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Employees who supervise or manage processes (vs. other employees) can be exempt from overtime pay: Ontario Labour Relations Board

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Ontario’s Employment Standards Act, 2000 provides that employees are entitled to overtime pay for all hours worked in excess of 44 hours in a week. However, there are certain exemptions to this entitlement – one of which applies to employees whose work is “supervisory or managerial in character and who may perform non-supervisory or non-managerial tasks on an irregular or exceptional basis”.

Unsurprisingly, there have been a number of employment standards decisions over the years in which an employee has advanced a claim for overtime and the employer has defended the claim on the basis that the employee is a supervisor or manager and therefore exempt. A number of decisions involving employees who did not supervise or manage employees have found that those employees were not “supervisory”. Occasionally, however, employees who supervise or manage processes – but not employees – are found to be true “supervisors” and/or “managers” such that they are exempt from overtime pay.

The recent decision in Levert Personnel Resources Inc. v. Steven McNeil and Director of Employment Standards provides one such example. In this case, the Ontario Labour Relations Board was tasked with determining whether Steven McNeil, an Account Manager for Levert Personnel Resources Inc., a personnel resources company, was exempt from overtime pay. Mr. McNeil was the primary contact for Levert’s clients in the mining sector. He had total responsibility for negotiating and signing contracts with these clients on Levert’s behalf, and was specifically tasked with managing the clients’ personnel requirements. Although Mr. McNeil did not recruit, hire or supervise the work of employees he placed at client sites, he was required to ensure that the terms of the contract which he had signed with the clients were met. In order to do this, Mr. McNeil would visit client sites and review the trade certificates of Levert’s employees. If an employee did not have the requisite certification, Mr. McNeil would dismiss the employee from the client work site. Mr. McNeil also worked to prepare annual forecasts and strategized and executed sales plans, all of which had a direct impact on the profit margins and financial operations of Levert. Based on this evidence, and despite the fact that Mr. McNeil did not manage or supervise employees directly, the Ontario Labour Relations Board concluded that Mr. McNeil’s work was supervisory and managerial in character.

As a result of this case and others that have been decided along similar lines, it is important for employers to avoid automatically concluding that employees who perform supervisory or managerial functions in relation to machines or processes, rather than in relation to employees, are entitled to overtime pay.

See decisions here: http://www.canlii.org/en/on/onlrb/doc/2011/2011canlii63520/2011canlii63520.pdf, and here: http://www.canlii.org/en/on/onlrb/doc/2012/2012canlii4267/2012canlii4267.pdf