{"id":2307,"date":"2015-07-02T01:17:54","date_gmt":"2015-07-02T05:17:54","guid":{"rendered":"https:\/\/www.zeilikmanlaw.com\/case-summaries\/related-companies-may-be-held-liable-for-wrongful-termination-in-common-employer-doctrine\/"},"modified":"2022-06-27T11:23:42","modified_gmt":"2022-06-27T15:23:42","slug":"related-companies-may-be-held-liable-for-wrongful-termination-in-common-employer-doctrine","status":"publish","type":"post","link":"https:\/\/www.zeilikmanlaw.com\/related-companies-may-be-held-liable-for-wrongful-termination-in-common-employer-doctrine\/","title":{"rendered":"Related Companies may be held Liable for Wrongful Termination in \u201cCommon Employer\u201d Doctrine"},"content":{"rendered":"

The Ontario Court of Appeal has upheld a decision of the Superior Court of Justice and dismissed an appeal in the case of\u00a0King v. 1416088 Ontario Ltd<\/em>. In\u00a0King<\/em>, the court held that when\u00a0there is a sufficient relationship among seemingly independent companies, that group of companies may be looked at as one entity or one \u201ccommon employer\u201d and therefore could be held liable for wrongful terminations.<\/p>\n

The court further held that those interrelated companies may also all be held liable for pension agreements despite the fact that only one company executed the agreement.<\/p>\n

Jack King (\u201cKing\u201d) worked as a bookkeeper for a company called Danbury Industrial for more than 38 years.\u00a0 Danbury Industrial owned\/operated or was related to a number of different companies under the umbrella of the \u201cDanbury\u201d group.\u00a0 King had worked for many of these different companies during his employment at Danbury Industrial.\u00a0 Danbury Industrial ceased business in October 2011 and all of its employees were terminated without cause including King.\u00a0 At the time of his dismissal, King was 73 years old and was not given any compensation for his termination.<\/p>\n

Soon after his termination, another related company called DSL Commercial began using the \u201cDanbury\u201d name and premises.\u00a0 Interestingly, King had also worked for DSL Commercial and had assisted in its creation prior to his termination from Danbury Industrial.\u00a0 DSL Commercial was owned by the son of the president\u2019 of Danbury Group.<\/p>\n

The appeal court held that there was a sufficient relationship between Danbury Industrial and DSL Commercial such that they should be considered as one entity as a \u201ccommon employer\u201d for the purposes of determining liability for King\u2019s wrongful dismissal.\u00a0 The appeal court agreed with the trial judge and their findings of fact with respect to the interrelatedness of Danbury Industrial and DSL Commercial. For example, there were several factors that the trial judge had looked to determine the extent of the interrelationship between DSL Commercial and Danbury Industrial.\u00a0 DSL Commercial used the same office furniture, address, telephone number, owned the \u201cDanbury\u201d name and King was instructed to assist DSL Commercial.<\/p>\n

The appeal court also held that the trial judge was right to decide that a pension agreement signed between King and Danbury Industrial should be valid as between King and DSL Commercial as well.<\/p>\n

OUR THOUGHTS<\/strong><\/p>\n

There are lessons here for both employers and employees. \u00a0It is not a rare practice for businesses to create multiple corporations in an effort to limit liability and for tax purposes.\u00a0 However, the \u201ccommon employer\u201d doctrine can be used by the courts to examine the actual relationships among corporations to determine whether or not they can be held jointly and severally liable as an \u201cemployer\u201d of the employee even if not actual or formal employer-employee relationship exists formally.<\/p>\n

The \u201ccommon employer\u201d doctrine is a powerful tool. Both employees and employers should be aware how the above \u201ccommon employer\u201d doctrine could affect how agreements between themselves and enforced and who could potentially become liable.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Ontario Court of Appeal has upheld a decision of the Superior Court of Justice and dismissed an appeal in the case of\u00a0King v. 1416088 Ontario Ltd. In\u00a0King, the court held that when\u00a0there is a sufficient relationship among seemingly independent companies, that group of companies may be looked at as one entity or one \u201ccommon […]<\/p>\n","protected":false},"author":6,"featured_media":5196,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[39,35],"tags":[],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"https:\/\/www.zeilikmanlaw.com\/wp-content\/uploads\/2022\/06\/Case-Summary.jpg","_links":{"self":[{"href":"https:\/\/www.zeilikmanlaw.com\/wp-json\/wp\/v2\/posts\/2307"}],"collection":[{"href":"https:\/\/www.zeilikmanlaw.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.zeilikmanlaw.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.zeilikmanlaw.com\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/www.zeilikmanlaw.com\/wp-json\/wp\/v2\/comments?post=2307"}],"version-history":[{"count":1,"href":"https:\/\/www.zeilikmanlaw.com\/wp-json\/wp\/v2\/posts\/2307\/revisions"}],"predecessor-version":[{"id":5164,"href":"https:\/\/www.zeilikmanlaw.com\/wp-json\/wp\/v2\/posts\/2307\/revisions\/5164"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.zeilikmanlaw.com\/wp-json\/wp\/v2\/media\/5196"}],"wp:attachment":[{"href":"https:\/\/www.zeilikmanlaw.com\/wp-json\/wp\/v2\/media?parent=2307"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.zeilikmanlaw.com\/wp-json\/wp\/v2\/categories?post=2307"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.zeilikmanlaw.com\/wp-json\/wp\/v2\/tags?post=2307"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}