Dispute over vacation is no day at the beach

Employer refused to allow carry-over of unused vacation days

This instalment of You Make the Call involves a dispute over the right to carry over unused vacation days.

In March 2004, Mark Walsh, an employee of the Department of National Defence (DND) in St. John’s, N.L., was told he would have to schedule his remaining vacation days (10 days) before the end of the fiscal year, which was the end of the month. DND then scheduled vacation days for the last week of March. Walsh challenged the policy, arguing the collective agreement specified unused vacation credits “shall be carried over.”

DND argued the collective agreement stated employees were expected to take all their vacation leave during the year it was earned. If employees had any remaining near the end of the year, the collective agreement allowed it to schedule an employee’s vacation leave to ensure it was used by year end. The collective agreement stated the employer “reserves the right to schedule an employee’s vacation but shall make every reasonable effort to provide an employee’s vacation leave in an amount and at such time as the employee may request.” When the end of the year approached and an employee still had several vacation days to use, it was left to unilaterally schedule the vacation.

DND said the objective was for there to be a zero balance of vacation leave credits at the end of the fiscal year, which ensures there are no buildups of “leave banks” by employees. The collective agreement, it said, allowed it to assign vacation time if operational requirements dictated the need to do so, while still taking into consideration employee requests for specific times.

You Make the Call

Was Walsh allowed to carry over vacation time under the collective agreement?
Could DNDschedule or pay out unused vacation credits at the end of the fiscal year?

If you said DND could schedule unused vacation time to prevent carrying over into the next year, you’re right. The board found the carry-over provisions in the collective agreement only applied if the employer refused to grant an employee’s requests for his vacation allotment during the year. In these circumstances, where the employee hadn’t requested his vacation time when the end of the fiscal year came around, DND was entitled to unilaterally schedule the remainder of his unused vacation.

The board agreed with DND that the collective agreement clearly stated employees were expected to take all their vacation leave during the year in which it was earned. It found the term “expected” was used instead of “shall” to allow carry-over if the employer had to deny requests for legitimate reasons.

“Carrying over vacation leave is possible only when an employee’s request for leave is denied. The employer has no record of any leave request having been denied during the fiscal year specified. Vacation leave credits are earned. However, the carry-over of vacation leave is not a right. It is a protection for employees should the employer not be able, due to operational requirements, to grant a vacation leave request in a given fiscal year,” said the board.

The board ruled the carry-over of vacation leave credits was not a right under the collective agreement, but rather “the consequence of an impossibility of using all the vacation leave credits.” This left DND with the option of scheduling or paying out any unused credits if an employee didn’t request them by the end of the fiscal year.

The board dismissed the grievance, saying a full right to carry over vacation credits for employees could only be negotiated in a new agreement during the next round of collective bargaining.

For more information see:

Walsh v. Canada (Treasury Board — Department of National Defence), 2009 CarswellNat 4605 (Can. Pub. Service Lab. Rel. Bd.).

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