When someone is hired as an employee in Ontario, the rules of their employment are governed by the provincial Employment Standards Act, 2000 (ESA). The ESA regulates many employment standards matters, including but not limited to the minimum wages to which every employee is entitled, when and how much overtime must be paid, and payment of statutory holiday and vacation pay.
About payment of statutory holiday and vacation pay specifically, any employee who believes they have not received all payments to which they are entitled may commence an employment standards complaint with the Ministry of Labour, Immigration, Training and Skills Development.
In this blog, we explore employment standards, specifically entitlement to vacation and statutory holiday pay, including what qualifies an employee to receive the same and when such benefits will be paid.
Employer Fails to Pay Statutory Holiday and Vacation Pay to Employee for 16 Years
The recent Ontario Labour Relations Board decision in Fiber Shield (Toronto) Ltd. v Gail Bevilacqua illustrates a dispute regarding entitlement to and payment of vacation and statutory holiday pay. The case involved an employee who had begun working for the employer, a franchise of an American corporation, in 2004 in an administrative capacity. While she occupied that position, she was paid a salary in exchange for her efforts, and she received compensation from her employer for both vacation and statutory holidays. In 2007, however, the employee took on a new role, that of account manager, in which she was compensated entirely through commission instead of a salary. When the employee transitioned to her new role, her employer advised that she was no longer eligible to receive vacation or public holiday pay compensation. The employee did not question her employer, as a result of which her employer failed to pay her any holiday or statutory holiday pay from 2017 until 2023, which is when the employee commenced a complaint with the Ministry regarding her entitlement to receive such compensation.
What are the Laws Regarding Payment of Statutory Holidays and Vacation Time?
As mentioned above, entitlement to payment for statutory holidays and vacation time is governed by the ESA. It must also be noted from the outset that section 5 of the ESA states that no party may contract outside of the provisions of the legislation; in other words, that section makes it illegal to enter into a contract that violates any provision of the ESA such that any such contract will be considered void and of no force and effect. For example, an employer cannot contract an employee to work for it in exchange for less than minimum wage because the ESA dictates that the wages paid to an employee must not be less than what the legislation dictates as minimum wage.
In specific reference to statutory holiday pay, section 24 of the ESA dictates that every employee is entitled to receive statutory holiday pay for every statutory holiday, calculated by the formula provided by that section. Section 26 of the ESA further provides that any employee scheduled to work on a statutory holiday that would otherwise constitute a regular working day must be given the day off work and paid for the shift they would have worked that day had it not been a holiday.
Section 35.2 governs the payment of vacation time and dictates that every employee must be compensated for vacation time by the formula provided therein.
Importantly, the rules regarding compensation for statutory holidays and vacation time are inapplicable to any “salesperson, other than a route salesperson, who is entitled to receive all or any part of his or her remuneration as commissions in respect of offers to purchase or sales that (i) relates to goods or services, and (ii) are normally made away from the employer’s place of business.”
How is Status as a ‘Route Salesperson’ Established?
Consideration of whether the employee in this case was entitled to compensation for statutory holiday and vacation pay came down to whether or not she was considered a “route salesperson” in her role with the employer. To that end, the Board noted that the reason for the differential treatment of salespeople under the ESA is that employers generally exude a lower level of control over work undertaken by such employees. However, control is not the sole factor determining whether a given employee is classified as a route salesperson. Rather, the factors considered in assessing the status of a given employee include the degree of control exerted by the employer in scheduling the employee and ordering and organizing their sales calls and “the degree of entrepreneurial initiative employee at issue exercises.”
As stated in this case, generally speaking, the greater the degree of control exerted by the employer and the lesser the degree of entrepreneurial initiative, the more likely the employee in question is to be categorized as a route salesperson, such that the provisions of the ESA respecting statutory holiday and vacation pay are applicable.
Was the Employee in this Case Entitled to Statutory Holiday and Vacation Pay?
After reviewing all applicable circumstances, testimony and evidence, it was determined that although the employer allowed the employee in question some degree of autonomy in executing the duties of her employment, it also exercised substantial control over where and when she undertook such work. Support for this conclusion was found in the fact that the employee had 12 major clients whom she was expected to visit 3-4 times per year, in addition to which she was expected to attend at the office 2-3 days per week, minimum, for 2-3 hours each time. The employer had maintained records and tracked the comings and goings of its sales staff, so they did not truly enjoy much autonomy. As such, the employee, in this case, was determined to be a route salesperson. She was entitled to statutory holiday and vacation pay for her tenure with the employer.
Although the complaint was lodged only in 2023, some 16 years after the employer commenced its policy of non-payment of such benefits, it was noted that the provisions of the ESA are not time-limited. No employee forfeits their right or entitlement to any monies, benefits or compensation owed to them due to their employment, no matter when the complaint is filed. As such, the employer was ordered to compensate the employee in question for all statutory holidays and vacation time to which she was entitled for the entirety of the 16-year period.
Contact Haynes Law Firm in Toronto to Discuss Your Employment Standards Claim
If you seek to file an employment standards claim related to vacation pay, statutory holiday pay or any other entitlement due you as an employee under the Employment Standards Act, 2000. You require knowledgeable legal assistance to help guide you through the legal process. Fortunately, Haynes Law Firm’s skilled, capable lawyers are here to help. From our offices in downtown Toronto, Ontario, Haynes Law Firm provides employees all over Ontario with cogent, thorough legal advice to resolve their legal matters. Contact us online or via telephone at (416) 593-2731, and one of our friendly staff will be pleased to schedule a confidential consultation.
