Why, under a salary deferral arrangement, is the employee required to report to work for a period at least equal to the period of leave? The Directorate responded:
The provisions of the Regulations ensure that a deferred salary sabbatical leave plan is aimed at taking a leave of absence and is not primarily intended to defer the tax payable on an amount earned as salary or wages. …
[I]f the employee did not intend at the time the salary deferral arrangement was created to return to work after the leave for a period at least equal to the duration of the leave, the deferred amounts must be included in the employee's income in the taxation year in which they were deferred. …
In addition, if the employee decides during the course of the arrangement to retire at the end of the leave and does not return to work as initially provided for in the arrangement, the deferred amounts will be taxed in the year in which it is known that the above-described condition will not be satisfied.
On returning to work, can the employee work part-time rather than full-time? The Directorate responded:
[I]f, prior to the leave, an employee was working full-time, then upon the employee’s return to work, the employee must once again work full-time within the employer's business … . If the employee was working part-time before the leave, the employee may return to work part-time or on a busier schedule … .