Canadian Employment Law Today

Canadian HR Reporter, 2021 service, ought not be able to disregard that service time, unless there is a logical break and a written contract that is clearly drafted, supported with consideration and compliant with statutory requirements. In one curious decision, Theberge-Lindsay v. 3395022 Canada Inc. (Kutcher Dentistry Professional Corporation), a break in service was found despite the continuous nature of the employment relationship. The employee started work with the employer in 1993. In 2005, she gave the employer more than three months' written notice of resignation. Prior to the effective date, the resignation notice was rescinded, which the employer accepted and the relation - ship continued for some time. The employer later offered a new agreement that limited her to the ESA minimums. The employee signed it and the relationship continued uninter- rupted until it was terminated in 2012. The employee argued that her employment began 1993. The employer argued that service time began in 2005. The trial judge found that the resigna - tion did not interrupt the continuity of the employment agreement. However, the Ontario Court of Appeal disagreed. According to the court, the employee's resignation broke the chain of employ - ment such that the employee had only been employed since 2005, the date of the new contract. The court held that "the minimum notice is the maximum amount to which the respondent is entitled, measured from 2005." The decision in Theberge-Lindsay is difficult to reconcile. It is scant on reasons and the wording of the 2005 contract is not disclosed. Given that the employment relationship continued after the recission, there appeared to be no consid - eration for the 2005 agreement. Further, even if there was consideration, it ought not to have reset her service to 2005 for statutory purposes, as the Court of Appeal held. The employee had been employed continuously since 1993, with no breaks in service. Her statutory entitle - ments, assuming the 2005 agreement validly contracted out of the common law, should have been measured from 1993. In Currie, Nylene relied on Theberge- Lindsay to justify the break in service allegedly created by Currie's "retirement." The court, however, distinguished Theberge-Lindsay on the basis that the employee intended to voluntarily resign, while Currie did not. Despite the anomalous features of Theberge- Lindsay, the case indicates that an employee's continuous service may be broken in circum - stances where an employee provides notice of resignation, rescinds it and agrees to a new contract of employment. Employers may disrupt an employee's service in circumstances where there is a clear and objective break in the employment rela - tionship. The artificial or coerced use of a resig- nation, as in Currie or Ariss, to signal a change in employment status is unlikely to create a break in service that is judicially recognized. Breaks in service may be recognized where the resignation is voluntary and effective, causing a real temporal break, or where the resignation has been rescinded and accepted by the employer. In any case, an employer wishing to reset an employee's service time may do so provided it uses a written contract that adheres to the following principles: • It uses clear and unequivocal language. • It is supported by valid consideration. • It does not contract below employment standards legislation. For more information, see: • Currie v. Nylene Canada Inc. 2021 ONSC 1922 (Ont. S.C.J.). • Sorel v. Tomenson Saunders Whitehead Ltd. (1987), 39 D.L.R. (4th) 460 (B.C. C.A). • Addison v. M. Loeb Ltd. (1986), 25 D.L.R. (4th) 151 (Ont. C.A.). • Ceccol v. Ontario Gymnastic Federation, 2001 CarswellOnt 3026 (Ont. C.A.). • Ariss v. NORR Limited Architects & Engineers, 2019 ONCA 449 (Ont. C.A.). • Theberge-Lindsay v. 3395022 Canada Inc. (Kutcher Dentistry Professional Corporation), 2019 ONCA 469 (Ont. C.A.). May 19, 2021 | Canadian Employment Law Today CREDIT: COURTNEYK iSTOCK ABOUT THE AUTHOR Rishi Bandhu Rishi Bandhu is an employment lawyer in Oakville, Ont., advising employers and employees on all aspects of employment and labour law. He can be reached at (905) 849-0025 or rishi@blpc.ca.

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