Prior Service with Bankrupt Employer Counted in Notice Period

In Chin v Beauty Express Canada Inc., 2022 ONSC 6178, Judge Morgan had a situation where the plaintiff, a 69-year-old beautician, first worked for 14 years for Company A, which then went bankrupt, then 6 years for the defendant. She worked in a Bay store, so after the change of employer, her bosses and workplace remained the same.

When deciding on the length of service on which to assess notice, the two choices offered by the parties were 20 years or 6 years. The judge rejected both of these choices and instead considered what advantage the defendant had when he hired the plaintiff who already had 14 years of experience on the job. The judge concluded that given the limited skills needed for the job, she should only be given half the notice she would have received had she been a 20-year-old employee. He therefore granted the plaintiff 10 months’ notice.

My comments:

The important thing to realize about this case is that the service interruption was due to a bankruptcy and not a sale of stock or assets. Therefore, the law is clear that the bankruptcy terminated his employment with Company A and that the defendant was not a successor employer, either under common law or the ESA. However, in this situation, the judge was always ready to take into account that the defendant had in fact inherited from an experienced employee and thus saved the time and expense of training a new employee.