Matheson v. Canadian Freightways Ltd. [2003] B.C.J. No. 2624
By Melynda Layton LLB
As Published in March 2004 Online Edition of OHRPA Legislative News
An employee returning to work with the same employer will be treated as a new employee when determining reasonable notice if it is clear upon recommencement the original period of employment was not intended to be recognized.
In Matheson v Canadian Freightways Ltd., Matheson began working with Canadian Freightways in 1973 and left in October 1985 after having assumed a managerial position. In July 1987 the plaintiff returned to Canadian Freightways. Due to personal reasons, in June 1998, Matheson instigated a transfer to B.C. where he assumed a lesser position. On May 9, 2000 Matheson received Notice of Termination of his employment. He was given eight months working notice of termination. At the time of his termination, his annual salary was $62,855.00 plus benefits, including the use of a company car. Matheson was 57 years old with a grade twelve education. Following termination of his employment, from January 2001 to July 27, 2001, Matheson was employed for Overland Freightways.
Matheson brought an action for wrongful dismissal arguing his employer treated him as though he was employed for an uninterrupted twenty-seven years and contended that this was the period that should be used to determine his notice entitlement. It was Matheson’s position that upon returning to Canadian Freightways in July 1987 he received his previous salary, was given two weeks vacation instead of the one he was entitled to, did not receive any training, nor was he put on probation.
Canadian Freightways argued Matheson was employed during two distinct periods. Upon his return in 1987, Matheson was treated as a new employee in all respects. The fact he was paid the same amount was merely coincidental. Matheson was not paid at the bottom of the scale as a reflection of his experience in the transportation industry, not because of his previous period of employment. When Matheson left his position in 1985 he was entitled to four weeks vacation. Upon his return he was only entitled to one; Matheson admitted the second week vacation was given to him “under the table”. Matheson further acknowledged he was not given any credit for his previous period of employment for pension purposes, vacation purposes, or service award purposes, and that he had to wait the normal waiting period before receiving any benefits.
Determining whether employment should be deemed continuous is a question of fact. Here, the court held the two periods of employment were separate and distinct. Noting the length of employment, the nature of the employment, age and training of Matheson and the availability of similar employment, the court held the appropriate notice period to be twelve months instead of eight. Thus, Matheson was to be compensated for the difference in his salary for the additional four months.
The British Columbia Supreme Court held Mr. Matheson did not have continuous service; each period was considered separate and distinct.
When an employee returns for a second period of employment with the same employer, the employer should take clear steps to ensure the two periods of employment are separate and distinct. This includes:
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Ensuring the employee is treated as a new employee;
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Ensuring previous periods of employment are not credited for benefit, vacation time, pension contribution, or service award purposes;
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Ensuring seniority only accumulates as of the second employment period; and
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Ensuring all policies and written documentation confirms service only accumulates as of the most recent period of employment.
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Paying an employee the same salary is not determinative of a continuous period of service. In Matheson, a return to the same pay level was coincidental and largely a reflection of the employee’s experience.
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Undertaking these measures will help ensure a clear break between the two periods of employment when determining the requisite notice period upon termination of employment.
To ask a question or for further advice please contact Melynda at melynda.layton@careerlaw.ca or by telephone at 613-225-4400
