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Employee’s unused vacation days payable after one year

Contract minimum of 10 yrs’ service unlawful

A high school principal did not have to work 10 years before being entitled to payment for her unused vacation time, a Rhode Island Superior Court judge has determined.

The defendant School Committee argued that the plaintiff principal’s own employment contract specified that a payout for unused vacation days was conditioned on 10 years of service being completed with the Newport Public Schools.

But Judge Bennett R. Gallo found that contractual provision unenforceable under G.L. §28-14-4(b).

“The statutory protection extends to employees who complete ‘at least one year of service,’” Gallo wrote. “To the extent that [the plaintiff]’s employment contract required her to have ten years of service to be eligible for payment of earned, unused vacation time, it contravenes the letter and spirit of §28-14-4(b).”

The nine-page decision is DiCenso v. Newport School Committee, et al.

Jeffery D. Sowa of Providence represented the employee, and Newport, R.I. attorney Neil P. Galvin the employer.

Administrative denial

Plaintiff Patricia DiCenso was employed as principal of Rogers High School in Newport. The last two of her annual employment contracts provided that, upon her termination, she would be paid for “all unused vacation days at the rate in effect at the date of termination up to a maximum of twenty-five (25) days, provided that ten (10) years of service have been completed with Newport Public Schools.”

At the time of her resignation, the plaintiff had not used 55 and one-half of her allotted vacation days, for which she requested payment. Her request was denied based on her failure to have completed 10 years of service.

The plaintiff then filed a complaint with the Rhode Island Department of Labor and Training’s Division of Labor Standards pursuant to G.L. §28-14-4(b).

A hearing officer held that the plaintiff was not entitled to any compensation for her unused vacation days because she had not served the requisite 10 years. According to the hearing officer, if the plaintiff “was not pleased or in agreement with the proposed terms and conditions presented, she could have refused to sign the annual contract.”

On appeal to the Superior Court, the plaintiff requested that she be awarded payment for all her unused vacation time.

Statutory intent

The plaintiff’s appeal was based on §28-14-4(b), which states: “Whenever an employee separates or is separated from the payroll of an employer after completing at least one year of service, any vacation pay accrued or awarded by collective bargaining, written or verbal agreement between employer and employee shall become wages and payable in full or on a prorated basis with all other due wages on the next regular payday for the employee.”

The employer claimed that the service requirement in the plaintiff’s contract was consistent with §28-14-4(b).

“Newport Schools contends — and the DLT hearing officer agreed — that the statute contemplates reference to the employment agreement to determine what, if anything, is owed to the employee as accrued vacation pay,” Gallo said.

“The statute, posits Newport Schools, simply requires that whatever is owed be paid as wages on the ‘next regular payday’ following the employee’s separation,” the judge said. “In Ms. DiCenso’s case, Newport Schools argues, nothing is due her under her contract for unused vacation pay because she did not complete ten years of service and, thus, nothing was owed her under §28-14-4(b).”

However, “Newport Schools and the DLT selectively read §28-14-4(b) and, in doing so, ignored its intent,” Gallo found. “Newport Schools may not avoid its obligation to compensate Ms. DiCenso for her twenty-five days of accumulated vacation time because she did not work for Newport Schools for ten years.”

The plaintiff went on to argue that the contractual provision imposing a 25-day limit to the unused vacation time for which she was eligible to be paid also violated the statute.

The judge found her argument to be without merit.

“Vacation rights are created by contract, and not statute,” he said.

The statute, Gallo noted, simply directs an employer to pay, as wages, “any vacation pay accrued or awarded by … written or verbal agreement.”

The written agreement between the parties entitled the plaintiff to 25 days of vacation pay.

“Because the statute allows the parties to determine via contract how much vacation pay an employee is entitled to upon separation, Ms. DiCenso’s contract properly contained a cap on that amount,” the judge concluded.

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