The COVID-19 pandemic has put much on hold, including many vacation plans. As travel remains restricted, some employees may be interested in postponing vacation until greater and safer options become available. However, employers that are continuing to experience slowed operations may prefer for employees to use up their vacation entitlement sooner rather than later. For this reason, as the end of summer nears, a number of employers may well be seeking clarification as to what rights and obligations they have with respect to employee vacation.
Employer obligations regarding employee vacation
Under the British Columbia Employment Standards Act (“ESA”), employers have an obligation to ensure that employees take a minimum amount of vacation. The minimum vacation entitlement under the ESA is two weeks after twelve months of employment and three weeks after five years of employment. Employers must ensure that employees take this minimum entitlement within 12 months of it being earned. The requirement to ensure employees take the minimum annual vacation is distinct from the obligation to pay vacation pay. In British Columbia, employees are not permitted to forgo their minimum annual vacation under the ESA and simply be paid out their vacation pay.
It is not uncommon for employment agreements to entitle employees to annual vacation over and above the minimum requirements contained in the ESA. Depending on the specific wording of the employment agreement, and any applicable vacation policies, employers may be able to allow employees to postpone the use of vacation entitlements over and above the minimum. That being said, it is not permissible, to renege on an agreement to provide vacation over and above the minimum requirements. Further, employers should note that the fact that an employee has been provided vacation in excess of the minimum requirements does not allow the employer to reduce the employee’s vacation or vacation pay under the ESA in the future.
For those employers looking ahead to next year, it should be noted that any employees that have taken a leave under the ESA, including COVID-19 related leave, are deemed to have been continuously employed for the purposes of calculating annual vacation entitlement.
Employer rights on employee vacation
In general, employers have the right to schedule employee vacation according to business needs and can require employees to take vacation at the employer’s discretion. Of course, in requiring employees to take vacation, employers must be cognizant of the ESA requirements, such as ensuring the minimum vacation is taken within 12 months of being earned and allowing employees to take vacation in periods of one or more weeks. Further, as temporary layoffs come to an end, employers should also note that notice of termination under the ESA may not coincide with annual vacation.
While the ESA does not provide employees with the right to stipulate when their vacation is scheduled, an employment agreement or employer vacation policy may do so. Whether an agreement or policy bolsters or fetters the ability of an employer to schedule employee vacation at its discretion will depend on the specific wording used. Employers would do well to consider whether existing agreements or policies contemplate the timing of vacation. Should that be the case, employers should be wary of unilaterally departing from contracted vacation entitlements, as this could put the employer at risk of a potential constructive dismissal or other common law claim.
In summary, while employers and employees alike may have preferences for how vacation is handled this year, businesses and organizations would do well to carefully consider rights and obligations flowing from the ESA, in addition to any applicable employment agreements and related policies prior to making any decisions on how vacation will be managed during COVID-19.