the
following:
a.
The onus is on the Employer to establish through evidence that a claimed
exemption to the Code is applicable to the facts before the Board in each
particular case, here the exemption in section 2(4). The Employer did not prove
on the balance of probabilities that the Employee was performing management
functions primarily after his transfer to the Production Kitchen in September of
2013. Accordingly, the hours of work provisions of the Code are applicable to the
Employee and in the absence of a contract dealing with hours of work and
payment of overtime, the Employee would be entitled to overtime for any hours
worked over eight (8) in a day or forty (40) in a week.
b.
An Employer is permitted to negotiate an employment contract which reflects a
monthly or yearly salary that is inclusive of the regular hours of work (40 per
week) and a certain number of overtime hours as long as the contract is clear. In
such cases, as long as the hours worked do not exceed the number of total regular
plus overtime hours expressly included in the salary, there can be no successful
overtime claim under the Code, or under the contract itself. The November 2012
contract between the Employer and the Employee is of this nature.
c.
Although the Employee’s duties and responsibilities were diminished when he
was demoted from Kitchen Manager to working supervisor, he continued to be
remunerated in accordance with the November 2012 contract. If the Employee
had disputed the demotion his option would have been to resign at that point and
claim constructive dismissal based on the employment contract having been
violated by the Employer. Having de facto accepted the demotion by continuing
to work in the Production Kitchen for more than six months, he cannot be in a
more favourable position with respect to the terms of the contract than if he had
claimed constructive dismissal. Accordingly, the salary of $40,000.00 per annum
for work up to fifty (50) hours per week remained in effect after the demotion and
until the Employee’s resignation in February of 2014.
d.
As a result, the Employee is entitled to overtime payment for any hours worked in
excess of fifty in a week. This is a total of sixteen (16) hours as set out on the
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spreadsheets and results in a payment owing of $461.52 as reflected on the
attached Statement of Adjustment.
e.
As the Employee was working under a contract which was inclusive of up to fifty
(50) hours per week, he is not entitled to any additional monies for a general
holiday.
f.
The Employee is entitled to vacation pay at four percent (4%) on all regular
wages earned between January 1, 2013 and February 25, 2014. As shown on the
Statement of Adjustment that is a total of $1,846.15. As the Employer has
already paid two amounts on account of vacation pay ($615.40 and $512.57), and
the Employee took two (2) days of paid vacation during this time period, the
amount owing for vacation pay is $410.50.
g.
The total amount owing to the Employee is therefore $872.02, as set out in the
attached Statement of Adjustment.
h.
The Employee’s appeal is therefore allowed and the Order of the Employment
Standards Division is revoked.
THEREFORE
The Manitoba Labour Board HEREBY ORDERS 6300154 MANITOBA LTD. to pay to the
Director of the Employment Standards Division forthwith:
WAGES:
The amount of Eight Hundred Seventy-Two Dollars and Two Cents ($872.02), less statutory
deductions, being wages owing to the Employee, D.P.
ADMINISTRATIVE FEE:
An Administrative Fee in the amount of One Hundred Dollars ($100.00) pursuant to
Section 96(1) of The Employment Standards Code.
TOTAL:
The total amount being Nine Hundred Seventy-Two Dollars and Two Cents ($972.02).
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DATED at WINNIPEG, Manitoba, this 30th of July, 2015 and signed on behalf of the Manitoba
Labour Board by:
“Original signed by”
K. L. Gibson, Vice-Chairperson
“Original signed by”
J. Witiuk, Board Member
“Original signed by”
R. Stecy, Board Member
CJ:tj:lo-s
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Case No. 70/15/ESC
File No. 118018
Page 8
STATEMENT OF ADJUSTMENT
Case No. 70/15/ESC
Employer:
6300154 Manitoba Ltd.
Employee:
D.P.
Rate of Pay:
$19.23 per hour ($40,000 per year ÷ 2,080 hours per year)
EMPLOYEE ISSUES INVESTIGATED:
Overtime Wages:
16 hours x 19.23 per hour x 1.5 ............................................................... $461.52
Vacation Wages: (4% of gross regular earnings taken from the two ROE’s)
2013 & 2014 Earnings taken from the two ROE’s for the
Pay periods ending from Jan. 6, 2013 to March 2, 2014 ..... $46,769.22
2013 & 2014 Earnings less vacation already paid by the
Employer on the March 7, 2014 Statement of Earnings (x 4%)
$46,769.22 - $615.40 = $46,153.82
$46,153.82 x 4% ................................................................................. $1,846.15
LESS Vacation Wages paid by the Employer
- Vac. wages paid on the Mar. 7/14 Statement of Earnings .... $615.40
- Vac. Wages paid – see Reasons for Decision........................ $512.57
- 2 Vac. Days taken in 2013
2 days (or 16 hours) x $19.23 per hour ............................ $307.68
Sub Total of Vacation Wages paid by the Employer .................. $1,435.65
Total Vacation Wages Owing .................................................................... $410.50
Determination: Total Amount Owing to the Employee ................................. $872.02
“Original signed by”
Charlene Jones, BOARD OFFICER
Note: An Administrative Fee of $100 or 10% of the total amount owing, whichever is greater,
up to a maximum of $1,000 will be charged on all Orders issued
/cj/lo-s