From our payroll expert, Alan McEwen:
By default, if the vacation promise is paid time off work (as opposed to vacation pay calculated as a percentage of earnings), then the leaves provided for in the Ontario employment standards are time that accrue the right to vacation.
However, employers can modify the promise so that the right to accrue paid vacation time is restricted to active service. You just can’t pick and choose the types of inactive service that are excluded. That would run afoul of the Human Rights legislation in Ontario.
Hope that helps. Glenn