Author: Stacey R. Ball

The “changed substratum doctrine” presents one way an employee can defeat the terms of their employment contract. In a recent Ontario decision, the doctrine was usefully summarized and applied.

Factual Overview

Mr. Celestini co-founded the defendant employer, Shoplogix, in 2002. In 2005, Celestini sold many of his shares in Shoplogix and stepped down from CEO to CTO. As part of this transition, he signed an employment agreement on May 17, 2005. This agreement included a termination clause that allowed for 12 months’ salary continuation with benefits and pro-rated bonus.

In 2017, 15 years after Celestini founded Shoplogix and 12 years after taking on the role of CTO, Celestini was terminated without cause.

The sole issue in this case was whether or not the substratum of Celestini’s contract of employment with Shoplogix changed substantially after the employment agreement of May 17, 2005 such that the contractual notice terms in the employment agreement (i.e. 12 months’ salary and benefits continuation) were unenforceable. If so, Celestini would be entitled to common law reasonable notice, which potentially would be higher than the notice provided in his contract.

Celestini took the position that the substratum of his contract had changed substantially. Shoplogix took the position that it had not, and that any change was minor and incremental.

Substratum Doctrine

The Ontario Superior Court has previously explained that contractual notice periods will not be enforceable if, over the course of an employee’s employment, the important terms of the agreement concerning that employee’s responsibilities and status have significantly changed. This recognizes that contractual terms which are fair at the beginning of the employment relationship may later be unfair when the employee:

• Develops new skills;
• Acquires a new position (although there is no requirement that they assume a new job title);
• Receives greater remuneration; or
• Acquires additional responsibilities.

According to the changed substratum doctrine, significant changes in employment can cause notice provisions in an employment contract to become unenforceable at the time of termination. Where the substratum of the employment contract at the time of hiring has disappeared or eroded sufficiently, it may be implied under the doctrine that the contract could not have been intended to apply to the position held by the employee at the time of their dismissal because the position is not the same as the position the original employment contract related to.

Did the Substratum Change? Is the Contract Enforceable?

When Celestini entered into the contract in 2005 he was CTO. He received his instructions from the CEO, Mr. Dwyer. At the time, Celestini was not responsible for operational programs or other activities related to Shoplogix’s sales or research and development activities. Rather, his role was to explain the business to others at Shoplogix, including its new sales team. He was responsible for internally transferring knowledge to others on the team so they could best understand the Shoplogix product and how to best market it. Significantly, Celestini had no direct managerial or operational responsibilities.

Mr. Dwyer left Shoplogix in 2007. Before a new CEO was hired, Celestini was tasked with managing the transition to a new CEO. His role shifted considerably. He was depended upon for managerial and operational duties that extended well beyond the CTO role he initially performed.

When the new CEO was introduced in 2008, a new manager approach was implemented that departed substantially from the approach of the CEO’s predecessor. Celestini saw his compensation change dramatically: from $300,000 in 2005 to $518,850 in 2016. Celestini was also tasked with significant new duties and responsibilities that fundamentally changed his employment from what it was in 2005 when he started as CTO. He became responsible for all the company’s infrastructure responsibilities, and travel became a significant part of his job despite being non-existent in 2005.

Based on all the above, the trial judge found that the substratum had changed – after the new CEO was introduced, dramatic changes were instituted to revitalize the company. The CEO reduced the senior management team and restructured its remaining roles, resulting in Celestini’s role as CTO fundamentally changing.

The substratum of Celestini’s employment contract had disappeared. Therefore, the changed substratum doctrine was implicated with the effect that the contract’s notice provisions were unenforceable. As a result, common law would apply. The trial judge awarded Celestini with 18 months’ notice (i.e. 6 months more than allowable under his employment contract of 2005).

An employee who has been wrongfully dismissed and is entitled to reasonable notice at common law will be compensated based on the number of months of notice the court concludes they should have received. The amount of payment they receive in lieu of that reasonable notice will often be determined based on the employee’s compensation in previous years. Sometimes, the parties disagree over what forms of compensation should be considered. For instance, should the employee’s base salary alone be considered? Or should the value of their benefits, bonuses, and car allowances, among other factors, also be considered?

In Koski v Terago Networks Inc., the parties agreed that the employee, Koski, was dismissed without cause and without notice, thus entitling him to pay in lieu of notice. They disagreed, however, on what forms of compensation should be considered in determining the quantum of pay.

Factual Overview

Koski was an employee of the defendant Terago Networks Inc. He worked as a Customer Success Manager, a supervisory position, at the time he was fired. He was 38 years old and had been workingworked with the company for 13 years. The trial judge concluded, based on these factors, that he should have received 13 months’ notice.

Terago did not disagree with the number of months of notice awarded. However, they disagreed on what should be considered in determining his compensation. There was no dispute that his $80,000 base salary would be included. Instead, Terago disagreed that Koski’s incentive bonus should be included. Koski, predictably, wanted his bonus to be included because this would increase his total compensation and entitle him to more pay in lieu of notice.

Therefore, the issue is whether Koski is entitled to compensation for any incentive bonuses he could have earned during the notice period.

The Bonus Plan

Terago submits that its incentive bonus plan excludes Koski from participating in any bonus payments after November 20, 2019 (i.e. the date he was dismissed). The bonus plan in question provides the following provision under the heading “Eligibility”:

Actively employed by Terago on the date of the bonus payout in 2020. For greater certainty, any statutory severance period or reasonable notice period applicable to an employee who has been dismissed by the Company (whether with or without cause) that overlaps with a bonus payout date shall not be considered as satisfying the “actively employed” requirements of the Program. As such, employees who have been terminated … prior to the bonus payout date are not eligible for any bonus payments referenced herein.

On its face, the provision appears to disentitle Koski from receiving his bonus because he was not “actively employed” on the date of the bonus payout. But, is this consistent with the law?

Wrongful Dismissal Damages and Bonuses

According to the Ontario Court of Appeal, wrongful dismissal damages should “place the employee in the same financial position he or she would have been in” had proper reasonable notice been given. Courts will typically include all the compensation and benefits an employee would have earned during that notice period.

This approach was further adopted by the Supreme Court of Canada. According to the Court, whether an employee is entitled to bonus or other benefits during the notice periods depends on two questions:

• Would the employee have been entitled to the bonus or benefit as part of their compensation during the reasonable notice period; and
• If so, do the terms of the employment contract or bonus plan unambiguously take away or limit that common law right.

Mr. Koski Entitled to Bonus

The first question in the above test is easily answered in the affirmative where the bonus is mandatory. However, in Koski’s case, the bonus is discretionary. Where bonuses are discretionary, one must consider whether:

1. the bonus structure is integral part of his compensation, and;
2. whether he would have received the bonus if he remained employed.

The onus is on the employee to affirmatively prove these questions.

Looking at Koski’s previous bonuses, the trial judge found that they were indeed integral to his compensation. Further, trial judge found that had he continued working through the notice period, he would have earned such bonus. Therefore, applying the test laid out by the Supreme Court of Canada, above, Koski would have been entitled to the bonus as part of his compensation during the notice period.

The second question in the Supreme Court’s test asks whether the bonus plan unambiguously removes the employee’s entitlement to the bonus. To accomplish this, the bonus plan must be absolutely clear and unambiguous. According to the Supreme Court, phrases such as “actively employed” and “with or without cause” are not sufficient. Rather, exclusion clauses, including those that exclude entitlement to bonuses, must clearly cover the exact circumstances which have arisen.

Ultimately, the trial judge found that Terago’s exclusion clause did not deprive Koski of his entitlement to his bonus incentive. The bonus plan provided that those who have been terminated are not eligible for the bonus – however, legally, one is not “terminated” until after the end of the notice period. Koski would have earned his bonus during the notice period, during which he would, at least legally, still be employed. Therefore the bonus policy is unclear – he must be terminated to not have the bonus, but he is not terminated, legally, until the end of his notice period, in which the bonus falls. Consequently, the policy does not unambiguously eliminate Koski’s common law right to his bonus payment. It must therefore be considered as part of his compensation for reasonable notice purposes.

In the recent Ontario decision Kraft v. Firepower Financial Corp., a dismissed employee was awarded a higher notice period due to his clear efforts to mitigate in light of the demonstrated difficulty of job searching in the midst of the COVID-19 pandemic.

Factual Overview

The Plaintiff, Mr. Kraft, was terminated from his job with the defendant without cause. He had worked with the defendant for 5.5 years, most recently as a specialized commissioned salesperson in investment banking with special focus on mergers and acquisitions. Mr. Kraft was mid-career and was well-qualified. His job required him to have specialized knowledge of the banking industry. He made a base salary of $70,000, and he also made bonus and commissions.

Of note, Mr. Kraft was involved in a major M&A deal with Arzon Limited (“Arzon”), a deal that closed six months after his termination of employment without cause.

Court Influenced by Employee Efforts, In Spite of Difficulties Arising From the COVID-19 Pandemic

In the circumstances, there was no doubt that Mr. Kraft made significant efforts to mitigate his losses as required by law. During the 13 months following his termination, he applied for over 70 different jobs. This certainly is not an insignificant effort.

Mr. Kraft was dismissed right at the outset of the COVID-19 pandemic. His job search coincided with the general closing of the economy due to COVID-19. Of central concern to the trial judge in this case was the job market at the time of Mr. Kraft’s dismissal and job search, as well as the impact of COVID-19 on that job market. Notably, and especially during the first half of the COVID-19 shutdown, there was much uncertainty in the economy and many employers had no interest in hiring workers in light of that uncertainty.

The employer attempted to argue that because Mr. Kraft was actually dismissed before the official COVID-19 shutdown, as implemented by the government, that this is not much of a consideration. However, regardless of when the government declares an emergency, the economy was already shutting down and remained closed during employee’s “inevitably prolonged search”. According to the trial judge:

“A global pandemic does not just emerge on the day of the government’s emergency decree.”

After reviewing comparable case law, the trial judge found that an employee like Mr. Kraft would, on average, receive around 9 months’ compensation. However, after considering the evidence related to the impact of COVID-19 on his job search, the trial judge felt he deserved slightly more: 10 months (i.e. one month more than if his termination were to occur in “non-pandemic” times).

Employee Awarded Commissions for Deal Closing After Termination

An interesting issue, in this case, is whether or not Mr. Kraft should be compensated for the commissions he would have earned from the Arzon deal had he remained with the employer. According to the Supreme Court of Canada, any commission that would have come due during the notice period is payable to the terminated employee. Furthermore, those commissions are considered wages under the Employment Standards Act and are required to be paid during the notice period.

The Arzon deal closed during the notice period (i.e., 6 months into the 10 month notice period). Therefore, applying the above principles, Mr. Kraft was owed the commission on that deal (which amounted to $77,559).

Employer / Employee Takeaway

For employees, this case reiterates the absolute necessity of keeping track of your job search efforts in order to prove you’ve met your duty to mitigate.

Employers, on the other hand, should consider keeping their own records regarding what jobs are available within a dismissed employee’s skills and qualifications and holding that employee accountable for not applying to such jobs. This would appear to be a failure to mitigate.

Ideally, productive mediations lead to settlements. Unfortunately, mediations can sometimes take a very long time. It isn’t surprising that after a long day of mediating, the wrongful dismissal lawyers might decide not to draft the formal minutes of settlement until the next day. While understandable, this decision could be a mistake.

In one recent case, choosing to delay drafting the materials had a serious consequence: the defendant employer decided they no longer liked the “agreement” that had been reached, but for which no formal document had yet been drafted. They took the position that no settlement had been reached at all.

The Mediation and Settlement

The plaintiff, Mr. Peres, was terminated from his position as President and CFO of the defendant employer. Mr. Peres commenced an action on December 2, 2020, which was the subject of a mediation that occurred on February 23, 2021. Present at the meeting was the plaintiff and his counsel as well as three representatives of the defendant and their counsel. Those representatives included the CEO and the Chair of the Board.

The mediation lasted all day. When the mediation was finally over, counsel exchanged emails summarizing and generally agreeing to the terms of the agreement. There was a list of five numbered points that defined the agreement. However, one provision of the agreement in particular, point 2, was problematic. It read, per plaintiff counsel’s email:

“2.         700,000 options are being granted in reasonable short order at a current exercise price and with an expiry date of November 10, 2023.”

To which defendant’s counsel replied:

“AGREED, SUBJECT TO BOARD APPROVAL ACTING REASONABLY.”

It was expected that the defendant would send the plaintiff draft minutes of settlement the next day. They did not. Instead, the defendant informed the plaintiff that the settlement as provided in the email did not receive the necessary Board approval.

At issue now is whether these emails, absent formally drafted minutes of settlement, constituted an agreement and whether that agreement can or should be enforced.

Was There An Agreement?

According the plaintiff, an agreement had been reached via email. The defendant used the word “AGREED”. The defendant later confirmed this in a subsequent email by saying “sounds good.”

On the other hand, the defendant argued that the emails were, at most, an agreement to agree, which is no agreement at all. There was no unequivocal offer or acceptance. Further, the entire settlement was subject to and conditional on the Board’s approval. The Board did not approve the agreement, thus there was no agreement.

After considering the perspective of each side, the trial judge found that there had indeed been an agreement. Although some further work was required in writing up the details, the parties had agreed on the essential terms of the agreement. The essential terms were clear, and the only remaining task was to put those essential terms into formal legal language. It was not necessary, strictly speaking, for the agreement to be produced in formal writing in order to be an agreement.

Is the Agreement Enforceable?

Having found that there was an agreement, the next question to be addressed was whether it can or should be enforced. Predictably, the defendant argued that it cannot and should not because the Board never approved the settlement as required by the emails forming the agreement. Although approval was only needed for point 2 of the agreement, the defendant argued this provision was an “essential pillar” of the overall agreement. If the Board did not approve this provision, they did not approve the rest.

The trial judge found that the agreement should be enforced in any event. The agreement stated that the board, acting reasonably, could disapprove. The trial judge found that there was no reasonable basis for the Board to decline the provision. That being the only provision in dispute, the rest of the agreement is capable of enforcement and should be enforced.

As such, the agreement reached by email was enforceable, despite not having been formally drafted or signed by the parties.

Important Takeaways

This case is an important reminder that what you say by email matters. You do not need formally drafted and executed minutes of settlement and release to have an enforceable agreement. If the essential terms of the agreement are clear, that will likely be enough.

Nevertheless, this entire situation could be easily avoided. Parties should be willing and able to present a formal settlement agreement promptly after the mediation has concluded. An easy way to accomplish this would be by having draft minutes of settlement, even in template form, prepared in advance so that you need only fill in the details discussed during the mediation. This would ensure there is no confusion moving forward and would prevent the possibility that one party might feel free to repudiate the agreement they reached at mediation.

The legal process is complicated. When you aren’t familiar with it, it’s easy to make mistakes. Some of these mistakes can be very costly. Some mistakes can be fixed. Some cannot, and if you make one of these mistakes, you may see your entire case thrown out. It is absolutely essential, for instance, that you bring your proceeding to the correct forum and within the correct amount of time.

In the recent Ontario Superior Court decision Andrew Scott v. Community Living Temiskaming South (“Andrew Scott”), a plaintiff had his entire case dismissed because he mistakenly commenced the proceeding in the wrong forum and because he did so too late.

The Time for Bringing Proceedings

The Limitations Act, 2002 sets out the two-year limitation period that applies to employment law proceedings. If you bring your claim more than two years after the claim was discovered, the court will have no choice but to dismiss your claim. In Andrew Scott, the plaintiff originally brought a claim for wrongful dismissal before amending it to a claim for constructive dismissal. Where a constructive dismissal arises from a change of position, case law suggests that the limitation period starts to run from the date of the change in position. In Andrew Scott, that change of position occurred on March 27, 2017. The plaintiff, however, brought his first claim on April 4, 2019, and then amended it on January 13, 2020. These dates are 24 months and 33 months, respectively, after the date the limitation period began to run. As a result, both claims fell outside the limitation period and were therefore dismissed.

Mitigation Efforts Irrelevant to Limitation Period

The plaintiff in Andrew Scott argued that the limitation period should have started later because he had remained with the employer in an effort to mitigate his losses in conformity with employment law principles. The Superior Court, however, did not believe this had any effect on when the limitation period began. Justice Koke found that mitigation cannot toll the limitation period as there is no reason a plaintiff could not mitigate his losses and commence an action at the same time.  Mitigation efforts, Justice Koke found, are wholly irrelevant to when a plaintiff discovers their losses and when the limitation period begins to run.

The Forum to Bring Proceedings

In the context of employment law, the proper forum will often depend on whether or not the employee bringing the proceeding is unionized. In Andrew Scott, the plaintiff was a member of a union when bringing his complaint. Notably, he commenced an action in the Ontario Superior Court. As it turns out, this was a significant error on his part. According to the Ontario Labour Relations Act, the resolution of disputes arising under a collective agreement should be provided through arbitration, not the courts.  Courts are not able to hear claims arising under collective agreements. Rather, a unionized employee with a claim against their employer must rely on the grievance process under the collective agreement and cannot turn to the courts for help.

The plaintiff in Andrew Scott, as a unionized employee, should not have turned to the courts for help. His answer lied in arbitration. As a result, Justice Koke found that he had no jurisdiction to hear the plaintiff’s claim, and the claim was dismissed.

The plaintiff may have had a case had he brought his complaint to the correct forum in the correct amount of time. He lost all chances of proving that case, however, when he brought it too late and to the wrong forum.  This case should serve as an important lesson not to delay in bringing a claim, and to ensure you bring it where it must be brought.

As of September 22, 2021, the Ontario government is requiring individuals to prove they are fully vaccinated in order to access certain businesses and public settings. These public settings include concert venues, movie theatres, convention centers, restaurants, nightclubs and casinos, among others. However, not everyone in Ontario has received the vaccination, and for a number of reasons. Some cannot receive the vaccination due to medical or religious reasons. Some simply do not want to take the vaccine and do not believe the government has the right to force them to do so.

Many who have not received the vaccine believe these mandatory vaccination policies are discriminatory or contrary to their human rights. However, they may be out of luck. According to the recent policy statement of the Ontario Human Rights Commission, such policies may not be discriminatory at all.

Generally Permissible: Reasonable Accommodations

According to the Commission, vaccine policies that are implemented to protect people at work or when receiving services are generally permissible as long as those who cannot receive the vaccine for Human Rights Code-related purposes are reasonably accommodated. By “Code-related purposes”, the Commission refers specifically to people who cannot be vaccinated due to medical or disability-related reasons.

The Ontario government has permitted exemptions to those who provide a written document supplied by a physician, registered nurse extended class or nurse practitioner explaining that the individual is exempt for a medical reason. According to the Commission, this is a reasonable accommodation.

Personal Preferences Not Protected

Significantly, according to the Commission, those who have refused the vaccine based only on personal preference do not have a right to accommodation under the Code. This is notwithstanding the fact the vaccine remains voluntary. Although the Code prohibits discrimination based on “Creed”, no tribunal or court decision has yet found a singular belief against vaccination or masks to amount to a creed. Even if it did, that would not necessarily grant these people exemptions from vaccine mandates. “The duty to accommodate”, says the Commission, “can be limited if it would significantly compromise health and safety amounting to undue hardship – such as during a pandemic.”

What Could this Mean for Employees?

The Ontario government is not the only one implementing vaccine policies. Many employers are requiring their employees be similarly vaccinated. Employees who refuse the vaccine face the risk of being terminated for their decision. Many of those employees had hoped to challenge such vaccine policies on human rights grounds. That avenue now looks rather gloomy. The Human Rights Commission has plainly said that vaccine mandates are generally permissible, so far as they provide reasonable accommodations to those who cannot get the vaccine for Code-related reasons. Those reasons do not include personal preference. It is likely that this approach, taken by the Commission in relation to the Ontario government’s vaccine policy, will be similarly applicable in the employment context. Simply not wanting to take the vaccine, as a personal choice, will probably be insufficient. Those who hope to challenge their employer’s vaccine policies will likely have to look elsewhere than personal preference. Not wanting to take the vaccine will likely be insufficient without some Code-related purpose, such as a disability, backing you up.

As of September 2021, our country is continuing to slowly reopen. As part of that slow reopening, we have seen a number of policies enacted that have sparked controversy and have been met with mixed reactions. Among those policies are mandatory mask policies. These policies often require that all people, employees and customers alike, wear face masks when inside the workplace.

At issue is whether or not these mandatory mask policies amount to a violation of human rights. For instance, many provinces including Ontario make it illegal to discriminate against a person on the basis of disability. If somebody were unable to wear a face mask on account of a disability, refusing to service that person due to their lack of a face mask would likely be discrimination contrary to the Ontario Human Rights Code.

This issue recently arose in an Albertan human rights complaint. The Human Rights Tribunal of Alberta held that a mandatory mask policy was not discriminatory and therefore did not violate the complainant’s human rights.

Factual Background: Szeles v Costco Wholesale Canada Ltd.

Mr. Szeles was a customer of Costco. He claimed to have a disability which prevented him from wearing a face mask as required by the company’s mandatory mask policy. An employee at Costco suggested he wear a face shield as opposed to the face mask, which Mr. Szeles refused on the grounds that the use of a face shield was stigmatizing and singled him out as a person with a disability. An altercation ensued and Mr. Szeles was escorted by police out of the store. He subsequently complained that Costco had discriminated against him in the area of goods, services and accommodation on the ground of physical disability.

In response, Costco argued that the mandatory mask policy was implemented to protect their employees and customers from COVID-19. According to Costco, they provided a number of reasonable accommodations for those who could not or would not wear face masks – the option of a face shield, or various online, home delivery or pick up options.

The Tribunal’s Decision

Ultimately, the Tribunal dismissed Mr. Szeles’ complaint. There was no doubt that Costco’s policy did have an adverse impact on persons who, by reason of disability, could not wear face masks. However, the Tribunal noted that there are limitations to the right to be free from discrimination, including where:

• a) the limitation or rule is instituted for valid reasons;
• b) it is instituted in the good faith belief that it is necessary; and
• c) it is impossible to accommodate persons who may be adversely affected, without incurring undue hardship.

There is no doubt that Costco’s mandatory mask policy was instituted for valid reasons. It was consistent with mandatory public health regulations both at the municipal and provincial levels. The accommodations offered, namely, the face shield was held to be reasonable. Various local and international health organizations have suggested that face shields are an alternative to face masks, albeit not as effective. The fact the face shield was not as effective as the face mask did not undermine the reasonableness of the mandatory mask policy. The same could be said for the other accommodations offered – online shopping, pick-up options, etc. In light of this, Mr. Szeles’ complaint was dismissed. The mandatory mask policy was not discriminatory on the grounds of disability.

A Contextual Analysis – Potential for Change

Interestingly, the Tribunal noted at the end of their decision that they reached their decision in light of the status of the pandemic at the time Costco implemented their policy. Public health guidance, they said, along with evidence about the pandemic will inevitably change over time. With that change, it is possible that a different decision could have been made. As such, their decision to dismiss the complaint here does not necessarily mean that no human rights complaint regarding mandatory mask policies will succeed. It may vary on a case-by-case basis.

However, for now, it seems employers can rest easy in implementing mask policies. Until the public health guidelines surrounding COVID-19 and preventative measures change, they likely will not get in trouble for having such policies. As the status of COVID-19 changes, so too should the employer’s policies. It is important to be flexible and continue to adapt to recent developments.

I Need a Vacation! What Are My Rights?

Everybody needs a break once in a while. Maybe work is just getting to be too much, or maybe the weather is too great to pass up. Whatever your reason for having one, everybody wants to have a vacation eventually. Luckily, employees in Ontario have a right to vacation time, so we can all get the time in the sun we need.

Under the Ontario Employment Standards Act, non-unionized employees who have worked for at least one year have a right to a minimum of two weeks of vacation. For example, if you were hired on June 1, 2021, then you will be entitled to two weeks of vacation after May 31, 2022. You will continue to earn two weeks of vacation after each 12-month period. Your entitlements will increase, however, once you have worked more than five years. At that point you will be entitled to three weeks of vacation after each 12-month period. So, for example, if you are hired on June 1, 2021:

• June 1, 2021 to May 31, 2022 Two weeks’ vacation
• June 1, 2022 to May 31, 2023 Two weeks’ vacation
• June 1, 2023 to May 31, 2024 Two weeks’ vacation
• June 1, 2024 to May 31, 2025 Two weeks’ vacation
• June 1, 2025 to May 31, 2026 Three weeks’ vacation
• June 1, 2026 to May 31, 2027 Three weeks’ vacation
• Etc.

Vacation time continues to accrue even where employees are away from work due to sickness, injury, temporary lay-off, or any other leave of absence that does not result in a break of service.

In addition to this statutory right to vacation time, non-unionized employees in Ontario also have a statutory right to vacation pay. Under the Employment Standards Act, employees who have worked less than five years are entitled to at least 4% of the gross wages earned in the previous 12-month period. Employees who have worked five years or more are entitled to at least 6% of those wages. The employer has an obligation to provide the employee with their vacation pay as a lump sum prior to them taking the vacation, with a few exceptions.

It is important to note that these are your minimum entitlements. Therefore, your employment contract may provide greater benefits than those guaranteed by the Employment Standards Act. Your employment agreement cannot provide you with less than these minimum entitlements – that would be contracting out of the Employment Standards Act and would be illegal.

Cruising on a Deadline

Although you are legally entitled to vacation time and vacation pay, you cannot necessarily take those vacations whenever you want. There are actually deadlines concerning when you may make use of your vacation time. An employee who has earned their two or three weeks of vacation time must actually take that time within 10 months after completion of the 12-month period. Furthermore, employers have the right to schedule vacation as well as the obligation to ensure the vacation is taken before the end of that 10-month period.

So, rest assured, your employer must allow you some vacation days. Your beach visit doesn’t have to be cancelled, after all!