Earning vacation during paid or unpaid leaves

Distinction between vacation time and vacation pay
By Colin Gibson
|Canadian Employment Law Today|Last Updated: 02/06/2019

Question: Does the time an employee spends on paid or unpaid leave count as time served for the purpose of earning vacation? Can an employer have a policy specifying that it doesn’t?

Answer: Across Canada, provincial employment standards legislation sets out the minimum vacation employees are entitled to, and how vacation is earned. For employees in federally-regulated industries, these entitlements are set out in the Canada Labour Code. While vacation entitlements are similar across Canadian jurisdictions, employers should check the applicable legislation before making a decision about vacation.

Employment standards statutes draw a distinction between vacation time and vacation pay. Vacation time is earned based on the employee’s length of continuous service with the employer. In most Canadian jurisdictions, employees are entitled to a minimum of two weeks’ vacation per annum after completing the first year of employment, and then three weeks’ vacation per annum after five years of employment.