Vacation Pay Memo

Dear Sisters and Brothers,

We are happy to announce that the Company and the Union have signed a Memorandum of Understanding regarding the outstanding Vacation Pay issue. We thank you for your patience, as it is a complicated situation. We wanted to ensure it was dealt with in a fair and reasonable manner. In order for us to get to this point, the Union had a number of meetings with the Company, researched into the Canadian Labour Code as well as Jurisprudence, and worked alongside Unifor, the Pilots Union, to ensure we were treated, and paid, as one. In December 2015, we brought this to the attention of the Company. Then we began to weigh the options available to us.  

The options that we discussed were: 

  • Go back to when the first CCM was on the payroll of the Airline.
  • Go back 7 years, (CRA refile limit for taxes)
  • Find a common middle ground
  • Go to arbitration 

As per the CLC, we would only be able to recover vacation pay for the 24 preceding months of date of complaint filed.

Reference: http://www.esdc.gc.ca/en/reports/labour_standards/filing_complaint.page

This immediately limited our options as an arbitrator would have to take this Recovery of Wagesinto consideration, if not abide by it. Instead we attempted to find a mutually agreeable solution with the Company.

As employees we have the responsibility to ourselves to verify that we are indeed paid correctly. We have to take some responsibility that we never realized the vacation pay issue until this time. The Local and the Company firmly believe the resolution is fair. Going back to 2011, i.e. vacation pay earned starting Jan 01- 2010, was a common middle ground.  

Included with this email are the MOU, calculation methodology, and the vacation pay calculations.

The short, simplified version of the vacation pay is as follows:

 As per our CBA, your Vacation Day Entitlement is based on your years of service, up to a max of 20 days, not including statutory holidays (8.4.1). If entitled to 15 days, you would be paid those at a rate of 4hrs per day x your current rate of pay at the time you take your vacation days.

 Each CCM also has a Vacation Pay Entitlement of 4-8% also based on years of service, on all taxable income (hours worked, OT, premiums, commissions, etc) (8.5.1). This is paid at your current rate of pay (vs the rate you accrued at). This is paid out to CCM’s when they are offline in excess of 30 days (mat leave, PLOA, layoff, etc). If you had experienced one of these situations, you would have been correctly paid out at that time.     

 The amount currently owed by the company, is the difference of the two:

Vacation Pay Entitlement – Vacation Day Entitlement = Amount Owing

 

Examples have been included to help paint a picture for you:

Example 1 – Scenario based on a CSM who works ~80hrs/month

 

You made $45 000.00 last year, on all of your taxable income.

Your hourly rate was 46.88 when you accrued your vacation (last year)

 You took your 15 days of vacation the following year, and were paid at 4hrs/day @$49.58/hour (your rate of pay when you actually take your vacation)

 15 days x 4 hrs x $49.58/hr = $2,974.80

 If you have been with the Company (as an FA or CSM) for more than 6 years, you should receive 6%

$45,000 x 6% = $2,700

 In this situation, you were actually overpaid” $274.80 as per the payout standards, but as per the vacation days pay, you were not, you were paid your entitlement. No money would be owed to you.

 

If you have only been with the Company for 5 years, then you would receive 4%

$45 000 x 4% = $1,800

In this situation, you were actually overpaid” $1,174.80 as per the payout standards, but as per the vacation days pay, you were not, you were paid your entitlement. No money would be owed to you

 

Example 2 – Scenario based on a CSM who works ~100hrs/month

 

You made $65,000 during your accrual year, on all taxable income.

Your hourly rate was $51.80 when you accrued your vacation (last year).

 You took your 15 days of vacation the following year, and were paid at 4hrs/day @ $51.80/hr

 15 days x 4 hrs x $51.80/hr = $3,108.00

 Payout as per our CBA is 6% for this person, based on time with the company.

$65,000 x 6% = $3,900

In this situation, you were actually underpaid $792.00 as per the payout standards. The Company owes you this amount.

  

Example #3 – Scenario based on an FA who works ~80hrs/month

 

You made $30,000 in your accrual year, on all taxable income at your hourly rate is $29.80.

The next year, when you take your vacation time, you are at $33.48/hr

 You took your 10 days of vacation, and were paid at 4hrs/day

 10 days x 4 hrs x $33.48/hr = $1,339.20

 Payout, as per our CBA is 4% for this person, based on time with the company.

$30,000 x 4% = $1200.

In this situation, you were actually overpaid” $139.20 as per the payout standards, but as per the vacation days pay, you were not, you were paid your entitlement. No money would be owed to you.

 

Example #4 – Scenario based on an FA who works ~100hrs/month

 

You made $40,000 in your accrual year, on all taxable income at your hourly rate is $29.80.

The next year, when you take your vacation time, you are at $33.48/hr

 You took your 10 days of vacation, and were paid at 4hrs/day

10days x 4hrs x $33.48/hr = $1,339.20.

Payout, as per our CBA is 4% for this person, based on time with the company.

$40,000 x 4% = $1600

In this situation, you were actually underpaid $260.80 as per the payout standards. The company owes this to you.

 

 

This is a simplified calculation. These examples are also only looking at one year at a time. You need to be aware that you have pay raises that occur within the year. Those need to be accounted for and the amounts will vary. Think of the scenario FA upgrading to CSM or vice versa, going from one year to the next, and the seasonality factor (many have been paid out already for certain years). Please also note that the times are normalized to the calendar year for calculation purposes, not the actual vacation year.

 This money less statutory deductions is what you will receive with this settlement for the years 2013 – 2014 – 2015.

For the years of 2011 – 2012, the company has decided to equal the amount owed to the CCM from 2013. This was done due to the changeover in accounting systems. It was virtually impossible for the company to calculate the actual amounts. 

 If the calculations indicate you are owed $200 for 2013 then the company will pay you $200 for 2012 and $200 for 2011. 

The Memorandum of Understanding can be viewed here.

The company will email each and every one of you with your specific monies owed, if any. Please review these carefully. Don’t hesitate to contact us should you have any questions.   

In solidarity,

 

The Executive of CUPE Local 4055

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