Various factors to consider whether a break in employment affects service time
Question: How long can an employee’s break in service be before it’s not considered a continuous term of employment with the same employer?
Answer: The length of an employee’s service is an important consideration in calculating the amount of notice of termination that is required. Issues may arise, however, when there have been “breaks” in an employee’s service. Breaks can arise for a number of reasons, such as leaves of absence, employer mandated layoffs, dismissals or voluntary resignations followed by re-employment with the original employer.
With respect to common law notice, unfortunately, courts have not consistently assessed breaks in service when calculating reasonable notice. The following factors have been applied by courts to determine whether employment is continuous:
•Objective intent of the parties. Courts are more likely to find a continuous relationship if an employee is rehired with the same entitlement to discretionary benefits or seniority that she had when the break in employment occurred. Courts are likely to make a similar finding if the employer induced the employee to return.
•Reason for the break. Courts are less likely to find a continuous relationship if the break is the result of an employee’s voluntary resignation as opposed to a leave for personal or family reasons, or the result of factors beyond an employee’s control.
•Length of the break vs. the total length of the employment relationship. Courts are more likely to treat the relationship as continuous if the break is for only a short period of time relative to the overall length of service.
The case of Graham v. Galaxie Signs Ltd. presents a unique case study. The court was required to calculate the notice period of an employee who was hired in 1983 and dismissed in 2007. There were two breaks of service in the course of employment. The first was an unapproved six-month leave of absence in 1990, during which the employee worked for a different employer. When he was rehired, he was treated as a new employee and lost his previous benefit entitlements. Consequently, the court did not use the period of service up to the start of this break in calculating notice. The second break, although 18 months longer than the first, was found not to have severed the employment relationship because the employer retained his seniority and previous benefit entitlements upon being rehired.
Conversely, in Day v. JCB Excavators Ltd., the employee was employed for six years before resigning. Ten years later, he returned to the original employer and worked for another 15 years. The court did not treat his employment as continuous, despite the fact that the parties had agreed to recognize his earlier employment for pension plan purposes. Staff appraisals signed by both parties stated that the employee’s hire date was the start of his second employment term. The appraisals, the length of the absence and the fact that the employee resigned to work for a competitor were determinative factors for the court.
Note that this does not address statutory requirements, which can be treated differently.
For more information see:
•Graham v. Galaxie Signs Ltd., 2010 CarswellBC 1061 (B.C. S.C.).
•Day v. JCB Excavators Ltd., 2011 CarswellOnt 13250 (Ont. S.C.J.).
