For many employees, vacation time is essential for maintaining a work-life balance to relax and spend time with their loved ones. As such, employees typically do not need to be forced into taking a vacation. However, there may be circumstances where an employer wants to mandate when employees take their vacation. 

Many companies experience times of the year when business tends to be slower. Traditionally, summer is a slow season for many businesses and this particular downturn is often at its worst in July. Given this trajectory, employers may try to force employees to take their vacations in July rather than risk being short-staffed during their busier periods. 

Employees might therefore wonder: Is this legal? The short answer is yes, but employers must adhere to the guidelines under the Employment Standards Act, 2000 (“ESA”). 

Vacation Time vs. Vacation Pay 

The ESA makes an important distinction between “vacation time” and “vacation pay.” Vacation time is the right to take time off from work. Vacation pay is a right to receive certain payments which accrue over time. However, these two entitlements accrue at different rates. Vacation pay accrues daily. Conversely, vacation time only accrues in blocks as soon as it is earned upon completing a “vacation entitlement year.” 

An employee who does not complete the full vacation entitlement year does not qualify for vacation time under the ESA. However, employees earn vacation pay as they earn wages. Therefore, if an employee works even just one hour, they are still entitled to at least four per cent of the hour’s wages as vacation pay. 

In general, the period of time that an employee is away from work because they are taking a leave of absence must also be counted towards the employee’s completion of a vacation entitlement year. 

Vacation Timing 

Section 35 of the ESA stipulates that an employer can determine when an employee takes vacation, subject to the following restrictions: 

1. The vacation must be completed no later than ten (10) months after the end of the vacation entitlement year for which it is given. 
2. If the employee’s period of employment is less than five years, the vacation must be a two-week period or two periods of one week each, unless the employee requests in writing that the vacation be taken in shorter periods and the employer agrees to that request.
3. If the employee’s period of employment is five years or more, the vacation must be a three-week period or a two-week period and a one-week period or three periods of one week each, unless the employee requests in writing that the vacation be taken in shorter periods and the employer agrees to that request.

Therefore, if you are a new employee hired on January 1, 2023, you are entitled to 2 weeks’ vacation only upon completing your first year on December 31, 2023. Your employer must let you take that time off before October 31, 2024 (10 months after the end of the vacation entitlement year). Furthermore, if your employer forces you to take your vacation time, that time must be scheduled in at least one-week blocks. In other words, an employer cannot force you to “take the day off.” 

An employer must also not schedule vacation time during an employee’s statutory notice period. An exception is available when, after having received the employer’s written notice of the termination of her employment, the employee agrees to take vacation time during the statutory notice period.

Under section 41 of the ESA, an employee can give only up some or all of their earned vacation time with the employer’s agreement, and the approval of the Director of Employment Standards. This approval does not affect an employer’s obligation to pay the employee vacation pay; employees may give up vacation time, but not the right to vacation pay.

Case Law 

It is important to note that the provisions of section 35 of the ESA are not absolute. 

In Cascades Canada ULC v Ontario, an Employment Standards Act Appeal before the Ontario Labour Relations Board, the Board stated that section 5(2) of the ESA can override mandatory provisions of section 35 regarding the timing of when employees must take their vacation.   

Section 5 (2) of the ESA states: “If one or more provisions in an employment contract or in another Act that directly relate to the same subject matter as an employment standard provide a greater benefit to an employee than the employment standard, the provision or provisions in the contract or Act apply and the employment standard does not apply.”

The Board noted that in today’s multicultural society, employees might prefer to take their earned vacation within a twelve-month period, rather than a ten-month period. For example, where the employee desires to visit Mecca for the Haj, which may fall within the months of May and/or June. In such a situation, the greater benefit should be allowed to override the provisions of section 35. At paragraph 20, the Board stated: “It would be counter-productive if the Board were to apply the Act in a manner for this employer, and its employees, that removed a greater advantage for employees, if they chose a different time, outside of the required ten-month period, in which to take their vacation.”

However, the Board clarified that if an employer forced an employee to take their vacation outside of the ten month period, then clearly section 5(2) would not provide a defence for the employer’s actions.

Takeaway

Ontario employers are afforded a great deal of discretion in directing when an employee can take a vacation. However, an employer’s treatment of vacation entitlements must always comply with the minimum requirements of the Employment Standards Act. 

If you have any concerns about your Employment Standards Act entitlements or any other employment-related matters, it is advisable to seek legal advice from an employment lawyer. 

Blake Bochinski