B.C. tribunal looks at agreement involving negative vacation balance
An accountant who took a three-month paid study leave and resigned just three weeks after returning must repay his former employer $4,664 in "vacation debt," a British Columbia tribunal ruled on Jan. 22, 2026.
Tribunal Member Peter Nyhuus found that Mohit Bains had agreed to repay Johnsen Archer LLP for the negative vacation balance he accumulated during his leave, even though no written policy explicitly required it.
The case highlights the risks employers face when making informal arrangements for employee development and raises questions about when verbal understandings become legally binding obligations.
The study leave that backfired
Bains began working as a staff accountant at Johnsen Archer LLP in 2021. In summer 2023, he requested a three-month study leave from July 1 to Oct. 2. Without sufficient accrued vacation time, Bains asked to go into a negative vacation balance to continue earning salary while away from work. The firm agreed to advance him 50% of his salary during the leave period, an exception to its usual practice.
Johnsen Archer's controller provided Bains with spreadsheets showing what his negative balance would be at various salary percentages and recommended he take only 25% to reduce the debt. The tribunal noted, “Johnsen Archer says it offered this arrangement with the understanding that Mr. Bains would either work his way out of the negative vacation balance or pay Johnsen Archer back if he resigned with a negative balance.”
When Bains returned to work in early October, his negative vacation balance totaled 241.55 hours, equivalent to $8,175. On Oct. 23, he gave two weeks' notice of resignation.
The unwritten agreement
Bains argued there was no contractual obligation to repay the debt because neither the employee handbook nor his employment contract explicitly required it. The handbook was silent on negative vacation balances, though it did contain repayment provisions for tuition and student fees.
The tribunal examined the handbook's education support policies, which required employees who left before or shortly after completing their designation to repay course fees. “I find the policy's intent is to ensure that Johnsen Archer benefits from the education it pays its staff to receive,” Nyhuus wrote, concluding the parties intended the study leave salary to function similarly.
The tribunal also considered Bains' response when confronted about the debt. Rather than disputing the obligation, he initially agreed to partial payroll deductions and later offered a long-term payment plan, citing financial hardship. These actions, the tribunal found, indicated he understood he owed the money.
Contract found, counterclaim dismissed
Nyhuus found the parties had a binding contract requiring repayment despite the absence of explicit written terms. The tribunal looked at email correspondence, verbal discussions between Bains and the controller, and the employment context at the accounting firm.
Bains had counterclaimed for $3,511 that Johnsen Archer deducted from his final two paychecks, arguing the deductions were unauthorized. The tribunal disagreed, finding the employer entitled to make those deductions based on the agreement.
“By failing to do so, I find Mr. Bains' breached the parties' contract,” Nyhuus concluded, ordering Bains to pay the remaining $4,664 plus $430 in pre-judgment interest and $175 in tribunal fees, for a total of $5,269.
