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Who decides when employees take vacation? And who would decide not to take it?

Who decides when employees take vacation? And who would decide not to take it?

Adam Gorley, Assistant Editor, HRinfodesk.com---Canadian Payroll and Employment Law News, June 2009

It might yet be early in the year, but with warm weather starting to become a regular event and thoughts of winter fading, no doubt many Canadians are starting to think of using some of their well earned vacation time. But by the end of the year, chances are reasonably high that you won't have used all of your allotted vacation days. “Not me!” you say, but 24 percent of working Canadians use only a portion of their given days, according to online travel agents Expedia's annual Vacation Deprivation Survey. “How can that be?” you ask. “Why would someone choose not to use their vacation time?” Well, the answer, if not exactly complicated, is more complex than it might seem at first.

Many Canadian workers say that taking a vacation is too expensive, or they would prefer to put their vacation pay into savings. These concerns are especially relevant in the current economic climate. Others say that family scheduling difficulties prevent using vacation days. Then there is the fear that an employer will look badly on employees who use all of their vacation time. According to the survey: 13 percent of employed Canadians find their work too busy or important to take time off, and 30 percent feel guilty about taking vacations. Considering these factors, it's easier to imagine that nearly one-quarter of working Canadians don't use all of their earned vacation time.

In some workplaces—particularly in manufacturing—the vacation period is mandated by production schedules and determined by management. In others, employees are free to pick their own vacation times—usually subject to the assent of management. In any case, employers must determine the appropriate levels of staff for different periods of the year, so they know how many of their people (and which ones) can take a vacation at a given time.

In the latest HRinfodesk Poll, we wanted to find out: In your organization, does the employer or the employee decide when vacation is taken? More than two-thirds of the 308 respondents to the poll said that vacation is decided by mutual agreement (68.5 percent); another 22.4 percent said that the employee decides when to take the time; and seven percent said the employer makes the decision. Less than two percent cited a plant shutdown policy as the determining factor. According to these results, nearly 91 percent of employers allow their employees at least some leeway to choose how to use their earned vacation days.

Regardless of who decides when an employee takes her or his vacation, in principle, it's the employer who has the ultimate say in the matter, but even this right has its limits. Labour and employment lawyer Robert Smithson points out that “the employer must have the ability to effectively manage its workplace”; but at the same time, “management decisions must be both lawful and reasonable” according to a court. This means the employer can't arbitrarily decide not to approve an employee's requests for vacation time or renege on an existing vacation-time agreement. Employers also don't have the right to fundamentally alter employees' terms of employment. Consequently, there are a number of ramifications to deciding when an employee uses her or his vacation time.

The issue of maintaining appropriate staffing levels, for example, touches on both the employer's right to manage its workplace and the employer's obligation to treat employees fairly. It's fine for an employer to let its employees choose their vacation period on their own—and probably good for employees' morale—but letting too many workers take time off at once could cause disastrous results if too few remain to perform the necessary work. A good vacations policy would probably cover this issue.

Other issues can arise if an employer doesn't have a vacation time policy or doesn't apply it consistently. For example, if an employee schedules two weeks of vacation during a period that eventually turns out to be inappropriate due to increased production or limited available staff, the employer may not be able to demand that the employee reschedule all or part of her vacation, especially if the employee has already made firm plans and made the employer aware well in advance. (Of course, good existing employee relations can always help in situations like this one.) A vacation policy might address which periods of the year are acceptable for vacations, or include a clause allowing the employer to reschedule employees' vacations under very specific (and reasonable) circumstances.

In addition, employers must schedule their employees' vacation time (by providing notice) or allow them to use their allotted days within the prescribed period. For example, in Ontario, employers must provide vacation time “no later than ten months after the end of the vacation entitlement year.” (See below for a link to a chart outlining the minimum requirements for annual vacation.) Moreover, in general, employees cannot waive their annual vacation without agreement from the employer, and in some cases from the relevant ministry of labour. This is to prevent employers from coercing employees into giving up their vacation time. (The chart linked below also touches on vacation waivers, but not all jurisdictions' labour/employment legislation deals explicitly with the subject, and it would be wise to consult a lawyer before attempting any such arrangement.)

Furthermore, whether or not employees use their earned vacation time, employers must give vacation pay.

In the current economic climate, employers who are experiencing slowdowns can even take advantage of employee vacations by encouraging them to schedule their time off when there is little for them to do, thus saving their productivity for busier times. With employee consent, this is a policy that can benefit everyone.

More findings from the Vacation Deprivation survey

Workers in Ontario identified themselves most often as “vacation deprived” (47 percent); Manitoban and Saskatchewan workers came next (45 percent); then Atlantic workers (43 percent); British Columbians and Quebecers (38 percent); and Albertans (35 percent).

As for who is most likely to use up their vacation days, on average, Albertan workers give back 2.81 days; Manitoban and Saskatchewan workers, 2.8 days; Atlantic Canadians, 2.21 days; BC workers, 2.04 days; Ontarians, 1.99 days; and Quebec's workers, 1.39 days.

There doesn't appear to be a significant correlation between the two variables. In addition:

  • This year Canadian workers will receive 18.7 vacation days per year on average (it's not clear whether this includes statutory holidays)
  • We will likely give back two of those days to our employers
  • This adds up to 34-million unused vacation days and $6 billion in free work for Canadian employers
  • Surveyed men report that they receive more vacation days than women (20.4 days vs. 16.86 days)
  • Many more Canadian workers are feeling the need for a vacation this year than last year: 42 percent vs. 33 percent
  • Despite the poor economic conditions, 84 percent of Canadians are planning a vacation trip this year
  • 32 percent of Canadian workers feel work stress while vacationing, some to the extent that they are unable to enjoy their time off
  • Nonetheless, 41 percent of us feel better about our jobs and more productive after returning from a vacation, and 54 percent feel “rejuvenated and reconnected to their personal life”
  • Obligations, such as weddings, religious occasions, family events and medical appointments, can take up almost half of the average Canadian worker's vacation allotment
  • Business travellers often take an extra day or two on trips as a vacation
  • 31 percent of Canadian workers plan on taking a whole week off and using their remaining days here and there
  • 39 percent plan to take two full weeks of vacation at once
  • We must be a healthy bunch: besides vacation days, we use an average of 2.78 sick days in a year
  • Women take more sick days than men (3.17 days vs. 2.42 days)
  • Interestingly, workers aged 55 and above took significantly fewer days than all workers below 55 (1.63 days vs. 3.06 days)

At any rate, if you are among the employers that don't simply mandate vacation periods, it is a good idea to encourage your employees to use their vacation days and to feel confident in doing so. More than likely, your employees need and deserve a break, and they will almost certainly benefit from it by being happier and better-rested at work. Vacations might be even more important now; in the Vacation Deprivation survey, 18 percent of Canadian workers said they need a break from the stresses associated with the current economic climate.

Well, if those extra-stressed 18 percent would use up all of their vacation days, maybe we'd all be better off.

For more information on vacation practices by jurisdiction, visit the HRinfodesk search page and use the term “vacation”.

You can find the Minimum Requirements for Annual Vacation With Pay Chart at www.hrinfodesk.com/index.asp?article=23533.