CITATION: Stock Transportation Ltd. v. Llanos, 2024 ONSC 575
DIVISIONAL COURT FILE NO.: DC-23-00000001-0000
DATE: 20240125
SUPERIOR COURT OF JUSTICE – ONTARIO
DIVISIONAL COURT
RE: STOCK TRANSPORTATION LTD., Appellant (Defendant)
AND:
Catherine Llanos, Respondent (Plaintiff)
BEFORE: Justice V. Christie
COUNSEL: Carole McAfee Wallace, for the Appellant (Defendant)
George T. Florea, for the Respondent (Plaintiff)
HEARD: January 18, 2024
REASONS FOR DECISION
On Appeal from the Final Order of Deputy Judge Robert M. Freedman of the Small Claims Court
Overview
[1] The Appellant, Stock Transportation Ltd. (“Stock”), appeals to this Court, in accordance with s. 31(a) of the Courts of Justice Act, from the final Order of Deputy Judge Robert M. Freedman of the Small Claims Court, dated November 4, 2022, awarding judgment to the Respondent, Catherine Llanos, in the amount of $5,288.69, less applicable statutory and tax deductions, plus prejudgment interest.
[2] According to the Appellant, the Deputy Judge erred in law when he found that section 9 of the Employment Standards Act, 2000 (“ESA”), which provides for continuity of employment where there is the "sale of a business", did not apply to the facts of the case, with the result that the Respondent was entitled to severance pay from Stock pursuant to s. 64 of the ESA. The Appellant requests that the judgment of Deputy Judge Freedman, with respect to the award of severance damages only, be set aside and that they be awarded costs of this appeal.
[3] According to the Respondent, the ruling of the Deputy Judge was correct, and the appeal should be dismissed.
Facts
[4] The facts at trial were not in dispute and were introduced by way of an Agreed Statement of Fact. Ms. Llanos testified at trial solely with respect to her claim for moral and punitive damages, which damages were not awarded, and are not the subject of this appeal.
[5] Stock is a company that provides school bus and other bus services within the Province of Ontario. Stock is a statutory severance employer, pursuant to s. 64 of the ESA. Under the ESA, where statutory severance pay is applicable, it must be paid either seven days after the employee's employment is severed, or on what would have been the employee's next regular pay day, whichever is later.
[6] Ms. Llanos commenced employment with Stock on August 9, 2010 as a bus driver. She was paid $18.25 per hour, and her hours and earnings varied from week to week.
[7] Stock had a contract with Student Transportation Services of York Region Consortium ("York Consortium"), to provide daily home-to-school student transportation services to the York Region District School Board and York Catholic District School Board on York Consortium routes. Ms. Llanos was one of the bus drivers who drove the York Consortium routes.
[8] Stock’s contract with the York Consortium was set to expire at the end of the 2020-21 school year (end of June 2021). On or about April 29, 2021, Stock provided Ms. Llanos with a termination letter. The letter stated that, at the end of the school year, Stock would no longer provide services to York Region District School Board and York Catholic District School Board, and that, as a result, the last day of employment for Ms. Llanos would be June 29, 2021. The termination letter also stated that any entitlement to severance pay to which Ms. Llanos may be entitled under the ESA would be paid to her following the Termination Date.
[9] The York Consortium awarded the contract for student transportation to a new operator, 947465 Ontario Ltd. operating as Voyago ("Voyago"), starting the following school year.
[10] On May 11, 2021, prior to the expiry of the contract, Stock and Voyago, separate corporate entities, entered into an agreement ("the Employee Introduction Agreement") pursuant to which Stock agreed to introduce to Voyago certain of its drivers that drove the York Consortium routes, for the purpose of Voyago making employment offers to them, on the condition that any such offer of employment from Voyago be on such terms and conditions of employment at least as favourable as those currently in place at Stock, and that Voyago recognize the employee's length of service with Stock. It was agreed between the parties that, aside from this Agreement, the significance of which is disputed, Stock did not enter into any contracts with Voyago for the transfer of any of Stock’s assets or business operations to Voyago that would be relevant to this action.
[11] On June 18, 2021, Ms. Llanos was offered employment by Voyago, effective August 15, 2021. In the offer letter, Voyago stated that Stock would no longer be operating the York Consortium routes in the upcoming school year, and that Voyago had entered into an agreement with the York Consortium to begin operating the York Consortium routes for the upcoming school year. The letter further stated that Voyago agreed to offer employment to certain employees of Stock, on terms and conditions of employment at least equal to the terms and conditions of employment with Stock. Voyago also stated that it would recognize such employees' past service with Stock, provided that they did not resign from their employment with Stock prior to starting with Voyago. Voyago further agreed to honor Ms. Llanos’ original start date with Stock. Certainly, Voyago’s offer to Ms. Llanos was consistent with the Employee Introduction Agreement. Voyago's employment offer to Ms. Llanos was conditional upon Ms. Llanos successfully passing Voyago's driver evaluation and providing a clean driver abstract.
[12] On June 21, 2021, Ms. Llanos accepted Voyago's offer of employment, on the terms proposed by Voyago. In the school year that followed, Ms. Llanos worked for Voyago, under the terms proposed by Voyago, driving York Consortium routes – the same routes she did for Stock.
[13] Stock did not provide Ms. Llanos with any statutory severance pay, asserting that it did not have to do so by virtue of s. 9 of the ESA, claiming that the Agreement constituted a “sale” within the meaning of that section.
[14] The parties agree that if Stock is liable to provide Ms. Llanos with statutory severance pay, the principal amount owing would be $5,288.69, less applicable taxes and statutory withholdings.
Findings and Decision of Deputy Judge
[15] Ms. Llanos pursued her claim to severance pay in Small Claims Court. The matter came before Deputy Judge Freedman, who gave oral reasons for decision on November 4, 2022. Ultimately, Deputy Judge Freedman determined that a sale, in accordance with section 9 of the ESA and the case law interpreting that section, had not taken place. The Deputy Judge stated explicitly that his basis for this was set out in paragraphs 16 through 19 of the plaintiff’s factum, which he adopted into his reasons. Those paragraphs, as adopted and relied on by the Deputy Judge, were as follows:
The Plaintiff's position is that there was no sale of the business or part thereof to Voyago within the meaning of Section 9 of the ESA. The Defendant did not own the York Consortium bus routes. To the extent that it was permitted to operate on said routes, it was permitted to do so by York Consortium through contract, which contract expired. The Defendant could not sell or transfer to Voyago that which belonged to York Consortium, i.e ., the licence or contractual right to provide bus services on York Consortium bus routes. That business was awarded to Voyago by York Consortium directly.
With respect to the Employee Introduction Agreement, this was in essence an agreement by the Defendant to provide Voyago with information about some of the Defendant's then current employees, with a view to Voyago potentially hiring such employees subject to certain terms and conditions. Unlike the situation in Abbott however, the disclosure by the Defendant to Voyago of information about its employees did not constitute a transfer from the Defendant to Voyago of any specific bundle of tasks and functions performed by an identifiable group of employees. The tasks and functions flowed from the York Consortium to Voyago, as part of the contract that was awarded by York Consortium to Voyago. Nor can it be said that the Employee Introduction Agreement constituted a sale of specific employees of the Defendant to Voyago. The law is clear that while assets can be purchased from a vendor, employees are not commodities that can be sold. Tab 4 - White v. Stenson Holdings Ltd. (1983), 1983 447 (BC SC) at paras. 13 and 14.
There is no evidence of any sale by the Defendant to Voyago. For example, there is no purchase and sale agreement, no list of assets, business activity or department being transferred or outsourced from the Defendant to Voyago, no invoices, and no evidence of any HST being charged by the Defendant to Voyago as part of any such transaction. In Abbot, there was clear evidence that there was a transfer of an entire division from Bombardier to CGI, including assets and business activities.
If the intent of the legislation was for continuity of employment to be deemed in situations where a sale did not occur, but there was nevertheless agreement between one company and another that the new company would employ certain employees with all terms of their employment remaining unchanged, including their original start date, the legislation would have stated that. Section 9 of the ESA however expressly requires a sale between the vendor and the purchaser.
[16] After adopting these paragraphs into his reasons, Deputy Judge Freedman stated in part:
I am concerned that the key is the word "transferred" in the Abbott decision and Merrill Lynch decision, a transfer/sale. Transfer is the key word. And I find that a transfer, the defendant could not have transferred. The defendant was not in a position to have been able to transfer any underlying activity because, whatever we want to call it, enterprise, because there was simply no more enterprise there. Or it means she had an interest, proprietary, or otherwise, by virtue of the fact that the contract with the York Consortium, York Region Consortium had come to an end and expired. It was not the transfer of that that ended up being the continuation of the plaintiff's employment. In my view, it was the institution of a new, or the formation of a new contract as between Voyago, the new service provider, and the York Region Consortium that set that underlying activity. This goes back to the issue, I think it is implicit in the Abbott and the Merrill Lynch decisions. There has got to be more than simply the nature of the work itself. There has got to be some type of - you know, it has to be a full going concern.
But there is, I think enclosed in those decisions is the fact that there's got to be some type of proprietary interest, something that is capable of being outsourced. And to my mind, the defendant no longer possessed that once the contract with York Consortium expired. This is almost like the nemo dat principle. You cannot transfer an interest which you do not hold.
So consequently, the letter or the agreement of introduction to employees was just that. It was nothing more than that. And it could not serve, it could not serve to do, to constitute or represent an actual transfer/sale, whatever we want to call it, of the underlying interest. That underlying interest had evaporated by virtue of the expiry of the contract. And I also wish to advise that it was reinstated or created by virtue of the new contract between York Consortium and the Voyago Transportation entity.
So I adopt the paragraphs 16 through 19 of the Plaintiff's factum as are correct in that regard with the additional sort of grasp on it, of what I am speaking of in terms of an underlying interest in - an interest in the underlying proprietary enterprise, which I think has to be there for the operation of section 9. There had to be an outsourcing of some type of activity, not simply a referral of the employees. There wasn't so much a transfer of an interest in activity as there was a, as there was of a utilization of the former employees of Stock using their own skills to, to I guess resume their own activities with Voyago. So I do not think there's an intellectual property aspect, or anything that would be capable of being called an intellectual property interest.
Consequently, I do find for the plaintiff with regard to the severance payment that I would find has been established in that sum of $5,280.69 less taxes and statutory deductions as per the agreement of the parties. It was not - just a second. I also find, this one would touch on the fact that this is not only a view. I am cognizant of the arguments made in the factum and the submissions of the defendant with regard to the expanse of the, the origin or the expanse of the interpretation to be given in these sections. I am cognizant of the referenced Supreme Court decision of taking the interpretation that favours the largest group of employees, the reference to the definition under, of business under section 1 (1) of the Employment Standards Act, and the definition of sales in subsection 9 (3).
But I cannot get around, despite the objective of section 9 (1), and the expansive approach taken in the case law, it is still, in my view, the defendant would still have to overcome or beat that wording. They are still sort of stuck with that hurdle in section 9 (1), and I find that it just cannot be said to have been achieved based on the facts of this case, for the primary reason that there was no underlying interest to be transferred when they sold, handing over whatever we want to call it. Whatever underlying right there was, in my view, ceased to exist by virtue of the finding of the expiry of the contract between York Consortium and Stock. So that, those are my comments with regard to the first issue on the severance issue.
[17] Clearly, central to the analysis of the Deputy Judge was the expiry of the contract. While it is true that the contract had not expired at the time of the Agreement, there was no doubt that the expiry was going to occur. This fact is undeniable. It is an admitted fact that Stock’s contract with the York Consortium expired at the end of June 2021.
Analysis
Standard of Review
[18] As per Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R 235, the standard of review is as follows:
a. For pure questions of law – correctness; in other words, “an appellate court is free to replace the opinion of the trial judge with its own” (para 8);
b. For all factual conclusions– cannot be reversed unless the trial judge has made a “palpable and overriding error”, palpable being one that is plainly seen. (para 10 and 25)
c. For questions of mixed fact and law – “subject to a standard of palpable and overriding error unless it is clear that the trial judge made some extricable error in principle with respect to the characterization of the standard or its application, in which case the error may amount to an error of law.” (para 37)
[19] There is no question that the interpretation of a statutory provision, in this case s. 9 of the ESA, is a question of law and the standard of review is correctness. See: Sullivan v. KSD Enterprises Ltd., 2019 ONSC 6698, para 6. However, the factual findings that the Deputy Judge made, which were frankly not in dispute, are entitled to deference and reviewable on a standard of palpable and overriding error.
Was the Decision of the Deputy Judge Correct
[20] The parties agree that the relevant statutory provisions are section 1(1), 9(1) and 9(3) of the ESA and that the correct test for determining whether a sale has occurred within the meaning of section 9 of the ESA is found in Abbott v. Bombardier Inc., 2007 ONCA 233.
[21] Section 9(1) of the ESA provides:
If an employer sells a business or a part of a business and the purchaser employs an employee of the seller, the employment of the employee shall be deemed not to have been terminated or severed for the purposes of this Act and his or her employment with the seller shall be deemed to have been employment with the purchaser for the purpose of any subsequent calculation of the employee's length or period of employment.
[22] Section 9(3) of the ESA defines "sells" as “includes leases, transfers or disposes of in any other manner” and defines "sale" as having a corresponding meaning.
[23] Section 1(1) of the ESA defines "business" as “includes an activity, trade or undertaking; (‘enterprise’)”.
[24] In Abbott v. Bombardier Inc., 2007 ONCA 233, the Plaintiffs were previously employed by Bombardier in its Information Technology Services ("ITS") Group. Bombardier entered into an agreement with CGI to transfer its ITS Group to CGI. CGI agreed to recognize each of the affected employee's original date of hire with Bombardier both for the purpose of determining notice of termination and severance pay under the applicable employment standards legislation and for common law purposes. The Plaintiffs were given notice of termination by Bombardier and accepted offers of employment from CGI. They brought an action against Bombardier claiming severance pay pursuant to the ESA. Bombardier moved successfully for summary judgment dismissing the claim. The Plaintiffs appealed, arguing that the motion judge erred in failing to apply the "going concern" test for determining whether the Bombardier / CGI transaction constituted a sale of a part of a business within the meaning of s. 9 of the ESA. In determining the issues in Abbot, the Court of Appeal set out a framework for the interpretation of s. 9 of the ESA, stating in part as follows:
[17] …the ESA is remedial legislation intended to set minimum standards for terms of employment. As such, in accordance with the provisions of s. 10 of the Interpretation Act, R.S.O. 1990, c. I.11, it should be given a "fair, large and liberal construction and interpretation as will best ensure the attainment of the object of the Act according to its true intent, meaning and spirit".
[18] Viewed in the context of the entire statute, in our view, the purpose of s. 9 of the ESA is to protect minimum statutory entitlements that are related to length of employment where the purchaser of a business, or part of a business, continues to employ the employees of the vendor following the sale. Such entitlements include: vacation entitlements, entitlements to pregnancy and parental leaves, as well as entitlement to notice of termination or pay in lieu of notice and severance pay. In our view, this statutory purpose is apparent from the expansive definitions of business and sale that are included in the ESA, the nature of the protections the ESA provides, and the wording of s. 9 of the ESA.
[25] The Court of Appeal relied on the principle in the Supreme Court of Canada decision of Machtinger v. HOJ Industries Ltd. 1992 102 (SCC), [1992] 1 S.C.R. 986, that an interpretation of s. 13 (now s. 9) of the ESA that extended protection to as many employees as possible is to be favoured over an interpretation that does not, and that applying the “going concern test” would have the opposite result. (para 19). The Court further stated:
[20] … while the "going concern" test has been used by the Ontario Labour Relations Board in decisions dealing with the meaning of sale of a business under the OLRA, we are not persuaded that that means that it is appropriate that the same test should be used under the ESA. We note that "business" is not defined in the OLRA, whereas it is broadly defined in the ESA. More importantly, the two legislative regimes target different issues. As noted in Metropolitan Parking, the OLRA regime is aimed, at least in part, at providing for the continuity of relationships between unions and employers in the context of the sale of a business. By way of contrast, the purpose of the ESA regime is to protect individual rights and to preserve continuity of seniority. Viewed in this context, in our view, the meaning of business in s. 9 of the ESA is to be given an expansive interpretation.
[26] The Court in Abbott accepted the lower court's reliance on the 1987 decision in Re Merrill Lynch Canada Inc., August 7, 1987, E.S.C. 2256, which found that the outsourcing of keypunch operations constituted a sale of a business, because the services clearly fell within the definition of "activity" and "undertaking". In particular, where there was a transfer of a specific bundle of tasks and functions performed by an identifiable group of employees, this fell within the definition of a sale of a business. (para 21)
[27] Ultimately, the Court of Appeal upheld the motion judge, in other words, section 9 applied, and no severance was payable. It must be noted that in Abbot, the parties agreed to the "transfer" of employees that were part of the "identifiable group employees" that performed the bundle of tasks and functions that was being disposed of by Bombardier and assumed by CGI, and further agreed that their original hire date with Bombardier would be recognized by CGI (which the Court of Appeal found to be "significant"). The Court did not indicate whether this aspect of the outsourcing agreements was necessary to find that s.9 of the ESA applied.
[28] In this case, the Appellant argued that the Deputy Judge started with a narrow focus, finding that the word “transfer” was key to the Abbott decision, and to the definition of “sells” under s. 9 of the ESA. On that basis, the Appellant argued that the Deputy Judge went on to find that Stock could not transfer an “activity” or enterprise because it did not have a proprietary interest in it, given that the York Consortium contract had expired and was not theirs to transfer. According to the Appellant, the Deputy Judge found that what was transferred had to be a “going concern”, but in this case the Employee Introduction Agreement was nothing more than an introduction to employees and could not constitute a transfer or sale of the underlying interest, as any underlying right had been extinguished.
[29] This court does not agree with this interpretation of the reasons of the Deputy Judge.
[30] Firstly, the reasons of the Deputy Judge must be read as a whole in order to fully appreciate and understand the basis for the decision.
[31] The Deputy Judge did not utilize a narrow interpretation of s. 9. He did not focus solely on the word “transfers” in the definition of sells, while giving no consideration to the other parts of the definition. In ruling that section 9 of the ESA did not apply to the facts of this case, the Deputy Judge referred to the definition of “sells” in subsection 9(3) of the ESA, the objectives of the legislation, and the expansive approach taken in the case law. Applying this broad interpretation, Deputy Judge Freedman concluded that the Appellant’s contract with York Consortium had expired, which was accurate, and that the Appellant no longer had any underlying right to the business activity in question, and therefore could not convey a part of that business to Voyago that they did not have to convey. Several comments of the Deputy Judge indicate that he was applying a broad interpretation to the definition of “sells” and “business”, including:
a. “So consequently, the letter or the agreement of introduction to employees was just that. It was nothing more than that. And it could not serve, it could not serve to do, to constitute or represent an actual transfer/sale, whatever we want to call it, of the underlying interest.”
b. “There had to be an outsourcing of some type of activity, not simply a referral of the employees.”
c. “I am cognizant of the arguments made in the factum and the submissions of the defendant with regard to the expanse of the, the origin or the expanse of the interpretation to be given in these sections. I am cognizant of the referenced Supreme Court decision of taking the interpretation that favours the largest group of employees, the reference to the definition under, of business under section 1 (1) of the Employment Standards Act, and the definition of sales in subsection 9 (3).”
[emphasis added]
[32] The Deputy Judge was certainly cognizant of the remedial purpose of s. 9 of the ESA. The Deputy Judge was certainly cognizant of the objectives of the ESA, including to protect employee’s rights. The Deputy Judge was aware of the interpretation of the legislation that favours the largest group of employees. Being fully aware of all of this, and applying it, the Deputy Judge found, on these facts, that “there wasn't so much a transfer of an interest in activity as there was a, as there was of a utilization of the former employees of Stock using their own skills to, to I guess resume their own activities with Voyago.” Applying a broad expansive interpretation to the legislation, this was a conclusion that the Deputy Judge was entitled to reach.
[33] Further, while the Deputy Judge did mention the “going concern” test, this was not the basis upon which he reached his decision. After mentioning the “going concern” concept, he immediately stated, in reference to the Abbott and Merrill Lynch decisions that inherent in those decisions was the fact that there had to be “some type of proprietary interest, something that is capable of being outsourced.” Deputy Judge Freedman concluded that, once the contact expired, Stock did not possess anything to outsource to Voyago. The only thing Stock conveyed was the introduction of employees. Employees, however, are not a business to be sold.
[34] As for the application of Federated Buildings Maintenance Corp., [1989] O.E.S.A.D. No. 14, this court does not agree with the interpretation that the Appellant places on this decision. In Federated Buildings Maintenance Corp., a referee appointed under a former version of the ESA examined the application of s.13(2) (now s. 9). In that case, a building services company, Federated, lost its contract to provide building services in Commerce Court, a building owned by CIBC, and was replaced by a new contractor, Hurley. Federated gave the affected employees notice of termination, and many of those employees were subsequently hired by Hurley. There was no agreement or any transaction between Federated and Hurley regarding the employees in question or any aspect of the business. The court stated as follows:
In the present case, in order to apply s.13 two finding must be made. There must be a 'sale' and that sale must be the sale of a ‘business'. From the foregoing it can be seen that the term 'sale' has been given an extremely broad interpretation. Thus, in the present case the CIBC is arguably the conduit that effects the transfer of an asset from Federated to Hurley. That the transfer is involuntary makes no difference. Simply put, on this theory the CIBC effects a transfer from Federated to itself and then it transfers the business to Hurley and s.13 is given a broad enough interpretation to find that there is a 'sale' from Federated to Hurley..
The more difficult matter is always whether there has been a ‘business’ transferred. In turn, the term ‘business’ has also been broadly interpreted, as in Thunder Bay Ambulance Services Inc. [1978] OLRB Rep May 467 where, the transfer was not that a business but what was found to be an essential element of that business.
The Metropolitan Parking case was ultimately decided on the basis that no business had been transferred from the first operator of the parking facility to the second operator of the facility. That, of course, is precisely the argument made by counsel for Hurley in the present case.
In the present case let us compare what Federated had at the start and what Hurley eventually wound up with.
From the foregoing it can be argued that after the new contract was made, the work performed by Federated was now being performed by Hurley. Indeed the evidence of the manager of Hurley was that there was really no difference in what Hurley was doing. However, as noted in the Metropolitan decision, the transfer of work is not enough to conclude that there has been the transfer of a business. As noted in that decision the matter is fundamentally one of how the transactions are to be characterized.
It seems to me that the essential difference between what Federated did and what Hurley does relates to the nature of the contract with the CIBC. It must be remembered that Hurley and Federated have been and are competitors. Federated performed a specific type of service for CIBC. The CIBC decided, for its own reasons, to change the type of service that it wanted and it invited both Federated and Hurley to bid on the performance of this new service. They both put in competitive bids and Hurley won and Federated lost. As a consequence of that loss, the work which had been performed by Federated is now performed by Hurley. Federated lost ‘business’ to Hurley, but can it be said that a business (or a part of a business) was transferred to Hurley?
While Hurley acquired certain supplies and hired the former employees of Federated it cannot be said that Hurley acquired a portion of Federated's organization, that is "a business entity". The matter is made more confusing by the fact that Hurley lured Stevens away from Federated, and Stevens is no doubt a key employee. Stevens, however, was not part of the 'transaction', he was not transferred, he simply changed his employer. In such circumstances it cannot be said that a viable business entity was transferred to Hurley. Had Stevens been part of the transaction, then the the outcome might have been different, but there is no evidence to suggest that Stevens was transferred with the work, rather the evidence is quite clear that Stevens simply choose to change employers.
In the present case, no matter how broadly one interprets the term ‘sale’ and the term ‘business’, it is difficult to see that Hurley ‘bought’ the ‘business’ (or part of the business) of Federated. Notwithstanding that Hurley did hire a number of employees and significant management from the former Federated operation, there is a significant difference between what Hurley got and what Federated gave up. Thus whereas Federated had a cost plus business with the bank, Hurley was in for a fixed price contract. Further, both Federated and Hurley were in business long before the event in question and they are both still in business after the event. In a very real sense the matter can be characterized as Federated loosing a customer and Hurley gaining a customer, Hurley didn't, even in its broadest sense, ‘purchase’ a customer of Federated, it competed for and won over the client's business.
In the final analysis, it is my view that even if one gives the broadest possible construction to the terms ‘sale’ and ‘business’, one cannot characterize the events in this case as being the sale of a business under section 13 of the Employment Standards Act.
[35] The Appellant takes the position that the referee in Federated found that a “sale” had occurred between Federated and Hurley, and that the fact of the transfer being an involuntary one through CIBC as a conduit, made no difference. With all due respect, this is not what the case represents. The referee was clearly contemplating the various arguments being put forward, using the words "on this theory". Ultimately, however, it is clear that the referee determined that this was neither a sale nor a business under the ESA. It is worth noting that building service providers are now covered by a different and specific section of the ESA - s. 10.
Conclusion
[36] Reviewing this matter using a standard of correctness, this court is not satisfied that the Deputy Judge erred in any way, either in his interpretation of s. 9 of the ESA, or his application of the legislation and case law to the admitted facts of this case.
[37] Deputy Judge Freedman made no error in this case. He considered the appropriate legislation and case law – the same legislation and case law being relied on as part of this appeal. His reasons, when read as a whole, clearly convey that he understood the broad approach that must be taken when defining either “sells” or “business” in the legislation. His reasons, when read as a whole, clearly convey that he applied that broad approach to the facts of this case – facts that were not in dispute.
[38] There was no “sale of a business” in this case. The Appellant wishes to put a meaning on the word “sell” which is so expansive so as to have no limits at all. The Appellant argued that “sells”, by including the words “disposes of in any other manner”, does not require a counterparty or a transaction, rather an employer could simply dispose of a part of a business by simply abandoning or winding down that activity. This cannot possibly be the correct interpretation of the “sale of a business”. Certainly, there must be a conveyance of some kind from one entity to another.
[39] Frankly, this court agrees with Deputy Judge Freedman that there was no “sale” of “part of a business” from Stock to Voyago. Stock’s contract for this service came to an end. Employees were advised of their termination and an effective date of that termination. The Employee Introduction Agreement that Stock and Voyago entered into was nothing more than what it indicates to be – an introduction by Stock to Voyago of experienced employees. This was not the “transfer of employees from Stock to Voyago” that the Appellant suggests. This was an introduction. It was the decision of Voyago whether to make an offer of employment and the decision of the employee whether to accept that offer of employment.
[40] It is worth noting that both Stock and Voyago appeared to be demonstrating concern with respect to the future employment of these employees. It is unfortunate that, in such circumstances, this has led to litigation.
[41] For all of the foregoing reasons, the appeal is dismissed.
[42] As for costs, the parties advised at the hearing that this issue has been resolved. If for some reason this is not the case, the court strongly encourages the parties to consult with each other and attempt to reach a reasonable agreement. If the parties are unable to agree as to costs, the court will accept written submissions on costs, which shall be no more than two pages in length, excluding supporting documentation, and which shall be provided to the court office, and to Bev.Taylor@ontario.ca, no later than 4:30 p.m. on January 31, 2024.
Christie J.
Released: January 25, 2024