Obscure law allows for some exceptions if permission is granted from employment standards director
Almost everyone in Canada must take the legislated vacation time for the province in which they work, says Mark Fletcher, a lawyer with labour and employment law firm Grosman, Grosman and Gale in Toronto.
“There's a clear rule of law set by the Supreme Court of Canada that employees cannot contract out of their minimum rights and entitlements under any employment standards legislation,” he says. “I think it's a relatively obscure rule, so many employers aren't aware of it.”
While it may not currently be a contentious issue, employers still need to be aware of the rules, he says.
“You've got policies where an employer might have a use it or lose it policy (and) you can't carry your vacation forward,” Fletcher says. “That, I think, offends the employment standards act and the legislation.”
If an employee or an employer is hoping to waive the rights of an employee to have a vacation, the province’s employment standards director must be contacted, he says.
“You have to get the labour ministry involved and the director of employment standards to actually say, ‘Yes, it's okay for this employee to give up that vacation time to which they're entitled,’” Fletcher says.
In Ontario, permission must also be given for vacation time above the mandated minimum to be waived.
“In terms of waiving vacation time that is over and above the province’s mandated minimum, I would have to reiterate that in Ontario, the employee and employer would need approval from the director of employment standards,” he says.
Some provinces and territories don’t allow for vacation rights to be waived whatsoever, says Natasha Smyth, vice-president of Vancouver-based onpayroll.ca, an online human resource management company.
The language outlining the rules differs from province to province, which can make it confusing for someone trying to understand the law, Smyth says.
In order to avoid confusion among employees, Smyth suggests employers quote the language written in the act when drafting a vacation policy.
“Employment standards might adopt their own language in each province, so it's easy enough for us to say, 'Oh this means that,’ or something more common, but really the correct thing is to list it the same as their language for it to be compliant,” she says.
It’s important for payroll and HR to pay attention to whether or not employees have taken their vacation. Hopefully the issue is caught before year-end, but if not then certain steps can be taken, says Fletcher.
“The employee's manager, first of all, should be on top of this and know whether the employee has taken the vacation time,” he says. “But assuming that didn't happen, the manager and employer should make sure the employee takes it as soon as possible within the following year… and that they're paid for it.”
