Issues with Short Term visa for Iceland
score:4
Your employer is likely overinterpreting what is asked of them. The embassy is not looking for a legally binding guarantee, just for something that tells them that you reasonably believe you will still have a job when you return.
The embassy always starts with a suspicion that your real intention is to immigrate illegally to the Schengen area and seek work there. Your task as an applicant is to prove that it is not so, by showing that it is in your own best interests to return to Canada after your visit. Having a good job to return to goes a long way for this, but only if you're not going to get fired from it if you abscond to Iceland and don't come in for weeks. So they want to know you have actually agreed with your employer to take vacation in such-and-such period, and that's what the "return to your job" language is for.
It ought to satisfy the embassy if your employer writes a letter reading something like
To whom it may concern:
John Doe has been employed with Yoyodyne Canada Ltd since November 2005 as a Senior Underwater Basket Weaver. We have mutually agreed that he will take vacation between December 3 and December 11, 2016.
(or hopefully at a time that is more opportune for experiencing Iceland).
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Source: stackoverflow.com
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