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
[A]lthough an employer is entitled to establish complex
corporate structures and relationships, the law should be vigilant
to ensure that the permissible complexity in corporate arrangements
does not work an injustice in the realm of employment law.
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
Written with the assistance of Samantha Cass, articling
Norton Rose Fulbright Canada LLP
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