March 23, 2022
A Moratorium on Mandatory Leave Cash-Out was implemented across all organizations within the core public administration. Many separate agencies, but not all, also implemented the Moratorium. If you are working for a separate agency, contact your HR advisor to confirm.
Background
In September 2016, following the implementation of Phoenix, a moratorium was imposed on mandatory leave cash-outs. An information bulletin in November 2020 indicated that 2020-2021 would be the last extension on the moratorium for the mandatory cash-out of vacation; mandatory cash-out of vacation leave would restart on March 31, 2022.
TBS has announced that the payout for excess leave balances accumulated prior to the 2021-2022 fiscal year will be made over five years, at 20% of the excess leave from 2021-2022 to 2024-2025, and 100% of the remaining amount in 2025-2026. Employees will also receive a payment for 100% of the earned but unused portion of their vacation leave accumulated during each fiscal year, starting on March 31, 2022, but limited to the amount necessary to reduce an employee’s carry-over to the carry-over limit.
Voluntary cash-out always remains an option, subject to the delegated manager’s approval.
For organizations serviced by the Pay Centre, the mandatory vacation leave cash-out will be issued before December 31, 2022.
Please refer to the GCpedia page for all the details and tools. Although a few examples are provided at the end of this document, the guide, available on GCpedia, provides many more. A Guide for Mandatory Leave Cash-out for Executives is also available on GCpedia.
Temporary Modifications to the Terms and Conditions of Employment for Executives
From January 2022 to March 2026, some provisions in the Terms and Conditions of Employment for Executives are temporarily modified to align with the excess leave cash-out provisions for other employees and to simplify the administration of the cash-out process.
From 2021-2022 to 2025-2026, the vacation leave credit carry-over limit for all executives will be 35 days or 262.5 hours, regardless of years of service. The additional carry-over allowed in exceptional circumstances will be reduced to a maximum of four weeks, regardless of years of service. Please note this additional carry-over may only be granted for vacation leave in the year it is earned (and not used). It does not apply to leave earned in previous years, and it must be approved by the delegated manager.
The provision that allows the liquidation of excess vacation leave credits over three years will be suspended during this period.
Central agencies have indicated that there will be no exception for people planning to use their excess vacation the following year or who plan to retire within the next few years.
The only exclusions being considered will be:
- Employees on leave without pay and in receipt of Employment Insurance benefits or in receipt of Disability Benefits/Long Term Disability benefits, will be excluded from the mandatory leave cash-out while they are in receipt of these benefits.
- Employees in a pending transfer to a new organization (working for the new organization but still being paid by the former one), will be excluded from the mandatory leave cash-out process until their pay is transferred to the new organization. (Not applicable to those on secondment.)
- The Employer may pause the mandatory leave cash-out in a given year, in certain situations where there is an issue with the completeness or accuracy of an employee’s leave data.
If you suspect that your leave data is inaccurate, you should immediately contact your manager/HR professional to inform them and discuss the situation.
Rate of pay for cash-out
Both mandatory and voluntary cash-outs are based on the executive’s current substantive base salary (not including performance pay).
For mandatory cash-outs, the current base salary is what the executive was earning in their substantive position on March 31 of the year in which the leave is being cashed-out.
For voluntary cash-outs, the current base salary is what the executive was earning on the date the request for voluntary cash-out was made.
For non-executives acting in executive positions at the time of the vacation leave cash-out, the collective agreement and/or terms and conditions of employment of their substantive position apply.
Calculations of mandatory cash-out at the end of 2021-2022
![Lifting of moratorium - calculations]()
In subsequent years:
If you had an excess leave balance at the end of March 2021, as long as your vacation leave exceeds 262.5 hours at the end of a fiscal year:
- Each year until 2024-2025, you will be paid 100% of the portion of that year’s vacation entitlement you didn’t use, plus 20% of the remaining excess leave balance.
- At the end of 2025-2026, you will be paid 100% of the portion of that year’s vacation entitlement you didn’t use, plus 100% of the remaining excess leave balance.
After March 2026, the temporary modifications to the Terms and Conditions of Employment for Executives will no longer be in place and the normal process will resume.
Important
Note 1: Be mindful that this cash-out amount may not be deducted from your leave bank until after it is processed by compensation services. This means your leave bank may show a higher balance, until the cash-out is processed.
Note 2: Other than the portion of the excess leave from previous fiscal years that will be cashed out, the balance remains available for use. For example, if in any given year 20% of the excess leave you had on March 31 is going to be paid to you in the following months, the balance of your excess leave remains available until the end of the fiscal year. This is valid until March 2026, at which point 100% of your excess leave will be paid.
