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Holiday closures for 2008

By Yosie Saint-Cyr, LL.B., Managing Editor at HRinfodesk.com---Canadian Payroll and Employment Law News, November 2008

This year, the public (statutory) holidays of Christmas (Dec. 25) and New Year's Day (Jan. 1) fall on Thursdays; and in Ontario and federally regulated workplaces, Boxing Day (Dec. 26) falls on a Friday. Our last HRinfodesk poll was conducted to understand how companies intend to deal with these particular public holidays in 2008 to balance customer demands and operational needs.

As can be seen below, out of 657 respondents to the poll, the majority of employers (48.25%/317) intend to comply by giving only the three public holidays of Christmas, Boxing Day and New Year's Day. However, a considerable number of businesses (23.59%/155) are completely closing their company during the holiday season, from December 25 (some have indicated and included December 24) to January 2 inclusively.

This article provides you with an overview of public holiday requirements and the ins and outs of a plant shutdown.

Public holiday requirements refresher

Statutory holidays (also referred to as general or public holidays in many statutes) are days of special significance that have been established by governments to commemorate or celebrate certain events. Every jurisdiction in Canada provides for a number of public holidays through its employment/labour standards legislation. Employees who meet qualifying requirements are entitled to be paid for the holiday while they have the time off or, if they are required or agree to work, to the payment of wages at a premium rate for work performed.

When an employee is given a day off on a statutory holiday, it must be the employee's regular day of work. Depending on the jurisdiction, an eligible employee is entitled to be paid public holiday pay, an average day's pay, general holiday pay or regular day's pay.

All jurisdictions establish certain conditions or prerequisites that an employee must meet before being entitled to a paid holiday. Although they vary significantly by jurisdiction, the conditions can include length of service; obligation to work on the holiday if required; obligation to work on the working day preceding/following the holiday; requirement to have earned wages for a number of days in the period preceding the holiday; and specific work arrangements, such as casual employment.

Very few jurisdictions allow employees to refuse to work on a statutory holiday, if asked to do so by their employer.

It should also be noted that some occupations and industries are expressly excluded from statutory holiday provisions, while others are not covered by employment or labour standards legislation. Exclusions vary, depending on the jurisdiction. They often include managers, professionals, salespersons, participants in work experience programs, sitters and certain agricultural workers, to name but a few. In addition, legislated statutory holiday provisions in many jurisdictions do not apply where the terms of a collective agreement confer at least the same rights or benefits to employees.

The statutes of most jurisdictions require that, if a holiday falls on a non-working day such as Saturday or Sunday, the employer provide a day off with pay at another time, generally before the employee's next vacation. Sometimes, legislation provides that holidays falling on a Sunday must be observed on the following day or specifically on that day.

In all jurisdictions, employees are entitled to a compensatory day off with pay if a public holiday for which they qualify coincides with their annual vacation. In some jurisdictions, the holiday may be scheduled at another time mutually agreed upon by the employer and the employee, normally before the next annual vacation.

In some jurisdictions, when a holiday occurs on a non-working day or during a vacation, employers may simply pay their employees an amount equivalent to their regular wages instead of granting them a substituted day off with pay. This is nevertheless subject to employee consent in some jurisdictions.

In some jurisdictions, any hours worked on a public holiday that are compensated with premium pay are not included when determining whether an employee has worked any overtime hours.

Sometimes an employee's job comes to an end before the employee can take a substitute holiday with public holiday pay that he or she has earned. Some jurisdictions legislate that, in this case, the employer must pay the employee's public holiday pay at the same time it pays the employee's final wages. This is so regardless of the reason the job came to an end, whether it is because the employee quit, was fired for good reason, or for some other reason.

The public holidays of Christmas and New Year's Day are celebrated in all jurisdictions. Boxing Day is only a public holiday in federally regulated and Ontario jurisdictions.

Note that several employers offer public holidays that they are not required to observe under employment/labour standards legislation in their jurisdiction as floater days. Organization allow employees one or several extra days off per year with pay (over and above regular holidays) to be used as floater days. For example, employers in other jurisdiction other then federally regulated and Ontario might offer Boxing Day as a floater day to their employees, instead of requiring them to come in the morning after Christmas day.

Plant shutdown

A company can close down for a week or two and have the employees take that as their vacation time and pay. This is legal, simply because the legislation allows the employer to decide when an employee takes their vacation. However, the employer must give employees sufficient notice that the company has a plant shut-down policy in place, and that is how their vacation will be scheduled. Be sure to give employees as much notice as is possible, to make sure they can make their vacation arrangements.

If an employer wants to shut down for a week in July or at Christmas, the employer is entitled to require its employees to take their vacation during that week, unless they have an employment contract or there is a policy that says otherwise.

If you plan on closing down the business, give as much written notice as possible and advise your employees that they will be paid for the time as part of their vacations. Also, employees must be paid their public holiday pay as stated in employment/labour legislation.

However, some employers often shut down during the holidays because their business slows down or they schedule maintenance work. Employees continue to receive their regular pay in addition to their public holiday pay. This is treated as an added fringe benefit provided by the employer.

Note that a plant shut down policy does not need to apply to all employees in the company. You may need some workers to come in during the plant shut down because some operations of the company must continue to function, or you may need emergency workers on call. This must be stated in the policy.

A plant shutdown requires preparation and advanced notice.

What must employers do?

Employers must ensure they are in full compliance with employment and labour standards legislation regarding how they deal with public (statutory) holidays within their organization.

While public holidays may seem like a simple and straightforward aspect within the context of employment policies, they are more complex upon further examination because of entitlement issues, how public holiday or an average pay is calculated, the correct way to calculate overtime in the weeks where there is a public holiday, etc.

If you want to know what specifically applies to your jurisdiction, go to the HRinfodesk Library, select your jurisdiction, click on Benefits, and then on Public (Statutory) Holidays.