Background
Gazmend Kondaj worked for Crossbridge Condominium Services Ltd. as the building manager at the SoHo Hotel & Residences Shared Facilities. After SoHo awarded its property-management contract to Duka Property Management Inc., neither company continued Kondaj’s employment. Crossbridge declined to reassign him, while Duka declined to hire him.
Duka paid Kondaj three weeks’ statutory termination pay and maintained benefits for that period under Ontario’s Employment Standards Act, 2000, but neither company paid common-law reasonable-notice damages. On summary judgment, the motion judge held Duka liable for $78,925, representing 10 months’ notice, plus damages for lost benefits. The judge also awarded Kondaj partial-indemnity costs before his settlement offers and substantial-indemnity costs afterward.
The Court’s Holding
The Court of Appeal dismissed Duka’s appeal. Reading ss. 56 and 75 of the Employment Standards Act, 2000 together, it held that when an incoming building-services provider refuses to continue an affected employee’s employment, the statute deems the incoming provider to have been the employer and to have terminated the employee. That deemed relationship triggers not only statutory termination obligations but also the employee’s common-law entitlement to reasonable notice.
The court concluded that this interpretation accords with the statutory text, scheme, and purpose of promoting employment continuity when building-services contracts change hands. It also dismissed Duka’s challenge to the substantial-indemnity costs award, holding that Kondaj’s settlement offers attracted the consequences of Rule 49.10 because the conditions for applying the multiple-defendant limitation in Rule 49.11 were absent.
The court also dismissed Crossbridge’s cross-appeal seeking its costs from Duka. Although the absence of a crossclaim was not decisive, the novelty of the dispute, Crossbridge’s failure to request a Sanderson order below, and its necessary role in the litigation supported the motion judge’s refusal to shift its costs to Duka.
Key Takeaways
- An incoming building-services provider that refuses to employ an affected worker is responsible for the worker’s common-law reasonable-notice entitlements under ss. 56 and 75 of the Employment Standards Act, 2000.
- The Act’s statutory minimums and common-law notice rights are intertwined; statutory deeming provisions can establish the employment relationship necessary for a wrongful-dismissal claim.
- A settlement offer involving multiple defendants may attract substantial-indemnity costs under Rule 49.10 when Rule 49.11’s prerequisites—alleged joint liability and possible contribution or indemnity rights—are not present.
Why It Matters
The decision resolves a previously unanswered question in Ontario’s building-services sector by assigning common-law notice liability to the incoming provider when it declines to retain an incumbent employee. Prospective providers must therefore account for affected employees’ service and potential reasonable-notice liabilities when bidding for and assuming building-services contracts.
The ruling also underscores that Ontario’s employment-standards legislation supplies minimum protections without isolating statutory termination rights from common-law remedies.