How do you count length of service/seniority in relation to employee leaves of absence?

Imagine this scenario: you are the director of Human Resources at ABC Co. and you are about to meet with one of your managers to discuss an employee named Jane. Jane was hired in January 2007 to work as a receptionist. Unfortunately, she has recurring health issues that require her to be off work on medical leave from March to June in her first year, from April to October in her second year and from March to August in her third. Her health improved, but she then came to speak with her manager and told him that she was pregnant. As a result, she was off work for a full year in accordance with the pregnancy and parental leave provisions set out in the Employment Standards Act. Six months after returning to work, she was involved in a motor vehicle accident and missed another two months due to injuries that she suffered.

The manager wants to see you as a result of a discussion that he had with Jane yesterday. Specifically, he had made the decision that there were too many receptionists at his location and he was going to dismiss one in order to bring his department within budget. Without consulting you, he had taken Jane aside after her shift ended yesterday and asked if she would be interested in a “package”. When she indicated that she might consider it, but had to know what the company would be willing to offer, he commented that since she was a fairly short service employee, the package could not be overly generous or it could risk upsetting others that were being let go as part of the cost-cutting efforts. She asked him what he meant by “short service” and he responded by saying that he had reviewed her file and she had only worked for a “couple of years” once you deducted all the time that she had spent leave. Upset, Jane responded that according to the law, she had more than more than five years seniority. In fact, she said, she had been meaning to speak with HR because in accordance with company policy, after completing five years of service she was entitled to an additional week of vacation, which had never been confirmed. The manager is coming to you and, based upon his email, expects you to confirm that Jane is completely off-base.

This scenario, or others like it, is not uncommon. There is significant confusion regarding how periods of leave are to be treated when entitlements are based upon length of service; this included the amount of notice of dismissal that may be required.

With respect to leaves that are created by statute, such as pregnancy and parental leaves, the starting point should always be the statute in question. In most cases and for most purposes, the legislation will provide that an employee’s length of service will continue to accumulate during a period of statutory leave. Typically, while the employee is not entitled to be paid while they are on leave (subject to any agreement between the parties that would be above and beyond the statutory requirements), they are entitled to continue to receive their employment related benefits and accumulating seniority.

As a result, while some may say that Jane has not “worked” for more than five years, she does have more than five years of service. As a result, if the company policy is to provide an additional week of vacation to employees with more than five years of service, she would qualify. Furthermore, if she is to be dismissed without cause, and her entitlement to notice or pay in lieu is based upon her length of service, then the entire period from her start date to the date of dismissal would count.

Lessons for employers

Employers should ensure that their policies and procedures comply with the applicable legislation. While the common law requirement of “reasonable notice” of dismissal may be open to interpretation, the statutory calculations are not. It can be quite embarrassing for an organization to find that they have offered two weeks of pay in lieu of notice to an employee that is statutorily entitled to five, and this can expose the organization to entirely unnecessary liability.

Employers should also ensure that their managers are trained with respect to fundamental employment law principles, and, perhaps more importantly, that there is a clear policy in place that managers should not make any human resources decisions without consulting the human resources department first. It is unfortunate that in some organizations, human resources (and legal) are often left in the dark until it is too late, and they can only try to clean up the mess.

Stuart Rudner
Miller Thomson LLP