Unjust Dismissal Under Canada Labour Code

Manager Exception


The term “manager” is not defined in the Code. Recent case law has offered this summary of principles to be used in the interpretation of this exclusionary term: 1

  1. The exempting words should be read in a narrow and restrictive sense;
  2. The analysis is one factually based on a case by case basis;
  3. The test is not the title but the actual work performed;
  4. A manager generally is defined as a person who performs administrative functions and who has a significant degree of independent autonomy and discretion.

The onus rests upon the employer to prove the employee is a manager, by statute. S. 167.2

A list of administrative functions was summarized in Walker as ones which involve “control of day-to-day operations, authority over finances and responsibility for personnel matters”:

… Administrative tasks include regulating personnel matters such as hiring, firing, promotion, performance appraisal, leaves and age allocations; planning budgets; making contracts with clients and customers; allocating expenditures for the operation of the organisation’s affairs; making decisions about the design of services and products; and generally regulating the work process.

Such administrative functions must be accompanied by “a significant degree of autonomy and discretion in matters of importance that have an impact on the employer’s operations”. Importantly the manager “must have autonomy to make final decisions and not the authority to merely make recommendations”.

That said, the “manager’s autonomy does not need to be absolute and may be restricted in certain areas”.

The wording of the Code has also led to a more restrictive reading of the exclusionary words.

s. 167(2)(a) relates to Division I of Part III, while S. 167(3) deals with Division XIV containing the unjust dismissal remedy. There is a difference in the wording of the two exclusions.

Division I does not apply to employees who are “managers or superintendents or who exercise management functions”.

Division XIV does not apply to “managers”. This is a narrower exclusion. The interpretation of these distinctions is such that persons who not “managers” yet exercise “management functions” or are “superintendents” have Code protections for unjust dismissal. 2

In Shek and Bank of Nova Scotia the degree of autonomy was described as follows: 3

91 The Federal Court of Appeal’s interpretation of “manager” in subsection 167(3) does not limit the application of that term just to the rare owner-manager who is accountable only to him or herself, nor just to the most senior executive who is directly accountable to the owners or their board of directors, nor only to those senior executives whose administrative authority spans all aspects of their employer’s organization. An individual who manages a division, department, branch or other administrative unit of an enterprise may also be a “manager” if he or she has been given real and significant power of independent action, autonomy, and discretion in the management of that administrative unit. Accordingly, I agree with the observation of Professor Rose in Beaudoin and Duncan (at page 29) that “... the fact that a manager is subject to some direction does not diminish his or her status as a manager within the meaning of 167(3), provided the overall control of the operation of the administrative unit remains in the hands of the said manager.” “Overall control” in this context involves having, in the words of the Ciminelli decision, “a significant degree of autonomy in decision making and directing others, and this in regard to important decisions of policy going somewhat beyond the normal day-to-day routine.”

An older, yet still germane case on this subject is a 1991 decision of the Federal Court, one which reversed the adjudicator’s finding on this issue. 4 Bateman was the manager of the Regional Data Centre, in which 200 employees were under his supervision. He had the “unfettered” power to hire, promote and transfer employees below a set salary level, which were 85% of this work force. He provided recommendations for such activities for the remainder, which were generally followed. He also was instrumental in yearly performance reviews, which impacted salary increments. Terminations were required to be approved by head office. He was yet able to make other disciplinary decisions, short of termination, independently.

The Federal Court reversed the finding of non-manager status and determined that the Code was not intended to exclude all employees who exercised “some management functions”.

However, in this case, Bateman was seen to have significant autonomy and discretion. While the Toronto office provided some overall supervision, Bateman nonetheless administered a large department, supervised 200 employees and “exercised a degree of autonomy and independence”.

Reference was made by the Federal Court in a prior Federal Court of Appeal decision decided in 1978. 5,urging that prudence should be taken in this assessment, given its exclusionary impact:

 [C]are must be taken regarding this question, as the section subtracts employees who are ‘managers’ from the body of persons enjoying that right. Consequently, the exception should not be wielded so as to strip the applicant of this protection simply because his job required him to exercise the power of independent decision-making….But to base a classification of ‘manager’ principally upon that fact is, in my view, to consider his position in isolation from the overall organization within which he functioned. (at para. 31).

The cases today remain very much factually driven. The modern cases synthesize the principles that are applicable.

“Guiding principles” were set out in a January 2023 decision: 6

  1. the term “manager” has a narrow meaning;
  2. the nature of the work actually performed must be examined;
  3. the administrative element of the position in issue must be present;
  4. the term “manager” is administrative rather than operational in nature;
  5. the position can include managers at the upper or lower end of the management chain;
  6. impressions and perception of the position by others as being part of management is insufficient;
  7. title or place in the management chain in not determinative;
  8. only exercising some managerial functions without authority is insufficient;
  9. imerely a conduit for higher body who is actual decision-maker or makes recommendation to higher body who approves or disapproves is insufficient.

Elements considered essential for a finding of “manager”

  1. power to act and perform duties independently;
  2. is part of management;
  3. primary responsibility is to manage;
  4. power or authority to hire, supervise, and otherwise be in charge of employees, including power to discipline and dismiss;
  5. evidence of firing and disciplining must be proven;
  6. responsibility for employer's operations and managerial attributes required for that purpose, i.e., accountability for management functions;
  7. sufficient or independent decision-making authority, though not absolute, and a certain measure of discretion;
  8. authority to make final decisions of significance.

This is an important issue as the consequence of an adverse finding removes the right to use the Canada Labour Code remedy, much like the discontinuance issue.