The holiday rush has ended. Financial reports are in and layoff notices have been issued to some employees. What about severance pay for seasonal employees?
In Snow Valley Resorts (1987) Ltd. v. Barton and Director of Employment Standards, 2013 CanLII 8963 (ON LRB), the Ontario Labour Relations Board upheld an Employment Standards Officer’s decision that granted entitlement to severance pay to a seasonal employee. The Board also affirmed a notice of contravention and fine against the employer for failing to pay severance pay.
Barton was employed from 1990 to 2011 by Snow Valley during the winter season. His contracts clearly stated that his employment was seasonal in nature and was for the current ski season only. Over 11 years, Barton worked a total of 80 months (6.7 years).
Section 65(2) of the Employment Standards Act, 2000 , provides:
All time spent by the employee in the employer’s employ, whether or not continuous and whether or not active, shall be included in determining whether he or she is eligible for severance pay under subsection 64 (1) and in calculating his or her severance pay under subsection (1).
In Ontario, if an employee has been employed for five years or more and the employer has a payroll of $2.5 million or more, then the employee is generally entitled to severance pay.
The Ontario Labour Relations Board found that Barton was entitled to severance even if his employment was seasonal in nature. Barton had worked non-continuously for more than 5 years. Under section 65(2), Barton was eligible for severance because all periods of employment were taken into account in determining if he had five or more years of service. In the end, he was not awarded the severance pay because he filed his ESA claim outside the six-month limitation period.
With respect to termination pay, the Board did not award termination pay as it was found that Barton’s employment was seasonal. The Board found that seasonal employment is for a definite duration even if the contract of employment did not specify an end date. Under the ESA Regulation 288/01, employees employed for a definite duration or defined task are not eligible for termination pay. The same exemption does not exist for severance pay.
Employers that hire seasonal employees or rehire employees with prior service need to be aware they may owe severance pay if the employee’s total service equals five years or more. An employee need not be full-time or a permanent employee to trigger severance entitlements under the ESA. Further, when a lay off lasts more than 13 weeks in a 20 week period under the ESA (or 35 weeks in a 52-week period if certain conditions are met), the employer will trigger a termination and severance pay if the employee is eligible.
Meghan Ferguson
Devry Smith Frank LLP
Kellogg Company, Devry Smith Frank LLP, Hudson's Bay Company, and in the employment standards, labour and health & safety divisions at the Ontario Ministry of Labour.
