The question posed in the title above seems simple, doesn’t it? To calculate years of service, all one has to do is take the start date of employment and count the number of years until the end date. Done.
But wait. Before you go, I have a few other questions for you. What happens to your years of service when the company you work for is sold to another company? What if you had a break or interruption in your years of service? Do you no longer receive credit for all of those years prior to the sale or the break in service? How is your entitlement to notice of termination affected? The answer to the question in the title above is not as simple you might have thought.
Fortunately, here are a couple of decisions that help to answer that question.
Sale of the Company – Manthadi v. ASCO Manufacturing
The Court of Appeal’s decision in Manthadi v. ASCO Manufacturing is an example where the employer’s assets were sold to another company. The employee in this case worked for 36 years prior to the sale. After the sale, the employee worked for the new owner for one month before being laid off, but was never recalled back to work. While the lower court concluded that the employee was entitled to 20 months of pay in lieu of notice based on 36 years of service, the Court of Appeal disagreed with the calculation of the employee’s tenure.
The Court of Appeal concluded that simply stitching together the periods of service with the two employers was not the proper approach. Instead, the law considers the appropriate weight to be given the employee’s experience with the previous employer. At paragraph 66, Juriansz J.A. wrote that this approach’s “flexibility enables the court to deal fairly with the endless variety of circumstances in which an employee’s claim may be presented. The court is able to recognize, under the rubric of experience, the equivalent of all or some of an employee’s service with the vendor employer in order to arrive at a fair result.”
Break in Service – Skowron v. ABC Technologies Inc.
In Skowron v. ABC Technologies Inc., a decision of the Superior Court of Justice, the employee worked for the employer for a total of 26 years, but with an 11 month break in service after the first 6 years. During that break in service, the employee attempted to establish a career as a consultant, but later returned to the employer – first as a dependent contractor and eventually as an employee once again three years later. The employment relationship continued for 17 years thereafter.
One of the issues for the court to determine was whether the employee’s length of service should be based on the entire 26 years of service, or simply the 17 years following the break in service. Myers J. concluded that although there was a clear break in employment, 17 years did not fairly encapsulate the employee’s length of service. With regard to the proper approach, at paragraph 24, his Honour wrote the following: “It is not a reductionistic inquiry as suggested by the defendant. Rather, the court takes a holistic approach to review all the relevant circumstances to try to arrive at an appropriate assessment of the amount of time reasonably required for the plaintiff to obtain new employment.”
As we can see from these decisions, when it comes to calculating one’s years of service, the approach is not a straightforward arithmetic calculation. Rather the approach to be taken may be described as flexible and holistic, weighing and considering all relevant factors to reach a fair and appropriate amount of time, or pay in lieu of time, to assist an employee in securing comparable employment which is the very purpose of notice of termination.
This article is intended only to provide general information and does not constitute legal advice. Should you require advice specific to your situation, please feel free to contact me to discuss the matter further.