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Guide Interpretation

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Part I - Act respecting labour standards

CHAPTER IV - Labour standards

Annual leave with pay (section 66 to 77)

Sections
66
67
68
68.1
69
70
71
71.1
72
73
74
74.1
75
76
77

Section 76

Contract of employment cancelled

If a contract of employment is cancelled before the employee is able to benefit by all the days of leave to which he is entitled, the employee shall receive, in addition to the compensatory indemnity determined in accordance with section 74 and attaching to the fraction of the leave that he did not enjoy, an indemnity equal to 4% or 6%, as the case may be, of the gross wages earned during the current reference year.

Interpretation

When the contract of employment is terminated, the employer shall pay the employee not only the indemnity related to the annual leave which he should have benefited from had he remained at work, but also an amount equal to 4% or 6% of the total earnings accumulated during the current reference year.

Example

  • Gross wages earned during the previous reference year = $30 000
  • Gross wages earned during the current reference year prior to the calculation of the indemnity = $8 200

(The notion of "gross wages" is examined in the interpretation of section 74 ALS.)

Calculation of the indemnity

$30 000 x 6% = $1 800
$8 200 (gross wages earned during the current reference year)
+ $1 800  (aforementioned indemnity)
= $10 000  (gross wages for the current reference year)
$10 000 x 6%= $600

Total indemnity

($1 800 + $ 600) = $2 400

1979, c. 45, s. 76.

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