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Part III of the Canada Labour Code (Labour
Standards)
Questions and answers about annual vacations with pay, based on
Division IV of Part III of the Canada Labour Code and on
the Canada Labour Standards Regulations are provided here.
They will be of interest to employees and employers in industries
under federal jurisdiction. Pamphlet 1 of this series describes the
types of businesses covered by the Code. It is available
from any Labour Program office of Human Resources Development Canada
and on the HRDC website.
1. How many weeks of vacation is an employee entitled to,
annually?
The basic entitlement is two weeks of vacation for every
completed "year of employment". After six consecutive
years of employment with the same employer, the entitlement
increases to three weeks of vacation.
2. What is the "year of employment"?
The "year of employment" is the period beginning on the
date an employee is hired, or on any anniversary of that date, and
ending 12 consecutive months later. It may also be a calendar year
or other period of 12 consecutive months as determined by the
employer, in accordance with the Regulations relating to an
industrial establishment.
3. Why is it important to define "year of
employment"?
First, an employee must complete a "year of employment"
to be entitled to a vacation. Second, the amount of vacation pay for
that vacation is based on the wages earned by the employee during
that "year of employment".
4. How is vacation pay calculated?
Vacation pay is calculated as a percentage of the gross wages an
employee earns during the "year of employment". Where the
vacation entitlement is 2 weeks, vacation pay is 4 per cent of
earnings in the entitlement year; where the entitlement is 3 weeks,
the vacation pay is 6 per cent of earnings.
5. What is the definition of "wages"?
The term "wages" includes every form of payment for
work performed, but does not include tips and other gratuities.
6. When can an employee take vacation?
Normally, an employee may take vacation at the discretion of the
employer or at a time mutually agreed to by the employer and
employee. But, it must begin not later than 10 months after
completion of the "year of employment" for which the
employee became entitled to vacation.
In cases where the employer has chosen the timing of the
vacation, the employer must give at least two weeks notice of when
the employee's annual vacation is to begin.
7. When is vacation pay payable?
Vacation pay is normally paid to the employee within 14 days
prior to the commencement of a vacation. However, vacation pay may
be paid during or immediately following vacation, if that is the
established practice in the employee's work place.
8. What is an employee's entitlement upon termination of
employment?
The employer must "pay out" any vacation pay owed to
the employee for any prior completed "year of employment".
In addition, the employee is entitled to vacation pay for the
partially completed current year.
9. Can an employee postpone or waive an annual vacation?
An employee may, by written agreement with the employer, postpone
or waive his or her entitlement to an annual vacation for a
specified year of employment.
10. Are there cases where the vacation pay provisions of
a collective agreement apply exclusively?
Yes. The vacation pay provisions of the Code do not
apply to employers and employees who are parties to a collective
agreement that provides rights and benefits at least as favourable
as those in the Code and where there is provision for a
third party settlement. The settlement of disagreements relating to
vacation pay are governed exclusively by the collective agreement.
For information only. For interpretation and application
purposes, please refer to Part III of the Canada Labour Code
(Labour Standards), the Canada Labour Standards Regulations,
and relevant amendments.
Additional copies of this publication can be obtained
from:
Public Enquiries Centre
Human Resources Development Canada
140 Promenade du Portage, Phase IV, Level 0
Gatineau, Quebec
K1A 0J9
Fax (819) 953-7260
www.hrdc-drhc.gc.ca
�Her Majesty the Queen in Right of Canada, 2002
Cat. No. MP43-345/3-2002
ISBN 0-662-66830-8
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