Manager or dispatcher?

Employment agreement acknowledged extra hours were possible and included in salary, but employee claimed he wasn't really a manager
|Canadian Employment Law Today|Last Updated: 01/21/2014

This instalment of You Make the Call features a dispute over whether an employee was a manager and was entitled to overtime time pay.

Richard Coles was employed as a dispatcher with Action Express & Hot Shot, a courier company based in Edmonton. His job duties included managing the company’s fleet and income without any direct supervision by the owners.

Coles didn’t hire or fire any staff, but had some input into hiring. He also reviewed the insurance, vehicle registration and workers’ compensation coverage of each driver and reported any issues to the owners of the company. Overall, Coles supervised four call takers and 25 drivers who were independent contractors.

If a driver was assigned a call and refused, Coles had the authority to send the driver home. However, the owners instructed him not to engage in arguments with drivers and to refer any problems to them. He assigned calls to drivers and made input into commission raises, but the final pay decisions were made by the owners.

In addition to assigning calls to drivers, Coles was expected to go on sales calls once per week. He didn’t have an expense account or company credit card, though he was reimbursed for any money he spent on customers. He did use a
company fuel card when he was out on sales calls.

Because Coles assigned the drivers work and ensured they were earning about the same on calls, Action Express considered him to be equivalent to a manager.

He was expected to work 50 hours per week and, although he asked for extra pay, Action Express said he was paid based on those hours. He was also compensated in other ways, such as a company care with paid insurance, a company cellphone and cash advances which were never paid back. One of the owners also claimed he bailed Coles out of jail twice for a total of $7,000.

When Coles was hired in 2008, he acknowledged his position didn’t include overtime pay. Though there was no written employment contract, but Action Express made it clear his salary was “all-inclusive.”

In addition, the company noted part of his job was making sales calls and salespeople were not subject to overtime pay. During busy times, he was in charge of the company’s after-hours phone and during slower times, he was allowed to leave early. He was also allowed to use his company cellphone 24 hours a day for personal use.

In early 2013, Coles’ employment was terminated by Action Express. Coles said he wasn’t clear on the reason for termination and filed a claim for overtime and vacation pay. He argued he wasn’t a manager and therefore was entitled to such pay under employment standards legislation.

In June 2013, Human Resources and Development Canada issued an order to pay Coles more than $10,000 for non-payment of overtime and vacation pay, but Action Express appealed the order, arguing Coles performed management duties and had agreed to his pay arrangement when he was hired.

You Make the Call

Was Coles entitled to overtime pay?
OR
Was Coles a manager and therefore not entitled to overtime pay?

If you said Coles was entitled to overtime pay, you’re right. The adjudicator found that, although Coles managed the drivers and assigned their work, there was little evidence that he had any true “independent action, autonomy or the discretion to make significant decisions.”

He could mediate driver complaints but could not resolve them — they had to be referred to the owners for that, said the adjudicator.

Action Express argued Coles determined the income of the drivers by assigning their calls, but the adjudicator found Coles was merely dispatching them and ensuring they earned about the same income. Any actual decisions on their
rate of pay and commission levels was decided by the owners with his input, and the same could be said of other
company matters.

“Mr. Coles did not independently run a major portion of the business on his own,” said the adjudicator. “He was
restricted by the types of decisions he could make and they did not amount to managerial functions.”

The adjudicator also noted that Coles’ job title was “dispatcher,” not “superintendent” or “manager.”

The majority of his time was spent dispatching, with a small part in sales, making him a regular employee who was not exempt from the overtime provision in the Canada Labour Code. The order to pay was upheld. See 1484174 Alberta Ltd. and Coles, Re, 2013 CarswellNat 4313 (Can. Labour Code Adj.).