Employer claimed worker's paid time off exceeded outstanding wages, vacation pay
An employer was not entitled to deduct money from a worker’s final paycheque to offset days the worker took off with pay after a disagreement over lieu time, the Nova Scotia Labour Board has ruled.
The worker was an operations manager for Farmer’s Daughter Country Market, a market operated by Elmbrook Farms in Wycocomagh, NS. She was hired in April 2021 with an agreement to work from 9 a.m. to 5 p.m. at the market “plus some at-home work.”
At the time of her hiring, the worker requested three weeks annual vacation instead of the two-week standard for managers with the market. Her supervisor declined her request but agreed that she could take lieu time in exchange for extra hours.
The worker tracked extra hours that she worked on her work computer with the intention of banking lieu time, although there was some errors including Boxing Day when the market was closed.
On Oct. 26, 2021, the worker texted her supervisor to ask if she could use some of her lieu hours to take the day off, to which the supervisor agreed. Another text on Dec. 27 said she had hours to cover an absence that day, to which the supervisor responded “No worries.”
Bonus plan
On May 23, 2022, the worker’s salary was increased and she became eligible for a bonus for managers. If Farmer’s Daughter reached $2.25 million in sales in 2022, the worker and all other managers would receive a $5,000 bonus. According to the worker, her expected hours of work increased by half an hour following a verbal discussion with her supervisor, but the supervisor said there was no change and the hours were 9 a.m. to 5:30 p.m.
Believing that the bonus would compensate her, the worker stopped tracking her extra hours.
According to Elmbrook Farms, the worker took 47 sick days for which she was paid her full salary. However, the sick days were tracked in an old payroll system that lost the records. The worker claimed that the time she used for her absences was lieu time, not sick time and she was never told that she would be expected to use vacation time to cover sickness absences.
The worker also took 10 days off to provide end-of-life care to her mother, two days to care for her mother-in-law, and one day to accompany her spouse to a medical appointment. According to the worker, she used lieu time for all of these and mentioned lieu time in a text exchange with her supervisor in January 2022. However, the supervisor claimed that it was discussed that vacation time would be used for these absences.
In August 2022, the worker took five days’ vacation to attend her mother’s celebration of life.
Performance concerns led to resignation
On Sept. 15, the worker met with the supervisor about performance concerns, including payroll inaccuracies being submitted. The worker acknowledged the concerns as well as what she had done well in a text message afterwards, but she didn’t receive any reprimand. The supervisor replied that she was confident in her abilities but had “some bumps to the circumstances.”
The market achieved $2.25 million in sales for 2022 and the worker was paid the first bonus instalment of $2,300 on Dec. 15. There were two more instalments scheduled for Dec. 29 and Jan. 12, 2023.
However, the worker resigned from her position on Dec. 12 following a discussion with her supervisor about performance and attendance concerns, and she didn’t receive the second or third bonus payments. There was some discussion about her returning to work, but on Feb. 20, 2023, the supervisor emailed the worker to confirm that she wasn’t welcome back.
The worker’s final paycheque indicated that she was paid for 80 hours worked between Dec. 9 and Dec. 22, 2022, but deductions were made for items charged at the store – as per the employee handbook – and a “net pay” deduction of $1,377.60 to recover the value of days that the worker didn’t work but was paid for. As a result, the worker received no pay from her final paycheque.
The worker filed a labour standards claim for unpaid vacation pay, holiday pay – she claimed she worked on Canada Day 2022 – the $1,377.60 deducted from her final paycheque, and the outstanding bonus payments.
Vacation pay, holiday pay
The Director of Labour Standards ordered Elmbrook Farms to pay they worker nearly $4,000 in unpaid wages, vacation pay – the worker was entitled to 16 vacation days during her tenure and used five - and holiday pay. Elmbrook appealed, arguing that the worker wasn’t owed any pay because she was frequently absent from work and paid for her absences beyond her contractual entitlements to paid leave. The value of the worker’s leave exceeded the value of any unpaid wages, holiday pay, or vacation pay, the company said.
The worker maintained that she was entitled to accumulate lieu time and all her absences were covered by it. She also argued that she was entitled to additional bonus payment of $2,700, although Elmbrook countered that she wasn’t eligible for the remainder of the bonus because she wasn’t employed with the company at the time the second and third payments were issued.
The board noted that it was undisputed that the worker was entitled to 16 vacation days and used five and she had the benefit of many other days away from work during her time at the market. However, there was no evidence that Elmbrook ever told the worker that she was required to use her vacation entitlement for her absences, the board said, adding that there were several text exchanges with the supervisor in which the worker referred to lieu time.
The board found that the worker was engaging in a lieu time process in which she tracked extra hours and took them as paid time off. The worker was upfront about it and her supervisor never told her that it wasn’t permitted or that she should use vacation time instead, said the board.
Since Elmbrook didn’t order the worker to use vacation time instead of lieu time, the company was on the hook for vacation pay for the worker’s 11 unused vacation days, the board said. In addition, the company had no evidence to show that the worker didn’t work on Canada Day 2022, so it was responsible for paying her holiday pay for that day, the board said.
Deduction from wages not permitted
As for the worker’s final paycheque, the deduction for items charged at the store was appropriate, but most of the rest of it was “a wholly inappropriate fiction,” the board said. The board found no evidence that there was an agreement with the worker to make any deductions outside the required statutory deductions, which is required for an employer to make deductions. As a result, the company wasn’t entitled to deduct any money for days it felt the worker was paid for and shouldn’t have been, said the board.
The board agreed with Elmbrook that the worker wasn’t entitled to the additional bonus payments. She met the first condition for the bonus – contribution to the generation of revenue prior to the $2.25 million threshold being met – but not the second, which was contributing to subsequent revenue, as she was no longer employed with the market, said the board.
The board upheld the Director’s decision ordering Elmbrook Farms to pay the worker nearly $4,000 in outstanding vacation pay, holiday pay, and unpaid wages. See Elmbrook Farms Ltd. v. MacFarlane, 2024 NSLB 48
