The Common Employer Doctrine is designed to ensure employees are able to collect money when there are numerous companies involved with their work.
This doctrine was considered in the case of Vaccaro v Twin Cities Power-Canada, U.L.C., 2014 ABQB 56 at 76, quoting from the case of Sinclair v Dover Engineering Services, [1988] DLR (4th):
…As long as there exists a sufficient degree of relationship between the different legal entities who apparently compete for the role of employer, there is no reason in law or in equity why they ought not all to be regarded as one for the purpose of determining liability for obligations owed to those employees who, in effect, have served all without regard for any precise notion of to whom they are bound in contract. What will constitute a sufficient degree of relationship will depend, in each case, on the details of such relationship, including such factors as individual shareholdings, corporate shareholdings, and interlocking directorships. The evidence of that relationship will be the element of common control.
The Court in Shamac Country Inns Ltd v Sandy's Oilfield Hauling Ltd, 2015 ABQB 518 looked at a number of factors which are considered in this process. At paragraph 28 the court said:
[28] A review of Downtown Eatery and Sinclair, together with other cases, reveals several factors that courts have considered in determining who the employer is when dealing with groups of related companies. This list is not exhaustive or comprehensive. Courts must evaluate the circumstances of each case on its own facts: Bartholomay v Sportica Internet Technologies Inc, 2004 BCSC 508 [Bartholomay]. Therefore, it may be that certain factors carry greater weight in some situations than in others.
[29] The factors identified include:
(i) Whether the worker performs services for other entities forming part of a group: Olson v Sprung Instant Greenhouses Ltd (1985), 1985 CanLII 1257 (AB QB), 64 AR 321 (Alta QB) at paras 16 and 18;
(ii) The closeness or integration of the relationship between the various entities: Johnston v Topolinski, [1988] OJ No 2829 at para 17; Downtown Eatery at para 34;
(iii) Whether there are common shareholders and directors of (or common control over) the various entities: Pattillo v Murphy Canada Exploration Ltd, 2001 ABQB 1070 at para 45 [Patillo];
(iv) Whether one entity holds the worker out as an employee: Sinclair;
(v) Whether an entity exercises control over the worker: Jacobs v Harbour Canoe Club Inc, 1999 CanLII 3642 at para 11 (BC SC); Jones v CAE Industries Ltd, [1991] OJ No 2295 (Ont Ct J); Patillo at para 45; Vaccaro v Twin Cities Power-Canada ULC, 2014 ABQB 56;
(vi) Whether an employment contract exists between one entity and the worker: Sinclair and Jacobs at para 17 – however, a written contract is not determinative on its own: Bartholomay at para 10);
(vii) Evidence of an intention to create an employer/employee relationship between the worker and the respective corporations within a group: Gray v Standard Trustco (Trustee of), [1994] OJ No 3031 (Ont Ct J), (1994), 1994 CanLII 7472 (ON SC), 8 CCEL (2d) 46 [Gray];
(viii) The worker’s relationship with and conduct towards the various entities: Bartholomay at para 10.
[30] While all of these factors are relevant to the analysis, one also has to consider the comment of Rawlins J in Patillo that “[k]ey factors in determining whether two entities may be considered a single employer are whether there is common control over both entities and whether they both exercise control over the employee” (at para 45).
As part of an employment lawsuit it is important to ensure the proper parties are brought in at the beginning. If you have questions about this doctrine, please feel free to contact us.
The information contained in this article is not legal advice. No solicitor client relationship is formed through this article. The reader is encouraged to retain counsel for advice in these matters.
