Filling in the Gaps: Continuity of Service and Gaps in Employment

When determining the reasonable notice period of a terminated employee, one of the major factors of consideration is length of service, along with other factors such as age and nature of position.  The longer an employee has worked for an employer, the more notice (or pay in lieu thereof) they are generally entitled to upon termination.  In some cases, however, an employee may have breaks in employment with the same employer, such as with respect to a leave for family reasons or even a voluntary resignation to work for another employer before returning to the original employer.  These breaks in employment raise an issue as to whether the court should include service before the break for the purposes of determining notice.

Courts have the discretion to disregard interruptions in service in determining the notice period and will examine the break in context of the full period of employment.  The assessment depends on several factors that have been interpreted by the courts, namely:

  1. The length of the gap in relation to the overall employment. The shorter the gap in the overall context of employment, the easier it is to disregard the gap and treat the employment periods as cumulative.
  2. The reason for the gap. The gap is more likely to be disregarded where the leave is for family reasons, to pursue further education with view to returning to work, or other matters beyond the employee’s control, rather than due to a voluntary resignation to seek alternative employment.
  3. The means of reintegration into the workplace. The gap is more likely to be ignored where the employee returns with recognition of their prior seniority, rather than being treated as a new employee. Similarly, whether the employee has been induced to return to work has been a consideration the courts have used to bridge service. This factor reflects an attempt to objectively determine the parties’ intentions.

The issue is less grey when it comes to statutory entitlements, specifically termination pay and severance pay.  There is express recognition in the Ontario Employment Standards Act, 2000, S.O. 2000, c. 41 that time spent on “leave or other inactive employment” is to be included when determining the period of employment for purposes of statutory termination pay, but this does not apply to a lay-off (s. 59).  In addition, all of the time spent “in the employer’s employ, whether or not continuous and whether or not active” is to be included when determining eligibility and calculating entitlement to severance pay under the statute (s. 65(2)).

If you are deciding how to deal with breaks in service for the purposes of assessing a reasonable notice period, whether employee or employer, it is best to seek the advice of an employment lawyer to help you navigate the law.  Contact Monkhouse Law today for a free consultation!

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About the Author: Miguel Mangalindan is a senior associate employment lawyer at Monkhouse Law where he practices Employment, Human Rights and Disability Insurance Law.

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