Vacation Leave Entitlements and Severance Pay
To: Heads of Human Resources Directors/Chiefs of Labour Relations and Compensation, Public Service Pay Centre, Miramichi
This Information Bulletin provides clarification to departments and agencies of the core public administration (CPA) regarding the calculation of vacation leave entitlements for employees who have received severance pay prior to joining or rejoining the CPA.
**This bulletin revises and replaces the bulletin of the same name dated **
As per the collective agreements, vacation leave entitlements are based upon years of service in the public service, whether continuous or discontinuous. The definition of “public service” in the collective agreements is the same as found in the Federal Public Sector Labour Relations Act.
However, the language pertaining to vacation leave entitlements is not uniform across all collective agreements. Some collective agreements require that periods for which an employee has, upon leaving the public service, taken or takes severance pay, be excluded from the calculation when determining years of “public service”. Other agreements include all service when determining years of “public service”, whether the service is continuous or discontinuous, without a severance exclusion clause.
For collective agreements with provisions that contain a severance exclusion clause
When calculating continuous or discontinuous service for the purpose of determining vacation leave entitlements, periods of “public service” will not include any period for which:
- Severance has been paid and there has been a break in service. A break in service means a break of one or more compensation days.
- Payment was received under severance termination provisions, the employee has terminated their employment and, following a break in service, the employee returns to work and is subject to a collective agreement where a severance exclusion clause exists.
When calculating “public service” for the purpose of determining vacation leave entitlements, period of “public service” will include any period for which:
- Severance has been paid but there has been no break in service. This was determined in a 2016 decision from the former Public Service Labour Relations and Employment Board (now the Federal Public Sector Labour Relations and Employment Board).
- Payment was received under severance termination provisions and the employee has not terminated their employment since the receipt of payment.
Note: This principle applies to employees who join the CPA from another public service organization, without a break in service even if severance was paid.
For collective agreements with no severance exclusion clause
When calculating continuous or discontinuous service for the purpose of determining vacation leave entitlements, all periods of “public service”, whether continuous or discontinuous, will count regardless of whether a severance payment has been received.
In summary, there are two key points to verify when calculating continuous or discontinuous service for the purpose of determining vacation leave entitlements:
- Is there a provision excluding service for which severance has been received?
- Has there been a break in service?
When calculating service for the purpose of determining vacation leave entitlements, all periods of service (continuous or discontinuous) will count except where a provision excluding service based on severance still exists, plus a severance payment (which includes payments from severance termination clauses) has been received and there is a break in service.
All questions should be directed to your Departmental Corporate Labour Relations or Corporate Compensation Official who, if required will direct their questions to the Compensation and Collective Bargaining Management group at the following email address: Interpretations@tbs-sct.gc.ca.
Original signed by
Compensation and Collective Bargaining Management
Compensation and Labour Relations
Office of the Chief Human Resources Officer
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