Dismissed worker can’t be forced to use vacation entitlements during working notice period, says Alberta Court of Queen’s Bench
An employee who has been giving working notice of termination can’t be forced to use his accrued vacation during the notice period, an Alberta court has ruled.
Michael Deputat, senior mechanical co-ordinator with Edmonton School District No. 7, was given notice that his employment was going to be terminated in May 2003. Deputat, who was 56 at the time, was given the choice of working to May 31, 2004, or accepting a $40,000 lump-sum payment.
Because his wife was in poor health at the time, he elected to continue working through the 12-month notice period as the benefits package, which included health-care coverage, would remain in effect.
The employer insisted Deputat use up his accrued vacation entitlement of about 63 days during the working notice period. The school board took the position that the termination letter it gave Deputat in 2003 did not immediately bring the original contract of employment to an end. Therefore, it had the right to insist that he use up this accrued vacation entitlement during the working notice period.
Justice Verville of the Alberta Court of Queen’s Bench agreed the termination letter did not immediately bring an end to the original contract of employment.
“However, this does not necessarily lead to the conclusion that the (school board) was entitled to insist that (he) use up his accrued vacation entitlement during the working notice period,” said Justice Verville.
When Deputat was given notice of termination, he had accrued 46.61 days of paid vacation and 16.18 days of paid leave in lieu of overtime. Had he taken the lump-sum payment, the school board would have been required to pay him for this time, which was equivalent to about 3.2 months.
By forcing him to take this vacation during the notice period, the school board was, in effect, shortening the notice period, he argued. The court agreed.
“It is my view that vacation time (or pay in lieu) and reasonable notice are two distinct entitlements,” said Justice Verville. “If an employee opts for working notice, these two entitlements should be exercised consecutively rather than concurrently. To do otherwise results in a reduction of the notice period which also leads to a reduction in benefits and pension contributions. It does not seem logical that an employee be penalized in this way. I find that the (school board) is not entitled to include the vacation entitlement in the notice period.”
Therefore, the court ordered that he be compensated for the 62.79 days of accrued paid vacation he had been forced to take during the notice period.
Deputat also lobbied for an increase in the reasonable notice period. In looking at an appropriate notice period, the court turned to the oft-cited case of Bardal v. Globe & Mail Ltd. In that case, an Ontario court said “there can be no catalogue laid down as to what is reasonable notice in particular classes of cases. The reasonableness of the notice must be decided with reference to each particular case, having regard to the character of the employment, the length of service of the servant, the age of the servant and the availability of similar employment, having regard to the experience, training and qualifications of the (employee).”
At the time he was dismissed, Deputat was earning about $74,000 per year plus a monthly car allowance of $275, benefits worth about $335 per month and biweekly contributions to a pension plan of $211.72. He had been with the school board for almost 25 years, from March 1980 until May 2004.
Deputat argued he should be entitled to 24 months’ notice. The court agreed that 12 months was insufficient, but said 24 was too high. Justice Verville settled on 18 months as a reasonable notice period. Deputat had already worked 12, so he was entitled to an additional six months’ notice.
The school board argued there should be a deduction for Deputat’s failure to mitigate his damages by looking for another job.
After receiving notice of termination, Deputat initially thought that, with his skills, it would be easy to find other employment at perhaps a slightly lower salary. But he quickly learned that his age was a factor and that employers were looking for young engineers with professional engineering status.
He didn’t really start looking for a job until January 2004, some seven months after being given notice that his employment would end in May 2004. But the court said that was understandable.
“I am of the view that (Deputat) had a valid reason — not that one was required — for electing to take the 12-month working notice,” said Justice Verville. “In the circumstances, it was not, in my view, unreasonable for (him) to wait until January 2004 before beginning a more active search for other employment … common sense would dictate that most employers, absent some future triggering event, do not forecast their job requirements eight to 12 months into the future. It is more reasonable to expect that employers will forecast their requirements, or fill vacancies, within a period of five months or less.”
The court also awarded him $335.67 per month for a period of about 9.2 months (the 63 days in vacation entitlements plus the additional six months’ reasonable notice it awarded), reflecting the school board’s monthly contribution to the benefits plan and $458.73 per month for the same amount of time for pension contributions.
For more information see:
• Deputat v. Edmonton School District No. 7, 2006 CarswellAlta 970 (Alta. Q.B.)
Michael Deputat, senior mechanical co-ordinator with Edmonton School District No. 7, was given notice that his employment was going to be terminated in May 2003. Deputat, who was 56 at the time, was given the choice of working to May 31, 2004, or accepting a $40,000 lump-sum payment.
Because his wife was in poor health at the time, he elected to continue working through the 12-month notice period as the benefits package, which included health-care coverage, would remain in effect.
The employer insisted Deputat use up his accrued vacation entitlement of about 63 days during the working notice period. The school board took the position that the termination letter it gave Deputat in 2003 did not immediately bring the original contract of employment to an end. Therefore, it had the right to insist that he use up this accrued vacation entitlement during the working notice period.
Justice Verville of the Alberta Court of Queen’s Bench agreed the termination letter did not immediately bring an end to the original contract of employment.
“However, this does not necessarily lead to the conclusion that the (school board) was entitled to insist that (he) use up his accrued vacation entitlement during the working notice period,” said Justice Verville.
When Deputat was given notice of termination, he had accrued 46.61 days of paid vacation and 16.18 days of paid leave in lieu of overtime. Had he taken the lump-sum payment, the school board would have been required to pay him for this time, which was equivalent to about 3.2 months.
By forcing him to take this vacation during the notice period, the school board was, in effect, shortening the notice period, he argued. The court agreed.
“It is my view that vacation time (or pay in lieu) and reasonable notice are two distinct entitlements,” said Justice Verville. “If an employee opts for working notice, these two entitlements should be exercised consecutively rather than concurrently. To do otherwise results in a reduction of the notice period which also leads to a reduction in benefits and pension contributions. It does not seem logical that an employee be penalized in this way. I find that the (school board) is not entitled to include the vacation entitlement in the notice period.”
Therefore, the court ordered that he be compensated for the 62.79 days of accrued paid vacation he had been forced to take during the notice period.
Deputat also lobbied for an increase in the reasonable notice period. In looking at an appropriate notice period, the court turned to the oft-cited case of Bardal v. Globe & Mail Ltd. In that case, an Ontario court said “there can be no catalogue laid down as to what is reasonable notice in particular classes of cases. The reasonableness of the notice must be decided with reference to each particular case, having regard to the character of the employment, the length of service of the servant, the age of the servant and the availability of similar employment, having regard to the experience, training and qualifications of the (employee).”
At the time he was dismissed, Deputat was earning about $74,000 per year plus a monthly car allowance of $275, benefits worth about $335 per month and biweekly contributions to a pension plan of $211.72. He had been with the school board for almost 25 years, from March 1980 until May 2004.
Deputat argued he should be entitled to 24 months’ notice. The court agreed that 12 months was insufficient, but said 24 was too high. Justice Verville settled on 18 months as a reasonable notice period. Deputat had already worked 12, so he was entitled to an additional six months’ notice.
The school board argued there should be a deduction for Deputat’s failure to mitigate his damages by looking for another job.
After receiving notice of termination, Deputat initially thought that, with his skills, it would be easy to find other employment at perhaps a slightly lower salary. But he quickly learned that his age was a factor and that employers were looking for young engineers with professional engineering status.
He didn’t really start looking for a job until January 2004, some seven months after being given notice that his employment would end in May 2004. But the court said that was understandable.
“I am of the view that (Deputat) had a valid reason — not that one was required — for electing to take the 12-month working notice,” said Justice Verville. “In the circumstances, it was not, in my view, unreasonable for (him) to wait until January 2004 before beginning a more active search for other employment … common sense would dictate that most employers, absent some future triggering event, do not forecast their job requirements eight to 12 months into the future. It is more reasonable to expect that employers will forecast their requirements, or fill vacancies, within a period of five months or less.”
The court also awarded him $335.67 per month for a period of about 9.2 months (the 63 days in vacation entitlements plus the additional six months’ reasonable notice it awarded), reflecting the school board’s monthly contribution to the benefits plan and $458.73 per month for the same amount of time for pension contributions.
For more information see:
• Deputat v. Edmonton School District No. 7, 2006 CarswellAlta 970 (Alta. Q.B.)
