A recent Ontario case illustrates how recognition of past
service with former employers can impose increased liability for
reasonable notice of termination.
Mr. Vist commenced employment in 1988 but left in 1992 to pursue
alternate employment. He returned to his former employer in 1993
and remained employed with them until 2003, at which time his
employer sold all of its assets to a third party. Mr. Vist was
provided with written notice of termination by his employer and he
accepted employment with the third party. Mr. Vist did not stay
with the third party for long and did some contract work for his
former employer between late 2004 and early 2006, and again for a
few months at the end of 2006. He was then offered a term contract
with his former employer beginning in January 2007. In mid-2007 he
was offered full-time employment. His employment offer stated that
for purposes of vacation and service milestones, his service date
would be 1993. In early 2008 the unit in which Mr. Vist worked was
acquired by another third party and he accepted its offer of
employment which stated that his new employer would "recognize
any accrued continuous service" with his previous
Mr. Vist's employment was terminated without cause by his
new employer in June 2009. Mr. Vist argued that despite the
3½ year break in his employment between 2003 and 2007, his
entire length of service (since 1993) with his former employer
should be used to determine the reasonable notice period while his
new employer argued that he only had 2½ years' service.
The Court held that Mr. Vist's employment since 1993 should be
taken into account for the following reasons:
Mr. Vist was employed continuously by his former and new
employers for over 16 of 21 years. In addition, he had worked under
contract for his former employer in some of the years that he
wasn't employed permanently.
When Mr. Vist was rehired by his former employer in 2007, his
service date for the purposes of determining vacation and service
milestones was acknowledged to be January 1, 1993. Further, his
offer of employment from his new employer in 2008 stated that the
company would "recognize any accrued continuous service"
with his former employer.
Nothing in Mr. Vist's 2007 employment contract contemplated
his length of service for the purposes of termination.
Implications for Employers
This case serves as a cautionary example for employers. The case
illustrates how new employment which agrees to recognize previous
service for certain purposes can affect reasonable notice periods.
Although the court did not consider the cumulative length of
employment as a single block, weight was given to the total amount
served and not just the last uninterrupted block of service. Where
the parties don't directly contemplate the effect of prior
service for the purposes of termination, it may be deemed as
continuous if the employer treats it as such. It is therefore
important for employers faced with a similar situation to directly
address the issue in an employment contract. A contract which
explicitly cuts off prior employment and sets forth a new set of
entitlements and responsibilities may pay dividends later if the
issue of proper notice ever arises.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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