An employee has 2 weeks of unpaid vacation time scheduled. That employee is being terminated. Can that 2 weeks of already scheduled vacation time count as notice of termination. Then the 3rd week required would be pay in lieu of notice? Is an employer allowed to structure the termination notice this way since it was already scheduled time off, and not forced to take this vacation time?

Under the Employment Standards Act, 2000 ("ESA"), the notice period cannot include any vacation time unless the employee, after receiving the notice, agrees to the inclusion of the vacation time in the notice period. If, as appears to be the case, you are referring to unpaid time off - per the ESA, an employee must not receive less than his or her regular wages for a regular work week during each week of the statutory notice period. IN SUM, based on what you have written, the fact that the time off has already been scheduled does not relieve you of the requirement to obtain post-notice consent of the affected employee - and if it is unpaid time off about which you are inquiring, there may be other reasons why this would be improper.