Friday, October 21, 2011

Bank Manager not really a "Manager"

The majority of my blog entries revolve around Provincially-regulated matters.  You often see me discussing the effects of Ontario employment statutes.  Yet that isn't the only legal regime at work in Ontario.  A handful of industries are Federally regulated instead, such as banking, telecommunications, and interprovincial transportation.  (Federal government employees are also, naturally, Federally regulated, but they fall into a different framework from most private sector employees as well.  I have enough experience with Federally regulated employees - both private and public sector - to be comfortable with the frameworks, but they are quite complicated.)

The Canada Labour Code is a rather massive labour/employment statute in the Federal sphere, covering similar subject matter to several Ontario statutes (such as employment standards, labour relations, and occupational health and safety).

But there is one rather unique feature of the Canada Labour Code, found in Division XIV (Unjust Dismissal):  With certain limitations, non-unionized employees can seek reinstatement to their positions when unfairly dismissed.  There is no Provincial equivalent.  (Rather, reinstatement in the Provincial non-union context is a remedy restricted to very select circumstances to illegal - not just unfair - reasons for terminations.)

Division XIV has its own complaint process, that people can use instead of Court.  (Court proceedings are still available to non-union employees, and the same common law principles apply as in the Provincial context.  But you can't get reinstatement that way.)

There are several prerequisites to getting into the Division XIV adjudication:
(1)  You work for a Federally regulated undertaking;
(2)  You are not a member of a bargaining unit (i.e. unionized);
(3)  You have been terminated after more than 12 months of service;
(4)  There is not another recourse mechanism in another Act of Parliament (as there would be for, say, public sector employees);
(5)  The termination was for reasons other than a shortage of work or discontinuance of the job function; and
(6)  You are not a "manager".

The first five are pretty straightforward, but the sixth is trickier, for several reasons.  Firstly, the exception isn't built into Division XIV, but is in a different part of the Code.  (To put this in context, Division XIV starts at s.240; the managerial exception is buried in s.167.)  This makes it easily missed by people who are not familiar with the Code.  Another difficulty is that "manager" is not actually defined in the Code.

This brings us to a recent decision in Roda v. Bank of Montreal, by Referee John Stout, in a matter referred to adjudication under Division XIV.  Mr. Roda was a branch manager at a BMO branch, and was dismissed.  He brought a complaint under Division XIV, and BMO argued that, as a manager, Division XIV recourse was not available to him.  So Referee Stout had to decide whether or not he had jurisdiction to hear the case on its merits, determining whether or not Mr. Roda was a "manager" within the meaning of the Canada Labour Code.  In a detailed analysis, he concluded that Mr. Roda's decision-making powers and any discretion he had were very limited, and he was kept on a tight leash by the bank, and accordingly was not really a "manager" despite his title.

If this decision holds up, it is likely to have repercussions across the banking industry.  There are a number of prominent judicial decisions involving dismissal of bank managers, and in my own practice I have dealt with dismissed bank managers from time to time as well.  From my observations, there doesn't seem to be a great deal of variation in how the big banks treat their managers, neither in the length of the leash nor the tendency to hold the branch manager accountable for anything that goes wrong nonetheless.  Accordingly, most (though not all) terminations of branch managers are based on allegations of cause, which occasionally get upheld in Court.  In most cases, the worst case scenario for the bank is that it may be required to provide pay in lieu of notice.  However, this decision could curtail the bank's right to terminate managers on a not-for-cause basis, with the result that most dismissed branch managers will be entitled to seek a reinstatement remedy.


This blog is not intended to and does not provide legal advice to any person in respect of any particular legal issue, and does not create a solicitor-client relationship with any readers, but rather provides general legal information. If you have a legal issue or possible legal issue, contact a lawyer.

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