Pursuant to the collective agreement, an employer grants sick leave to its employees annually, with the balance of the sick leave paid out in December of each year, except that if there is a termination of employment during the year, the balance is paid out at that time.
CRA noted (citing Harel) that “the payment of a lump sum to cover the balance of unused sick leave accumulated over the years can be considered a retirement allowance” – but, here, the sick leave payouts likely were employment income given that “the payment of the balance of such leave is made annually in accordance with an employment agreement.”