3022-99-ES Success Driver Training Inc., Applicant v. Janice Brown and Cheryl Star, Employment Standards Officer and Ministry of Labour, Responding Parties.
Employment Practices Branch File No. 61004642
BEFORE: Patrick Kelly, Vice‑Chair.
APPEARANCES: Vinod Bhatia appearing on behalf of the applicant; Richard Overland and Janice Brown appearing on behalf of Janice Brown; Heidi Ann Lazar-Meyn appearing on behalf of the Ministry of Labour.
DECISION OF THE BOARD; August 31, 2000
This application was filed as a director’s request for review, pursuant to section 58.22 of the Employment Standards Act, R.S.O. 1990, c.E-14, as amended (“the Act”) in respect of Order to Pay # 54254. At the July 26, 2000 hearing, it was agreed that the Order to Pay was issued against the applicant corporation and not against any of its directors. The matter therefore proceeded as an employer application for review pursuant to section 68 of the Act.
The applicant and the individual responding party in this matter were not represented by legal counsel. At the outset, I indicated that, while they were entitled to participate without legal representation, they bore the risks of so doing in a legal proceeding that would affect their rights and interests. They indicated that they accepted these risks.
The Employment Standards Officer (“the Officer”) determined that Ms. Brown, the individual responding party (“Brown”), was not paid wages in the last week of her employment in July 1999, and was not paid vacation pay for any part of her period of employment with the applicant. The employer’s position was that a cheque in the amount of $527.50 issued to Brown on July 8, 1999 was intended to cover both termination pay and wages for the final week of employment. Moreover, the employer contended that vacation pay was always paid to Brown as an included portion of Brown’s wage of $8.00 per hour.
The sole witness to testify on behalf of the applicant was Veena Bhatia (“Mrs. Bhatia”), who indicated that her role with the applicant was to assist in the hiring of employees. She attended at the interview of Brown, which led to Brown’s hire by the applicant. Mrs. Bhatia testified that during the interview, the $8.00 hourly wage
for the position was discussed, and that it was made clear to Brown that it was inclusive of vacation pay. In response to questions put to her by counsel for the Ministry of Labour, Mrs. Bhatia was unable to explain the basis for calculating the vacation pay portion of Brown’s hourly wage. It became obvious that, following the hire of Brown, the applicant had never actually established the delineation between regular wages and vacation pay in respect of Brown’s remuneration.
The only other evidence tendered by the applicant was a copy of the front page of a Record of Employment issued by the applicant in respect of Brown’s termination of employment, which indicates that Brown commenced employment with the applicant on August 10, 1998, and that the last day for which she was paid was July 8, 1999. The document, which appears to have been filled out by Vinod K. Bhatia (“Mr. Bhatia”), a director of the applicant, indicates total insurable earning of $8384.00 inclusive of vacation pay and termination pay. The information on the Record of Employment concerning Brown’s start and termination dates was not disputed. The purported inclusion of vacation pay as reported in the total insurable earnings column of the Record of Employment remains, of course, in dispute.
Brown testified that vacation pay was never discussed during her employment interview with the applicant, or at any other time thereafter. She also testified that, as a person coming off unemployment insurance benefits to take a new job, she would not have accepted anything less than a base wage of $8.00 per hour with the applicant, and further testified that she made clear to the applicant that she was concerned about increasing her hourly rate as quickly as possible following the commencement of her duties. Her testimony in this regard was never seriously challenged by the applicant.
It was common ground among the parties that Brown was terminated by the applicant on July 8, 1999, the day on which Mr. Bhatia was scheduled to leave on a family vacation. On or shortly before July 8, 1999, Brown had been entrusted by Mr. Bhatia with three post-dated pay cheques, one for herself for wages during the previous week, and two others which she was to distribute to a co-worker on consecutive pay days while Mr. Bhatia vacationed.
Brown testified that she was terminated by the applicant for persistently insisting that she be paid vacation pay. She estimated that she began raising the issue with Mr. Bhatia in the last month of her employment. She testified further that Mr. Bhatia claimed her vacation pay was included in her hourly rate, and that when she challenged that view, he said he would discuss it with her again at a future time. When it became obvious that her demands were not going to be met, she informed Mr. Bhatia on July 8, 1999 that she would refer the matter to “the Board” for a determination as to her
rights. That led to a heated exchange between Brown and Mr. Bhatia, following which Mr. Bhatia informed Brown that she was terminated. There followed a further exchange in which, according to Brown, Mr. Bhatia insisted on inspecting a bag which Brown had in her possession as she was leaving the applicant’s premises. According to Brown, an angry Mr. Bhatia reached for the bag, and in so doing came into contact with her breast. Shortly thereafter, Brown left the premises, and decided to file a complaint with the police regarding the physical confrontation. At the time, she felt that a sexual assault had taken place. She filed her complaint the same day. She also telephoned what she referred to as “the Labour Board”, and testified that she was instructed to return to the applicant two of the three post-dated cheques she still had in her possession, and keep the cheque payable to her for the preceding week’s wages. She kept and, presumably, cashed that cheque as there was no dispute as to her entitlement to the previous week’s wages.
Brown then arranged to have a neighbour drive her back to the applicant’s premises on July 8, 1999. She testified that on arrival, she handed the two cheques back to Mr. Bhatia, and stated her belief that he owed her vacation pay, termination pay and unpaid wages (for that week). Mr. Bhatia is then alleged to have handed Brown a termination letter, with a cheque in the amount of $527.50. This cheque, a copy of which was produced at the hearing, had the hand written words “Termination Pay” in the lower left section of the document beside the typed heading “FOR”. All hand written portions of this cheque appear to be that of a single individual. It was not disputed that the cheque was made out by a representative of the applicant, nor that that representative completed the words “Termination Pay” on the cheque. Brown testified that at the time, she was not certain what the cheque was meant to cover, and that there was no verbal explanation offered to her by Mr. Bhatia at the time. At any rate, she left the applicant’s premises. Upon further reflection, she decided not to proceed with the sexual assault charge, having concluded that the physical contact had probably been unintentional.
I accept Brown’s version of the events immediately prior to and following her termination. It is important to emphasize here that the applicant led no evidence whatsoever concerning the termination of Brown or the circumstances surrounding the issue of the cheque for $527.50. The applicant made no attempt to challenge Brown’s contention that she was terminated because she became insistent, to the point of perhaps outright hostility, that her claim for vacation pay be satisfied. The Board understood the applicant’s position regarding the cheque for $527.50 to be that it was inclusive of both termination pay and Brown’s last week of wages, because the amount of the cheque exceeded what Brown was entitled to under the Act in respect of termination pay in lieu of notice of termination. Again, the applicant presented no evidence to support its position on this point, nor did it get any support for that position in its cross-examination of Brown.
The applicant clearly failed to demonstrate that the contract of employment with Brown included a term that her hourly rate of pay was inclusive of vacation pay. While Mrs. Bhatia testified that the inclusion was discussed at the employment interview with Brown in 1998, the applicant failed to provide any evidence that it calculated vacation pay discretely from Brown’s regular rate of pay, as it is required to do by section 10(2) of the Act. The pay stubs put in evidence by Brown disclose that only the stub for the last pay cheque she received indicated that her weekly pay was inclusive of vacation pay (although no amount for vacation pay was specified). The other pay stubs do not contain anything at all about vacation pay. I find that the applicant’s purported inclusion of vacation pay in the pay cheque preceding Brown’s last week of employment was an attempt to counter and frustrate Brown’s repeated claims in the last month of her employment that she was entitled to vacation pay over and above her hourly rate. In any event, Brown’s evidence that she persisted with her claim for vacation pay in the last month of her employment, and her further evidence that Mr. Bhatia continued to put her off by saying he would discuss her claim at a future time (only to finally resist it) was not seriously contested by the applicant. That evidence suggests there never was a meeting of the minds between the parties upon Brown’s hire regarding the issue of vacation pay. I put no weight, therefore, on Mrs. Bhatia’s contention that Brown agreed her hourly rate of pay was inclusive of vacation pay.
Even if there had been an agreement concerning vacation pay of the type claimed by the applicant, there was no evidence that the applicant had obtained the approval for such agreement from the Director of Employment Standards, as required by section 31 of the Act.
This case is similar on its facts and concerning vacation pay to Re Feroughi (c.o.b. Sooters Studio) [1993] O.E.S.A.D. No 191 (Referee Levinson) wherein the Referee concluded that there was no agreement to include vacation pay in the claimant’s hourly rate of pay. I see no reason to depart from the reasoning in that case in deciding the issue of vacation pay in this one.
The applicant failed to adduce any evidence that the cheque for $527.50 was in respect of anything other than what it purports on its face to be, that is, a cheque for termination pay.
Accordingly, the applicant is liable to Brown for unpaid wages in respect of her last week’s work, and for vacation pay on all wages earned by Brown during her employment with the applicant, as determined by the Officer.
DISPOSITION
- The Board makes the following orders and directions:
(i) the application is dismissed
(ii) the wages paid to the "Director in trust" plus any interest accrued thereon in relation to this matter shall be disbursed as follows:
to be paid to Janice Brown $831.34
(iii) the administration fee as set out in
the Order to Pay shall be retained by
the Government of Ontario
Consolidated Revenue Fund $100.00
(iv) total amount held by the Director $ 931.34
“Patrick Kelly”
for the Board