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Common Date for Calculating Vacation Entitlement - Act Part 7, Section 60

Last updated on April 7, 2021

Contents:

Summary
Text of Legislation
Policy Interpretation
Related Information

Summary

This section explains an employer’s obligations if they establish a common date for calculating their employees’ annual vacation entitlement.  

Text of Legislation

60. An employer may use a common date for calculating the annual vacation entitlement of all employees under sections 57 and 58, so long as this does not result in a reduction of any employee's rights under those sections.

Policy Interpretation

Due to accounting preferences, some employers may choose to use a common date (for example, the calendar year or the employer’s fiscal year) for all employees for vacation purposes, rather than using individual employee anniversary dates. Since the employee’s rights cannot be reduced, each employee is deemed to reach their first anniversary the first time the common date occurs after their date of hire.
 

Example

  • An employee begins work on March 1, 2018. Their employer uses a common date of September 1st to calculate annual vacation entitlements for all employees. As of August 31, 2018, the end of the employer’s common year, the employee is deemed to reach their first anniversary date and is entitled to 4% vacation pay on wages earned and a pro-rated amount of vacation time, based on their actual length of service. Since the employee has been employed for six months, or half a year, they are entitled to half of their yearly statutory entitlement of two weeks’ vacation, or one week.

    The employee must be granted their vacation prior to August 31, 2019 (within the 12 months following the employer’s common date of September l) in accordance with s. 57(2).

    From September 1, 2018 onwards, the employee earns their vacation entitlement on an annual basis from September 1 to August 31, in accordance with the employer’s common date.

    Since using a common date cannot result in a reduction of employee rights, the employee is deemed to reach their five year anniversary with the employer on August 31, 2022. They become entitled to three weeks' vacation and 6% pay in the year starting September 1, 2022.

    Note:
    If the employer did not use a common date, the employee would become entitled to three weeks of vacation and 6% vacation pay as of March 1, 2023. The common date moves the employee's anniversary ahead to September 1, 2022. If the employer used the common date to make the employee's five year anniversary date September 1, 2023 (later than their individual anniversary date), that would represent a reduction in employee rights and would be a contravention of s.60.

Employees covered by a collective agreement

If a collective agreement contains any provisions about annual vacation or vacation pay that meet or exceed the requirements of Part 7, those provisions of the collective agreement replace the Act’s requirements for employees covered by the agreement. Otherwise, the Act’s requirements are deemed to be incorporated in the collective agreement.

Where there is a collective agreement, disputes respecting the application, interpretation or operation of Part 7 must be resolved through the grievance procedure, not through the enforcement provisions of the Act.

Under ss. 33 and 37 of the Employment Standards Regulation certain employees and occupations are excluded from Part 7.

Related Information

Related sections of the Act or Regulation

ESA