What happens when an employee wants to take vacation leading up to date of resignation?
By Jeffrey R. Smith
Severing the ties of an employment relationship isn’t always easy, whether it’s the employer or the employee doing the severing.
In addition to the potential emotional difficulties of people involved, there can be a fair amount of paperwork to ensure everything’s in order. The employer has to make sure the employee gets everything she’s legally entitled to as well as administrative things like getting back any company property and wrapping up email accounts, pension plan transfers and so on. To proceed with all of this, both sides need a termination date to work from.
When an employee resigns or an employer terminates, there is an effective date at which point all compensation arrangements and administration would be taken care of. But what if an employee resigns with an effective date, but has a vacation balance she would like to use up? This was the situation the Town of Whitby in Ontario found itself in when an employee gave a resignation date but took three weeks of vacation leading up to that date.
The employee had already booked vacation over Christmas, from Dec. 21 to Jan. 2. However, she later gave notice of resignation and wanted to use another week of vacation she had earned, so she gave her effective date as Jan. 11, though her last actual day at work would still be Dec. 21 and she told others that was her last day.
The town questioned whether the employee would be entitled to holiday pay for Christmas Day and Boxing Day, since there was an employment standards requirement to work the last scheduled day before and first scheduled day after a holiday to warrant holiday pay. Though this requirement includes vacation days, the town was concerned she wouldn’t be back in the office at all after the holidays. It told the employee if she didn’t work after the holidays, her resignation would be considered effective Dec. 21 and her remaining vacation days would be paid out to her without the holiday pay.
An arbitrator found the town unilaterally changed the employee’s resignation date contrary to her intentions, which effectively terminated her employment and put the employer on the hook for the termination: Whitby (Town) and CUPE, Local 53 (Gorman), Re, 2013 CarswellOnt 9515 (Ont. Arb. Bd.).
It’s not unusual for employees to use vacation days they’ve earned when they’re close to retirement to move up their last date in the office, so it makes sense an employee who still has a vacation balance might try the same after providing notice of resignation. In this case, the employee’s last day at work was different her last day as an employee.
However, vacation days have to be approved by the employer, so what happens if an employer doesn’t approve of this practice? If an employee gives a resignation date, but doesn’t want to work for several days before that and she’s entitled to that many vacation days, what course of action is available? Can the employer refuse the vacation request and pay out the value of the outstanding vacation days, thus forcing the employee to either change her resignation date or work up to the original one?
Jeffrey R. Smith is the editor of Canadian Employment Law Today, a publication that looks at workplace law from a business perspective. He can be reached at Jeffrey.firstname.lastname@example.org or visit www.employmentlawtoday.com for more information.