Time After Time: Does The Years Of Service Clock Start Ticking Anew When Your Employer Comes Under New Ownership?

Written on behalf of Arbesman Hamilton LLP

It can be stressful to learn that the company you work for has been purchased by another company. The first thing that is likely to cross your mind is whether you’re going to have a job under the new ownership. In the unfortunate event that you lose your job, you’re likely to expect notice, or pay in lieu of, in line with how long you’ve worked for the company. However, what if the new owners don’t acknowledge your service under the previous ownership? The Ontario Superior Court of Justice recently dealt with that very question.

33 Years of Service Come to an End

The employee in the case at hand began his career with the employer in 1983. The business was eventually sold to new owners in 2002. The employee accepted an offer of employment with the new owners and worked for them until his position was terminated in 2016.

In 2013 the employee requested to be moved from full-time to part-time, a request the employer granted. In establishing how much notice to provide the employee, the employer relied on the minimum standards set out in the Employment Standards Act, 2000 (the ESA). The employer’s position was that the employee had resigned from a full-time job in 2013 and signed a new employment agreement as a part-time employee. As a result, the employer only provided him with 3.5 weeks of notice, which reflects the ESA’s minimum requirements of one week of notice per year of employment.

The Court Rejects the Employer’s Position

The court did not agree with the employer’s position, stating “In the absence of notice from (the employer) that (the employee) would not be credited for his years of service with (the old owners), recognition of that service is deemed to be part of (the employee’s) contract of employment with (the employer).” The court went on to state that a purchasing employer must give express notice to employees that they do not intend to give credit to work performed for previous owners. In the absence of such notice, a purchasing employer must include past service when calculating notice periods.

The court recognized that the employment contract signed by the employee and the employer provided for only the amount of notice mandated by the ESA, leaving the employee unable to enjoy a lengthier period of notice as established in common law. However, in recognizing that the employee had worked for the employer for more than eight years, he was awarded eight weeks of notice, the maximum allowed under the ESA.

At Arbesman Hamilton LLP, we represent both employers and employees in employment law matters. We can help employees draft clear contracts with the aim of avoiding litigation in the future, and policies that reflect employment law standards. We can also help employees and employers understand their rights and responsibilities in matters relating to employment law. Call us at 416-481-5604 or find us online to schedule a consultation today.