Canadian Employment Law Today

Canadian HR Reporter, 2021 4 How does a short interruption in the employment relationship factor into reasonable notice entitlement? Breaking down breaks in service EMPLOYMENT STANDARDS legislation outlines the minimum amount of notice or pay in lieu of notice that terminated employees are entitled to receive, based on the length of time worked with the employer. However, issues can arise concerning the calculation of length of service where there has been some form of interruption to the employment relationship. The issue is addressed by legislation. In Ontario, for example, service is not consid - ered broken for the purpose of statutory notice of termination or termination pay if there isn't a break in service of more than 13 weeks. Breaks in service are irrelevant for the purpose of calculating severance pay — all periods of employment, whether contin - uous or not, and whether active or not, are accounted for in determining severance pay entitlement. Breaks in service can, however, be relevant to the determination of reasonable notice in wrongful dismissal actions. One interesting issue that arises from time to time is whether or not an employee's continuous service — consisting of no inter - ruptions whatsoever — can be broken for the purpose of calculating reasonable notice. Currie v. Nylene is a recent decision out of Ontario that addressed this issue. Diane Currie's service with her employer, Nylene Canada, and predecessor employers, began in 1979. In 2017, Nylene advised Currie that she was eligible to start receiving pension income while continuing to work full time. As a condition of doing so, Currie was required to sign a new contract of employment, which she did. Nylene terminated Currie's employment 18 months later, along with the employ - ment of several of her colleagues. Currie took the position that she was entitled to reasonable notice on the basis of 39 years of continuous employment, while Nylene argued that Currie was only employed for about 18 months — although it paid her the maximum statutory entitlements under the Employment Standards Act, 2000 based on her 39 years of service. The court agreed that Currie was employed for 39 years and awarded her 26 months' reasonable notice, finding that there were exceptional circumstances to warrant an award above the judicially recognized maximum of 24 months. The court held that Currie did not voluntarily resign or retire from the employment relationship such that the chain of continuous employment was broken. She simply executed a new employment agree - ment in 2017 for the sole purpose of accessing pension benefits and had no intent to waive her prior service in exchange for those benefits. The decision in Currie is consistent with a range of cases where judges have refused to disregard prior continuous service that is inter - rupted with a new contract of employment. Sale of business Where the assets of a business are sold, the law deems employment with the selling business to be terminated. If the purchaser hires the terminated employees, employ- ment standards will deem employment continuous for statutory purposes only. Employment with the purchaser is a fresh contract of employment for common law purposes. However, purchasers often enter contracts with transferred employees that do not make it clear that prior service will not be recognized beyond statutory purposes. In such cases, with some varia - tion depending on province, courts are likely to deem service continuous — see Sorel v. Tomenson Saunders Whitehead Ltd. and Addison v. M. Loeb Ltd. Fixed-term contracts Fixed-term contracts simply expire at the end of the contract. Where, however, an employer and employee enter multiple, successive fixed- term contracts, the court retains the discre - tion to disregard the final fixed-term contract prior to termination. In these circumstances, the court treats the fixed-term contract as a vehicle to negotiate terms and conditions on an annual basis, in a relationship that the parties otherwise consider to be indefinite and long-term. The Ontario Court of Appeal's 2001 decision in Ceccol v. Ontario Gymnastic Federation remains the leading decision in this respect. In that case, the court awarded reason - able notice and disregarded a series of 16 fixed-term contracts that were automatically renewed by the parties until the last contract. Change in employment status In these cases, a resignation is offered by an employee not to terminate the relationship but to mark a transition to a different status. In Ariss v. NORR Limited Architects and Engineers, the plaintiff, John Ariss, desired to transition to part-time employment with NORR after 27 years of continuous service that began in 1986. The employer was prepared to change his status provided Ariss resigned from employment and waived his prior service and any accrued entitlement to severance pay. Ariss agreed to do so. When his employment was terminated in 2016, his employer provided him with notice of termi - nation dating back to the start of the part- time agreement in 2013. He was given only 3.5 weeks' notice of termination. The Ontario Court of Appeal agreed with the motion judge's decision that Ariss' resignation was not effective to interrupt his service for statutory purposes on the basis that it was "an entirely artificial attempt to create an interruption in employment when in fact there was none." Ariss was, neverthe - less, limited to the statutory minimums because NORR had validly contracted out of the common law. The principle underlying each of these decisions is that an employer that benefits from an employee's skillset and knowl - edge, gained from several years of loyal CASE IN POINT: REASONABLE NOTICE Length of service determines statutory entitlements to notice of termination and severance pay. It is also arguably the strongest predictor of reasonable notice periods awarded by judges. But things can get cloudy where the employment relationship was temporarily halted at some point. Employment lawyer Rishi Bandhu discusses circumstances where an interruption in someone's employment somewhere along the line can influence the amount of common law notice to which an employee is entitled. BACKGROUND BY RISHI BANDHU The employer adopted a policy that a driver was expected to cover for a service advisor on weekends and holidays — intended to advance drivers through the company while adapting to new economic circumstances.

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