We propose the use of Manchester encoding in conjunction with balanced detection to overcome the mode partition noise (MPN) limit of quantum-dash Fabry-Perot mode-locked lasers (QD-MLLs) used as multi-wavelength sources in short-reach applications. The proposed approach is demonstrated for a 10-mode laser, each carrying a 10-Gb/s signal. We show that bit-error-rate floors as high as 1e-4 when traditional non-return-to-zero (NRZ) modulation is employed with a single-ended detection scheme can be pushed below 1e-9 thanks to the introduction of Manchester encoding together with balanced detection. The benefit of the scheme could be attributed to the spectral shift of the Manchester spectrum, resulting in a smaller overlap with the high-relative intensity noise (RIN) region present at low frequencies, and the use of balanced detection. We clarify the origin of the performance improvement through comparisons of single-ended and balanced detection and the use of a RIN emulation technique. We unambiguously show that the use of balanced detection plays the leading role in MPN mitigation enabled by Manchester modulation.