I would like to get collection or list of Item objects, but I get array of arrays now.
Item[][] s = employees.Select(e => e.Orders.Select(o => new Item(e.ID, o.ID)).ToArray()).ToArray(); Can anyone select me solution to do it?
P.S. just LinQ solution :)
You need to use SelectMany to concatenate result sets.
var items = employees.SelectMany(e => e.Orders.Select(o => new Item(e.ID, o.ID))); For what it's worth, this can be written somewhat more succinctly and clearly in LINQ syntax:
var s = from e in employees from o in e.Orders select new Item(e.ID, o.ID); 
Orders should have a reference back to Employee and there is no need for Item.
The extension method you're looking for is called "SelectMany": http://msdn.microsoft.com/en-en/library/system.linq.enumerable.selectmany.aspx
Have a look at Enumerables.SelectMany(), see the example in this Stack Overflow question.
