You can find the BC employment standards act at
http://www.bcest.bc.ca/ and you can contact them and ask. You can find the Canada labour laws at
http://www.hrsdc.gc.ca/eng/labour/labour_law/index.shtml Many companies do base something like this on seniority. I can't say if it's fair or legal. My employers have always just kept people based on who they need.
You can get a new LMO without giving up your old LMO but as soon as you use the new LMO to change your work permit, you can not work for the old employer anymore. You can not have a work permit for 2 employers. If you are already waiting for PNP, if you change jobs, you have to start again with the new employer.