Continuous employment in Canada is the period of service that the law treats as unbroken when calculating employment rights, even in some situations where ownership changes or an employee has time away from work.
Your years of service can affect termination notice, severance, vacation and other rights based on how long you have been employed. Changing positions, taking a protected leave or continuing to work after a business is sold does not necessarily reset your service to zero.
If you are fired, offered a new contract or told that your original start date no longer counts, don’t accept that answer without checking it. Losing credit for earlier service can significantly reduce what an employer says you are owed.
On This Page:
- 1. What Continuous Employment Means
- 2. What Counts as Continuous Employment
- 3. Breaks in Service
- 4. When a Business Is Sold
- 5. Continuous Employment & Severance
- 6. Provincial & Federal Rules
- 7. FAQs
What Does Continuous Employment Mean?
Continuous employment means that your service is treated as one ongoing period rather than several separate periods of employment.
The concept matters because many employment rights increase with length of service.
Depending on the law that applies to you, continuous service can affect:
- Termination notice or termination pay
- Statutory severance pay, where applicable
- Vacation entitlements
- Eligibility for certain job-protected leaves
- Other rights tied to length of employment
Length of service is also an important factor when calculating full severance pay in Canada for many non-unionized employees.
What Counts as Continuous Employment?
Employment normally remains continuous when you keep working in the same employment relationship without a legal break in service.
Your service does not normally restart simply because:
- You receive a promotion
- Your job title changes
- Your duties or responsibilities change
- Your compensation changes
- You move between full-time and part-time work
- The company’s shareholders or owners change but your legal employer remains the same
Do maternity, parental or other protected leaves break continuous employment?
No. A protected leave from work does not normally reset your years of service.
You remain employed while properly taking statutory job-protected leave. Your employer can’t simply treat you as a new employee when you return because you were away from work.
Does a new employment contract reset your service?
No. Signing a new contract while continuing to work does not automatically erase the service you have already accumulated.
Be especially cautious if an employer presents a new agreement that says your service begins on a new date or that earlier employment will not count toward future termination rights.
A contract can’t take away minimum employment standards that legislation requires an employer to recognize. Other contractual and common-law rights require a separate analysis.
If you’re being asked to accept new terms, read our guide on what to do when your employer asks you to sign a new employment contract.
What Is a Break in Service?
A break in service is a period between employment that can cause earlier and later service to be treated separately.
A true break can arise when an employee resigns, employment ends and the employee is later rehired, or there is another significant gap between periods of work.
But not every period without active work breaks continuous employment.
Does a temporary layoff break continuous employment?
Not necessarily. Employment standards laws can preserve service during a lawful temporary layoff or when an employee is recalled within the applicable rules.
However, there is a separate issue: an employer does not always have the contractual right to temporarily lay off a non-unionized employee. A layoff that complies with employment standards legislation can still create a constructive dismissal issue.
If you have been laid off, see our national guide to layoffs in Canada.
What if you quit and later return?
Resigning and later returning can create a genuine break in service, but the answer depends on the applicable law and the length and circumstances of the gap.
Some employment standards laws preserve earlier service after relatively short interruptions. Don’t assume either that your old service automatically counts or that it automatically disappears.
Does Your Service Carry Over When a Business Is Sold?
Often, yes. Employment standards laws across major Canadian jurisdictions protect an employee’s prior service when a business changes hands and the employee continues working.
The first question is how the transaction is structured.
Share sale
In a share sale, your legal employer normally remains the same company.
Someone new owns the company, but the corporation employing you has not changed. Your original service therefore normally continues without interruption.
Asset sale or transfer
In an asset sale, the purchaser can be a different legal employer, but employment standards legislation can still require your previous service to be recognized.
That means an employer cannot necessarily treat a long-service employee as having “day one” service simply because the business was purchased by another company.
The common-law analysis is more complicated. A change in the identity of the employer can create a new employment contract, but previous service with the business can still be highly relevant to future severance rights.
For a complete explanation, see employee rights when a business is sold in Canada.
How Does Continuous Employment Affect Severance Pay?
Longer service can increase the termination compensation an employee is owed, which is why the correct start date can matter enormously after a dismissal.
Employment standards legislation uses length of service to determine minimum termination rights. Those minimums are important, but they are not necessarily your full severance entitlement.
Many non-unionized employees also have common-law rights unless an enforceable employment contract validly limits them. Length of service is one important factor, along with:
- Age
- Position and responsibilities
- Compensation
- Availability of similar employment
- The employment contract
Depending on those factors, full severance can reach as much as 24 months’ pay.
Can your employer simply change your start date?
An employer can’t simply rewrite history to avoid employment standards rights that depend on legally recognized service. This is particularly important after a business acquisition.
If your severance package uses a later start date than you believe is correct, don’t sign a release before the employment history has been reviewed.
If your employer has undercounted your service and offered too little compensation, you can also have a wrongful dismissal claim.
How Do Continuous Employment Rules Differ Across Canada?
The practical principle is similar across Ontario, Alberta, British Columbia and federally regulated workplaces: a qualifying business transfer does not automatically wipe out an employee’s accumulated service.
- Ontario: When a business is sold and the purchaser employs an employee of the seller, prior service is generally carried forward for Employment Standards Act purposes. A gap of more than 13 weeks can break this statutory continuity.
- Alberta: When ownership changes and the employee continues working for the business, previous length of service is retained. Alberta also treats service as continuous when an employee is rehired after a break of less than 90 days.
- British Columbia: When all or part of a business is disposed of, employment is treated as continuous and uninterrupted for Employment Standards Act purposes.
- Federally regulated employees: The Canada Labour Code protects continuity in qualifying transfers and certain retendering situations. A gap of more than 13 weeks can prevent the federal continuity rule from applying.
These are minimum employment standards rules. Your employment contract and common-law rights can affect what you are owed beyond those minimums.
Continuous Employment FAQs
Does changing jobs within the same company reset your service?
No. A promotion, transfer, new title or change in duties does not normally restart your years of service when your employment relationship continues.
Does going from part-time to full-time reset your years of service?
No. Changing from part-time to full-time work does not normally erase the service you accumulated with the employer.
Does a business sale reset your years of service?
Not automatically. If you continue working after a qualifying sale or transfer, employment standards laws can require your previous service to be carried forward.
Does maternity or parental leave count as continuous employment?
Yes. Properly taking a statutory job-protected maternity or parental leave does not normally break the employment relationship or reset your service.
Can continuous employment increase your severance?
Yes. Length of service can increase statutory termination entitlements and is also an important factor in calculating full common-law severance for many non-unionized employees.
Make Sure Your Full Service Is Counted
A disagreement about your start date can look minor until your employment ends. At that point, losing credit for years of service can materially reduce a severance offer.
If you have been terminated, your company was sold or your employer is asking you to sign a contract that changes how your prior service is treated, get advice before signing anything.
The employment lawyers at Samfiru Tumarkin LLP advise non-unionized employees in Ontario, Alberta and British Columbia on severance, business sales, employment contracts and disputes over years of service.