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Labour & Employment Law Blog

Summary Judgement Ruling Establishes Holding Companies are Not Common Employers

Zeilikman Law

Zeilikman Law

Case Summary

THE CASE

The Superior Court of Justice ruled on the issue of common-employers and personal liability of directors in the context of a wrongful dismissal action. The plaintiff was the manager of a Nissan Infiniti automotive dealership in Ottawa, which was owned and operated by the Tony Graham automotive companies. After he was terminated, the plaintiff sued the dealership, along with the directors and the holding companies associated with the dealership. The defendants brought a motion for summary judgement to have the claims dismissed as against the directors and the holding companies on the basis that they were not employers of the plaintiff and therefore have no place in the action for wrongful dismissal.

In this case, the judge found that a summary judgement was appropriate under the circumstances and ruled in favour of the defendant-moving party to strike the directors and holding companies from the Statement of Claim.

WHAT IS A SUMMARY JUDGMENT?

A motion for summary judgment is an expedited process for dealing with all or part of a claim and it can be brought by either the plaintiff or defendant to an action. Bringing a summary judgment is appropriate in situations where there is no genuine issue requiring a trial, allowing either the plaintiff or defendant to obtain judgment in their favour without having to deal with a lengthy and costly trial. In granting a motion for summary judgment, the judge will typically look at whether the process under rule 20 will allow them to make a well-informed decision given the facts relevant to the issue(s), and whether a summary judgment would be a more effective way of dealing with the matter. Summary judgments are typically used by lawyers as a method of keeping costs down for their clients in matters involving facts that are fairly straightforward or undisputed.

OUR THOUGHTS

This decision is particularly important because it affirms that holding companies are not common employers and will not be held liable for the contractual breaches of their associated operating companies. In this case, despite the fact that holding companies were financially integrated with their operating companies to a “great extent,” the judge found that this was not enough to establish a common-employer relationship. The holding company had neither direct nor indirect control over the employee and therefore should not be held liable for the contractual breaches of their operating company. This is an important precedent to keep in mind, specifically for employers. In certain circumstances, it may be prudent to set up holding companies to limit exposure to liability arising in the course of employment. However, in other instances, courts will break through the corporate fiction to get to the parties responsible.

Another interesting take-away from this case is the fact that the claim was dropped as against the directors in their personal capacity. The judge found that the directors were acting in their managerial and directorial capacity during the events which serve as the basis for the claim, and therefore cannot be held personally liable. The judge was satisfied that the plaintiff had not brought sufficient evidence to “pierce the corporate veil,” and thereby awarded a summary judgement in favour of the defendants. To have any chance of success in extending liability to the principals of a company in their personal capacity, the plaintiff must bring forth specific evidence suggesting that the actions of the principals were themselves tortious or exhibit a separate identity or interest from that of the company. Personal liability on behalf of officers is rare absent evidence suggesting a tortious act, or conduct amounting to fraud, deceit, dishonesty, or want of authority.

See: Sproule v Tony Graham Lexus Toyota et al. (2016 ONSC 2220)

The above article is for general information purposes only, does not constitute legal advice or create a solicitor-client relationship. Because each case is unique and factually driven, if you have concerns with regard to the foregoing issues, please make an appointment with one of our lawyers or a qualified legal practitioner elsewhere. We represent clients in the Greater Toronto Area including Toronto, North York, Markham, Vaughan, Thornhill, Newmarket, Aurora, Brampton, Mississauga, Barrie, Ajax, Whitby, Pickering and Oshawa.

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Legal Receptionist

Zeilikman Law is an employment law firm located in Vaughan, Ontario. We are looking to hire a legal receptionist to join our firm. Preference will be given to candidates who have experience working as a receptionist at another law firm.

Location: Vaughan, Ontario.

Start Date: Immediately.

Hours: Monday to Friday, 9 am to 5 pm. Full time. In-person only. This is not a remote work position.

Wages: 35,000 to 40,000 per year.

Duties and Responsibilities:

  • Manage our firm’s multi-line telephone system to receive incoming calls.  Screen incoming telephone call inquiries to determine the nature of the telephone call and provide standard information related to our legal services.  Take and deliver messages and route incoming telephone calls to the appropriate staff person.
  • Answer general inquiries coming from the firm’s social media and website email.
  • Welcome in-person visitors upon arrival.  Direct visitors to the appropriate staff person and / or office or boardroom.
  • Organize in-person visitor schedule to prevent overlap and multiple bookings.
  • Receive, sort, and distribute daily mail and deliveries.
  • Arrange for couriers.
  • Keep front reception, kitchenette area and boardroom tidy.
  • Perform various clerical duties such as filing, photocopying, and faxing on an as-needed basis.
  • Process client or other payments.
  • May be asked to run minor errands outside of office such as attending post office to arrange a courier or pick up mail.
  • May be asked to assist other law clerks or lawyers of the firm as required and as appropriate.
  • Any other basic administrative duties or tasks as deemed appropriate.

Required Skills:

  • Basic knowledge of general office procedures including filing, faxing, and printing and copying.
  • Basic word processing computer skills.
  • Proficient in receptionist and telephone practices, etiquette, and decorum.
  • Professional attitude and appearance.
  • Excellent organizational skills.
  • Positive customer service attitude is a must.
  • Must be able to maintain confidential and sensitive information.

Education and Experience:

  • Highschool diploma or equivalent.
  • 1 – 2 years’ experience in an office setting with an emphasis in accounting, reception or clerical work is required.   We would prefer experience in a law firm environment.

Applications for this position should be sent via email to jennifer@zeilikmanlaw.com. All applications should include a cover letter, resume and at least two references. Only successful candidates will be contacted.