The Ontario Superior Court of Justice has given the green light to a proposed class action suit against investment dealer RBC Dominion Securities Inc. that seeks vacation pay for commissioned advisors and their assistants.
The proposed national class action alleges that the firm breached employment standards by failing to provide mandated vacation pay to investment advisors who were solely compensated by commissions, and for their assistants and associate advisors who were partly paid by commission.
The allegations have not been proven.
According to the decision to allow the case to proceed as a class action, the firm agreed that employment laws require that commissioned employees be paid for vacation and statutory holidays, in addition to their earned commissions, and that these amounts must be reported to employees.
“The problem here is that no such information was ever provided to the (wholly or partly) commissioned employees,” the court noted.
As a result, advisors couldn’t rely on their pay stubs to determine whether they’d received the required vacation pay or not, it said.
“The defendant admits that it may have breached the recording and reporting requirements,” the decision said.
The firm argued the case should be dismissed because it should be up to the employee to demonstrate they didn’t receive their required vacation pay, the decision said, and that advisors received their commission payouts whether they were on vacation or not.
However, the court rejected those arguments. It concluded that the onus is on the employer, not the employee, to show that mandated vacation pay was provided.
“The case law is clear that an employer cannot rely on a statement in the employment agreement that vacation and public holiday payments are ‘included in your pay,'” the court said in its ruling.
“The employer is obliged to record and report the calculation and payment of vacation and public holiday pay — otherwise, the employee will have no basis for determining whether or not these statutory entitlements were even provided,” it said.
The firm’s claim that advisors were paid whether they were on vacation or not will have to be tested at trial, it said, and not at the certification stage.
While it may be true that advisors received their commission payouts while on vacation, it’s “beyond dispute that the payment of previously earned commissions that happen to be paid while the employee is on holiday cannot also count as additional required vacation or public holiday pay,” the court noted.
It will have to be determined at trial whether the firm’s vacation pay obligations were factored into these payments or not, the decision said.
“Or, is this a case where the defendant employer simply decided to bury its [employment law] obligations under the misguided ‘included in payout rates’ provision, expecting few if any complaints from a high-income-earning work force?” the court said.
“At this stage of the proceeding, the most that can be said is: we don’t know.”
The court noted that the firm may still prevail at trial, but that the plaintiffs have met the requirements for certification as a class action.
The proposed class covered by the lawsuit includes all of the firm’s commissioned investment advisors, associates and assistants in all provinces and territories — except British Columbia and Alberta, which don’t require vacation pay for advisors — going back 15 years.