23 Nov What is a common employer in Ontario?
In some workplaces, an employee can work for more than one employer. There are situations where there are multiple businesses in one corporation, and each business could have their own principal employer leading the business. So, an employee could be hired by the corporation but completing work for another business in a particular division.
These employers can be characterized as “common” employers when they simultaneously share status as employer and become liable for an employee or group of employees. The common employer doctrine maintains that the court can treat two or more individual entities as one employer, where they are assigned the responsibility to carry out any necessary legal matters for their employee, like providing termination pay.
There are certain circumstances that can arise in the workplace that can prompt a common employer relationship. Examples include: if an employee is paid by an employer other than the one who has been supervising them in the past, if an employee completes work for multiple employers without knowing who their principal employer should be, or if the companies work as one large entity etc.
How is an employer designated as a common employer?
There are three characteristics that a judge can consider when discerning common employers. The judge will review the employment contract, the sector the employee has been managed, and the possibility of shared supervision with more than one employer.
However, the principal factor a judge will consider when determining a common employer is whether there was intention to create an employer-employee relationship. Meaning, if an employer works for a business within a major corporation, that corporation is not responsible for an employee unless there is clear intention that they act as an employer managing the employee.
To test whether there was intention to create an employer-employee relationship, the judge will engage in an objective test (assessing the intention of a reasonable person in the circumstances), instead of a subjective test (a person’s state of mind). The objective test will ask whether there was “effective control” over the employee in question and will analyze their employment contract to identify any affiliation.
If you are an employee who is supervised by a common employer and are being legally managed as though you are under an individual employer-employee relationship, please contact KCY at LAW by filling in an online consultation request or contact us by phone at 905-639-0999 to book your consultation today.