Managerial employee gets overtime pay, Canadian Employment Law Today, Issue No. 553 (March 27, 2010)

In Ontario, an employer’s statutory obligation to pay for overtime is triggered when an employee works more than 44 hours in a week. The right to overtime pay applies to all employees except those whose “work is supervisory or managerial in character and who may perform non-supervisory or non-managerial tasks on an irregular or exceptional basis,” according to employment standards legislation. The overtime exemption for managers may be applicable even if an employee is not exclusively performing managerial or supervisory work. However, section 22(9) of the Ontario Employment Standards Act, 2000 (ESA), does allow overtime to be paid to managerial employees who find themselves in a situation where they spend 50 per cent or more of their time during a work week performing non-managerial tasks, but this provision hasn’t come into play until just recently.

In Glendale Golf and Country Club Limited. v. Sanago and Director of Employment Standards, Massimo Sanago was employed as an executive chef. The fundamental character of his position was managerial, but a short-staffed kitchen required him to perform non-managerial duties such as line cooking. Ontario legislation considers non-managerial tasks performed by managerial employees to be performed for the employer, regardless of whether the employer requested or permitted it. Since Sanago was a managerial employee who was forced to perform non-managerial tasks, the Ontario Labour Relations Board had to determine whether those tasks were performed on an “irregular” or “exceptional” basis.

The evidence established that, over a period of two months, Sanago spent 55 per cent of all hours worked performing non-managerial line cooking duties. Since this crisis in the kitchen — brought on by quitting or firings of about one-half of the kitchen staff — lasted for two months before a state of normalcy returned, the board found it was “out of the ordinary” circumstances and an “exceptional” event. Normally, Sanago’s claim for overtime would have been denied, but the board determined that, despite his position, Sanago was entitled to overtime pay for those weeks where he spent more than one-half of his time performing non-managerial tasks.

Having acknowledged there were no prior decisions that have interpreted section 22(9) of the ESA, the board presented the parties with an opportunity to provide submissions with respect to its applicability. Both the employer and the Ministry of Labour claimed section 22(9) of the ESA did not apply to Sanago. The country club argued the executive chef position was 100 per cent managerial and, as such, Sanago was not requested to perform duties of any other kind. The ministry argued the executive chef position did not qualify for the overtime exemption, so there was no work performed that was exempt from the overtime provisions.

Short-staffing caused exceptional event

However, the board concluded there was no basis, statutory or otherwise, to support an interpretation that would exclude the managerial/supervisory exemption under section 22(9) of the ESA. The board compared the managerial employee status to an employee who works for a taxi company both as a cab driver and as a dispatcher. Working as a cab driver, the employee would be exempt from overtime, but working in the office as a dispatcher, the employee would not be. If the employee worked more than 50 per cent of the work week as a dispatcher, she would be entitled to overtime pay for all hours worked in excess of the statutory threshold of 44 hours. There are many jobs exempt from the overtime provisions, including that of executive chef, whose work is supervisory or managerial in character but may involve non-supervisory or non-managerial tasks on an irregular or exceptional basis. The board saw no reason to distinguish the overtime exemption for a managerial/supervisory person from other exempt jobs.

Glendale is of importance to both managerial employees and employers, albeit for different reasons:

1. It clarifies that if a particular job falls within the managerial exemption and the duties of that employee’s job require her to perform non-managerial tasks, section 22(9) of the ESA applies and the employee is entitled to overtime pay for work performed in a work week, so long as the non-managerial work in that work week takes up 50 per cent or more of the time the employee spent working.
2. It explains that if an employee is employed in a position that qualifies for the managerial exemption but who spends 50 per cent or more of her time during a work week performing the non-exempt work on an irregular or exception basis, section 22(9) will apply.
3. It suggests that managerial/supervisory employees might want to document hours worked performing non-managerial tasks in order to substantiate a claim for the overtime pay.

For employers:

1. It advises employers that once they become aware their managerial/supervisory employees are engaged in non-managerial tasks they should promptly advise them, in writing, to stop performing such tasks, if the employers wish to avoid claims for overtime.
2. It indicates that it would be prudent for employers to develop a policy requiring managerial/supervisory employees to obtain authorization prior to engaging in non-managerial tasks and ensure consistent compliance with the policy.