Keeping the identity of the employer clear when working with staff agencies can help when employment comes to an end
Do you know how long you’ve worked for your employer? If you started as a temp worker recruited by an agency, it may not be as long as you think.
When employees are dismissed by their employers, they’re legally entitled to an amount of reasonable notice of termination or to be paid the equivalent of their earnings during that notice period. It’s been well-established that the length of notice entitlement is determined by factors such as the employee’s age, length of service, the character of the employment, and the availability of similar employment in the job market.
For federally regulated employers, the length of service is also a factor in determining whether an employee has the right to make an unjust dismissal complaint under the Canada Labour Code – which is notable since federally regulated employers otherwise cannot dismiss employees without cause under the code.
A worker for the Bank of Canada found out about the technicalities of determining length of service. The worker was initially hired by a human resources recruitment and staffing company that had an agreement with the Bank of Canada to provide temporary workers to fill specified roles.
The staffing company placed the worker in a position at the bank, where she worked for 10 months – during which time the staffing company paid her salary and collected its fees from the bank. After 10 months, the worker successfully applied for a full-time position with the bank and resigned from her role with the staffing company, though her placement with the bank through the staffing company had another two months to run. Her new position performed essentially the same duties with the same team.
However, eight months later, the bank terminated the worker’s employment after she had problems with a new manager. The worker filed an unjust dismissal complaint under the code, but the bank challenged her ability to do so. The bank argued that though the worker had been with the bank performing the same work for 18 months, she had only been an employee of the bank for the last eight months – meaning she didn’t meet the code’s minimum requirement of 12 months of service to make an unjust dismissal complaint. The worker countered that the bank benefited from her work from the beginning but tried to take no responsibilities of an employer.
The adjudicator agreed with the Bank of Canada’s position, noting that “tripartite” agreements between staffing agencies and companies were common in the modern business world where the agencies employed people to perform work for the companies. There was no reason to believe such an arrangement was entered into simply to avoid the code’s unjust dismissal requirement, said the adjudicator.
The adjudicator also noted that such an arrangement can be abused or used to inappropriately mask situations where the client is the true employer, but such circumstances would have to be determined through examination of the “attributes of employment.” That wasn’t the case here, as it was clear the worker was an employee of the staffing agency from the beginning – she applied to the agency and was paid by it – and she clearly resigned from her employment with the agency when she successfully applied for the permanent position with the bank. In addition, the existing agreement between the agency and the bank was meant for just such circumstances, said the adjudicator.
Things can be a bit more complicated when a worker joins a company from a temp agency, but when agreements are clear from the beginning, it’s easier to figure out who the true employer is. Many employers use staffing agencies for temp workers, so it important to make sure it’s clear who is the employer and what work is to be performed – and who’s doing the termination when the time comes.