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Appeal allowed; employer cannot roll vacation pay into commissions without ensuring statutory minimums are met.
The appellant, a commissioned sales representative, appealed the dismissal of her claim for unpaid vacation pay under the Canada Labour Code.
The motion judge had found that the employer could satisfy its vacation pay obligations by paying them out of commission sales.
The Divisional Court allowed the appeal, holding that the employer failed to show the employee's commission rates were adjusted to include vacation pay or that she received a benefit equal to her statutory entitlements.
The Court also found the claim was not statute-barred, as the limitation period began on the last day of employment.
Judgment was granted for the appellant in the amount of $35,396.02.
Vacation pay may be satisfied from commission earnings under an enforceable agreement.
On a summary judgment record, the court decided a federal employment dispute concerning entitlement to vacation pay for a commission-only employee under the Canada Labour Code.
The plaintiff argued for vacation pay in addition to commissions, while the defendant maintained that the parties had an enforceable agreement permitting vacation pay to be drawn from commission earnings.
The court held that nothing in the Code prohibited such an arrangement, provided the statutory formula of 4% or 6% of yearly compensation was met.
Finding the agreement enforceable, the court dismissed the action and awarded the defendant $20,000 in costs.
