Common employer doctrine

Asselin v. Gazarek et al., 2011 ONSC 5871 is a wrongful dismissal case dealing with the common employer doctrine at common law. The doctrine provides that an employee can have, as a matter of fact, more than one employer. The analysis is quite helpful:

[19] Mr. Asselin relies on the common employer doctrine in the common law context.[8]

[20] The doctrine is explained by Stacey Reginald Ball, Canadian Employment Law, Rel. 44, vol. 1, looseleaf (Markham: Canada Law Book, 2011), at page 4-1:

The courts now recognize that, for purposes of determining the contractual and fiduciary obligations which are owed by employers and employees, an individual can have more than one employer. The courts now regard the employment relationship as more than a matter of form and technical corporate structure. Consequently, the present law states that an individual may be employed by a number of different companies at the same time.

[21] The leading case on the common employer doctrine is Sinclair v. Dover Engineering Services Ltd. 1987 CanLII 2692 (BC SC), (1987), 11 B.C.L.R. (2d) 176 (S.C.), aff’d 1988 CanLII 3358 (BC CA), (1988), 49 D.L.R. (4th) 297 (B.C.C.A.). In that case, the plaintiff, a professional engineer, worked for Dover, the operating company, but was paid by Cyril, a related management company. When the employee was terminated, the court held that both companies had exercised control over his employment and could therefore be considered his employer and liable for wrongful dismissal damages.

[22] The Ontario Court of Appeal approved the common law doctrine as articulated in Dover, as well as in subsequent other cases, in Downtown Eatery(1993) Ltd. v. Ontario, 2001 CarswellOnt 1680, 200 D.L.R. (4^th) 289 (C.A.). In Downtown, the plaintiff was terminated from his employment at a nightclub called For Your Eyes Only. He had originally sued the company that served as a “paymaster” for the employees but in later proceedings sought to recover from a number of other related companies involved in the nightclub operation - one company owned the premises, one owned the trademark and licenses, one owned the chattels and equipment, and one acted as paymaster.

[23] The court held that there was a “highly integrated or seamless group of companies which together operated all aspects of the For Your Eyes Onlynightclub” (para. 34). It held that the whole consortium operated the nightclub and that all of the companies could be regarded as common employers and liable for the plaintiff’s claim. The court’s concern was that a complex corporate structure not be permitted to defeat the legitimate entitlements of wrongfully dismissed employees: Downtown, at para. 36.

[24] The issue in the common employer cases, and what the courts look at, is “where effective control over the employee resides” (Downtown, at para. 33). If the plaintiff’s employment is controlled by more than one company, or by a group of companies, then in the appropriate case all of those companies may be viewed as his collective employer, regardless of who the actual employer is: see Downtown, at paras. 30 to 40.