Recently, Dan Hassell, Zubas Flett Lawyer, spoke with Jeffrey Smith of Canadian HR Reporter. The opinion piece, which discussed a recent decision of the Ontario Court of Appeal (ONCA) is summarized below.
Ontario Court of Appeal finds break in service, but employer benefited from worker’s experience
The Ontario Court of Appeal tackled treatment of a worker’s previous service after the company underwent bankruptcy proceedings. Despite finding that the employee had discontinuous service, the ONCA awarded seven months’ notice period to a worker who was dismissed and rehired for 2.5 years after the Company underwent bankruptcy proceedings. Essentially, the Court gave weight to the worker’s previous service with the same Company as a factor in the common law reasonable notice period.
“It seems like when there’s a new employment relationship, in some circumstances, there might be an implied contractual recognition of the prior service, unless the employer contracts out of that and makes it clear that the previous service with the predecessor employer is not going to be recognized,” Hassell told Canadian HR Reporter.
The 47-year-old employee was hired as a senior business analyst in 2011 at Guestlogix, a technology company providing digital concierge services to airline passengers. In June 2016, Guestlogix obtained a protection order from its creditors under the Companies’ Creditors Arrangement Act (CCAA) where it signed an agreement releasing them from any liability for claims by its employees that arose before the agreement’s implementation date. The employee was rehired by Guestlogix on the same terms and conditions of employment on September 22, 2016, until she was dismissed on June 13, 2019. The ONCA found that while the employer’s identity remained the same after the sale of the business, Guestlogix explicitly terminated the employee’s employment and rehired her in 2016, triggering a new start date. Even if her employment was not continuous, the ONCA found that her previous service could boost her common law notice entitlement, thereby awarding the employee with seven months reasonable notice.
“Many employers may assume that where there is a break in service, previous service won’t be factored in, but they will often be wrong. In this case, the worker’s stint before the termination rehiring was given enough weight so that it was almost treated like continuous service, despite the appeal court’s disagreement with the motion judge’s decision” Hassell told Canadian HR Reporter.
Hassell believes that the seven months’ notice award by the ONCA is almost in the range of a notice period for an employee with a full eight years of service as opposed to just 2.75 years. He cautions employers to consider the previous service of employees as there could be a greater entitlement than one might think upon termination.
“With the post-pandemic great resignation, there could be a lot of situations where employees are returning back to previous jobs if the grass isn’t greener, so this could come up quite a bit,” Hassell said.
See Antchipalovskaia v Guestlogix Inc, 2022 ONCA 454
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If you have any questions or inquiries regarding your employees’ entitlement at common law. Contact Zubas Flett Law at 416-593-5844 or questions@employment-lawyers.ca.