Continuity of Employment (No Termination or Severance)

What is the Employment Standards Act?

The Employment Standards Act is the law that contains basic rules about employing people and working. Both employees and employers have rights and
responsibilities under the Act.

 

 Does the Act cover all employees in Ontario?

Most employees are covered by the provincial legislation. However, employees working in industries that fall under Federal jurisdiction, such as, Post office, Banks, Railways, Radio stations, Airlines, Television stations etc. are not covered. 

If you are member of the trade union and your contract of employment is governed by the collective agreement, you may not be covered by the Act.

If you are currently employed with the company, you may be able to file a claim with a request that your name not be disclosed. The Act protects you when you are exercising your rights under it.

Section 10(2) of the Act states:

The employment of the employee shall be deemed not to have been terminated or severed for the purpose of this Act and his or her employment with the replaced provider shall be deemed to have been employment with the new provider for the purpose of any subsequent calculation of the employee’s length or period of employment.

This clarifies that there would be a continuity of employment of an employee if there is a change of service provider and if the new service provider hires him or her within 13 weeks of change.  If this happens, the employee would not be considered to have been terminated by the replaced service provider under the Act. Since the employee is not considered to have been terminated by the replaced service provider, he or she is therefore, not entitled to termination notice or pay in lieu of termination notice or severance pay under the Act. The employee does not lose his or her period of employment with the replaced service provider but it is simply added to his or her period of employment with the new service provider.

In other words, if a service provider is replaced and the employee is retained by the new service provider within 13 weeks of change, the employee’s combined period of employment would be considered when calculating his or her entitlements under the Act such as:

1.     Vacation - Employees are entitled to at least two weeks vacation with pay uponcompletion of 12 month period of employment.

 

 2.     Pregnancy Leave - Employees may be entitled to pregnancy leave if they have been employed for at least 13 weeks preceding the expected date of birth.

3.     Parental Leave - Employees may be entitled to parental leave if they have been employed for at least 13 weeks prior to starting the leave.

4.     Written notice of termination or pay in lieu - Employees may be entitled to written notice or pay in lieu if they have been employed for at least 3 months. The notice or pay could range from one to eight weeks depending on length of service.  

5.     Severance Pay - Employees may be entitled to severance pay if they have been employed for at least 5 years. The severance pay could range one to twenty six weeks.

Note: Regardless of whether the new service provider hires the employee of replaced service provider, the vacation pay is the responsibility of the replaced service provider.

If you or the employer disagrees with the investigating officer’s decision, both parties have a right to appeal to Ontario Labour Relations Board within 30 days of the officer’s decision. The Board appoints a referee to hear the appeal. It does not cost the employee to request an appeal but the employer may be required to deposit monies in trust with the Ministry of Labour if it is found to be owing. The referee decision is final and binding on both parties.   

In the past, the Ministry was very aggressive in defending the rights of an employee and would send a legal counsel to represent the employee at the Board’s hearing to deal with the matter. It rarely does so now. Obviously, the employer has advantage over the employee in these circumstances. The question arises, should the employee also engage the services of a professional? It is my view, employee’s may not engage such services at the officer’s level hearing but may do so at the at the referee level hearing, particularly, if the issues are complex.

It is important that if a hearing has been scheduled, the employee must attend such a hearing to present evidence to support its position or to contest the employer’s evidence, otherwise, the officer or the referee may rely on the evidence of the employer to render a decision.   

This information is provided for guidance only and should not be considered as a legal advice.

If you have further questions regarding your entitlements under the Act, please send your questions by e-mail at esaconsulting@hotmail.com or by fax at (905) 331-1805.

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