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BMO facing a class-action lawsuit over vacation, statutory pay calculations

The Bank of Montreal is facing a class-action lawsuit over vacation and statutory holiday pay for employees who have been laid off.

“Shortchanging employees on vacation and statutory holiday pay is a widespread issue and could be happening at more banks in Canada,” said Andrew Monkhouse, founder of Toronto-based Monkhouse Law. “However, this practice violates the Canadian Labour Code and denies employees their statutory rights.”

Monkhouse Law filed a statement of claim to certify the class action in the Supreme Court of British Columbia. It covers the period from Jan. 1, 2010, “until such time as a notice to the class is sent out in the future.”

“The BMO class action is a national class that alleges the company violated the Canada Labour Code (CLC) by calculating vacation and public holiday pay on an employee’s base pay only, ignoring money paid for bonuses, commissions, stock options and share units,” the firm said in a press release.

It was filed on behalf of a financial planner and private wealth consultant who worked at BMO from June 2009 to June 2017. Allegations must still be proven in court. BMO has many employees who receive variable compensation and commissions, and others who are paid bonuses.

Monkhouse Law provided the following explanation on the rules under the code.

“Employees must be paid additional vacation pay of four per cent of annual wages, six per cent if they have five to 10 years of continuous employment, and eight per cent if they have over 10 years of continuous employment, and holiday pay equal to one twentieth of what they earned over the prior four-week period before a holiday,” it said.

“So, if a six-year employee earned $52,000 and received $48,000 in variable compensation for a total of $100,000 per year, the individual would get three weeks vacation pay totaling $3,000 ($1,000 per week) under the BMO policy. However, under the CLC, the employee would be entitled to six per cent of total compensation, or $6,000.”

The law firm is no stranger to class-action lawsuits against major Canadian companies on the issue of vacation and stat holiday pay on termination — it has previously filed actions against RBC Insurance Agency; RBC Life Insurance; and Aviva General Insurance, it said in a press release.