32Continuation contracts and related continuation contracts

32 Continuation contracts and related continuation contracts

Continuation contracts (1) A services contract (the later contract) is a continuation contract in relation to a pre‑reform commencement contract if: (a) the parties to the later contract are the same as the parties to the pre‑reform commencement contract; and (b) one or more of the following subparagraphs is satisfied in relation to the later contract: (i) the later contract is entered into pursuant to an option or similar right contained in the pre‑reform commencement contract, or contained in another contract that is a continuation contract in relation to the pre‑reform commencement contract; (ii) the contract period of the later contract immediately follows the contract period of the pre‑reform commencement contract; (iii) the contract period of the later contract immediately follows the contract period of another contract that is a continuation contract in relation to the pre‑reform commencement contract; and (c) the later contract relates to the performance of the same kind of work as the pre‑reform commencement contract.

Note 1: See also subsection 35(7), under which a contract may be taken to be a continuation contract.

Note 2: For how this section applies in a transfer of business situation, see section 36.

(2) For the purposes of subparagraphs (1)(b)(ii) and (iii), the contract period of a services contract is taken to immediately follow the contract period of another services contract even if those periods are interrupted by an interval, but only if that interval: (a) is consistent with a regular pattern of contracting between the parties to the contracts; or (b) is covered by regulations made for the purposes of this paragraph. Related continuation contracts (3) A services contract is a related continuation contract in relation to another services contract if: (a) the following subparagraphs are satisfied: (i) the other services contract is a pre‑reform commencement contract; (ii) the first‑mentioned services contract is a continuation contract in relation to the other contract; or (b) the 2 services contracts are continuation contracts in relation to the same pre‑reform commencement contract.