Court File and Parties

COURT FILE NO.: CV-16-546960 DATE: 20170530 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Edward Neil Rowland, Plaintiff – AND – AVL Manufacturing Inc., VDC Manufacturing Inc., Hamilton Metalworks Inc., and ECO-H Technologies Inc., Defendants

BEFORE: E.M. Morgan J.

COUNSEL: Justin Tetreault, for the Plaintiff Richard Simmons, for the Defendants, VDC Manufacturing Inc., Hamilton Metalworks Inc., and ECO-H Technologies Inc.

HEARD: May 30, 2017

Endorsement

[1] The Plaintiff was terminated without notice by his employer on July 31, 2013 after 9 years of employment. He is 53 years old, and his last position with this employer was as Vice President, Project Management, of the Defendant, AVL Manufacturing Inc. (“AVL”). He has brought an action for damages for wrongful dismissal and here seeks summary judgment under Rule 20.01 of the Rules of Civil Procedure.

[2] There is no dispute that the Plaintiff was terminated without notice and is entitled to compensation, although the parties do not agree with each other on the amount of compensation. There is also no dispute about the Plaintiff’s efforts to mitigate his damages; both sides concede that the Plaintiff found new employment, albeit at a lesser salary, two months after his termination.

[3] The issue here is whether all of the Defendants were the Plaintiff’s common employer. The Plaintiff commenced employment with the Defendant, Hamilton Metalworks Inc. (“HMW”) on March 28, 2006. After 6 months, on October 1, 2006, he was transferred to AVL. Since that time, his salary and benefits have always been paid by AVL and his employer for all accounting and tax purposes has been AVL. In 2006, the Plaintiff was issued separate T4’s for the periods in which he was employed by HMW and AVL, respectively. Thereafter, whenever the Plaintiff performed any services for one of AVL’s sister companies – which the Defendants concede happened sporadically – AVL would bill that company for the services.

[4] There is no dispute that the Defendants are all owned by the same shareholders who are members of the same family. There are interlocking directors, and the companies operate out of the same corporate address. Further, they market themselves on their website as the “AVL Group of Companies”.

[5] The Plaintiff contends that they are all one business entity and, for legal purposes, are unified as his common employer. The Defendants contend that they only present themselves as a group for marketing effect, and that for legal purposes they are separate corporate entities and AVL was the Plaintiff’s sole employer.

[6] AVL is insolvent and the action against it has been stayed. The action continues against the other Defendants.

[7] The Plaintiff has sworn an affidavit in which he says that he performed tasks for all of the group of companies, but he speaks in generalities rather than in specifics. In other words, he says that he did things like estimating, quoting, and covering other employees on vacation, but mentions only one project of HMW’s in which he was an actual Project Manager while employed by AVL.

[8] The Defendants’ affiant, Vincent DeCristofaro, concedes that he is a director and officer of each of the Defendants and that they are related companies in the sense that they share common shareholders and directors and are engaged in mutually supporting businesses. He also makes the point, however, that the Defendants are not engaged in the same business as each other, but rather supply separate and distinct services – one is an engineering company that designs manufactured goods, another is a fabrication and welding company that produces manufactured goods, and the other two are marketing companies for different lines of product.

[9] Mr. DeCristofaro also makes the point that although there are one or two employees who are indeed employed by several of the Defendants, the Plaintiff is not one of those employees. He deposes that to the extent that the Plaintiff has ever worked for another of the companies (other than AVL), formal Purchase Orders were issued to the relevant company for his performance of those services.

[10] I note that just as the Defendants market themselves on their website as a “Group of Companies”, the Plaintiff has marketed himself on his C.V. as working for a single company, AVL. In my view, neither of these marketing efforts is significant, as they are not aimed at the issue at hand. The Defendants’ website is targeted at customers, and is not designed to send a message to the Plaintiff or other employees with respect to the corporate identity of their employer. Similarly, the Plaintiff’s C.V. is targeted at prospective employers, and is not designed to make a point about the corporate or group identity of his former employer. These reciprocal marketing efforts are just that – marketing efforts – and should not be taken to reflect the views of either party with respect to the employment relationship.

[11] It is significant that the Defendants have consistently kept a formal distance from each other not just in their corporate legal structures, but in their dealings with the Plaintiff. Whereas the Plaintiff worked for one of the Defendant companies, HMW, for the first 6 months after being hired, that company formally transferred him to AVL, where he continued to work for the rest of his 9 years on the job. Likewise, the Plaintiff himself has conceded that the companies issued invoices and Purchase Orders to each other for services he rendered to companies other than his formal employer, AVL. This documented separation between the Defendant corporations in terms of their responsibility for the Plaintiff militates against their having common control over the Plaintiff as employee: Sinclair v. Dover Engineering Services Ltd., [1987] BCJ No 60, at 181 (BCSC).

[12] In order to establish that two or more legal entities are his common employer, the Plaintiff must demonstrate that he had a reasonable expectation that the Defendants were each a party to his employment contract. “[M]ere allegation of corporate affiliation simpliciter is not sufficient to bring the common employer doctrine into play… Any plaintiff invoking the common employer doctrine must be able to demonstrate on the particular facts of the case that he or she held a reasonable expectation in the circumstances that each of the alleged common employers were parties to the employment arrangement governing that particular employee at all relevant times”: Mazza v. Orange Corporate Services Inc., 2015 ONSC 7785, at paras 85-86, aff’d 2016 ONCA 753.

[13] Where the employee is aware that he was employed by a single employer, the fact of interlocking shareholders with his formal employer does not itself establish a common employer: Dumbrell v. The Regional Group of Companies Inc. (2007), 2007 ONCA 59, 85 OR (3d) 616, at para 83. The onus is on the Plaintiff to demonstrate that there was “effective control over the employee” by all of the alleged common employer companies: Downtown Eatery (1993) Ltd v. Ontario (2001), 54 OR (3d) 161, at para 33 (CA). There must be evidence of an actual “intention to create an employer/employee relationship between the individual and the respective corporations within the group”: Gray v. Standard Trustco Ltd. (1994), 8 CCEL (2d) 46 (Gen. Div.).

[14] The Plaintiff has not succeeded in establishing that there was anything like “a highly integrated or seamless group of companies which together operated” what was effectively one business and one employer: Downtown Eatery, at para 34. An example of such integration would be where one company in the group is the ‘paymaster’ for the others such that it is impossible to say which one is the real employer: Ibid., at para 33. On the evidentiary record before me, it cannot be said that the Defendants “apparently compete for the role of employer”: Sinclair, at 181.

[15] The Plaintiff was an employee of AVL, and on July 31, 2015 was terminated by AVL. His claim for wrongful dismissal or pay in lieu of notice lies against AVL. There is insufficient evidence here to establish that he has any claim at all against the other Defendants.

[16] It is the Plaintiff’s position that this issue can be determined on a summary judgment motion, without a trial. I am inclined to agree. As the Court of Appeal has observed, a “claim for wrongful dismissal without cause…strikes me as the type of case usually amenable to a Rule 20 summary judgment motion”: Arnone v. Best Theatronics Ltd., 2005 ONCA 63, at para 12. This includes cases where the issue on which the matter turns is that of common employer: Dear v. Glamour Designs Ltd., 2015 ONSC 5094.

[17] The Plaintiff’s motion is dismissed.

[18] Counsel for the Defendant has submitted a Costs Outline seeking $5,400 in costs on a partial indemnity basis. This is a reasonable amount. Given that it is roughly half of what the Plaintiff’s Costs Outline indicates he would seek, it is clearly within the range of costs that an unsuccessful party could reasonably expect to pay in relation to this type of motion: Rule 57.01(1)(0.b).

[19] The Plaintiff shall pay the Defendant $5,400 in costs, inclusive of fees, disbursements, and HST.

Morgan J. Date: May 30, 2017