Law Firm Loses To Ex-Lawyer Over Unpaid Vacation And Holiday Pay

Intro

When an employment relationship ends, nothing gives lawyers more confidence than a well drafted employment agreement. But sometimes even lawyers (while acting as employers) don't get it right. RG Bissett Professional Corp v Kusick, 2018 ABQB 406, highlights why it is crucial to keep up to date and accurate employment records while ensuring that employee entitlements and duties are clearly spelled out in employment agreements. Failure to do so can have significant financial consequences.

Background

David Kusick ("Kusick") was employed as a lawyer with Stringam Denecky LLP ("Stringam"). After Kusick resigned from Stringam, he filed an Employment Standards complaint for unpaid vacation and holiday pay. The dispute reached the Alberta Court of Queen's Bench after an Employment Standards Officer and Provincial Court Umpire ruled against the employer law firm.

Kusick started working for Stringam on April 18, 2005. On November 23, 2009, he signed a revised employment agreement that contained the following provision regarding compensation ("Clause 3"):

"The Partners will pay David a gross salary of 40% his months receipts of fees, inclusive of vacation pay entitlement [...]".

The dispute between the parties largely stemmed from the wording of this clause. For the reasons set out below, the Employment Standards Officer awarded Kusick $33,280.14 for unpaid vacation pay and $19,746.32 for unpaid general holiday pay for the two-year period before Kusick's employment ended. Both of Stringam's appeals were unsuccessful.

Issues

Two overlapping issues formed the basis of the award against Stringam.

First, was the problem of merging holiday pay and vacation pay. Stringam argued that vacation pay and holiday pay were interrelated concepts, with holiday pay impliedly included in vacation pay. In other words, Stringam argued that a singular term referred to both concepts and that this was the understanding of the parties when the employment agreement was entered into.

This argument was rejected on the basis of the clear distinction in the Employment Standards Code ("Code") between holiday pay and vacation pay. Specifically, holiday pay refers to pay for general holidays (e.g., Labour Day, Canada Day, Remembrance Day etc.). Vacation pay, on the other hand, refers to the percentage of wages an employee must be paid each year depending on the employee's vacation entitlements. The legislation governing the calculation, application, and operation of these...