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In the application the "current employer"/"previous employer" is referring to you, not the recommender. So as staind said he would be a previous direct supervisor at your current employer. Usually apps have space to explain why you didn't choose your current direct supervisor. The fact that he left 2 months ago is a very good reason not to use your current supervisor so I wouldn't worry about it. _________________
Definitely current employer if you are still at the firm. It probably isn't even that important, because the exact nature of the relationship and timeline should be disclosed in the first paragraph of the letter anyway. _________________
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