Stuart Rudner here with another Rudner Law video employment law update.
Today I want to talk about titles and why you may not want to be called a manager or a supervisor or a director, even though those titles look great on a business card. The last couple of years we’ve seen a lot of title inflation. All of a sudden people aren’t custodians, they are directors of custodial services. And sales people are no longer sales people, they’re sales managers. And the reality is these titles might seem great, and often employers use them as a bit of an incentive or a reward, or a way to convince clients or customers that the person is more experienced or has more seniority than they really do. However, some employers also use these things in order to try to deprive people of their statutory entitlements, such as overtime pay.
The reality is that every jurisdiction in Canada has legislation which provides for overtime pay, but it has exemptions. Exemptions are not based upon how you’re paid, contrary to popular belief. Even if you’re paid by salary, you’re entitled to overtime pay, unless you fall within one of the exempt categories. And the most common exempt category is a manager or a supervisor. That’s why it often pays businesses to call someone a manager and then say you’re not entitled to overtime.
So for employers, I give you this warning: just because you call someone a manager or a supervisor or a director, it doesn’t mean that they are for the purposes of overtime pay. If you look at the legislation, which differs a little bit in every jurisdiction, the key point is that they must be carrying out duties as a manager or a supervisor almost exclusively. They can occasionally do non-managerial or non-supervisory work, but if they routinely do that kind of work, they’re not exempt and they’re entitled to overtime pay. So for example, the supervisor who covers for their employee’s shifts every day and does non-managerial and non-supervisory work is entitled to overtime pay. So there’s a warning for employers that you may be breaching the employment standards legislation if you don’t give those employees overtime pay.
And a warning for employees: just because your employer says that you don’t get overtime pay because of your title doesn’t mean it’s true. You are entitled to dig a lot deeper and you may be leaving a lot of money on the table. The other way in which this becomes important is when it comes to looking at severance pay. Severance pay, in accordance with the common law, depends on a number of factors and one of them is the nature of the individual’s job. Supervisors and managers tend to get lengthier notice periods. This is a situation where the employee might use that inflated title to their advantage by saying that they were a manager, therefore entitled to more notice. Again, however, the title doesn’t matter. Courts will look beyond the title to assess the reality of what the person does on a daily basis. And if they are really not managing anyone, if they’re just managing accounts, for example, they’re not going to be considered to be a manager. Similarly, if they’re routinely doing non-managerial work, or if really the title is illusory and not reality, they’re not going to be treated like a manager.
So, for all intents and purposes, these lofty titles may sound great, but they can have legal implications that everyone should be aware of, and they should not just assume that just because someone is a manager or a supervisor, that somehow impacts their legal rights.
As everyone knows, Rudner Law works with both employers and employees, and if anyone has any questions about any of the things I’ve talked about, or thinks that they need legal advice, then please feel free to reach out to us at rudnerlaw.ca. Thanks.
