The "common employer doctrine" recognizes that an
employee can have a number of employers. The doctrine has the
effect of preventing an organization from arranging its corporate
structure in way that attempts to circumvent its legal obligations
to its employees.
The common employer doctrine comes into play when an employee
seeks damages for wrongful dismissal against his or her employer,
but the employer has insufficient assets to satisfy the claim. The
doctrine acts to permit the employee to "pierce the corporate
veil" and recover damages from a related company.
The Ontario Court of Appeal decided the leading case addressing the doctrine, and subsequent
cases have reinforced the applicable
principles. In determining whether two or more companies are a
"common employer," courts consider various factors
including: individual shareholdings, corporate shareholdings, and
interlocking directorships. Any similarities in the physical
locations of the companies may also weigh in favour of a finding
that two companies are a common employer. Ultimately, the key
question in the analysis is whether there is an element of common
Written with the assistance of Samantha Cass, articling
Norton Rose Fulbright Canada LLP
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Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
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