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Archived - Discussion Paper on the Review of Labour Standards in the Canada Labour Code

I. Responding to the Evolving Workplace

A. Hours of Work

4. Exclusion of Managers, Superintendents and Professionals from Hours of Work Rules

Commission Recommendations:

Existing provisions of Part III, which exclude managers, superintendents, employees exercising management functions and professionals from hours of work regulations, should remain unchanged at present (R. 4.8)

Employees exercising management functions, superintendents and designated professionals are exempt from the provisions of the Code regarding hours of work. This means that they are not entitled to overtime pay or rest periods and that they can work more than the weekly maximum of 48 hours.

As the Commission noted in its report, there are several reasons for this exclusion. Labour standards are primarily intended to protect vulnerable, low-wage workers, rather than higher-ranking employees like managers and professionals, who tend to be well-paid. These employees also recognize the need to put in long hours and view this as a central part of their lives, and are therefore unlikely to comply with working-time regulations. They hold positions of trust and responsibility that may require them to compromise their personal interests to fulfil their duties. They are normally salaried on a monthly or annual basis so that they will not “watch the clock”. As well, they supervise their own work, making it difficult for employers to monitor their hours. The Commission also heard anecdotal evidence that attempts in some companies and other countries to regulate the working hours of these employees had failed. Given that the “culture of long hours” is not likely to be changed by Part III, the Commission recommended that the Labour Program promote awareness among managers and professionals of the deleterious consequences of excessive and unsociable working hours on themselves, their families, and their long-term performance at work. It also recommended that Part II of the Canada Labour Code—which deals with occupational health and safety—enshrine the principle that no one, including managers, professionals and superintendents, should be required to work so many hours that their health is endangered.

Some would argue that managers, professionals and superintendents should be covered by working time rules under Part III in order to protect their health and well-being. Others would say that it is generally reasonable to exempt them, but that there are certain categories of managerial employees, professionals or superintendents who should be covered.

The Canada Labour Standards Regulations defines “professionals” as being members of the architectural, dental, engineering, legal, or medical professions. It is important to consider whether this list needs to be amended in some way. For instance, there may be occupational categories in the federal jurisdiction that should be added to this list. Another question is whether employees who earn a salary above a certain threshold should be considered “professional”, regardless of their occupational classification. In Manitoba, employees who have substantial control over their working hours and earn more than twice the Manitoba industrial average wage (i.e., more than $70,390.32 per year as of June 1, 2007) are excluded from overtime pay and hours of work rules.

The Commission also made a related recommendation that the terms “manager,” “exercising management functions”, and “superintendent” be defined by regulation, with the possibility of adjusting the definitions on a sector-specific basis. This could provide greater clarity for employers who must determine which workers are exempt from working-time rules. In the event of a dispute, Labour Program officials currently determine whether a person is a manager, exercises management functions, or is a superintendent based on the principles set out by courts and tribunals (jurisprudence). For instance, in determining whether a person is a manager, the key question is whether the person exercises actual authority, based on the following factors: having the power of independent action, autonomy and discretion; exercising decision-making powers in matters of importance; having staffing authority; having powers of supervision and control; job title, qualifications and salary; public capacity, such as being a spokesperson for the company; and having the authority to act on the company’s behalf in labour relations matters.

It is important to consider whether these principles should be specifically set out in a regulation and if so, whether there is any need for adjustments based on sectoral differences. There may also be particular occupational categories in the federal jurisdiction that should be considered as being “manager” or “superintendent” positions.

For discussion:

• Should designated professionals continue to be exempt from working time rules? If so, which professionals should be exempt? Should employees who earn an amount above a certain threshold be considered “professional”? If so, what is an appropriate threshold?
• Should managers, employees exercising management functions and superintendents continue to be exempt from working time rules? If so, should the definition of these terms be set out in regulations under Part III? Is there any need to adjust the definitions based on sectoral differences? Are there any occupational categories in the federal jurisdiction that should be included in any of these definitions?

5. Mechanisms to adjust working hours

a) Ministerial Permits

Commission Recommendations:

• When determining whether to grant or deny a permit, the Minister should provide interested parties with the opportunity to make their views known. The Minister should weigh the competing considerations and allow variations or adjustments only if, on balance, a reasonable case has been put forward for doing so.
• Permits should be limited to one year’s duration. Any permits currently in force would remain valid until their expiration date.
• When the employer seeks the renewal of a permit, the Minister (or another delegated official) should presume that renewal is appropriate unless he has reason to believe that conditions have changed since the permit was originally issued; the employer has exceeded the hours authorized by the permit; or the employer has been guilty of an unfair employment practice under Part III (R. 7.4, 7.7 and 7.8).

Part III provides that the Minister can issue a permit to exceed maximum working hours if satisfied that there are “exceptional circumstances to justify the working of additional hours.” An application for a permit may only be made by an employer or an employer’s organization. The employer must advise the affected employees of the application by posting a notice at least 30 days before the proposed start date of the permit.

Employee submissions on permit applications

Under the current system, employees must be notified of a permit application, but have no opportunity to formally submit their views on the matter. Allowing employees to do so could help to ensure that permits are issued in a procedurally fair, transparent manner. Employee submissions could be facilitated by requiring the employer to post the notice of the application immediately after it is made and to advise all employees, at the time that notice of the application is posted, of their right to make written submissions to the Labour Program within a specified time period. Employers could also be required to post a notice advising employees of the outcome of the permit application. On the other hand, allowing employees to make formal written submissions may delay the permit application process.

Duration of permit

Under the current system, a permit is valid for whatever duration is specified by the Minister, although this may not exceed the period of time it is anticipated that exceptional circumstances will continue. The Commission proposed that all permits be limited to one year’s duration, with a presumption of renewal. This reflects current practice in the Labour Program. Permits are given for whatever duration is appropriate in the circumstances, but never for more than one year. Where the circumstances that justify a permit continue on an ongoing basis, the Minister will issue up to two permit renewals of one year each.

Some view a statutory one-year time limit as too restrictive, because the Minister will no longer have the discretion to issue a longer permit if need be. Others argue that since permits are meant to be used in exceptional circumstances, imposing a one-year time limit is reasonable.

Some accept that the duration of permits should be set on a case-by-case basis, depending on the circumstances, but believe that employees should be advised of the proposed duration so that they may address this issue in their written submissions.

Renewal of permit

There is no provision in Part III that specifically deals with the circumstances under which permits will be renewed. In the Commission’s view, the process would be more efficient and transparent if Part III specifically provided for permit renewal. Under the Commission’s proposal, the Minister (or another delegated official) would presume that a permit renewal is appropriate, unless he has reason to believe that conditions have changed, the employer has exceeded the hours authorized by the permit, or the employer has been guilty of an unfair employment practice under Part III. (Unfair employment practices,[4] which include repeated or multiple infractions, fraudulent attempts to conceal non-compliance, and the use of threats or coercion against employees to discourage them from seeking to enforce their rights, are discussed later in this paper.) This proposal could balance the need for efficiency in renewing permits with the need to protect the integrity of the permit system. Because permits to work excessive hours are meant to cover “exceptional circumstances,” it is important that they only be issued where justified and where there is an expectation that the employer will comply with the terms and conditions.

For discussion:

• Should employees be given the right to make written submissions in response to a permit application? If so, how could the employer facilitate this process?
• What is the appropriate duration of a permit? Should it vary depending on the circumstances?
• Should a permit renewal be presumed appropriate, unless there is reason to believe that working conditions have changed, the employer has violated the permit, or the employer is guilty of an unfair employment practice?

[4] In the Commission report, the phrase “unfair labour practices” is used. However, Part I of the Canada Labour Code deals with “unfair labour practices” in connection with unionization issues. To avoid confusion, the Commission’s phrase has been changed to “unfair employment practices.”

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Date Modified:

2012-02-15