THE QUESTION
I’ve been unable to take all of my vacation days and asked for them to be rolled over into the next year. Our schedule has been too demanding, so even if I took days off, I knew I’d still have to work a few hours a day. However, my employer denied my request and now I’m losing eight days of vacation. Is a use-it-or-lose-it vacation policy legal? Or is my employer obliged to pay me out for those lost vacation days instead?
THE FIRST ANSWER
Jaime Burnet, labour and employment lawyer, Pink Larkin, Halifax
In most provinces, the basic rights of non-unionized employees are set out in provincial employment standards statutes. These statutes typically provide that employees are entitled to a minimum amount of vacation time based on their length of service. For example, under the Nova Scotia Labour Standards Code, an employee who has been employed for less than eight years, and who works at any time during 12 continuous months, is entitled to an unbroken, paid vacation of at least two weeks following the 12-month entitlement period. Individual employment contracts can provide for more vacation time, but cannot provide for less than the statutory minimum.
Where an employee does not or cannot take their minimum vacation time, provincial employment standards generally require that the employer pay out the employee’s statutory vacation pay. This applies even where the employer has a “use-it-or-lose-it” vacation policy.
A “use-it-or-lose-it” policy could apply, however, to vacation entitlements over and above the statutory minimum. Consider an employee in Nova Scotia who has been employed for less than eight years and whose contract provides for three weeks of vacation (one week more than the statutory minimum). If the employee is unable to use any of their vacation time, and the employer has a clear “use-it-or-lose-it” policy, of which the employee is aware, and which applies only to vacation time in excess of the statutory minimum, the employee may only be able to claim vacation pay for two of the three unused weeks. If, however, the employer’s “use-it-or-lose-it” policy stated that it applied to the employee’s total vacation entitlement, including the statutory minimum two-week period, the policy would arguably be unlawful, and therefore unenforceable.
THE SECOND ANSWER
Amiri Dear, lawyer, Hummingbird Lawyers LLP, Toronto
Whether or not you can carry your vacation time over is largely dependent on your employment contract. Many employers have a “use-it-or-lose-it” policy that requires employees to forfeit unused vacation time after a certain period. In the absence of a written employment contract expressly addressing your ability to carry over vacation time, the provisions of the Employment Standard Act (ESA) will guide your vacation time.
In Ontario, employees are entitled to vacation time after they have worked for the employer for one year. Under the ESA, an employee who worked less than five years for the employer is entitled to two weeks of vacation time. If an employee has worked for an employer for more than five years, they are entitled to three weeks. The ESA stipulates that employees have to use their vacation time within 10 months of the year in which they have earned it. The ESA, therefore, makes no provision for the carrying over of vacation time. As such, the employer is not required to permit you to carry over your vacation time unless they have expressly agreed to do so by way of either a written employment contract, collective bargaining agreement or an oral undertaking to do so. In such instances, an employee will forego any unused vacation time.
Depending on your tenure, vacation pay amounts to either 4 or 6 per cent of your annual wages. However, the employer is not required to compensate you for the vacation days that remain unused.
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Andrea Yu