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Group Termination Notice Payable, Despite Continued Employment
February 27, 2007

A Nanaimo company which contracted out care services for a group home has been ordered to provide group termination pay to several of its former employees, even though the contractor immediately hired the employees.

Nanaimo Seniors Village Partnership decided to contract out a portion of its care services, previously provided by employees of Well-Being Senior Services Ltd. to CareSource Solutions Inc. Well-Being informed its employees that their employment contracts would be terminated when the work was transferred to CareSource. The employees were advised that Well-Being expected, but could not guarantee, that their employment would continue uninterrupted with the new contractor. Of the 112 employees affected, all but nine were ultimately rehired by the contractor and did not miss a shift. The employer assumed that termination notice was not required for those rehired by the contractor because their employment continued uninterrupted.

A Director of Employment Standards disagreed, and ordered Nanaimo Seniors Village and Well-Being to pay roughly $730,000.00, in lieu of group termination notice. On appeal, the Employment Standards Tribunal confirmed the Director’s award, but reduced the employer’s total liability, finding that 51 of the employees affected were “casual” and therefore excluded from the group termination provisions under the Employment Standards Act. The matter was remitted back to the Director to re-calculate the revised award, which is likely to be reduced by roughly 45%.

The Tribunal confirmed that, where there is no termination of employees on or prior to the disposition of a business and the new employer assumes accrued obligations under the Act, the group termination provisions do not apply. However, in this case, as employees received notice of their termination before their agreements with the new contractor, CareSource, took effect the Tribunal concluded that the group termination provisions applied.

Re: Nanaimo Seniors Village Partnership & Well-Being Seniors Services Ltd., BC EST D010/07