Toronto, ON – July 8, 2026 – As summer vacation season gets underway, employers may be fielding more questions about vacation time and vacation pay. A recent Alberta decision is a timely reminder that those obligations can become complicated where a worker has been treated as an independent contractor but is later found to be an employee.
In White v Al-Man Trucking Inc., 2026 ABCJ 94 (CanLII), the Alberta Court of Justice confirmed that worker misclassification can expose employers to vacation pay liability, though limitation periods may restrict recovery.
The Plaintiff claimed he was wrongfully dismissed in January 2023 after more than eight years as a truck driver for the Defendant. The Defendant argued he was an independent contractor who resigned for health reasons and raised a Limitations Act defence to his vacation pay claim.
Was Mr. White an Employee?
The Court applied the Supreme Court of Canada’s test from 671122 Ontario Ltd v Sagaz Industries Canada Inc. 2001 SCC 59 (CanLII), which asks whether the individual is in business on their own account. Control remains relevant, along with factors including:
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- whether the worker provides their own equipment;
- whether the worker hires their own helpers;
- the degree of financial risk taken by the worker;
- the degree of responsibility for investment and management held by the worker; and
- the workers’ opportunity for profit.[1]
Applying these factors, the Court found Mr. White worked exclusively for the Defendant from November 2014 on a set schedule, was paid bi-weekly at a fixed rate, did not invoice or charge GST, used a company-supplied truck, and had no helpers, business investment, WCB number, or corporate structure. The CRA also ruled that Mr. White was an employee from January 16, 2022, to January 23, 2023, and issued him a T4 for the 2022 taxation year.
The Court concluded Mr. White was an employee.
The Plaintiff’s Historical Vacation Pay Claim is Statute-Barred in Part
The Plaintiff sought historical vacation pay from 2018 to 2022, which predated his dismissal in January 2023.
Mr. White sought vacation pay at 6% of wages for the full misclassification period under s. 34.2(b) of the Employment Standards Code, arguing he only discovered the misclassification when he applied for Employment Insurance in February 2023.
The Defendant argued the claim was barred by the Limitations Act. While the wrongful dismissal claim was not statute-barred, the Court found the limitation defence relevant to historical vacation pay. The Court considered both actual discovery and when Mr. White ought to have known of his potential claim.
Mr. White testified he never took vacation and was never paid any vacation pay and thought he was an employee from the time he started with the Defendant in 2014.
The Court held that Mr. White’s lack of knowledge about vacation entitlements did not delay the limitation period, particularly because he believed he was an employee throughout his time with the Defendant and could have inquired earlier.
Mr. White was statute-barred from recovering vacation pay before August 1, 2022, and proved only $2,242.87 in unpaid vacation pay for August 1, 2022, to January 26, 2023.
Employer Takeaways for Summer Vacation Season
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- Worker classification: Before the busy summer vacation period, employers should confirm that workers are properly classified. Employment status affects benefits, statutory deductions, vacation entitlements, and potential liability.
- Vacation pay: Employers should ensure vacation pay and time entitlements are being tracked and paid correctly, particularly as more employees request time away during the summer months.
- Limitations periods: This decision is favourable for employers, but limitation outcomes remain fact-specific. Mishandling vacation pay can still be costly, especially where issues surface during vacation planning or after employment ends.
With summer vacation season in full swing, now is a good time for employers to review worker classifications and vacation pay practices before issues arise. If you have questions about employment status or vacation pay obligations, please contact the author or any other member of the Protea team.
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Ibid at paras 47-48. ↑
