In today’s blog I will explain some of the things to consider when Employers have a specific written agreement with their employees to deal with any “special arrangements” regarding things like Vacation pay, when to take public holidays, or similar topics.
The Ministry of Labour (MOL) has provided clauses in the Employment Standards Act (ESA) to allow these arrangements, but Employers need to remember that they must be in writing in order to be considered as being in effect (or enforceable).
You will want to make sure that each agreement is done separately, for each topic and employee.
- Vacation Pay: Some employees prefer to get their vacation pay included with each paycheck. In this case, even though there may be a Vacation Policy that states their vacation pay is included on each pay, this will not be sufficient.
Employers must have a separate agreement for each employee, stating clearly that this employee agrees to have the vacation pay included, rather than having it accrue and paid out when they take their vacation time off. This is because the Employment Standards Act “rule” is for the vacation pay to accrue, so that the employee receives money and time off at the same time (paid vacation).
Also, if any employee chooses, they may opt out of the company policy and there would be no penalty for doing so. The employer would have to ensure that any such employee has their vacation pay accrue, as per the ESA provision.
- Observing Public Holidays: This is often overlooked, but since July 1 falls on a Wednesday this year it will be an issue for some Employers. If the public holiday falls on a “normal working day” (a day that the business is normally open), the employer and employees may agree to observe (take) their public holiday on another day-such as the Friday or Monday before or after the holiday.
If this is the case, you must have a written agreement for each of the holidays that would be affected and it must be an individual agreement with each employee. Please see my blog on Public Holiday pay for information on how to pay employees for these days.
So remember, if the Employment Standards Act has a provision that says “where the employer and employee(s) agree….” you must remember to get the agreement in writing in order for the MOL to consider it “legal”.