I am planning to retire in 2022. In early April this year, the company for whom I have worked for 11 years announced updates to their annual leave. There is a new rule that says I have to inform my leader six months prior to my retirement date about taking banked leave days immediately prior to retirement. If I inform my employer with less than six months’ notice, what will happen?
THE FIRST ANSWER
Alexis Radojcic associate lawyer, Ryan Edmonds Workplace Counsel, Toronto
There are important caveats to this answer given that we don’t know your province of employment or whether you are unionized, in which case the terms of the collective agreement will apply.
Generally speaking, an employer’s right to manage its work force includes the right to schedule an employee’s annual leave. While most workplaces allow an employee to take vacations at times that are mutually agreeable, employment standards legislation in many provinces actually allows an employer to unilaterally schedule an employee’s vacation time.
In this case, if you don’t provide your employer with the requested six months’ notice of retirement, it can simply deny your request to take any remaining leave before your departure. However, you can still retire on the specified date, since an employee always has the right to resign, and your accrued vacation will still be paid out.
Leaving aside whether your pension plan includes a requirement to give six months’ notice of retirement (which is another issue entirely), there is little an employer can do to sanction non-compliance with this new rule. Since the failure to notify would not meet the very high threshold of just cause for dismissal, the employer is unlikely to terminate your employment since the employer would then have to pay statutory termination entitlements to someone who is planning to resign. Because retirement is intrinsically age-related, any such termination could ground a claim for human rights damages as well.
Regardless, there are many important variables that are currently unknown. Before deciding whether to give notice of retirement, and if so, how much notice to give, you should definitely speak to a qualified employment lawyer.
THE SECOND ANSWER
Rebecca Saturley managing partner, Stewart McKelvey, Halifax
This question raises two distinct issues: the right of the employer to dictate when an employee schedules vacation and the ability of the employer to change a policy.
First, with respect to scheduling, this will depend on the employment standards legislation in your province. However, many provinces, including Ontario, provide that the employer has the right to schedule your vacation and therefore this policy is acceptable.
On the second issue, employers cannot change a fundamental term and condition of employment without providing reasonable notice to employees – such a change is called a constructive dismissal. Normally constructive dismissal arises in the event of a change to compensation or a demotion. Constructive dismissal could apply to a significant policy change, however, the policy change referenced in the question is likely not significant. The policy does not take away vacation time and relates only to the scheduling of vacation which is within an employer’s right.
While the introduction of this policy does not trigger any legal right, there is still a practical solution. Vacation timing can be approved by a manager. The employee should go to their manager and explain why they want to take the vacation immediately prior to retirement and what benefit that will be to the employer. For example, it may be less disruptive to have the vacation immediately prior to retirement, with a commitment from the employee to ensure all transition issues are completed.
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