There's too many “managers” in the kitchen

Unfortunately, as is often the case, the law does not necessarily reflect business realities. It is true that in many jurisdictions in Canada, managers may be exempt from overtime and other statutory restrictions regarding hours of work. 

For example, the Ontario Employment Standards Act, 2000 exempts those persons from overtime and the hours of work restrictions “whose work is supervisory or managerial in character and who may perform non-supervisory or non-managerial tasks on an irregular or exceptional basis.” 

All restaurants have them: the frontline manager (or two) who ensures the smooth operation of the restaurant on a day-to-day basis. These people are given the title of “manager”; they are treated like managers; and they are paid like managers. Sometimes they have to pitch in and work overtime. But the benefit of calling someone a manager is that they are not eligible for overtime, so no need to worry about those extra hours, right?

Sasha Segal

The challenge for the restaurant industry is that it is not uncommon for these managers to chip in and perform non-managerial duties, often on a daily basis. For example, a kitchen manager may be in charge of the overall operations of the kitchen and may have such other managerial duties as hiring the kitchen staff and developing the schedules for the kitchen staff. But that same manager may help with cooking and serving when the restaurant is busy. Everyone is familiar with those all-hands-on-deck kind of days. 

Unfortunately, while a manager chipping in may be beneficial from a business perspective, from a legal perspective, it can be problematic. Generally speaking, the more non-managerial work a manager performs, the more blurred the line between manager and non-manager becomes.  If, for example, a manager simply prepares the work schedules for other employees, but otherwise performs the same functions as non-managerial employees, this person is unlikely to be considered a true manager at law. 

The mere fact that an employee is called a “manager” does not necessarily make it so. Nor is it sufficient on its own to have an employment contract that refers to the individual as a manager.  

Another common myth: simply paying someone a salary rather than an hourly rate does not automatically make someone a manager. 

Whether someone is truly a manager involves consideration of a number of factors and a focus on what the manager actually does on a day-to-day basis. For example, does the manager have the authority to hire and fire employees? Can the manager discipline employees? Does the manager direct the work of others? Does the manager schedule the work of others? Does the manager perform non-managerial duties? 

You may be thinking, what’s the big deal if we call someone a manager and it turns out they are not? 

Let’s just call this person a manager, so that we don’t have to pay overtime, and see what happens later on. While this may save some money in the short term, in the long term, the consequences of this type of misclassification can be great. 

Misclassified managers may file claims for unpaid overtime through a variety of different venues, including the provincial ministry of labour, or through an overtime class action, particularly where the restaurant has a number of locations and there are a number of possibly misclassified managers. To avoid these possible outcomes, it is important to get the labelling right the first time. 

So what’s a restaurant to do? For starters, review your managers’ duties and see what they are actually doing on a day-to-day basis. Are they truly performing the duties of a manager?

Revisit your job titles for future hires. If you want to give someone the title of “manager”, but you know that they will not be performing enough managerial duties to classify them as a manager in the legal sense, then call them a manager and pay them overtime. 

A little extra work at the front end can go a long way. 

Sasha Segal is a lawyer in the Toronto office of Littler LLP. She provides employers with strategic advice relating to a number of employment and labour law issues, including the implementation of various workplace policies and procedures. 

For more information regarding hours of work and harassment in the workplace, a free webinar is being held on June 28. Please contact ssegal@littler.com for an invitation to the webinar.