In Mazanek v Bill & Son Towing ( 2021 ONSC 4512) Justice Steele awarded a 6 month notice period to a 44 year old tow truck driver with 5.5 years service. The employer failed to prove multiple allegations of theft and other misdeeds.
At no time during his employment was he paid statutory vacation pay as he was wrongly considered to be an independent contractor. The Court considered the usual factors and found that he was an employee and not an independent contractor .
This finding that the Plaintiff was in fact an employee governed by the Employment Standards Act led to a claim for vacation pay for the entire period of employment. However the Judge found that the Limitations Act restricted claims for unpaid vacation pay to the date 2 years from the commencement of the claim. However the comments on this issue was very brief on this issue, one single paragraph in an award of 80 paragraphs. This is all that the judge said on the vacation pay issue :
[77] As I have determined that Mr. Mazanek was an employee of Bill & Son, he is also entitled to damages on account of vacation pay under the ESA. Mr. Mazanek claimed damages for accrued but unpaid vacation. Bill & Son argues that if there was any vacation pay due and owing it would only be due and payable two years preceding the commencing of the action. Any claimed amount preceding that date would be statute barred under the Limitations Act. I agree.
My Comments:
The Judge did not list any of the counterarguments that I assume were made by the Plaintiff’s lawyers. This issue has come up before me in many mediations and it would appear that the issue may not be as cut and dry as set out in this case.
For instance, since the Plaintiff was treated by the defendant as a contractor and not an employee, how could he “discover ” his entitlement to vacation pay until a Court , the Ministry of Labour or CRA declared him to be an employee?
This principle of discoverability was set out in the leading case of Evangelista v. Number 7 Sales Limited ( 2008 ONCA 599) in which the Ontario Court of Appeal said as follows:
[43] Finally, the appellant argues that the trial judge erred in allowing public holiday and vacation pay going back to 1996 notwithstanding the two year statutory limitation period in s. 96(3) of the Act and/or the two year limitation period in the Limitations Act 2002, S.O. 2002, c. 24, Sch. B.
[44] Section 96(3) of the Act does not apply to civil lawsuits. It applies to filing complaints with the Ministry of Labour.[2]
[45] As to the Limitations Act, 2002, the appellant first paid the respondent vacation pay in December 2003. The trial judge accepted the respondent’s evidence that he was not aware of his entitlement to vacation or public holiday pay before that time. The trial judge held that the respondent’s lack of awareness as to his entitlement went to the issue of discoverability. As a result, the respondent’s action, which was commenced in July 2004, was well within the two year limitation period in the Limitations Act, 2002.
[46] I see no basis to interfere with the trial judge’s conclusion that the respondent’s entitlement to public holiday and vacation pay should not be reduced on the basis of the operation of a limitation period.
In this case it was only when the Court determined that the Plaintiff was in fact an employee and not a contractor that the Plaintiff could have ” discovered ” that he was entitled to vacation pay. Therefore , following the logic of the Court of Appeal in Evangelista, should he have not been awarded his unpaid vacation pay for his entire period of employment?
I am not sure that this case is the final word on this issue.
For a copy of this case email me at barryfisher@rogers.com.