Who’s The Boss? The Common Employer Doctrine

Many companies and organizations are comprised of various corporations for liability, tax, and other business reasons. This can lead to confusion as to who the employee’s employer is and whether the employee technically has multiple employers while working with the same company. If a company does consist of multiple corporations, and in the event an employee commences a wrongful dismissal lawsuit against his or her employer, such corporations are at risk of being named as additional defendants to the action and having a judgment rendered against them.

The Common Employer Doctrine

The recent Ontario decision of Sproule v Tony Graham Lexus Toyota 2016 ONSC 2220 sheds some light on this complex issue. In that case, the plaintiff had been employed as a manager for a car dealership. He alleged he had been wrongfully dismissed and in turn ended up suing the dealership he managed along with several other separately incorporated dealerships, holding companies, and directors associated either directly or indirectly with his former dealership. In doing so, the plaintiff relied on the “common employer” doctrine which provides that an employee may be terminated by several related organizations under a single employment agreement provided the parties intended for the employee to be directed and employed by all the related organizations. In order for the “common employer “ doctrine to apply, the companies involved need to be more than just simply related to one another – they need to be involved in an employment-related function specifically with respect to the employee.

The  Common Employer Doctrince - Who's The Boss - KCY at LAW

Sproule v Tony Graham Lexus Toyota 2016 ONSC 2220

The Court did not agree with the plaintiff regarding the holding companies that were sued and found that these companies did not engage in business on their own accord and that they did not exercise any control over the plaintiff in the employment context. The Court also dismissed the plaintiff’s claim against the personal defendants involved, finding that while they had control over the plaintiff, their actions in terminating the plaintiff were done in good faith and within their authoritative scope.

Sproule v Tony Graham Lexus Toyota 2016 ONSC 2220 - Common Employer Doctrine Case

Common Employer Doctrine for Employees & Employers

What does the Common Employer Doctrine mean for employees involved in similar situations? For one, determining who has control over your employment to the extent they can be sued can be a challenge. All the plaintiff often cares about is whether there is someone who can be successfully sued in order to satisfy any judgment. While it may make good sense to be over-inclusive from the outset, employees need to be careful that this broad all-encompassing approach does not have a counterproductive effect.

What does the Common Employer Doctrine mean for employers? They need to be careful as to how they organize their corporate structure and they need to review these structures on a regular basis to ensure liability is contained and to know their true level of protection against dismissed employees. Despite the above-noted decision, Courts have in the past found that closely related businesses or organizations are common employers.

Employment Law Specialists

Ultimately, every employment situation is different and the Courts decide these cases based on the particular facts of the matter. It is always important that whenever in doubt as to your rights and options you contact a lawyer as soon as possible.

We at KCY at LAW have the experience and knowledge required in order to provide you with what you need to be informed before making any decision. Contact us right away at (905) 639-0999 or get in touch online to book your consultation!

Temporary Lay Offs And Their Legality

Despite what many people may think, generally speaking an employer does not have an inherent right to temporarily lay off employees. The reason why many may believe otherwise stems from language contained in the Ontario Employment Standards Act. The Act makes specific reference to temporary lay offs and the parameters of how long they may last before turning into a termination. Despite this language, employers must be very careful before making a decision to temporarily lay off an employee.

Temporary Lay Offs – Employer Rights

Typically, the right for an employer to temporarily lay off an employee exists in certain employment industries, such as construction. In order for this right to be implied or automatic however, it either needs to be specifically laid out in the employee’s contract or there needs to be sufficient evidence that the employee is aware there may be a risk that he or she will be laid off. Furthermore, even if an employee acquiesces to being temporarily laid off does not mean that that layoff will be upheld by a Court. In fact, the Ontario Courts have ruled against this notion.

Temporary Lay  Offs Employer Rights - KCY at LAW

High Standard To Be Met For Temporary Lay Offs

The standard that must be met from an employer’s perspective to lay off an employee without the fear of any repercussions can be very high and, as such, employers should consult with a lawyer before implementing any lay offs or series of lay offs. If a Court is not convinced that an employer’s decision to lay off an employee is not proper, the employee may be able to successfully sue the employer for constructive dismissal and be awarded damages flowing from a termination of employment.

Standard to be met for temporary layoffs - KCY at LAW

Legal Advice For Temporary Lay Offs

If you or someone you know has been laid off, or if you are an employer thinking of laying off an employee, contact KCY at LAW at (905) 639-0999 to book your consultation! We will give you the information and advice you need to properly ensure your options are canvassed and your rights are looked after! Call now!

Supreme Court Holds Job Security Is A Right For Non-Unionized Employees Of Federally Regulated Employers

In the very recent case of Wilson v Atomic Energy of Canada Ltd., the Supreme Court of Canada ruled six to three in what has been described as a game-changing decision in employment law and, specifically, for federally regulated employers and employees.

Wilson v Atomic Energy of Canada Ltd

The plaintiff in this case, Mr. Wilson, was a non-unionized employee of Atomic Energy, a federally regulated company. Following four years of continuous employment, Mr. Wilson was terminated after reporting improper procurement practices within the company. While Atomic Energy did not deny terminating Mr. Wilson’s employment on account of his allegations of corruption, it argued that since it had provided Mr. Wilson with a generous severance package his dismissal was legal. Mr. Wilson requested written reasons for his dismissal believing that he was terminated for whistleblowing. Atomic Energy refused to provide specific reasons and simply stated that Mr. Wilson had been terminated on a without cause basis. On appeal, the Federal Court of Appeal upheld the company’s decision, overturning almost forty years of arbitral law.

The Supreme Court’s Ruling will have a Significant Impact on Federally Regulated Employers

The Supreme Court’s subsequent ruling turned on an interpretation of the Canada Labour Code provisions giving federally regulated employees the right to bring a complain to an adjudicator if they believed their dismissal was wrongful or unjust. A key part of the Court majority’s decision was based on the fact that in the 1,740 cases since the Canada Labour Code provisions took effect, adjudicators had ruled in all but 18 cases that employers could not dismiss an employee without cause. The Supreme Court ultimately ruled that non-unionized employees of federally regulated companies are entitled to similar protections regarding dismissals as those given to unionized workers.

This decision will have a significant impact on federally regulated employers as it essentially means that they will be unable to terminate their employees on a without cause basis. The Canadian Labour Congress stated that this will bring accountability and fairness to approximately 500,000 non-unionized employees, preventing their employers from simply terminating them at will. Employers will now have to meet the high threshold test of just cause if they are likely able to terminate their employees.

Are you are a Federally Regulated Company or an Employee of One?

If you are a federally regulated company and have concerns over issues relating to the dismissal of employees, or, if you are an employee of a federally regulated company and believe you have been unjustly dismissed, it is important that you contact a lawyer right away to clarify the options you have and ensure your rights are protected.

Contact KCY at LAW today by calling 905-639-0999 or online and book a consultation.