Continuity of Employment in Ontario (Exception)

What is the Employment Standards Act?
The Employment Standards Act is the law that contains basic rules about employing people and working. Both employees and employers have rights and
responsibilities under the Act.
Does the Act cover all employees in Ontario?
Most employees are covered by the provincial legislation. However, employees working in industries that fall under Federal jurisdiction, such as, Post office, Banks, Railways, Radio stations, Airlines, Television stations etc. are not covered. 
If you are member of the trade union and your contract of employment is governed by the collective agreement, you may not be covered by the Act.
If you are currently employed with the company, you may be able to file a claim with a request that your name not be disclosed. The Act protects you when you are exercising your rights under it.
Section 9(1) of the Act states:
If an employer sells a business or a part of a business and the purchaser employs an employee of the seller, the employment of the employee shall be deemed not to have been terminated or severed for the purpose of this Act and his or her employment with the seller shall be deemed to have been employment with the purchaser for the purpose of any subsequent calculation of the employee’s length or period of employment.
Section 9(2) of the Act states:
Subsection (1) does not apply if the day on which the purchaser hires the employee is more than 13 weeks after the earlier of his or her last day of employment with the seller and the day of sale.
This section clarifies that the purchaser is not restricted to hiring the employee of the seller in order to avoid the continuity clause of the Act, the continuity provision would not apply if the purchaser hires the employee of the seller after 13 weeks have passed since the sale of business or his or her employment with the seller, whichever happens first, that is, 13 weeks count starts from the date the employee was terminated by the seller due to the selling of the business.
The continuity provision of the Act would not apply in a situation where the employee was terminated prior to the sale of business for reasons unrelated to the sale. In other words, even if the purchaser employs the employee of the seller within 13 weeks, the continuity provision would not apply if he or she was terminated for reasons other than sale of business. 
Although, these provisions do not make it clear what would happen to an employee who is on lay off? The Ministry would take into consideration when this individual is deemed to be considered terminated.
The employee is deemed to have been terminated if he or she has been on temporary lay off for 13 weeks if the employer does not provide benefits and if it does provide benefits, the lay off can be up to 35 weeks and if the business is sold while the employee is on lay off, his or her last day of employment with the seller would be at the end of 13 weeks or 35 weeks of layoff. If the purchaser hires this employee, 13 weeks count would start from his last day with the seller.
If you or the employer disagrees with the investigating officer’s decision, both parties have a right to appeal to Ontario Labour Relations Board within 30 days of the officer’s decision. The Board appoints a referee to hear the appeal. It does not cost the employee to request an appeal but the employer may be required to deposit monies in trust with the Ministry of Labour if it is found to be owing. The referee decision is final and binding on both parties.    
In the past, the Ministry was very aggressive in defending the rights of an employee and would send a legal counsel to represent the employee at the Board’s hearing to deal with the matter. It rarely does so now. Obviously, the employer has advantage over the employee in these circumstances. The question arises, should the employee also engage the services of a professional? It is my view, employee’s may not engage such services at the officer’s level hearing but may do so at the at the referee level hearing, particularly, if the issues are complex.
It is important that if a hearing has been scheduled, the employee must attend such a hearing to present evidence to support its position or to contest the employer’s evidence, otherwise, the officer or the referee may rely on the evidence of the employer to render a decision.   
This information is provided for guidance only and should not be considered as a legal advice.

This article is provided by Rajinder K. Batra, who is a retired Employment Standards Officer with the Ministry of Labour with 15 years experience in these matters.

If you have any questions regarding your employment, please contact the writer by e-mail at      

If you don’t have access to e-mail; you can fax your question at (905) 331-1805.

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