Vacation Pay Does Not Conflict with Working Notice

Deputat v. Edmonton School District No. 7 – Alberta Court of Appeal – January 14, 2008

An employee’s working notice period is not reduced when an employer makes an employee take vacation time during this period, nor is the employee’s entitlement to either working notice or vacation time denied by the same combination.

The Alberta Court of Appeal’s recent decision on January 14, 2008 in Deputat v. Edmonton School District No. 7 [2008] A.J. No. 22 (“Deputat”) determined that combining working notice and vacation time together did not result in an inconsistency or a double deduction from the employee during the working notice period. Either the employee is able to stay at home and be paid, or receives monetary compensation for those vacation days which were not taken by the end of the working notice period.

In Deputat, the employee had worked for the employer for twenty-four years when he was terminated without cause. The employer gave the employee a notice period of one year, which he decided to work through. However, the employee had banked more than thirty days worth of holiday time. This was against an existing written policy stating that no more than thirty days of holiday time could be accumulated. The employer requested that the employee take some of this extra holiday time off during the working notice period and the employee complied. Once the period of working notice had finished, the employee sued the employer for wrongful dismissal.

Deciding in favour of the employee, the Trial Judge found that the notice period should have been eighteen months instead of the one year which had been provided. Furthermore, the Trial Judge found that the employer should not have combined the holiday time with the working notice period because this reduced the employee’s notice period. The employer appealed this latter point.

The Court of Appeal decided that the Trial Judge had erred in concluding that combining holiday time and working notice resulted in a reduced notice period. Instead, the Court found that, “Working notice and taking paid vacations are perfectly compatible. There is no inconsistency, and no double deduction…The employee lost no holiday rights. For every day of holidays he had earned, he either stayed home and was paid, or he got an extra day’s pay at the end without working.” Additionally, the Court found that implied through the holiday policy’s thirty day limit was the inability for an employee to accumulate their holidays past this limit by working through them and then receiving extra pay. The Court stated, “On the topic of holidays vs. extra pay in lieu of holidays, the employer had a clear written policy limiting –banked’ holidays to 30 days. Even if that policy was often not enforced, it stops the court from implying a term in the employment contract that an employee had a right to bank over 30 days. And it also bars implying a term that an employee has a right to work every working day and take extra pay instead of any holidays.”

This decision demonstrates that an employee is not permitted to use the notice period as a means to maximize the amount of money they will receive from their employer. Instead, the notice period is to provide the employee with time to seek out new employment, as the Court in Deputat states. An employee is entitled to ensure that the amount of notice given is reasonable, but this does not permit the employee to an increase in the notice period because some of that time was spent on holiday.

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