Right to vacation pay in Ontario

The Employment Standards Act is the law that contains basic rules about employing people and working. Both employees and employers have rights and

responsibilities under the Act.

 

Most employees are covered by the provincial legislation. However, employees working in industries that fall under Federal jurisdiction, such as, Post office, Banks, Railways, Radio stations, Airlines, Television stations etc. are not covered. 

 

If you are member of the trade union and your contract of employment is governed by the collective agreement, you may not be covered by the Act.

 

If you are currently employed with the company, you may be able to file a claim with a request that your name not be disclosed. The Act protects you when you are exercising your rights under it.

 

Section 35.2 of the Act states:

 

This section requires the employer to pay vacation pay to all employees. The minimum vacation pay to be paid is 4% of the wages for the period for which his or her vacation is considered. In other words, the employer can always pay more than 4% of the wages but cannot pay less than 4%. This is based on the requirement that all employees are entitled to at least two weeks vacation.

 

Some employers give more than two weeks vacation after certain number of years. In such cases, the employer is not required to give corresponding percentages of wages, that is, if the employer gives three weeks vacation after say 5 years service, it does not mean the employer must pay 6% vacation, although, if the employer does so, it will be acceptable but the Act does not force the employer to pay 6%. The employer can still pay 4% vacation pay and not violate the Act. However, if the contract of employment specifies that the employer would pay 6% vacation pay for three weeks vacation or 8% vacation pay for 4 weeks of vacation, the Act then would require the employer to fulfill its obligation.

 

The section also clarifies that in calculating vacation pay, the previous vacation pay paid is not included in the wages for which vacation pay is being paid.

 

Generally speaking, the vacation pay is calculated for employees other than salaried employees, that is, who may be paid on hourly basis or commission or some other methods. The salaried employees get their regular salary while they are on vacation. The Act does not require the employer to continue to pay salary when employees are on vacation and also calculate 4% vacation pay. In other words, there is no requirement that the employees have their salary continued as well as receive at least 4% vacation pay.

 

                

If you or the employer disagrees with the investigating officer’s decision, both parties have a right to appeal to Ontario Labour Relations Board within 30 days of the officer’s decision. The Board appoints a referee to hear the appeal. It does not cost the employee to request an appeal but the employer may be required to deposit monies in trust with the Ministry of Labour if it is found to be owing. The referee decision is final and binding on both parties.    

 

In the past, the Ministry was very aggressive in defending the rights of an employee and would send a legal counsel to represent the employee at the Board’s hearing to deal with the matter. It rarely does so now. Obviously, the employer has advantage over the employee in these circumstances. The question arises, should the employee also engage the services of a professional? It is my view, employee’s may not engage such services at the officer’s level hearing but may do so at the at the referee level hearing, particularly, if the issues are complex.

 

It is important that if a hearing has been scheduled, the employee must attend such a hearing to present evidence to support its position or to contest the employer’s evidence, otherwise, the officer or the referee may rely on the evidence of the employer to render a decision.   

 

This information is provided for guidance only and should not be considered as a legal advice.

This article is provided by Rajinder K. Batra, who is a retired Employment Standards Officer with the Ministry of Labour with 15 years experience in these matters.

If you have any questions regarding your employment, please contact the writer by e-mail at esaconsulting@hotmail.com

If you don’t have access to e-mail; you can fax your question at (905) 331-1805.