Senior managerial personnel dismissal

Glossary

Recourse in case of a dismissal not made for good and sufficient cause

Senior managerial personnel

Recourse offer to senior managerial personnel about dismissal

I – Recourse in case of a dismissal not made for good and sufficient cause

The recourses in case of dismissal not made for good and sufficient cause is a job protection measure.

This recourses reinforces the measures of the Civil Code dealing with contract of employment.

In some situations, its provides for the possibility of reinstating the employee in his job.

An employee who has worked for the same enterprise for 2 years or more and who believes that he was dismissed without good and sufficient cause may file a complaint with the Commission des normes du travail.

DEFINITIONS :

Dismissal : permanent severing of the employment relationship decided by the employer. The causes that an employer may invoke include:

• Misconduct• Bad attitude• Lack of skills• Insufficient performance• Incompetence.

A dismissal implies that the employer still needs someone to do the work, but no longer wants you to be the person doing it.

Constructive dismissal: indirect means whereby an employer dismisses an employee by presenting it as a layoff or a permanent layoff. 

The employee may also be forced to resign as the result of substantial and unjustified changes in his conditions of employment or through various forms of harassment.

Double sanction: An employer cannot reprimand an employee twice for the same mistake. 

For example, if the employer suspends an employee for an inappropriate action that he committed, the employer cannot decide afterwards to dismiss the employee for the same reasons.

TIME PERIOD :

 The action in case of dismissal not made for good and sufficient cause must be exercised no later than 45 days after the dismissal. 

EXCEPTIONS :

• The standard does not apply to an employee who benefits from an equivalent action under another law or a collective agreement.

• The law does not apply on some employees as  :– Persons responsible to keep in a home, child, a sick, a disabled

or elderly person if their employer doesn’t pursuit a profit ;– The individual voluntarily incorporated by incorporation to

provide services;– Senior managerial personnel ;– An employee subject to the Act respecting Labour Relations,

Vocational Training, and Workforce Management in the Construction Industry.

II – SENIOR MANAGERIAL PERSONNEL

The senior managerial personnel

qualification to a employee have a

triple impact :

on the applicable law

on the jurisdiction

which will deals with the case

on the verdict of the recourses

The Act respecting Labour Standards excluded senior managerial personnel, except some kind of standards.

Example: the standards dealing with public order (c. IV, div. IX, s. 93 and 97 LNT)

On a other hand, middle and inferior senior are subject to the Act respecting Labour Standards, and this, also for the notice of termination of employment or layoff and compensation to this effect.

However, increase overtimes do not apply to this senior (s. 54, paragr. 3° LNT).

Senior managerial personnel is totally excluded from all recourses provided for a dismissal “not made for a good and sufficient cause”.

This implies that the senior managerial personnel may take civil action to defend his interests, if he disagrees with the decision of the employer and he must bear the legal cost to this effect, if necessary.

Unfortunately, the law doesn’t provide definition of “senior managerial personnel”.

However, case law elaborates several factors to determinate if a person are or not a senior managerial personnel.

Generally, these factors allow the analysis of this notion “senior managerial personnel” but they aren’t the only available or determining factors.

THE SENIOR MANAGERIAL PERSONNEL QUALIFICATION:

The only fact that a person is qualified senior managerial personnel aren’t enough to establish that the person necessarily is; this fact can at most be use as a evidence to establish the status of this person. It possible that there is no senior managerial personnel in the firm. This factor become applicable for small firm which the direction function is exercised by the owner himself or the main shareholder.

Some criteria to define the senior managerial personnel

1. The hierarchic level in the organizational structure

Senior managerial personnel must be a part of the high management: the owner, the president of the board of directors or the president.

It is important to look on the size of the firm in the criteria evaluation.

2. The level of decision

Senior managerial personnel contribute to the preparation of the main directions of the firm, the major decisions concerning the firm.

3. The level of autonomy

Senior managerial personnel have a great autonomy and an important decisional power.

4. Personnel management

Senior managerial personnel manage senior staff.

He must has an important role to play in personnel management concerning the power to bind the firm with third-party.

5. Working conditions

Senior managerial personnel are part of best paid employees of the firm.

Practical application of the criteria

1. Person who is directly accountable to the Board of Directors or Director-general

In big firm which operate in several establishments, we can considerate as a senior managerial personnel, person who directs one of the big firm’s establishments. But, other “lower” senior level have to exist to take control of the leadership of one part of the firm.

However, we have to exclude local small branch manager, for example a shop, by opposition from a plant manager of a big firm.

2. Person who sit on the Board of Directors of a subsidiary

The person designated by a holding company to sit on the Board of Directors of a firm within it has interests, can be considerate as a senior managerial personnel when he acts as a representative to direct the subsidiary’s business.

3. Senior counsel

Some person can be considerate as a “senior managerial personnel” without take the direction of a firm sector.Example: senior counsel who support the line manager.

4. Shareholder status

Be a shareholder for a senior doesn’t necessary implies that he is a senior managerial personnel.

The status of senior managerial senior depends on the percentage of shareholder participation.

III - RECOURSE OFFER TO SENIOR MANAGERIAL PERSONNEL ABOUT DISMISSAL

A. The provisions of the Canadian Labour Code

B. The provisions of the Civil Code of Québec

A – Canadian Labour Code

The contain of section 240 of the C.L.C : Reference: LRC 1985, c L-2, s. 240

(1)  Subject to subsections (2) et 242(3.1), any persona) who has completed twelve consecutive months of

continuous employment by an employer, and;b)  who is not a member of a group of employees subject to

a collective agreementmay make a complaint in writing to an inspector if the employee has been dismissed and considers the dismissal to be unjust.

Time period

(2) Subject to subsection (3), a complaint under subsection (1) shall be made within ninety days from the date on which the person making the complaint was dismissed.

 Extention of the time

(3) The Minister may extend the period of time referred to in subsection (2) where the Minister is satisfied that a complaint was made in that period to a government official who had no authority to deal with the complaint but that the person making the complaint believed the official had that authority.

R.S., 1985, c. L-2, s. 240;R.S., 1985, c. 9 (1st Supp.), s. 15.

Exclusion of “Managers”: 

The current accepted definition of “manager” explain the exemption because it’s limited to senior managers within an organized hierarchy who be likely to be well paid and, consequently, can lean on the common law instead of the section 240 to correctly safe their interests.

Thus, a double criteria applies on the status of “manager” definition.   

Firstly, the person in question must be involved in the management of the organization as a manager.  Indeed, the managers have an important position in the organization (decisional position, more responsibility…).

The managers don’t only execute, they run or manage their domain.[Stone v. Bank of Nova Scotia, may 1994 (Abramsky), pp. 10-11, case in which a bank director was excluded of section 240 because of his status of “manager” ]

Secondly, a “manager” must also have the power to lead an “independent action, and only at his own discretion”.[Per Mackay J. In Island Telephone Co. v. Canada (Labour Secretary), [1991] F.C.J. No. 978, 44 C.C.E.L. 168 (T.D.), p. 184]

Concerned person doesn’t necessarily need to have a “total” independence to be a “manager”; all the person have to do is have independence “… in several domains in which she is responsible” .[Smith v. Sunwest Int’l. Aviation Services Ltd., Oct. 1998 (Poetker)]

Managers who satisfied to this two requirements don’t belong to the vulnerable economically class of employees point by section 240. Consequently, seniors managerial personnel are excluded of the protection system of section 240 above-mentioned.

B – Civil Code of Québec 

  As senior managerial personnel is excluded of the application of Act respecting Labour Standards (s. 3 par. 6, A.L.S.), his claim must find its rise in the Civil Code.

The claim must be pursue through a common law court, most of the time the High Court, and aim the obtaining of compensation representing the equivalent of the reasonable notice of termination in the way of section 2091 Civil Code of Québec.

We have to notice that this section allows the employer to terminate the indefinite contract which binding him to his employee.

The notice compensation is set regardless of the nature and the importance of the function exercised by the manager, his age and his years of service.

MUTUAL OBLIGATIONS :

 The Civil Code of Québec provides certain rules relating to the employment contract and, accordingly, the breach of contract.

Theses rules are part of the common law et generally apply to any employment contract, regardless of the status of the employee or the employer. The employment contract is fixed-term or indefinite. It is a fixed-term if the parties have previously set a deadline by providing a date or a event after which the contract expires.

Employment contract forces the employer:

to allow the execution of the performance of work agreed,

to pay the remuneration fixed,

to take appropriate measures to the nature of the work in order to protect the health, the safety and the dignity of the employee.

Employment contract imposes to the employee:

to perform his work with prudence and diligence,

to act to with loyalty,

to refrain from the use of confidential information obtain in the execution or during work.

END OF THE CONTRACT :

Each party can also terminate the indefinite contract of employment by giving the other party a notice or a notice period for this purpose.

During the notice, the contract continues between the parties with the obligations related thereto each of them.

However, the notice can be paid in the form of monetary compensation.

In all cases, the notice must be a reasonable period or reasonable amount.

The reasonableness of the notice must be assessed based on several factors including:

o The circumstances of the engagement;o The nature and the importance of the work performed;o The fact that the employee has left a sure and gainful job;o The intention of the parties;o The difficulty for one or other party to find a replacement, or an other equivalent job;o The years of service of the employee;o The age of the employee

In general, parties can not terminate the fixed-term employment contract before term.

REQUIREMENT OF SERIOUS AND SUFFICIENT ARGUMENT TO TERMINATE THE CONTRACT OF EMPLOYMENT:

However, whether under a fixed-term contract of employment or under indefinite contract of employment, a partie may, for serious cause, terminate, unilaterally and without notice the employment contract.

The employer who invokes this right must demonstrate a serious and sufficient argument for its decision to terminate the employee’s employment, that is to say a serious breach of the employee for performance its contractual obligations.

ACTION :

The party who fails to give notice to which it is entitled, is exposed to a civil action against it.

When the dismissal is made irregularly, the employee may go to the Court for redress.

The employee can claim reasonable notice of termination is due to him, in the case of an indefinite employment contract, or the compensation that would have been paid in the case of fixed-term employment contract.

The employee may also claim moral damages when the the injury was foreseeable or if the injury results from willful misconduct or gross negligence.

Exemplary damages can also be granted when there was intentional infringement to a right or freedom protected by the Charter of Human Rights and Freedoms.

However, the employee can not obtain his reinstatement by an action based on Civil Code of Québec.

TIME PERIOD :

The remedies under the Civil Code of Québec must be pursued through court action, within tree years following the dismissal.

Thank you for your attention

BROWNSTEINBROWNSTEIN& ASSOCIATES

6000 Côte des Neiges , Suite 590Montréal, QuébecCANADA H3S 1Z8

Tel: (514) 939-9559 – Fax: (514)

939-2289Web site:

www.brownsteinlaw.com