The Court of Appeal of Quebec recently considered, in the Skiba v. Playground decision, the issue of overtime pay and, in particular, the correct interpretation of sections 54 and 55 of the Act respecting labour standards. In our opinion, this decision will have certain repercussions in the workplace, and we find it useful to review the factual background giving rise to those repercussions, as well as the conclusions of both the Superior Court and the Court of Appeal.
The employment relationship between Mr. Darren Skiba and Playground Limited Partnership began in 2003 and ended in 2008, due to what the company deemed to be financial reasons. It should be noted that over the course of this employment relationship, Mr. Skiba held the successive positions of regional accountant, business unit manager and financial analyst.
Subsequent to the termination of the employment relationship, Mr. Skiba initiated legal proceedings on two grounds. Firstly, it was his opinion that the change of his position title from business unit manager to financial analyst in 2006 constituted a demotion for discriminatory reasons. Secondly, he felt that the termination of his employment in 2008 was not in accordance with Québec law.
At trial, Mr. Skiba sought payment of damages for abuse of rights, aggravated damages and severance pay and, alternatively, payment for overtime hours worked but unpaid. For the matter at hand, we will examine only the alternative claim concerning overtime pay as this was the sole aspect considered by the Court of Appeal.
Following a review of the facts and the case law in interpretation of section 55 of the Act respecting labour standards, the Superior Court, per Chantal Masse J., concluded that Mr. Skiba was not entitled to overtime pay. The Superior Court justified its conclusions by noting that Mr. Skiba’s claim had little basis in law since, throughout the employment relationship, he was paid in the form of an annual salary rather than an hourly wage. Also, the employer had no policy in place stipulating that Mr. Skiba was entitled to overtime pay.
As such, on October 31, 2011, the Superior Court upheld the unlegislated principle that an employee compensated in the form of an annual salary rather than an hourly wage is not entitled to overtime pay unless that employee has specifically made other arrangements with the employer.
Decision of the Court of Appeal of Quebec
At a later date, on the appeal filed by Mr. Skiba, the Court of Appeal also concluded that the appellant was not entitled to overtime pay. However, it is important to note that the reasons for the conclusions of the Court of Appeal differed from those of the Superior Court.
In this regard, the Superior Court considered the form of compensation (annual salary) provided to Mr. Skiba in determining whether the provisions of section 55 of the Act respecting labour standards, concerning payment of overtime, were applicable to his case. The Court of Appeal, however, addressed instead whether Mr. Skiba should be considered a manager within the meaning of section 54 of the Act respecting labour standards. If so, he would consequently be exempt from application of section 55 of the Act.
After reviewing the matter, the Court of Appeal found that in order to determine whether Mr. Skiba should be considered a manager under section 54 of the Act, it was necessary to examine his roles and responsibilities in the context of the company. The Court of Appeal concluded that although Mr. Skiba held the position of financial analyst, which at first glance is not classified as a management position, his responsibilities in terms of operations management and his involvement in a number of strategic matters within the company meant that he held a management position within the meaning of section 54 of the Act. The Court of Appeal concluded that on this basis, Mr. Skiba was exempt from application of section 55 of the Act.
As such, the Court of Appeal found that to determine whether an employee is a manager under section 54 of the Act respecting labour standards, it is necessary to look beyond the employee’s position title and consider all work tasks, roles and responsibilities.
Although the Superior Court concluded that Mr. Skiba was not entitled to overtime pay due to the fact that his form of compensation was an annual salary, the Court of Appeal excluded payment of overtime on the grounds that Mr. Skiba held a management position without studying the matter of form of compensation.
As such, although the Court of Appeal confirmed that Mr. Skiba, in his position as a financial analyst, was not entitled to overtime pay due to the fact that he could be considered a manager, they did not express any opinion as to whether the form of compensation is relevant in determining whether an employee is entitled to claim overtime pay.
Given the silence of the Court of Appeal on the above mentioned aspect, it is interesting to pose the following question:
If the Court of Appeal had arrived at the conclusion that Mr. Skiba could not be considered a manager, would it have concluded, as the Superior Court had, that Mr. Skiba’s compensation in the form of an annual salary precluded him from claiming overtime pay?
In our opinion, the silence of the Court of Appeal leaves room for interpretation in determining whether a non-management employee receiving an annual salary is entitled to overtime pay.