Your grandfather sounds like an interesting guy. Can you tell us more about his service?
I had never heard of the three-year rule, but a) I can't see all of the Regular soldiers who went to Korea with their respective 2nd Battalions having to forfeit their wings for no other reason than an administrative order and b) their may very well have been an amendment or cancellation of CAO 84-25 in later years which saw soldiers like your grandfather having their wings reinstated.
I would suspect that CAO 84-25 was amended but I have not been able to find a reference. Certain battalions were designated as para battalions for the newly created Mobile Striking Force. 1 PPCLI was one of the first para battalions with parachute training occurring in 1948/49. When the Korean War broke out 2 PPCLI was raised for Far East service but it was not designated as a para battalion until its return to Canada in late 1951 when it took over the para role from 1PPCLI that was proceeding to Korea. Apparently service in Korea was not considered a parachute role. Consequently when my grandfather (who was still with 2 PPCLI) decided not to jump anymore he was required to forfeit that para badge and was posted out of the battalion to Western Command I&A Cadre.
The following is the contents of a memo in my grandfathers service file from 1952. Please excuse the formatting as I had some difficulting in pasting this from MS Word.
Memorandum
Ottawa, 6 May 52
Entitlement to Wear Cdn Para Badge
Posted in rank Sgt to 1 PPCLI
1PPCLI commenced Para Trg Oct 48
Qualified on course #14 Inf Para Trg course 28 Dec 48
Posted to Cdn Army Special Force (2PPCLI) 17 Sep 50
2PPCLI designated Para Bn Nov 51
If he can count his service in CASF as time served in Para unit he would have more than sufficient time to qualify under CAO 109–1(6)(c). However, if he cannot, he has approximately 24 months to count toward the required time.
FW Oxley, Major, Pers RCIC
Minute 2
1.Under the provision of CAO 84–25 this WO could not retain the parachute badge once he has not served the required time with a parachute unit. 2. Since it will be known in 2 PPCLI that this WO has voluntarily discontinued parachuting, it appears even more mandatory that he relinquish the badge to prevent the establishment of a precedent.
RN Bruce Maj, for D Inf, 7 May 52
Minute 3
1.If this WO has not completed a total of three years active parachute duty on strength of a parachute unit, etc., (as stated in CAO 84–25) he must forfeit his badge, having declared his intention to discontinue jumping. 2. Such declaration must be submitted to his CO in writing.
GWG, Trg6, 8 May 52
Minute 4
A short minute that is not legible.