It certainly seems to be the season of class action lawsuits, with another being recently certified to proceed as such, on behalf of a large class of employees.
In recent months and years, Ontario has seeing a number of claims for historical vacation pay where the 4% or 6% has (in some cases for a number of years) been calculated on base salary earnings only, rather than on all elements of wages, such as commissions and annual bonuses.
Most of these claims are seeking unpaid vacation going back years, far beyond the limitation period of two (2) years, with the appropriateness and legality thereof quickly becoming a question of its own before the Courts, in addition to quantifying the awards being sought, which run well into hundreds of millions of Dollars.
Most recently, the banking sector had seen class actions of this sought be certified but they are starting to appear in other sectors across Ontario as well. At the nub of the issue, is the fact that the ESA requires vacation pay to be calculated on base earnings, commissions, overtime pay, public holiday pay, termination pay under the ESA, and other allowances for room and board.
However, not everything is included when calculating vacation pay and under the ESA, exclusions include vacation pay paid out or earned, tips and gratuities, discretionary bonuses and gifts not related to hours or work, production or efficiency, expenses and travelling allowances, living allowances, contributions to benefit plans, severance pay and any federal employment insurance benefits.
Preston Legal is not presently involved in any of class actions underway but have been advising various employers who have picked up similar issues within their historical practices.
