Guidelines_Rehiring_Retireesdoc - City of Toronto Customized by Levone



The City of Toronto’s divisions may need to rehire, on an exception basis, former
employees, who have retired early in order to assist the corporation to address shortfalls
in skills and knowledge.

Former employees who may be considered for rehire are those who have retired from
the city and are in receipt of an OMERS pension. The exception to this is:
Retirees who left with a severance payment or retirement incentive who cannot be
rehired for two years after their termination date under the terms of the Re-employment
of Former Employees after Reorganizing policy.

Note: Retirees may be rehired to undertake non-bargaining unit work only.

Hiring process
Retirees should be engaged, where possible, as consultants. In situations where this is
not possible, retirees may be hired on an employer-employee basis.

Rehiring retirees as consultants

In these situations, retirees would be required to establish themselves as legitimate
consultants with a separate office address, telephone/fax number, GST number and
other features of running their own business, to establish that there is no longer an
employer/employee relationship between the city and the individual retiree.

A contract between the city and a consultant specifies project expectations deliverables
and timelines.
Divisions can authorize the engagement of consultants in accordance with the Municipal
Code, Chapter 195, Purchasing, and the provisions specified in the Revised Delegation
of Authority for the Engagements of Consultants, April 12 2000.

The engagement of consultants is done through a purchase order issued by Purchasing
and Materials Management for amounts over $7500, or a Divisional Purchase Order
issued by the division, up to $7500 including all taxes and charges.

Note: In the Revised Delegation of Authority for the Engagements of Consultants, April
12, 2000, reference is made to “sole source”. This is defined as a situation where the
person who is engaged is considered the only person who is able to undertake the work

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It is recommended that a period of 35 weeks or more from the retiree’s termination date
should elapse before a contractual arrangement is made if a retiree is undertaking the
same or very similar work to his/her pre-retirement job, and/or if he/she received a
retirement allowance (e.g. sick pay credit grant) from the city.

Rehiring retirees as employees

It is recommended that a period of 35 weeks or more from the retiree’s termination date
should elapse before the re-employment occurs and after every fixed term of re-
employment. If an employee is on salary continuation to bridge to retirement, the
employee’s retirement date is his/her final date on the active payroll.

It is recommended that retirees who are hired as employees should be rehired to work
for a maximum of 1000 hours a year and a fixed term of less than 12 continuous
months. This can be renewed for a subsequent period after a 35-week break.
Management should ensure that retirees are not required to work overtime, so as not to
exceed 1000 hours in a 12-month period.

A detailed contract between the retiree and the city should be signed by both parties.
This contract specifies the terms and conditions of employment including designated
holidays, vacation pay, working location, overtime, statutory and other deductions.

Legal contracts

Standard templates for the purpose of rehiring retirees, either as employees or
consultants, have been developed by staff of the Legal Division. These contracts
includes a clause clearly indicating that former periods of employment with the city will
not be considered in determining the length of any subsequent notice regarding
termination. The Legal Services division offers its services to review all contracts in
order that potential legal difficulties may be identified and minimized.

Duration of employment

It is recommended that retirees’ services should be limited in duration (no longer than
two years) whether hired as employees or retained as consultants.


Retirees may be rehired by the city, on an exception basis, with the appropriate
authorization. Each situation should be discussed with Human Resources and Legal
before proceeding.

It is recommended that a division that plans to rehire a retiree documents the following:
 the reasons for rehiring the retiree
 the nature of the hiring relationship i.e. as a consultant or as an employee
 the period of time for which the retiree is being rehired

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   the number of hours per week/month/year that the retiree is expected to work
   the terms and conditions of employment
   the authorization for the hiring contract.

A copy of the documentation is sent to:
 HR Director of Staffing, Compensation and Employment Equity to inform succession
   management, and
 HR Staffing, Workforce Transition & Employment Equity Unit for reporting purposes.

Salary and Benefits
Retirees who are rehired as employees are paid within the salary range of the
respective pay grade, and subject to standard deductions at source, such as income tax
and Employment Insurance. Canada Pension Plan (CPP) contributions are deducted if
the retiree is not already collecting CPP benefits. If a retiree is collecting CPP benefits,
he/she is advised to contact the Federal Government’s Income Securities Program to
determine the impact.

Health and dental benefits are not included in the employment contract; there are no
contributions to OMERS either from the employer or employee.

Vacation entitlement and statutory holidays are paid in compliance with the Employment
Standards Act and can be taken in time or payment.

Retirees are not covered for long-term disability or life insurance benefits.

Retirees are not entitled to accumulate sick credits or take sick leave.

Retirees who work for the city as consultants are responsible for invoicing the city for an
agreed amount based on the project undertaken or billing the city for their time at an
agreed rate per hour/day. No deductions are made at source and there are no
provisions for payment of vacation, designated holidays etc. The consultants are
responsible for remitting these funds to the appropriate government agencies.

Succession Planning

When retirees are rehired as employees, consideration should be given to using their
skills and knowledge not only to perform the work required, but also to mentor other
employees. This strategy contributes to succession planning and facilitates the transfer
of expertise.

Approved by: Executive Management Team, December 15, 2003

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Related Information

Municipal Code, Chapter 195, Purchasing

Re-employment of Former Employees after Reorganizing

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