The Financial Pitfalls of Inaccurate Staff Designations
In the Bahamas, employees who are deemed “management” are afforded certain rights and benefits under the Employment Act, 2001, that non-supervisory staff are not entitled to receive. Management’s scheduled compensation generally exceeds amounts paid to non-supervisory staff. In the case off separation or termination, management is compensated with one month’s basic pay for each year worked, up to 48 weeks pay. On the other hand, management’s working hours are expected to be flexible, so they are not entitled to receive overtime compensation for time worked in excess of 8 hours per day or 40 hours per week.
The recent Court of Appeal decision of Duran Cunningham v Baha Mar Development Company Limited SCCiv App No. 116 of 2010, has further clarified the law in The Bahamas pertaining to an employee’s designation as either a supervisor or manager, particularly for the purpose of ascertaining that employee’s rights in the event of separation.
In that case, the Court of Appeal held that whether or not an employee is designated a “supervisor” or “manager” by his employer or his written job description, under the law his position is clarified by viewing objectively the functions and duties which the employee performed in the course of employment. A key factor for determining whether an employee is indeed a supervisor or manager, is the extent of the employee’s ability to independently exercise his judgment when performing his duties.
For example, an employer compensates an employee designated a “manager” in accordance with the provisions of the Employment Act, which provides that a manager is not entitled to overtime pay. This employee, labeled a manager but in fact doing work that does not require him to independently exercise his judgment, then routinely works well in excess of the standard hours of work. When the employer dismisses the employee, the employee takes the position that he was not, in fact, a “supervisor” or “manager” given his actual job functions and responsibilities. He then initiates an action against the employer for payment of the arrears of overtime as non-management staff, in accordance with the provisions of the Employment Act.
If the employee is able to successfully show the Court that he was not a supervisor or manager within the meaning of the law, the employer may be liable to that employee for all hours worked in excess of 8 hours per day or 40 hours per week,
In order to avoid the potential financial consequences of this situation, employers should periodically evaluate the functions and responsibilities of all supervisory and management staff, to determine whether or not their designations are accurate.
For further information, please contact our Graham Thompson’s Employment & Labour Group at email@example.com