Does Voluntary Break in Service Affect Settlement Entitlement?

Hetherington v Saskatchewan Liquor and Gaming Authority, 2020 SKQB 110

For the purposes of determining severance entitlement, a Saskatchewan Court found that an employee worked for the Government of Saskatchewan for a total of 28 years, despite voluntarily leaving her employment for 29 months during that time. The employee was awarded damages in lieu of a reasonable notice period of 17 months.

Facts

From 1987 until April 2005, the employee Hetherington worked in Saskatchewan’s public sector in various management capacities including the Saskatchewan WCB and the Saskatchewan Property Management Corporation. She left her employment with the government of Saskatchewan to take on a management position with the City of Lethbridge in Alberta for approximately 29 months, which ended when she returned to Saskatchewan after being hired by the Saskatchewan Liquor and Gaming Authority (“SLGA”).

Due to the government’s plan to privatize 40 SLGA liquor stores, 15 SLGA corporate positions were terminated, including Hetherington’s position. Hetherington’s last day was June 30, 2017. SLGA advised that her severance package would be based on her roughly 9 years of post-interruption service at SLGA. Hetherington commenced an action for wrongful dismissal and applied for summary judgment.

Issue #1

SLGA argued that SLGA was a Crown corporation, separate from Saskatchewan public service, and therefore when Hetherington commenced her employment with SLGA, she was actually starting to work for a different employer. The court, citing Larsen v. Saskatchewan Transportation Co., 1993 CanLII 9124 (SK CA), found that employment with one or more Crown corporations generally qualifies as employment for the Government of Saskatchewan. Therefore the court determined that Hetherington’s prior government service should be taken into account.

Issue #2

With respect to the 29 month break when Hetherington worked in Alberta, the employment contract with SLGA was silent on whether Hetherington would be credited for her previous years of service. The court relied on the principle outlined in Beach v IKON Office Solutions Inc. (1999), 1999 CanLII 5522 (BC SC), where the court stated:

“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.”

The court in the case at hand summarized 11 principles that the courts have applied. After applying these principles, the court found that Hetherington was:

1. not induced to return to her employment, but the SLGA hired her in large part due to her previous experience;
2. hired at the maximum salary for that position;
3. credited for previous service in terms of vacation leave (5 weeks), long-service recognition, and the pension plan.  (A memo from HR was sent advising that Hetherington’s start date would be 1989 for various benefit calculations, and Hetherington received a letter from the Premier for 25 years of service); and
4. absent for a relatively short amount of time compared to her total employment (29 months vs 28 years – 7.86% of the time)

Accordingly, the court determined that Hetherington’s entire government career should be counted towards her length of service in terms of calculating an appropriate notice period.

Conclusion

Hetherington was found to be employed by the same employer for 28 years despite the 29 month interruption in service as the SLGA/employer effectively treated her as a long-term employee, except when it came to paying her severance. After application of the Bardal factors, she was awarded 17 months’ notice.

Notes for Employers

When rehiring employees, the employment contract (or re-employment contract) should have explicit language regarding previous service and how it relates to notice of termination periods. Further, the employer should be mindful whether or not the re-hired employee is treated as a long-term employee or a new employee, after taking into account elements such as salary, vacation, benefits, and service awards among others.

Have further questions regarding this publication? This post was authored by Ryan Chan. Please don’t hesitate to contact him at [email protected] or anyone else listed on the authors page.