| 19(1) | 5-9149 |
| Maureen Shea-DesRosierss | |
| (613) 957-8953 | |
| December 11, 1989 |
Dear Sir:
This is in reply to your letter of November 10 and 16, 1989 and further to our telephone conversation 19(1) Shea-DesRosiers) of December 4, 1989.
24(1)
It is a question of fact whether an individual has retired or suffered the loss of an office or employment, and accordingly we must limit our response to the following general comments.
In a situation where an employee is rehired by his former employer shortly after leaving an office or employment, it is the Department's position that the employee has not suffered a loss of employment. As a consequence thereof, a payment received by the employee in respect of any such departure would not be considered a retiring allowance.
The Department is of the view that where, in an arm's length situation, a long term employee has retired without any assurance of being rehired at that time, and has received a payment from the employer in recognition of long service, the payment would normally be considered to be a retiring allowance regardless of the fact that the employee is rehired at a later date when circumstances have changed.
The Department has also taken the position that an employee who has received a payment upon leaving his/her employment with the option to return after a short period of unpaid leave (e.g. there months) cannot be said to have retired at the time such leave commenced. Further, in a situation where an employee is retained as a consultant shortly after leaving an office or employment, the question of whether the employee has in fact retired can only be determined after an examination of the terms and conditions of the new employment contract and any other relevant documents. We enclose a copy of Interpretation Bulletin, IT-337R2, entitled "Retiring Allowance", for your information.
The above comments are an expression of opinion only and are not binding on the Department. We trust however that our comments will be of assistance to you.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate