Re-uniting with former employee can be tricky

An employee works for a company for a number of years and then resigns. After a few years pursuing other opportunities, either by invitation or application they end up returning to the old employer. Invariably, they resigned and were not terminated from the first period of employment. Employers don’t tend to fire people and then hire them back later. Always, they left under good terms having given appropriate advance notice of their departure. They knew enough never to burn a bridge if you do not have to.

The tricky part comes when, years later, they are terminated from their position. Do they get credit in their severance package for all of their service or just the second part? Diane worked for a provincial government for eighteen years but left to take an opportunity to be a City Manager in another province. After two and a half years she was not as thrilled with the new position as she thought she would be and applied for an open position back with her old employer and was hired. Ten years later her position was eliminated as a result of restructuring and she was terminated. Was she a ten year employee or a twenty eight year employee? Nothing in Diane’s offer letter for the second period of employment spoke to the issue of whether her previous seniority would be recognized. She received vacation entitlements as if she had never left and eventually received long service awards based on her entire period of employment.

The offer letter for the second period actually contained a one year probationary period. At trial the judge decided that the employment contract was not determinative on its own and she had to look at the entire situation. The judge noted that the employer benefited greatly from Diane’s extensive experience with the organization and that was probably why she won the competition for the job. She was awarded the very top of the salary range for the position along with the vacation and long service awards. She resumed contributions to the government pension plan. 

Based on all of the circumstances, Diane won her argument and the judge awarded her 17 months of pay based on her 28 years of service. The employer could have avoided the entire situartion by having the following words included in Diane’s offer letter when she returned, “You acknowledge and agree that any previous service with the employer will not be taken into account for the purposes of assessing your entitlement to reasonable notice at common law if you are ever terminated without cause.”Few employers however, remember to add such a provision. It keeps the lawyers working. I should note that there are lots of cases that go the other way. Many judges would have taken one look at the probationary period and said that was completely inconsistent with the continuation of seniority and the case would have been over. If employers simply made the above clause part of every contract they would not even have to remember to think of the issue if they were rehiring a former employee. There might be some employees that are so attractive as a candidate that they could choose to address the clause and specifically have their previous service acknowledged for the purposes of the severance package. The unfortunate part is that neither party really turns their mind to the issue of an eventual termination at the time of the happy reunion.