Canada: Family Ties – Ontario Court finds that Separate Companies are a Common Employer

In a recent case, a 66-year old employee was dismissed from his employment. For a total of nine years, this employee held the same job title, performed the same responsibilities, and was remunerated in the same way. However, after eight years, the employer informed the employee that, going forward, he would be compensated by a different company. When the employee was dismissed a year later, the company provided him with three months' notice on the basis that he had only been employed with that company for one year.

Ultimately, the Ontario Superior Court of Justice refused to find that the employee had been employed by two distinct employers. Rather, the Court held that the two corporate entities were really two branches of the same family business: the presidents of the companies were family members; their operations were run out of the same building; and the employee's job duties had remained unchanged throughout the entire period. In rendering its decision, the Court cited the following passage from the Ontario Court of Appeal's decision in Downtown Eatery (1993) Ltd v Ontario (2001):

Accordingly, the Court held that the two companies in this case were a common employer, and the employee was entitled to twelve months' notice of his termination as a result of his nine years of service.

Written with the assistance of Samantha Cass, articling student.

Norton Rose Fulbright Canada LLP

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