In the absence of a legally enforceable contract dealing with entitlement on termination, it has been said that an employee employed for an indefinite term may only be terminated summarily for just cause or in the absence of just cause, upon reasonable advance notice or pay in lieu of such notice.
Determining the period of reasonable notice of termination at common law is an exercise that is said to be more “art than science”. As previously noted, courts have rejected any formula-based approach to notice determination in favour of a more individualized approach first espoused by the Ontario High Court in Bardal v. Globe and Mail Ltd. where the Court noted:
“There can be no catalogue laid down as to what is reasonable notice in particular classes of cases. The reasonableness of the notice must be decided with reference to each particular case,having regard to the character of the employment, the length of service of the servant, the age of the servant and the availability of similar employment, having regard to the experience, training and qualifications of the servant.”
Length of service is one of the key factors that is used in deciding on the notional period of reasonable notice in any given case. In most cases, length of service is easily determined.
However, in cases where the employee works for some period, leaves the employ of the company for whatever reason (e.g. resigns or is terminated) and is subsequently rehired after some break in service the issue of length of service isn't so clear. How do we deal with the “break in service” in determining length of service for purposes of calculating the period of reasonable notice where the employee is subsequently terminated?
The issue was recently considered in Dobbs v. The Cambie Malone’s Corporation 2011 BCSC 1830 (CanLII). In this case, the central issue was whether Mr. Dobbs “should be regarded as an employee with 11 years of continuous service or an employee with 30 months of service at the time of his termination”. Although this was the “central issue” the Court noted that “ the length of continuous service may have less bearing on the notice period than the parties assume.”
The Court observed:
“On the undisputed facts, Mr. Dobbs has either 11 years of continuous service, or 11 years of service onsisting of an initial 8.5 years, a hiatus of 11 months and a subsequent 30 months of service prior to his termination. In my view, the issue is whether the notice period ought to be affected by the 11-month break in service given all of the factors present in this case.” How is the “break in service” to be treated?
The Court summarized the law in Beach v. Ikon Office Solutions, Inc.,  B.C.J. No. 1574 (S.C.), where the Court said at para. 13:
Where there is no express term in the re-employment contract dealing with the issue, the question is whether the employer has effectively recognized continuity of service.
Following a review of a number of case, Madam Justice Wedge in Dobbs put the law this way:
All of these decisions stand for the proposition that in the absence of an express contract term dealing with a hiatus in an employee's term of employment, the question is whether the employer and employee conducted themselves at the point of rehire in a manner consistent with the employee being given credit for the entire employment period. It is a question of fact to be determined on all of the evidence.
In this case, the Court determined that in the discussions leading to Dobbs' return "the parties assumed that Mr. Dobbs would be treated as an employee with many years of service with the company and not as a newly hired employee". Accordingly, the Court held him to be an 11 year employee not a 30 month employee.
It is important for employers to turn their mind to breaks in service when re-hiring a former employee and decide how prior service will be treated . A carefully drafted employment contract can specifically spell out the intentions about how prior service will be handled. Although there may be some ability to deal in the contract with the impact of prior service on common law reasonable notice, for example, it is critically important to understand the rules regarding breaks in service and prior service under the Employment Standards Act, 2000 and that any attempt to contract out of these requirements will be void and unenforceable.