A common issue terminated employees have is that they may have left their employer for a period of time and then rejoined at a later date. It is very important to determine if there has been a break in service as this could drastically change termination entitlements at common law. The Ontario Court of Appeal recently dealt with this issue in the Currie v. Nylene Canada decision.

The Facts and Discussion:

The Plaintiff, Ms. Currie, originally began working with her employer back in 1979. In June 2017, she was advised that she had satisfied the criteria to receive her accumulated pension plan. In order to access those funds, she was required to retire. The employer, Nylene, told her she could retire (to get access to the pension plan), but would then offer her employment following the retirement. Ms. Currie ultimately decided to access her pension plan.

Less than two weeks later, Ms. Currie accepted Nylene’s offer of employment. The offer stated:

  • Your current job responsibilities and reporting relationships will remain the same
  • You will be compensated at your current salary level or rate of pay
  • Your accrued and unused vacation balances, if any, will be recognized
  • You will be eligible to participate in Nylene Canada’s employee benefits plan
  • Your service will be recognized for purposes of determining vesting and benefits eligibility under the Nylene Canada benefit plan.
  • You agree to carry out your work in accordance with the policies and procedures of Nylene Canada. The policies and procedures are available to all employees through the shared file management system.
  • You agree that the wearing of required protective safety equipment and complying with safety rules when called for are conditions of your employment.

In December of 2018, Nylene terminated Ms. Currie’s employment. She was 58 years old at the time of her dismissal.

The trial judge awarded Ms. Currie damages based on a period of reasonable notice of 26 months. Nylene then appealed the decision to the Ontario Court of Appeal. Nylene argued that the trial judge erred in using the period of time from 1979 until 2018 as her total service time. They submitted that her June 2017 retirement constituted a break in service of her employment. The rehiring through the June 2017 employment letter reset her years of service clock back to zero.

The trial judge did not agree with Nylene’s argument that there was a break in service with the retirement and subsequent rehiring. He stated reasons such as:

  • Currie’s employment record did not acknowledge an alleged retirement;
  • Currie did not provide any notice of resignation or retirement;
  • Currie relied upon the company’s representation that everything would remain the same when she signed the June employment letter;
  • Currie was told if she accessed her pension, nothing in her employment would change, and
  • Currie was not prepared to stop working but opted to sign the documents prepared by Nylene only after her employer approached her and informed her of the pension entitlements.

The Court of Appeal agreed that, given the findings of fact, it was acceptable for the trial judge to conclude that the retirement/rehiring process proposed by Nylene for the limited purpose of accessing her pension plan did not affect her years of service. As a result, the Court of Appeal agreed with the trial judge that a 26-month reasonable notice period was warranted. She worked for the employer for 40 years, from the age of 18 until 58. She had limited education and specialized skills that made it very difficult to find comparable employment. Thus, a 26-month reasonable notice period was justified.

Main Takeaway

Even accounting for the other factors, Ms. Currie would not have received 26 months but for the trial judge concluding there was no break in service time due to the retirement/rehiring process that took place in June 2017. Had there been deemed a break in service, the notice period awarded would have been substantially less.