Overview

[1] The plaintiff, Sandra Manthadi, seeks damages from the defendant, ASCO Manufacturing (“ASCO”) for the alleged wrongful dismissal from her employment. She commenced this proceeding under the simplified procedure rules pursuant to rule 76 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (“Rules”).

[2] Ms. Manthadi is 69 years of age. She commenced working for 63732 Ontario Limited, o/a ASCO Manufacturing Limited (“637”), a company that manufactured tables and desks, as a blaze welder on February 7, 1981. 637 carried on business in Toronto and was owned by Mr. Israel Friedman. On November 1, 2017, 2603420 Ontario Inc. (“260”), purchased all of 637’s tangible and intangible assets, excluding accounts payable and accounts receivable. The transaction closed on November 3, 2017. 260 also purchased the name “ASCO” from 637; in these reasons, when I refer to ASCO, I am referring to the defendant. Mr. Dindar Singh is the owner and manager of ASCO.

[3] Ms. Manthadi claims that she was offered and accepted continued employment with ASCO as a blaze welder on November 6, 2017 when it purchased 637 as a going concern. She seeks damages for her wrongful termination as she was not given any notice when she was terminated by ASCO on December 13, 2017. ASCO denies these assertions and says that it only purchased the assets of 637 and offered Ms. Manthadi temporary employment with ASCO on a fixed term contract to work as a general labourer to assist with moving the assets it purchased from 637 to its place of business in Brampton. Her employment ended when that work was complete.

[4] On June 26, 2019, Justice Fowler Byrne heard Ms. Manthadi’s summary judgment motion. Justice Fowler Byrne relied on s. 9(1) of the Employment Standards Act, 2000, S.O. 2000, c. 41 (“ESA”) and found that Ms. Manthadi’s employment was continuous, that she was entitled to notice, and that her 36 years of service with 637 should be considered when assessing damages. ASCO was ordered to pay damages of $66,391.40 for her wrongful dismissal: 2019 ONSC 5572. ASCO successfully appealed and on July 29, 2020, the Court of Appeal for Ontario set aside the summary judgment and ordered the matter to proceed to trial: 2020 ONCA 485. The Court found that the motions judge erred in applying s. 9(1) of the ESA and discussed the common law’s approach to reasonable notice by a successor employer.

[5] Pursuant to the Rules, the affidavits of Ms. Manthadi and Mr. Singh were filed as their evidence in chief; they were both cross-examined on those affidavits. No other affidavits were filed from other witnesses. As I will discuss in these reasons, the lack of evidence from other witnesses is problematic as both parties rely on inadmissible hearsay evidence in support of their respective positions. The inadmissible hearsay evidence is not on peripheral issues but on matters that go to the core of the dispute.

[6] Prior to trial, the following admissions were made by ASCO in response to a Request to Admit:

• ASCO purchased the assets of 637 pursuant to an Agreement of Purchase and Sale dated November 1, 2017 that was executed on November 3, 2017 (the “Purchase Agreement”).

• Ms. Manthadi was not a party to the Purchase Agreement.

• ASCO did not provide Ms. Manthadi with a copy of the Purchase Agreement.

• Ms. Manthadi was not provided with a written contract of employment from ASCO.

• Ms. Manthadi was not interviewed by ASCO before she began working for ASCO.

• Ms. Manthadi did not sign any document regarding the continuity of her service between 637 and ASCO.

• There is no correspondence between ASCO and Ms. Manthadi regarding the continuity of her service between 637 and ASCO.

• There was no lay-off period between Ms. Manthadi’s employment with 637 and with ASCO.

• Ms. Manthadi entered into a Settlement and Release Agreement with 637 (the “Release Agreement”) regarding the termination of her employment with 637; ASCO was not a party to the agreement, was not involved in any discussions about it, nor did it negotiate any term of it.

• On December 13, 2017, ASCO advised Ms. Manthadi that she was being laid off with an unknown date of recall.

• ASCO did not recall Ms. Manthadi back to work and, on February 9, 2018, issued a Record of Employment for Ms. Manthadi advising that the reason her employment was terminated was a “shortage of work/end of contract or season”.

• Ms. Manthadi has not worked for ASCO since December 13, 2017.

[7] For the reasons that follow, I find that Ms. Manthadi is entitled to reasonable notice of 12 months.

Issues

[8] The issues to be determined are as follows:

a) Does the Release Agreement Ms. Manthadi signed releasing 637 from any claims arising from the cessation of her employment bar her from seeking damages from ASCO?

b) If Ms. Manthadi is not barred from seeking damages from ASCO, was she hired by ASCO to work on a temporary or indefinite basis?

c) If Ms. Manthadi was hired on an indefinite basis, can her prior years of service with 637 be considered in determining what notice she is entitled to from ASCO?

d) Did ASCO purchase 637 as a going concern?

e) If Ms. Manthadi is entitled to notice, can mitigation be argued if it was not pled by ASCO in its statement of defence and if so, was there a failure to mitigate?

f) What, if any, notice was Ms. Manthadi entitled to when her employment with ASCO was terminated?

Position of the Parties

[9] Ms. Manthadi’s position with respect to the issues to be determined is as follows:

a) The finding by the Court of Appeal for Ontario that the Release Agreement does not bar Ms. Manthadi from bringing this claim against ASCO is a binding determination of law and the issue is res judicata.

b) Ms. Manthadi was hired on an indefinite basis as a blaze welder by ASCO and not on a short-term fixed contract as a general labourer; the onus is on ASCO to prove, unambiguously, that she was hired on a fixed term basis.

c) ASCO purchased 637 as a going concern. After the purchase was completed, her employment continued with ASCO with no break in her years of service.

d) As ASCO told Ms. Manthadi that her 36 years of service with 637 would be recognized, those years should be considered when determining damages for her wrongful termination from ASCO.

e) As mitigation was not pled by ASCO, it cannot argue that Ms. Manthadi failed to take steps to mitigate her damages.

f) She is entitled to notice of 24 months.

[10] ASCO’s position is as follows:

a) The finding by the Court of Appeal for Ontario that the Release Agreement does not bar Ms. Manthadi from claiming damages from ASCO is not binding.

b) The Release Agreement signed by Ms. Manthadi bars her from bringing this claim against ASCO. Although ASCO was not named in the agreement, the common law exception to the doctrine of privity of contract applies.

c) ASCO did not purchase 637 as a going concern. ASCO only purchased 637’s assets; it did not intend to, nor did it hire any 637 employees other than on a fixed term basis as general labourers to move the purchased assets. It was a term of the purchase that 637 terminate its employees and pay them severance.

d) Ms. Manthadi’s employment as a blaze welder did not continue when ASCO purchased the assets from 637; she was hired by ASCO as a general labourer for a fixed term for the limited task of packing and unpacking the purchased assets. Her employment was terminated when that work was complete.

e) In the alternative, if there is a finding that ASCO hired Ms. Manthadi for an indefinite period and that it purchased 637 as a going concern, her prior years of service with 637 should not be considered when assessing a reasonable notice period when her employment was terminated. The terms of Ms. Manthadi’s employment with ASCO as a general labourer were substantially different from her work as a blaze welder with 637 and ASCO received no benefit from her skill as a blaze welder.

f) While failure to mitigate was not pled, Ms. Manthadi addressed the issue in her trial affidavit, and she was questioned about it at examinations for discovery. She is therefore aware that ASCO is relying on a failure to mitigate as part of its defence and therefore suffers no prejudice.

g) As part of her mitigation efforts, Ms. Manthadi ought to have pursued a claim against 637 to set aside the Release Agreement rather than seek damages from ASCO.

Preliminary Comments Regarding Inadmissible Evidence

a) The Affidavits

[11] Before I review the evidence, I will comment on the inadmissible hearsay evidence in both Mr. Singh’s and Ms. Manthadi’s affidavits that is not admissible for the truth.

[12] In paragraph 10 of Ms. Manthadi’s affidavit, she deposes that on September 28, 2017, she was advised by 637 that the company was being sold and that she would be offered “continued employment with the purchaser, ASCO Manufacturing”. She did not identify who told her that she would be offered continued employment nor was any evidence led from any person at 637 who told her about this continued employment. This is hearsay evidence that is not admissible for its truth.

[13] In paragraph 12 of Ms. Manthadi’s affidavit, she deposes that on or about November 6, 2017, she was offered and accepted continued employment with ASCO on an indefinite basis. She did not identify who offered her the continued employment and it was only during her cross-examination that she testified that it was Mr. Singh who made this offer to her. This was evidence that ought to have been included in her affidavit.

[14] Mr. Singh’s affidavit is more problematic. It is replete with hearsay evidence, improper legal argument and evidence that is not within his direct knowledge.

[15] I will start with a review of the evidence that presumably came from Ms. Manthadi’s examination for discovery or though this litigation and was therefore not evidence within his direct knowledge and should not have been included in his affidavit.

[16] Paragraphs 1 to 3 of Mr. Singh’s affidavit discuss Ms. Manthadi’s personal details such as where she was born, when she moved to Canada, how and when she started to work for 637 and her lack of training as a welder. While none of this evidence is in dispute, it is not evidence that Mr. Singh would have been permitted to testify about had he given viva voce evidence as it is not evidence based on his direct knowledge. The proper way that evidence ought to have been introduced was to read it in from the transcript of Ms. Manthadi’s examination for discovery or by way of cross-examination of Ms. Manthadi, as was done by ASCO’s counsel.

[17] In paragraph 36, Mr. Singh describes Ms. Manthadi’s work duties at 637. He agreed when cross-examined that the entirety of paragraph 36 was not within his direct knowledge but was evidence obtained through this litigation. Again, this was not proper evidence to include in his affidavit.

[18] I will now turn to the hearsay evidence in Mr. Singh’s affidavit that is inadmissible for its truth.

[19] In paragraph 5, Mr. Singh gives evidence about what Ms. Manthadi was told by Mr. Friedman about the sale of 637. He deposes that Ms. Manthadi was told her employment was being terminated in November 2017, but he does not state who told her that. He also deposes that Ms. Manthadi was advised that she should have her own independent legal advice to review an employment termination agreement given to her by 637 but he does not identify the source of that information. His evidence is that Ms. Manthadi retained the same lawyers who currently represent her in this litigation.

[20] This paragraph contains inadmissible hearsay as Mr. Singh is giving evidence about what Mr. Friedman told Ms. Manthadi. His comment about her current legal representation is irrelevant to the issues in dispute. I have therefore not considered the contents of this paragraph.

[21] In paragraph 25, Mr. Singh deposes that Mr. Friedman suggested to him that ASCO hire some of the “recently terminated 637 employees” as general labour to pack the assets it purchased rather than hiring workers through an employment agency to do that work. Mr. Singh also deposes that Mr. Friedman explained that using 637 employees to help with the move would be more efficient given their knowledge of the equipment and machinery. Mr. Friedman did not file an affidavit or present any evidence during this trial. Thus, Mr. Singh’s evidence about what Mr. Friedman told him is hearsay and inadmissible for the truth.

[22] In paragraph 26, Mr. Singh deposes that Mr. Friedman told “the former 637 employees about the new and fixed nature of their employment with the Defendant.” Mr. Singh’s evidence is that he relied on those representations and believed that any former 637 employee ASCO hired to help with the move knew they were hired on a temporary basis. In the absence of any evidence from Mr. Friedman, what Mr. Friedman told the employees is hearsay and inadmissible for the truth.

[23] Mr. Singh’s affidavit also contained several paragraphs that are legal submissions and not evidence. There are sentences that start with “the deponent submits…” which is a good indication that what follows is not evidence.

[24] Paragraph 9 is argument that Ms. Manthadi ought to have commenced an action against 637 in connection with the Release Agreement she signed with 637. This is not evidence but rather a legal argument and I have not considered it as evidence in reaching my decision.

[25] In paragraph 20, Mr. Singh states that Ms. Manthadi has led no evidence that she was offered continued employment with ASCO on an indefinite basis. In paragraph 21 Mr. Singh argues that even if Mr. Friedman told Ms. Manthadi that she had continued indefinite employment with ASCO, that does not bind ASCO. These are legal submissions and not evidence and should not have been in Mr. Singh’s affidavit.

[26] In paragraphs 48-49, he discusses issues surrounding Ms. Manthadi’s legal representation. He raises this issue again in paragraphs 54-55, alleging that Ms. Manthadi “has sued the wrong party for wrongful dismissal” and that she should be more concerned with issues about her own legal representation and the legal advice she received. Mr. Singh is not a lawyer. These irrelevant assertions should not have been included as evidence in his affidavit.

[27] When affidavits of witnesses are filed for summary trials as evidence in chief, the same rules of evidence apply as if the party was testifying in person. I would have entertained a motion to strike several paragraphs from Mr. Singh’s affidavit but was not asked to do so. Nonetheless, I have not considered any of the hearsay evidence in Mr. Singh’s affidavit for its truth nor any of the legal arguments presented in the guise of evidence nor the irrelevant assertions.

[28] For future matters, counsel must prepare proper trial affidavits that should only contain the deponent’s direct evidence and not hearsay or legal argument.

b) The Viva Voce Evidence

[29] Ms. Manthadi was cross-examined about a meeting with all 637 employees and what Mr. Friedman said at that meeting about the sale of the business and the nature of their employment with ASCO. She testified that Mr. Friedman told the 637 employees that the business had been sold and was moving from Toronto to Brampton. She also testified that Mr. Friedman told the employees that if they worked for the new owner they would be working under the same conditions, everything would be the same, that they had nothing to be afraid of, their employment would continue, and their years of service would be recognized.

[30] As Mr. Friedman did not give any evidence at this trial, the evidence of what he said at this meeting is hearsay evidence that is not admissible for its truth.

[31] Ms. Manthadi was also cross-examined about conversations she had with “Mr. Ken”, her supervisor at ASCO. “Mr. Ken” is Ken Abaimdun who was employed with ASCO. Ms. Manthadi testified that she was told by “Mr. Ken” that ASCO was closing for a week in December to set up welding stations in Brampton where she would continue to work as a welder.

[32] As Mr. Abaimdun did not give evidence during this trial, Ms. Manthadi’s evidence of what he told her is inadmissible hearsay evidence that cannot be admitted for the truth.

[33] When Mr. Singh was cross-examined, he testified about what he heard Mr. Friedman tell the 637 employees about the nature of their employment with ASCO at a meeting he attended. He testified that at this meeting Mr. Friedman told the 637 employees that they were being hired on a temporary basis by ASCO to do general labour work to pack and unpack the purchased assets for the move to ASCO’s place of business in Brampton. Mr. Singh testified that he relied on what Mr. Friedman told the employees regarding their temporary employment at ASCO.

[34] Mr. Singh also testified that it was Mr. Friedman who suggested to him that ASCO hire 637 employees to pack and unpack the purchased assets as they could do it more efficiently as they were familiar with the equipment and machinery.

[35] As Mr. Friedman did not give evidence at this trial, Mr. Singh’s evidence of what he heard Mr. Friedman say at the meeting and what Mr. Freidman told him is inadmissible for the truth.

[36] The Court of Appeal for Ontario found that one of the issues in dispute which required a trial to resolve was whether Ms. Manthadi was hired by ASCO on an indefinite or fixed term basis. As both parties testified that Mr. Friedman told the 637 employees something that supports their respective positions and that they relied on what Mr. Friedman said, it is concerning that neither party led evidence from Mr. Friedman.

Review of the Admissible Evidence

[37] As much of the evidence relates to more than one of the issues, I will start with a review of the evidence before addressing each of the issues that must be resolved. I will also make credibility and reliability findings for both witnesses as there is conflicting evidence on one of the main issues in dispute: what Mr. Singh said or did not say to Ms. Manthadi regarding ASCO’s offer of employment. A resolution of that evidentiary dispute is relevant in determining whether Ms. Manthadi was entitled to notice when she was terminated by ASCO.

a) Ms. Manthadi’s Employment with 637

[38] Ms. Manthadi moved to Canada from Guyana in 1980. She attended high school in Guyana. In 1981 she found employment at 637 (then known as ASCO Manufacturing Limited) and worked there continuously for 36 years as a blaze welder. She received on-the-job training for that position. She does not have any formal training or certification as a blaze welder. She is not trained to do any other type of welding. She has not had any other employment since moving to Canada.

[39] When she was cross-examined, Ms. Manthadi explained that blaze welding is different from arc welding. She described it as a softer kind of welding. She agreed that she had a designated blaze welding station at 637.

[40] In 2016 Ms. Manthadi earned $39,384.84. In 2017, while working for ASCO, she was paid $18.64 per hour and worked, on average, 44 hours per week.

[41] Ms. Manthadi’s paystubs from 637 for the period of April 25, 2016 to September 25, 2017 confirm that she was paid $18.43 per hour. Her employer’s name on those paystubs was ASCO Manufacturing Limited (meaning 637). There was no description of the nature of her employment on the paystubs.

b) The Settlement and Release Agreement

[42] According to Ms. Manthadi, on or about September 28, 2017, she learned that 637 was being sold and that she would be offered continued employment with the purchaser. Her evidence was that she was given a Release Agreement to sign that had the date of September 28, 2017 written on the second page. She deposed that while the Release Agreement was dated September 28, 2017, she did not sign it until after she accepted continued employment with ASCO on November 6, 2017.

[43] Ms. Manthadi was cross-examined about a second Release Agreement dated November 30, 2017 that was attached to a letter dated December 8, 2017 from her lawyer to 637’s lawyer. That agreement was signed by Ms. Manthadi but not by Mr. Friedman.

[44] The terms of both Release Agreements are the same except for the date on the second page and the termination date of Ms. Manthadi’s employment on the first page. The relevant terms of the agreement are as follows:

WHEREBY The following terms set out the Agreement between Manthadi, Sandra (hereinafter referred to as the Employee) and ASCO MANUFACTURING LIMITED (hereinafter referred to as “Asco”) in connection with the cessation of his employment effective the close of business November 6, 2017 (the “Termination Date”).

Severance/Termination Pay. Asco hereby pays to the Employee the sum of $5,900 less required statutory deductions representing 8 weeks gross compensation in full satisfaction of all claims, causes of action or demands including all severance pay, termination pay or other compensation howsoever arising to which the Employee would otherwise be entitled.

Written Notice. The Employee hereby acknowledges receipt of written notice delivered as of or before the date hereof proving him/her with written notice of the termination of his/her employment.

Salary Compensation. Asco will continue to pay the Employee his/her usual compensation less statutory deductions from the date hereof up to and including the Termination Date in addition to the compensation referred to in paragraph 1 hereof.

Vacation Pay. Asco has paid or will pay the Employee all vacation pays owing and accrued up to and including the Termination Date.

Independent Legal Advice. The Employee has been instructed by Asco to seek independent legal advice as this document has significant legal implications. Notwithstanding the encouragement of Asco to do so the undersigned has acknowledged that he/she understands and is fully satisfied with the terms of this settlement and is signing this Settlement and Release Agreement notwithstanding their absence of independent legal advice.

Release. In consideration of the foregoing and by the Employee accepting these arrangement, the Employee hereby releases and forever discharges Asco, its officers and Directors, and its subsidiaries and affiliates, their employees and representatives, of and from all manner of actions, causes of action, suits, debts, accounts, covenants, contracts, claims and demands whatsoever which Asco has had, now has or which his legal personal representatives, heirs, executors, administrators or assigns or any of them, hereafter can, shall or may have against Asco, its officers and directors and its subsidiaries and affiliates, their employees and representatives, for or by reason of any cause, matter or thing whatsoever in connection with the Employee’s employment with Asco, including without limitation the cessation of such employment. (Emphasis added.)

[45] Ms. Manthadi testified that she accepted $5,900 from 637 and signed the Release Agreement after she accepted employment with ASCO and that when she signed the Release Agreement, she believed that her prior 36 years of service would be recognized by ASCO. She agreed that when she accepted $5,900 from 637, it was compensation for her years of service at 637.

[46] When she was cross-examined, Ms. Manthadi’s evidence was that the first time she was told about a Release Agreement was by a secretary at 637, after the company was sold. Her evidence in chief, however, was that she was given it on September 28, 2017, which was before 637 was sold; the sale to ASCO did not close until November 3, 2017. Ms. Manthadi could not recall if she saw the agreement before or after a general meeting that she testified all 637 employees, Mr. Singh, Mr. Friedman and Mr. Abaimdun attended after the company was sold. She could not recall the date that meeting occurred.

[47] Ms. Manthadi identified her signature on both Release Agreements. The agreement dated September 28, 2017 was also signed by Mr. Friedman, and there was a signature of a witness. The date of termination of her employment in that agreement was November 24, 2017. In the agreement dated November 20, 2017, the date of termination of her employment was November 6, 2017.

[48] When she was cross-examined about the two Release Agreements, Ms. Manthadi’s evidence was that she recalled signing only one although she agreed it was her signature on both. She did not know why there were two Release Agreements with different dates, with her signature on both. She testified that she signed the Release Agreement dated November 30, 2017 at 637’s premises in Toronto and that a secretary was present as a witness; she recognized the secretary’s signature as the witness on that agreement. She denied that her lawyer was present when she signed it. She did not recall her lawyer explaining the terms of the Release Agreement to her.

[49] When the summary judgment motion was argued, the only Release Agreement in evidence was the agreement dated September 28, 2017. According to the reasons of Justice Fowler Byrne, Ms. Manthadi’s evidence was that she did not sign that agreement until late November 2017, after she accepted continued employment with ASCO and the date “September 28, 2017” was already written on the agreement when she signed it. This was also her evidence in chief at trial.

[50] The Court of Appeal accepted the Release Agreement dated November 30, 2017 as fresh evidence when it heard the appeal of the summary judgment motion but found nothing turned on there being two Release Agreements.

[51] It is not clear to me why the Release Agreement dated November 30, 2017 was not part of the evidentiary record when the summary judgment motion was argued.

[52] Mr. Singh’s evidence when he was cross-examined was that he was not aware that Ms. Manthadi signed a Release Agreement until this litigation was commenced. He agreed that Ms. Manthadi did not sign an agreement releasing ASCO from any claims regarding the cessation of her employment.

c) The Purchase of 637

[53] ASCO entered into an agreement with 637 on November 1, 2017 to purchase its assets and name for $500,000 (the “Purchase Agreement”). The transaction closed on November 3, 2017. The relevant terms of the agreement are as follows:

AGREEMENT FOR THE SALE OF ASSETS AND NAME OF THE BUSINESS ASCO MANUFACTURING LIMITED LOCATED AT 66 Eddystone Ave ., Toronto, Ontario

This Agreement of Purchase and Sale dated November 1st, 2017

2603420 ONTARIO INC. (herein after Buyer)

Between

ASCO MANUFACTURING LIMITED (herein after Seller)

Subject to the satisfaction of the conditions described in this Agreement, at the closing of the Transaction which Is scheduled to complete on November 3rd, 2017. (the closing date), Buyer 2603420 ONTARIO INC ., agree to purchase and the Seller agree to sell all of the property and assets (excludes accounts receivable and accounts payable as to completion) used in connection with or otherwise relating to the Business as a going concern, whether real or personal, tangible or intangible, and wheresoever situate, Including, without limitation, all chattels, fixtures, goods, Inventory, goodwill, intellectual property (including, without limitation, the domain name, email addresses, telephone and fax numbers, the trade name "ASCO MANUFACTURING" and all assets listed in Schedule A of Agreement of Purchase and Sale and all other trademarks and trade names of the Seller related to the Business, equipment, Material Contracts, Business Orders in progress and on hand not completed and shipped to customers, furniture, designs, occupational licenses, customer list, supplier list. equipment, stock, tools and any Item used In the course of the Business known as ASCO MANUFACTURING LIMITED located at 66 Eddystone Ave., Toronto, Ontario, Canada, M3N 1H4 for the Purchase Price of $500,000cnd.

Schedule: A attached hereto form(s) part of the Agreement.

Payment of the Purchase Price:

As agreed between the parties the Seller allowed the purchaser to use or operate the assets of business at Seller's location 66 Eddystone Ave., Toronto, Ontario, Canada, M3N 1H4 to run the business from the completion date to November 29th, 2017, without any payment of rent, utilities etc. On the 29th day November, 2017 Buyer will move the assets of the Business purchased to new location at Buyer's expense and provide the vacant possession to the Seller and leave it in broom swept condition.

Financial Statement:

The Seller will provide recent 3 years Financial Statements to the Buyer for Its review, Tax Return filed 2015 and 2016 and GST/HST returned filed 2015-2016 and as of completion date. Proof all due of income taxes and GST/HST accounts are paid in full and up-to-date.

Business Licences:

The Seller holds all proper licenses, permits and authorities as may be required by any Regulatory Authority having jurisdiction over to carry on the Business, and all such licenses, permits and authorities are valid, subsisting and in good standing, without violations, and there are no outstanding work orders, by-law violations or deficiency notices outstanding with respect to the Business. The Seller shall provide a copy of all such licenses and agree to sign all the documents as required to transfer those licenses to the new buyers upon acceptance or upon request by buyer after completion at no further costs.

Non Competition:

Seller and Israel Friedman or Jay Friedman, the any officer, director, partner, shareholder of Seller jointly and severally covenant not to carry on or be engaged in or concerned with (elther directly or indirectly in any manner whatsoever) any business competitive with or similar to the Business as presently carried on by Seller at any time In future. Except, Jay Friedman will enter into a consulting agreement on closing with the Purchaser. Jay will act as a consultant for the Purchaser and provide consulting services for up to 30-40 hours per week at a compensation of $1,200.00 per week plus HST for a period of 6 months from the date of closing. Israel Friedman in light of his advance age will use his best efforts to make himself available from time to time without any compensation for a period of 90 days from the date of completion.

Seller's Debts and Other liabilities:

Purchaser is not assuming any of Seller's debts or all other liabilities including but not limited to tax, GST/HST, RST, Accounts Payable, Accounts Receivable, Income tax, payroll taxes etc. Seller will pay all debts and other liabilities of the business of whatever kind, whether now known or unknown , that are or may become a lien on the assets being purchased by Purchaser.

Seller's Representations and Warranties:

H. "Seller represents and warrants that it has provided notice of termination to all employees of the business which paid each of them severance pay of one week per year up to 8 weeks. The Seller shall pay all salaries, termination package, severance pay and payroll remittances, wages, vacation pay and benefits in addition to the said severance pay up to and including the Date of Closing." Seller further represents and warrants that there are no outstanding disputes, actions, claims, grievances, court proceedings, human rights issues, government applications or investigations with respect to any employee of the Business. If in case Buyer seeks to retained any of the employees of Seller, the selection will be done on Interview basis with a sole and absolute discretion of Buyer.

J. Seller will Indemnify, defend, and save Purchaser harmless from and against any financial loss, legal liability, damages or expenses arising from any breach of the above representations and warranties.

k. Seller and Israel Friedman or Jay Friedman, the any officer, director, partner, shareholder of Seller jointly and severally covenant not to carry on or be engaged in or concerned with (either directly or indirectly in any manner whatsoever) any business competitive with or similar to the Business as presently carried on by Seller.

m. The Seller and Purchaser represent and warrant and agree that the Purchaser will not be taking any liabilities of the Seller or Seller Business. The Seller's account receivable and payable as of the day of closing will remains the Seller's Property, Purchaser has no responsibility for collecting and paying those accounts on behalf of Seller. The Seller Indemnify and save harmless the Buyer and Its' officers, directors, shareholders from and against all liabilities and claims and demands In connection with the Purchases Assets, accounts and or Business of the Seller.

[54] Mr. Singh testified that the Purchase Agreement reflected ASCO’s intention to purchase only 637’s assets and name. Mr. Singh’s evidence is that when ASCO purchased 637’s assets, he owned MG Manufacturing Ltd, a business that manufactured furniture in Brampton. As that business had an existing building, machinery and employees in Brampton, where the purchased assets were moved, ASCO did not purchase 637’s building in Toronto nor did it intend to hire 637’s employees. It was also his evidence that ASCO told 637 to terminate its employees as ASCO did not intend to hire them as it had an existing workforce.

[55] Mr. Singh’s evidence was that ASCO wanted to purchase 637 assets as it was a good deal, and the assets could be used to grow the business in the future.

[56] Mr. Singh’s evidence was that the warranties given by 637 in the Purchase Agreement, including the warranty regarding terminating all 637 employees, were important to ASCO and reflected the intention of the parties that ASCO was only acquiring the assets and business name of 637 and did not intend to hire any of the existing employees.

[57] During cross-examination, Mr. Singh testified that when ASCO purchased 637, it continued to make the same products that 637 manufactured, under ASCO’s name. He agreed that when ASCO bought 637, it intended to continue the business and make the same products – tables and desks – in addition to other furniture MG Manufacturing Ltd. manufactured at the same location in in Brampton.

d) The Offer of Employment to Ms. Manthadi

[58] It is not disputed that after the transaction closed, twenty of 637’s employees, including Ms. Manthadi, became employees of ASCO. No evidence was led if this was all or only a fraction of all 637 employees.

[59] Ms. Manthadi’s evidence in chief was vague about the offer of employment from ASCO. She deposed that on or about November 6, 2017, she was offered and accepted continued employment as a blaze welder with ASCO on an indefinite basis. She did not give any evidence in chief about who made her this offer.

[60] It is agreed that Ms. Manthadi was not asked to submit a resume, nor was she interviewed, before she started to work for ASCO, and that there was no written agreement between the parties regarding her employment with ASCO.

[61] Ms. Manthadi deposed in her affidavit that she was not told that her employment with ASCO was temporary or that her years of service with 637 would not be recognized by ASCO. Her evidence was that she understood that her employment with 637 would continue with ASCO and that her years of service would be recognized.

[62] Ms. Manthadi was cross-examined about this offer and acceptance of employment with ASCO. She testified that Mr. Singh attended a meeting with all 637 employees at the plant in Toronto; she could not recall the exact date of this meeting, but it was after 637 was sold. Mr. Friedman and Mr. Abaimdun, whom she referred to as “Mr. Ken”, were also present. She testified that Mr. Friedman spoke first to the employees, followed by Mr. Singh. Her evidence when cross-examined was that Mr. Singh told the 637 employees at this meeting that he was willing to accept anyone who wanted to work for him, under the same conditions and doing their same job, at a new location in Brampton, and that their years of service would be recognized. She testified that she accepted the offer to work for Mr. Singh as she needed a job. I presume this meeting occurred on or about November 6, 2017 as that is the date Ms. Manthadi and Mr. Singh agree that Ms. Manthadi was offered and accepted employment with ASCO. The core of the dispute is the nature of the employment offered to her.

[63] Ms. Manthadi denied that Mr. Singh said that ASCO’s offer for employment was temporary and was limited to moving the purchased assets from Toronto to Brampton and that her employment would end when the move was completed.

[64] Mr. Singh testified that he attended a meeting at 637 with the employees and that Mr. Friedman and Mr. Abaimdun were present. He denies saying anything at this meeting, or at any time, to Ms. Manthadi about her employment with ASCO but relied on what Mr. Friedman said to all 637 employees at that meeting.

[65] According to Mr. Singh, on November 6, 2017, ASCO hired Ms. Manthadi on a temporary basis for general labour work to pack and then unpack the purchased assets; this was the offer conveyed by Mr. Friedman. He did not convey this offer to Ms. Manthadi. According to Mr. Singh, ASCO was going to hire labourers from an employment agency to do this work, but he decided to offer the work to the 637 employees, including Ms. Manthadi. It was also Mr. Singh’s evidence that he thought it was a reasonable gesture to offer short term work to the 637 employees while they looked for other jobs.

[66] Mr. Singh’s evidence was that MG Manufacturing Ltd. had an existing workforce that was sufficient for its level of production and thus ASCO did not need to hire any 637 employees other than on a temporary basis to move the purchased assets. It was also his evidence that he did not hire Ms. Manthadi as a welder as ASCO was not in need of a blaze welder as ASCO does not use that type of welding in its manufacturing process. His evidence was that Ms. Manthadi’s experience as a welder was therefore immaterial to ASCO.

[67] He agreed on cross-examination that when ASCO hired Ms. Manthadi, he was unaware of Ms. Manthadi’s training or experience as a welder and only learned that she was a blaze welder during this litigation.

[68] According to the admissible evidence from Mr. Singh, he did not tell Ms. Manthadi, either orally or in writing, that she was being hired by ASCO as a welder on an indefinite basis and that her years of service with 637 would be recognized. According to his admissible evidence, he did not tell Ms. Manthadi, either orally or in writing, that she was only being hired on a short-term basis as a general labourer and that her employment would end when the move from Toronto to Brampton was completed.

e) Working for ASCO

[69] Ms. Manthadi deposed that she worked continuously for ASCO as a welder, working the same number of hours and earning the same hourly rate of pay, until she was terminated on December 13, 2017.

[70] When Ms. Manthadi was cross-examined, she testified that commencing November 6, 2017, she continued to work as a blaze welder at the Toronto location for the first week after 637 was sold. She agreed that the work was for existing 637 orders. During the second week, her work was split between welding and packing the purchased assets. During the third week, she was only packing. Her evidence was that all former 637 employees were doing the packing work to get ready to move to Brampton. She testified that when she moved to Brampton, she worked unpacking the purchased assets. She did not do any welding and there was no welding station for her in Brampton. Her evidence was that she understood that she would eventually be doing welding work for ASCO in Brampton.

[71] Ms. Manthadi’s paystubs from ASCO for the period of November 5, 2017 to December 20, 2017 indicate that her hourly rate of pay was $18.43, the same as it was with 637. She worked the same number of hours per week. The name of the employer on those paystubs is ASCO Manufacturing; the address is the Brampton location. Her occupation was described on the paystubs as “general help”.

[72] While Ms. Manthadi’s hourly wage was unchanged, Mr. Singh deposed that Ms. Manthadi’s vacation pay was reduced from 6% to 4% as she was a new employee with less than five years of employment. Ms. Manthadi was not asked if she was aware of this change in vacation pay.

[73] According to Ms. Manthadi, on or about December 4, 2017, she received a letter from ASCO stating that it was shutting down from December 4 to December 9 while it moved to 197 Advance Blvd. in Brampton and would be resuming work on December 11. This letter was addressed “Dear Employees” and was from “Management”. The letter asked for the employees’ phone numbers and directed them to contact “Mr. Ken” if they had any questions.

[74] According to Ms. Manthadi, she was not called to return to work on December 11, 2017. On December 13, 2017 she was told that she was being placed on a temporary layoff.

[75] Ms. Manthadi exchanged some texts with Mr. Abaimdun after December 13, 2017. She first texted him on December 17, 2017 and asked if she was returning to work on December 18, 2017. She received a text in response from Mr. Abaimdun on December 17, 2017 saying “no, not Monday”, and that he would let her know when. Ms. Manthadi texted Mr. Abaimdun on December 26, 2017 saying she was hoping to hear from him about when she was to return to work. There was no response. She texted Mr. Abaimdun a third time on January 1, 2018 saying she was hoping for a response about when she should return to work. Again, there was no response.

[76] Ms. Manthadi recalled receiving a Record of Employment (“ROE”) from ASCO. According to the ROE, her first day worked was November 6, 2017 and the last was December 13, 2017. It described her work as “general helper”. The ROE also said that the reason for termination of her work was “shortage of work/end contract or season” and the expected date of recall was unknown.

[77] In support of her claim that she was not told when she was offered employment with ASCO that she would be terminated when the move was complete, a portion of the transcript from the examination for discovery of Mr. Singh conducted on December 15, 2020 was read in as follows:

110 Q. What did you tell these employees when you hired them?

A. We did not tell them anything. We had them work to for us because at Mr. Friedman’s behest. Otherwise, we were going to hire people from an agency.

111 Q. Okay. So if you didn't tell them anything, I gather you didn't tell them when their employment was going to end?

A. When their work was finished, when the moving was finished because they were only hired for the moving purposes.

112 Q. Sir, you just told me didn't tell them anything.

A. We did not tell them anything, but when the moving was finished, we told them that the moving is finished and that's it.

113 Q. I see. So you didn't tell them until it was time for their employment to end? You didn't tell them ahead of time; is that right?

A. Mr. Friedman may have told them that you'll be done when the moving is finished. We did not tell them anything. We -- once the moving was finished, we told them that moving is finished and that's it, they can leave.

114 Q. Now, you didn't check with Mr. Friedman to see if he told them ahead of time, did you?

A. No.

115 Q. Okay. So will you agree with me, sir, that none of these employees would have known when their employment was going to end until the day that you actually told them it was going to end?

A. No, we -- they knew. We all knew that the moving is finished and their work is finished too.

116 Q. How did they know that?

A. Because when all the assets were moved and placed at the new place, they knew that their work is finished.

117 Q. Okay. But they didn't know that until the assets were actually moved and you told them that work was finished; right?

A. Yes.

[78] When he was cross-examined, Mr. Singh could not recall if the first time he told Ms. Manthadi her employment was temporary was when she was laid off.

[79] According to Mr. Singh, each of the twenty former 637 employees ASCO hired were employed with 637 as welders, wood workers or press operators. None of these employees was offered their same work at ASCO. Rather, each was hired as a general labourer on a temporary basis and did work associated with moving the purchased assets. Each of the former 637 employees was laid off or quit and were given ROEs that were filed as evidence. If laid off, the reason on each ROE was “shortage of work/end of contract or season”. The start date of work for all but two of the employees was November 6, 2017. Each ROE has a different last day worked but none was after December 15, 2017. In each ROE, the employee’s occupation at ASCO was described as “general help”.

[80] Mr. Singh’s evidence was that all 637 employees were given the notice that Ms. Manthadi received informing them that ASCO would be shutting down from December 4 to 9 and returning on December 11, 2017. His evidence was that the reason for the closure was because several of the assets purchased from 637 were defective or unusable and the closure was necessary to determine the extent of the defective equipment and machinery and to address this with 637.

[81] Mr. Singh’s evidence was that ASCO had no plans to set up a welding station for Ms. Manthadi at the warehouse in Brampton and none was ever set up.

[82] On cross-examination, Mr. Singh testified that ASCO was not doing any manufacturing in Brampton when it employed Ms. Manthadi and the work only involved transferring the purchased assets to the Brampton location. He agreed that during this time, customers could still buy products from ASCO.

Analysis

Issue One: Does the Release Agreement bar Ms. Manthadi from advancing a claim against ASCO?

[83] The Court of Appeal for Ontario considered this question and found that the Release Agreement only applied to 637 and specifically held that the summary judgment motion judge was correct that it did not disentitle Ms. Manthadi from making a claim against ASCO: para. 74. The Court was also aware that there were two Release Agreements with two separate dates and specifically found that nothing turned on this: para. 9.

[84] Despite these findings, defence counsel argues that this was not a binding finding made by the Court of Appeal and made submissions that the Release Agreement barred Ms. Manthadi from advancing this claim against ASCO.

[85] In support of that position, ASCO relies on Ashak v. Ontario (Family Responsibility Office), 2013 ONCA 375, where the Court found that when dismissing a motion for summary judgment, the court has power to make binding determinations of law under rule 20.04: para 9. The Court also found that any binding legal determination must form part of the formal order.

[86] The Court of Appeal revisited Ashak in Skunk v. Ketash, 2016 ONCA 841. The Court stated at para. 58:

In an attempt to provide greater clarity, I would summarize the effect of this court’s jurisprudence as follows:

The general rule is that an order dismissing a motion for summary judgment is an interlocutory, and not a final, order.

If a party argues that the motion judge made a final, binding determination of law that disposes of the substantive rights of one of the parties (”Binding Legal Determination”) in dismissing the summary judgment motion, then this court will consider whether the motion judge’s order invokes r. 20.04(4) and references the legal determination that the party argues is a Binding Legal Determination.

If the order does not invoke r. 20.04(4) and reference the legal determination that the party argues is a Binding Legal Determination, the court will usually consider whether the precise scope of the point of law determined by the motion judge is clear and whether it is clear that the motion judge intended that her determination be binding on the parties at trial. In this case, it was not clear that the motion judge intended his determination to be binding on the parties at trial.

[87] These decisions are distinguishable as the motion judge in this case granted judgment and made findings of law and fact when reaching that decision.

[88] Although this was not argued, ASCO’s position may be that when the Court of Appeal overturned the motion judge and dismissed Ms. Manthadi’s summary judgment motion, it ought to have specified that the finding that the Release Agreement did not prevent her from advancing this claim was a binding determination of law pursuant to rule 20.04(4). In not doing so, ASCO argues that the issue is not res judicata and therefore not binding.

[89] When the Court of Appeal discussed the Release Agreement, it did not state that there was an evidentiary dispute that required a trial to determine that the agreement did not bar Ms. Manthadi from advancing this claim. The Court did, however, find that there was an evidentiary dispute regarding the Release Agreement regarding two issues that required a trial. The first is in determining the length of notice period assessed against ASCO and the second is in determining Ms. Manthadi’s understanding of how she would be treated on the sale of 637 and the terms on which she entered the employ of ASCO: paras. 75-76.

[90] When I read the decision from the Court of Appeal in its entirety, I am satisfied that its finding that the Release Agreement does not bar Ms. Manthadi from seeking damages from ASCO was a binding final determination of law. The Court of Appeal was clear that a trial was required to deal with the relevancy of the Release Agreement in relation to other issues but not with respect to whether it was a bar to this proceeding against ASCO.

[91] If I am incorrect and the decision is not binding, in my view, the doctrine of privity of contract nonetheless applies. This doctrine means that only the parties to a contract can be bound to it or entitled under it: Greenwood Shopping Plaza Ltd v. Beattie et al., 1980 202 (SCC), [1980] 2 S.C.R. 228, at pp. 236-238. ASCO was not a party to the Release Agreement. Ms. Manthadi only agreed to release 637 from any claims arising from the cessation of her employment with 637. She did not release ASCO from any future claims should ASCO terminate her employment.

[92] ASCO argues that 637 was an agent for ASCO and stepped into its shoes when it entered the Release Agreement with Ms. Manthadi. In support of this position, ASCO argues that the Release Agreement must be considered in context with the Purchase Agreement and that the interplay between the two creates this agency relationship. ASCO argues that this agency was created from the terms of the Purchase Agreement that required 637 to provide notice of termination to all employees, pay them severance, and indemnify and save harmless ASCO from any claims arising from a breach of this warranty.

[93] I do not agree. While the Purchase Agreement required 637 to pay severance to its employees and indemnify and save ASCO harmless, it did not require 637 to secure releases from the employees. Had ASCO wanted that protection, it could have included a term that in addition to paying severance, 637 was to obtain signed releases from the employees.

[94] ASCO also argues that the common law exemption to privity of contract should apply, relying on London Drugs Ltd. v. Kuehne & Nagel International Ltd., 1992 41 (SCC), [1992] 3 S.C.R. 299. ASCO argues that it is a third party beneficiary that should be entitled to the contractual provisions of the Release Agreement.

[95] I do not accept that argument even when I consider the interplay between the Purchase Agreement and Release Agreement. This is underscored by Mr. Singh’s evidence that he was unaware that Ms. Manthadi signed a Release Agreement until after this litigation was commenced. I fail to see how ASCO had a reasonable expectation that it would be protected by an agreement it knew nothing about nor requested as a term of the Purchase Agreement. Furthermore, there was no evidence led that 637 intended to extend the benefit of the Release Agreement to ASCO. The evidentiary record does not support an exception to the doctrine of privity of contract.

[96] I agree with Ms. Manthadi’s argument that when she signed the Release Agreement, she was releasing 637 from any claims that arose from the cessation of her employment at that time. The Release Agreement did not state that Ms. Manthadi released ASCO from claims that may arise in the future, when and if her employment was terminated by ASCO: Hannan v. Methanex Corp., 1998 6476, 103 B.C.A.C. 199 (C.A.), at para. 37

[97] Thus, if I am incorrect and the finding of the Court of Appeal is not a binding determination of law, I am satisfied that the Release Agreement was an agreement binding only on Ms. Manthadi and 637 and the doctrine of privity of contract applies.

Issue Two: Did ASCO hire Ms. Manthadi on fixed term employment contract or was her employment with ASCO an indefinite contract?

[98] The Court of Appeal found that Ms. Manthadi’s employment with 637 ended when it sold its assets and business name to ASCO and that as a result, it was necessary to determine the nature of her new employment agreement with ASCO: para. 49. Specifically, the issue of whether Ms. Manthadi was employed by ASCO on a fixed term or indefinite contract must be resolved to determine if she was entitled to notice when she was terminated by ASCO.

[99] The presumption at common law is that reasonable notice must be given to terminate an indefinite contract of employment: Machtinger v. HOJ Industries Ltd., 1992 102 (SCC), [1992] 1 S.C.R. 986, at p. 997. Absent an agreement to the contrary, an employee is entitled to common law damages if reasonable notice is not given: Bowes v. Goss Power Products Ltd., 2012 ONCA 425, at para. 23. This presumption can only be rebutted if the employment contract “clearly specifies some other period of notice, whether expressly or impliedly”: Machtinger, at p. 998.

[100] This principle does not apply to fixed term employment contracts. At the end of a fixed term, an employee’s employment ceases: Chambly (City) v. Gagnon, 1999 703 (SCC), [1999] 1 S.C.R. 8. The protections of the ESA and the common law principle of reasonable notice do not apply when a fixed term contract expires: Ceccol v. Ontario Gymnastic Federation (2001), 2001 8589 (ON CA), 55 O.R. (3d) 614 (Ont. C.A.), at para. 25. Given the significant consequences to an employee, unequivocal and explicit language is necessary to establish a fixed term contract. Any ambiguities are to be interpreted against the employer: Ceccol, at para. 25.

[101] The Court of Appeal found that the burden was on ASCO to establish “unambiguously” that Ms. Manthadi was hired as a fixed term employee as a general labourer for the specific task of moving the equipment it purchased from 637: para. 80. In my view, ASCO has failed to do that.

[102] There is contested evidence about what Mr. Singh told Ms. Manthadi about her employment with ASCO. To determine if she was offered indefinite or fixed term employment, I do not have to resolve that dispute nor make any credibility or reliability findings as my decision is based on Mr. Singh’s evidence that he did not say anything to Ms. Manthadi about the offer of employment at ASCO.

[103] Ms. Manthadi did not sign a written employment contract with ASCO. According to Mr. Singh, there were no direct discussions with Ms. Manthadi before she started working for ASCO on November 6, 2017 regarding either the nature of her work or that it was only temporary employment that would end when the move of the assets was complete. ASCO relies on what Mr. Friedman allegedly told Ms. Manthadi about the temporary nature of the work with ASCO. As Mr. Friedman was not called as a witness, ASCO is relying on inadmissible hearsay evidence about the oral offer it alleges Mr. Friedman made to all 637 employees, including Ms. Manthadi.

[104] While employment contracts can be made orally, Mr. Singh’s evidence is that he did not speak with Ms. Manthadi about the nature of her employment with ASCO, whether it would end when the move was completed, or that her years of service with 637 would not be recognized by ASCO. His evidence at examination for discovery was that Ms. Manthadi was told her employment was terminated only when the move was completed. There is no evidence that he told Ms. Manthadi, before she accepted employment with ASCO, that her employment would end when the move was completed. Thus, there is no evidence of an oral agreement between ASCO and Ms. Manthadi.

[105] Mr. Singh’s reliance on what Mr. Friedman told the 637 employees is not only inadmissible hearsay evidence but even if the evidence was admissible or Mr. Friedman had testified, it is not clear to me how ASCO can rely on what the former employer told its employees as the basis to establish an oral employment contract between ASCO and Ms. Manthadi.

[106] If ASCO’s intention was to hire Mr. Manthadi on a fixed term contract to do a specific task for a limited period, it had an obligation to communicate that offer to her. Based on Mr. Singh’s own evidence, it did not do so. Had the fixed term nature of the offer of employment been communicated to Ms. Manthadi, she then could have decided whether to accept that employment or refuse to sign the Release Agreement and seek damages from 637 for wrongful dismissal.

[107] While Mr. Singh may have believed that ASCO was hiring Ms. Manthadi on a temporary basis for a specific fixed job, he did not communicate that to her.

[108] I accept Ms. Manthadi’s evidence that she understood that her termination on December 13, 2017 was a temporary layoff. This is corroborated by the texts she sent to Ken Abaimdun asking when she would be returning to work.

[109] Mr. Singh argues that I should take a more contextual approach and look at all the circumstances surrounding the purchase of ASCO’s business including the following: 1) the uncontested evidence that none of the employees from 637 worked for ASCO after December 16, 2017; 2) that each employee was given a ROE; 3) that ASCO had no intention of hiring any of the 637 employees for anything other than to assist with the move; and 4) that in the Purchase Agreement, 637 agreed to terminate all its employees and provide them with severance pay. ASCO argues that based on this evidence, I can infer that it did not offer to hire Ms. Manthadi for an indefinite period.

[110] In my view, that evidence does not detract from ASCO’s obligation to communicate its offer to Ms. Manthadi of a fixed term period of employment to move the purchased assets and that her employment would end once the move was complete. Inadmissible hearsay evidence about what a third party told Ms. Manthadi does not satisfy ASCO’s obligation to establish the unambiguous terms of the nature of Ms. Manthadi’s employment.

[111] Accordingly, I find that Ms. Manthadi’s employment with ASCO was indefinite and not fixed.

Issue Three: Can Ms. Manthadi’s prior years of service with 637 be considered in determining reasonable notice following her termination from ASCO?

[112] Having found that ASCO hired Ms. Manthadi on an indefinite basis, she was therefore entitled to notice when she was terminated by ASCO. The next issue is whether Ms. Manthadi’s 36 years of service with 637 must be considered in determining what that notice ought to have been.

[113] The Court of Appeal clarified that there is a distinction between termination of an employee by a successor employer under the common law and pursuant to s. 9(1) of the ESA which deals with continuity of employment when a business is sold. The Court of Appeal found that the motion judge erred in finding that s. 9(1) of the ESA applied to a claim for damages under the common law: paras. 47-48. The Court of Appeal then reviewed the common law approach to reasonable notice by a successor employer.

[114] The Court of Appeal affirmed the principles set out in Addison v. M. Loeb, Ltd. (1986), 1986 2474 (ON CA), 53 O.R. (2d) 602 (C.A.) in addressing how prior service with a predecessor employer is recognized in addressing reasonable notice by a successor employer. Addison involved a sale of assets from one company to another. The plaintiff worked for 20 years as an assistant manager of a grocery store that fell into receivership in 1981 before its assets were sold shortly thereafter to the defendant. For two years, the plaintiff worked for the defendant doing his same duties as he had for 20 years with the former employer before being terminated.

[115] In determining that the plaintiff’s 20 years of service with his former employer ought to be considered in determining reasonable notice, the Court found as follows, at paras. 22-23:

In these circumstances and in the absence of an express understanding to the contrary, it would, I think, be unfair to assess the appellant’s damages for wrongful dismissal in the same manner as if he had walked into the store for the first time after the respondent purchased the business and became a new employee of the respondent, even at the rank of assistant manager. An examination of the authorities in cases where an employee has been employed by a purchaser of a business after having been employed for some time by the vendor and has subsequently been wrongfully dismissed discloses no clear principle other than that in the majority of the cases some recognition is given to the period of employment with the predecessor employer.

Although length of service is a factor in determining the proper award for damages, it is not the only factor. The conduct of the parties is relevant. Furthermore, when the appellant assumed employment with the respondent, the respondent automatically received the benefit of the services of a very experienced assistant manager and one fully familiar with the operation of the store.

[116] In Addison, the Court found that length of service was not the only factor to consider when assessing damages. The Court found that the employer received the benefit of an experienced manager, did not have to go out and recruit and train a new manager and was able to benefit from the exiting manager’s knowledge of the store’s operations.

[117] The Court of Appeal did not agree with Ms. Manthadi’s argument that there is an implied term in an employment contract with a successor company that an employee will be given credit for their years of service with the predecessor company unless the successor company advise or makes an agreement with the employee to the contrary. This was the finding in Sorel v. Tomenson Saunders Whitehead Ltd. (1987), 1987 154 (BC CA), 39 D.L.R. (4th) 460 (B.C.C.A.), which the Court of Appeal found did not overtake Addison: at para. 61. The Court of Appeal held that Addison remains the law in Ontario and reasonable notice is determined by applying the factors set on in Bardal v. Globe & Mail Ltd. (1960), 1960 294 (ON SC), 24 D.L.R. (2d) 140 (Ont. H.C.J.).

[118] Therefore, if I find that ASCO was a successor employer, I can consider Ms. Manthadi’s prior years of service with 637 in determining what notice she ought to have been given by ASCO.

Issue Four: Did ASCO purchase 637 as a going concern?

[119] ASCO argues that it only purchased the assets of 637 and did not purchase it as a going concern. As a result, ASCO argues that it is not a successor employer and Ms. Manthadi’s prior years of service should not be considered in determining reasonable notice.

[120] Ms. Manthadi asserts that when ASCO bought the assets and name from 637, there was a change of ownership and her employment as a welder was continuous. Therefore, ASCO is a successor employer, and her years of service should be considered in determining a reasonable notice period.

[121] In an asset sale, the buyer purchases only the assets they want which can be tangible assets like machinery and intangibles like goodwill; it can also purchase the business name.

[122] When purchasing a business as a going concern, ownership and control of the business is transferred to the purchaser and the business continues to operate as usual. All assets and liabilities are purchased and there is no need for new employee contracts as the employees continue to be employed by the purchaser company.

[123] When determining the circumstances where the common law recognizes prior years of service by a predecessor employer, the Court of Appeal in Manthadi noted that in both Addison and Sorrel the successor company purchased the company as a going concern: para. 68. In both of those cases, the employee’s work was continuous with the only change being the identity of the employer. At paras. 71-72 the Court of Appeal held:

…Where a successor employer buys the business as a going concern, while the employee is terminated and enters into a new employment contract with a new employer, their connection to the ongoing business undertaking is continuous. Only in this situation does the common law give special recognition to the employee’s prior service with their previous employer.

In this situation the employees’ basic duties and responsibilities will usually remain the same after the sale, but that need not be the case. It is not unusual that a purchaser of an ongoing business offers a promotion to one or more of the vendor’s employees. What is necessary is that the employee’s relationship to the ongoing business undertaking continues uninterrupted despite the change in the identity of their employer. (Emphasis added.)

[124] In both Addison and Sorel, the successor company purchased the assets of the predecessor company. In Addison, the employee continued to perform the same duties as he had with the predecessor company. In Sorel, the successor company also acquired the staff from the predecessor who continued to perform their same functions as if there has been no change in ownership. In Sorel, the Court found that where there has been merely a change in ownership, it is open to the judge to consider the period of continuous employment as a whole: para. 10. The Court also referred to the purchaser’s expectation that it would retain the vendor’s employees “without alteration of their terms of employment and with the benefit of their experience”: para. 9.

[125] ASCO argues that the purchase of 637’s assets was not merely a change in ownership and that it specifically required all employees to be terminated.

[126] The Court of Appeal did not address the argument that ASCO was not a successor company as it only purchased the assets from 637. In my view, that is an issue that must be addressed as it is relevant to the issue of whether Ms. Manthadi’s prior years of service should be recognized in determining reasonable notice.

[127] Whether or not a transaction is an asset purchase or purchase of a business as a going concern is a fact-specific determination. ASCO relies on Frederiks v. Executive TFN Waterpark Limited Partnership, 2022 BCSC 1725 where, at para. 17, the court set out the following factors to consider in determining if a business was purchased as a going concern:

a) the nature of the transaction;

b) the portion of the sale price allocated to goodwill;

c) whether the duties of the individual or the terms of the employment with the new company are similar to and of the same character to the duties the individual had performed for the vendor of the business;

d) whether the individual received a substantially reduced salary and no benefits;

e) whether the purchased company had ceased its operation prior to the purchaser and vendor entering into discussions for the purchase and sale of the company;

f) whether the vendor told their employees that the purchaser would not recognize their prior service;

g) whether the purchaser told employees that it would be “business as usual”; and

h) whether the purchaser retained all of the vendor’s employees and the right to use the vendor’s name.

[128] I will consider each of these factors.

a) The nature of the transaction

[129] The first page of the Purchase Agreement clearly states that it was an asset purchase agreement, and a list of assets was attached to the agreement. According to the first paragraph, ASCO also purchased the name, goodwill, domain name, email addresses, telephone and fax number, and customer list. The only assets/liabilities it did not purchase were 637’s account payables and receivables or the building where 637 operated. All purchased assets were moved to its existing facility in Brampton.

[130] In the first paragraph, it also states that ASCO was purchasing the assets “used in connection with or otherwise relating to the Business as a going concern…” The phrase “as a going concern” would seem contradictory to this only being an asset purchase.

[131] The Purchase Agreement also includes a term that one of the owners of 637 would act as a consultant for ASCO for a period of six months after closing. If it was only an asset purchase, why would a former owner need to continue as a consultant? This suggests the agreement was more than an asset purchase and that ASCO intended to operate it as a going concern.

[132] According to the Purchase Agreement, 637 agreed to terminate all its employees and pay them severance and to indemnify ASCO if this warranty was breached. This term suggests that this was not a purchase of a going concern where employees would continue to work for the new business.

[133] An agreement by a predecessor company to terminate its employees is not determinative that the successor company did not purchase it as a going concern. In Dhatt v. Kal Tire Ltd., 2015 BCSC 1177, a decision both parties rely upon, it was a term of the asset purchase agreement that all employees would be terminated before the closing date of the asset sale. The defendant was an automotive services company. It purchased the assets of a business that carried on the same type of work. The plaintiff worked for the successor company for six years before being terminated.

[134] In Dhatt, the defendant argued that it did not purchase the predecessor company as a going concern, did not keep the same name, and hired only some of the employees, and on different terms.

[135] Although the agreement was an asset purchase agreement and only some employees were hired by the purchaser company, the court found that the employee’s years of service with the former employer should be considered in determining the appropriate notice period to which he was entitled from the defendant, the successor employer. The court found that the defendant had purchased the business for continued use as an automotive business and retained several of the employees who worked at the same location. The court noted that the plaintiff carried on doing the same work, did not receive a termination letter from his former employer, and there was no lay-off period between the two jobs. The court found that the plaintiff was continuously employed from the date he commenced employment with the predecessor employer.

[136] Accordingly, requiring 637 to terminate its employees in the Purchase Agreement is not determinative of whether ASCO purchased 637 as a going concern and was a successor employer.

[137] In my view, a reading of the Purchase Agreement could support either argument that ASCO purchased 637 as a going concern or as an asset purchase, making this a neutral factor.

b) Goodwill

[138] The next factor is how much of the purchase price was attributed to goodwill. While the Purchase Agreement states that ASCO was purchasing 637’s goodwill and there was a warranty that 637 would maintain the goodwill pending the sale, there was no evidence of what portion of the sale price was allocated to the goodwill. I consider this to be a neutral factor.

c) Ms. Manthadi’s duties at ASCO

[139] The third factor is whether Ms. Manthadi’s duties or the terms of her employment with ASCO were like her duties with 637. There is no dispute that Ms. Manthadi did some welding work for the first week and some during the second week after the transaction closed. There is also no dispute that she then worked packing and unpacking the purchased assets and did not do any blaze welding at the Brampton location. I must also consider Ms. Manthadi’s evidence that Mr. Singh offered her employment with ASCO under the same conditions, doing the same job, but at a new location in Brampton, and that her years of service with 637 would be recognized.

[140] As Mr. Singh denies saying anything to Ms. Manthadi regarding her employment, I must make credibility and reliability assessments to determine whose evidence I accept. To be clear, I have not considered the hearsay evidence of what either Mr. Friedman or Mr. Abaimdun might have said in making these assessments.

[141] While I found that Mr. Singh’s failure to communicate an oral offer of employment to Ms. Manthadi barred a finding that her employment with ASCO was for a fixed term, I can still consider his evidence that he said nothing to her in determining whether I accept Ms. Manthadi’s evidence that he offered her continued employment as a welder.

[142] Mr. Singh’s evidence that ASCO’s intention was to hire 637 employees, including Ms. Manthadi, as general labourers for a limited period is corroborated by other documentary evidence. All 637 employees hired by ASCO were given ROEs that confirm their first day of work was on or about November 6, 2017, and their term ended by no later than December 16, 2017. The ROEs describe their employment as “general help”. This is consistent with Mr. Singh’s evidence that the employees, including Ms. Manthadi, were hired to assist with the move and were not hired in the same capacity as their employment with 637. Furthermore, Ms. Manthadi’s pay slips describe her work as general labour. This is consistent with Mr. Singh’s evidence that Ms. Manthadi was not hired as a welder.

[143] I have concerns with the reliability of Ms. Manthadi’s evidence. Those concerns arise from her evidence regarding the two Release Agreements she signed. While she testified that she only signed one Release Agreement, she could not explain why there were two, with different dates. She also denied reviewing the terms of the Release Agreement with her lawyer. As the second Release Agreement signed on November 30, 2017 was sent from her lawyer to 637’s lawyer, it is reasonable to infer that she had some discussion with counsel and that is why he sent it to 637’s lawyer.

[144] Her evidence in chief was that while she was given the Release Agreement on September 28, 2017, she did not sign it until some time in November, after she was offered and accepted employment with ASCO. She then testified under cross-examination that she signed it at 637’s place of business in Toronto and that a secretary witnessed it; she recognized the secretary’s signature on the Release Agreement dated November 30, 2017.

[145] When the summary judgment motion was argued, the only Release Agreement in evidence was the one dated September 28, 2017. My impression was that Ms. Manthadi may have been tailoring her evidence to explain why there was a Release Agreement dated September 28, 2017, releasing 637 from any claims relating to the cessation of her employment, before she was offered a job with ASCO, as her evidence is that she only signed it after being assured of employment with ASCO. When confronted at trial with both signed Release Agreements, while agreeing her signature was on both, she insisted she signed only one.

[146] Her evidence became even more confusing when she insisted that she signed the Release Agreement at 637 with a secretary as a witness. In my view, that evidence is consistent with her signing the Release Agreement on September 28, 2017, and not later in November as she deposed. Also confusing was her evidence denying that she reviewed it with her lawyer which appears to be inconsistent with her lawyer sending the executed agreement to 637’s lawyer to hold in escrow.

[147] It may be that Ms. Manthadi was confused about dates and whether she signed one or two agreements. Nonetheless, it raises concerns about her general reliability. In my view, releasing 637 from any claims arising from her 36 years of employment in exchange for a payment of $5,900, when she would have been, at common law, entitled to more, would have been a significant event. This is not a reliability concern arising from a peripheral issue but rather a core issue to this dispute.

[148] I find as a fact that Ms. Manthadi signed two Release Agreements: the first on September 28, 2017, at her workplace with 637, before she was offered employment with ASCO, and the second, dated November 30, 2017, after she accepted employment with ASCO on November 6, 2017.

[149] I note, however, that the agreement dated September 28, 2017 stated the date of termination of her employment as November 24, 2017, which was not accurate. The agreement dated November 30, 2017 stated the date of termination of her employment as November 6, 2017, which was the correct date. There is an absence of evidence explaining why there were two agreements signed but the objective evidence indicates that the agreement dated November 30, 2017 was the accurate agreement, based on the date of termination of Ms. Manthadi’s employment.

[150] Ms. Manthadi’s evidence that she was hired to work as a welder is also inconsistent with her pay slips and ROE, both of which describe her as a general labourer.

[151] I am also concerned that Ms. Manthadi’s evidence that Mr. Singh made a specific oral offer of employment to her was not part of her evidence in chief but only arose during her cross-examination. In my view, this was important evidence regarding the nature of the employment with ASCO that the Court of Appeal stated was a key evidentiary issue to resolve at trial.

[152] Given my reliability concerns with Ms. Manthadi’s evidence, and having no such concerns with Mr. Singh’s evidence, I reject Ms. Manthadi’s evidence that Mr. Singh offered her employment with ASCO as welder and assured her that her years of service would be recognized.

[153] As neither Mr. Friedman nor Mr. Abaimdun testified, I cannot make any findings about what they told Ms. Manthadi about her employment with ASCO and whether her years of service would be recognized.

[154] I find therefore that ASCO intended to hire Ms. Manthadi as a general labourer and not as a welder, despite performing welding duties for the first week and partly in the second week of her employment with ASCO.

[155] Despite my concerns regarding the reliability of Ms. Manthadi’s evidence, I accept her evidence that she believed her employment was continuing and that she was going to work as a welder for ASCO in Brampton. Her emails to Mr. Abaimdun corroborate her evidence that she was expecting to return to work after December 13, 2017. Furthermore, despite her confusing evidence about the two Release Agreements, I accept her evidence that when she signed the November 30, 2017 agreement, she believed she had continuing employment with ASCO. If she knew that her employment with ASCO was temporary and would be ending shortly after she signed the Release, it is illogical that she would agree to accept only 8 weeks severance pay after 36 years of service with 637. While ASCO may not have intended to hire Ms. Manthadi on an indefinite basis as a welder, it failed to communicate anything to Ms. Manthadi regarding her employment leaving it open to her to believe that her employment as a welder was continuing.

[156] The only way to resolve the finding that ASCO only intended to hire Ms. Manthadi as a general labourer with Ms. Manthadi’s evidence that she believed she was hired as a welder is the undisputed evidence that Mr. Singh said nothing to her regarding her employment with ASCO. There was not, in essence, a meeting of the minds regarding the terms of Ms. Manthadi’s employment with ASCO. From Ms. Manthadi’s perspective, after ASCO purchased the business, her work continued, uninterrupted, as a welder and then she was tasked with moving the purchased assets to her employer’s new premises. While her paystubs and ROE refer to her working as “general help” she was never asked if she was aware, when she received those documents, that her employment was described in this fashion.

[157] Thus, while there is evidence that I accept that ASCO intended to hire Ms. Manthadi as a general labourer to assist with the move, it failed to communicate that to Ms. Manthadi who I accept believed she was continuing to work as a welder.

[158] In Manthadi, the Court of Appeal commented that where a successor employer buys the business as a going concern, the basic duties and responsibilities of an employee will usually remain the same after the sale, but these need not be the case. While the Court noted that it is not unusual for an employee to be given a promotion after sale, what is necessary is that the employee’s relationship to the ongoing business continues uninterrupted despite the change in the identity of their employer: para. 72.

[159] Thus, even if Ms. Manthadi’s duties changed after the purchase, she worked continuously despite the change in the identity of her employer.

[160] Given these findings, I consider this to be a neutral factor.

d) Ms. Manthadi’s income

[161] The fourth factor relates to Ms. Manthadi’s income. There is no dispute that she was paid the same hourly rate and worked the same hours; there was only a small change in her vacation pay. This factor favours a finding of a purchase of 637 as a going concern.

e) Cessation of 637’s operations

[162] There is no evidence that 637 stopped its operations at any time prior to the sale. Ms. Manthadi’s uncontested evidence is that she continued to work at her welding station at the Toronto location before and after the transaction was completed. Her employment was continuous. This factor favours a finding of a purchase of 637 as a going concern.

f) Prior service

[163] The sixth factor is whether 637 told their employees that ASCO would not recognize their prior service. In this case, I heard no admissible evidence of what 637 told its employees, including Ms. Manthadi, about their prior years of service. Mr. Friedman was not called to testify, nor did he provide an affidavit. This factor favours a finding that this was an asset purchase

g) Business as usual

[164] The seventh factor is whether ASCO told the employees that it would be “business as usual”. According to Mr. Singh, he did not tell the employees anything about their employment at ASCO whereas Ms. Manthadi’s evidence is that he said that everything would be the same. As I do not accept Ms. Manthadi’s evidence about what Mr. Singh said and I accept Mr. Singh’s evidence that he did not say anything to 637 employees, I consider this a neutral factor.

h) Retention of employees and use of name

[165] The eighth factor is whether the purchaser retained all the vendor’s employees and the right to use the vendor’s name. ASCO purchased the name from 637 and operates under that name. There was no evidence whether the twenty employees from 637 represented the bulk of 637 employees. What is uncontested is that these employees worked for ASCO as general labourers and that their employment ended when the move was complete.

[166] Ms. Manthadi deposed that her employment was continuous after the transaction closed and that she continued to work as a welder. That was not accurate, however, as she only worked as a welder for up to two weeks, on existing 637 orders, and her duties then changed to assisting with the move. At no time did she perform any welding work in Brampton nor is there any admissible evidence that she was going to do any such work. I accept her evidence that she believed she was going to work as a welder in Brampton, in the absence of any admissible evidence that she was told otherwise and given Mr. Singh’s evidence that he did not communicate anything to her. Thus, I find that this is a neutral factor.

[167] When I look at the totality of the evidence and weigh all the factors, I conclude that ASCO purchased 637 as a going concern. While the place of business changed, Mr. Singh’s evidence was that ASCO was going to continue to manufacture the same products as 637. Ms. Manthadi was not privy to the terms of the Purchase Agreement. From her perspective, and in the absence of having been told anything by ASCO, she was going to continue to work as a blaze welder making the same products, but at a different location, being paid the same hourly rate. It was ASCO’s responsibility to tell her clearly and unequivocally that her employment was for a limited purpose and would end at a particular time – when the move was completed – which it failed to do.

Issue Five: Can mitigation be argued if it was not pled and if so, was there a failure to mitigate?

[168] The Statement of Defence filed by ASCO did not raise any allegation that Ms. Manthadi did not mitigate her damages when her employment was terminated. ASCO did not seek leave to amend its pleading at the commencement of trial. Had it done so, I would likely have granted the relief given counsel’s submission that Ms. Manthadi was questioned about this issue at examinations for discovery and gave evidence about her efforts to find employment in her trial affidavit. Counsel for Ms. Manthadi argued that this evidence was relevant in assessing the Bardal factors and not as evidence going to mitigation.

[169] ASCO was unaware that Ms. Manthadi would take this position until it was raised during the trial when counsel began to cross-examine Ms. Manthadi about her mitigation efforts. Neither counsel in their written or oral submissions provided any jurisprudence addressing the issue.

[170] I am therefore prepared to consider the issue.

[171] Five months after she was terminated from ASCO, Ms. Manthadi was diagnosed with thyroid carcinoma. She underwent surgery and radiation therapy. She was cleared by her family doctor to commence looking for work in February 2019.

[172] Ms. Manthadi’s evidence is that she regularly searched for job postings and applied to 26 positions before October 14, 2022 when she swore her trial affidavit. She filed as evidence business cards from businesses where she applied for employment. She did not find any new employment between December 13, 2017 and December 3, 2019 and did not earn any income during that time.

[173] When cross-examined, Ms. Manthadi testified that she dropped off her resume to several manufacturing businesses located in the Derry Road area. Her evidence was that she looked for work as a blaze welder as that is the only work she has ever done. She was 65 years of age at the time she looked for employment. She never received a phone call or interview from any of the companies. She did not look for any other type of employment.

[174] ASCO argues that Ms. Manthadi had a duty to pursue a claim for wrongful dismissal against 637 and her failure to do so is a failure to mitigate. ASCO relies on White v. Stenson Holdings Ltd., 1983 447 (BC SC) and Major v. Phillips Electronics Ltd., 2005 BCCA 170 in support of that position.

[175] While those decisions address whether an employee has a right to seek damages from the former employer when sold to a successor company, they do not stand for the principle that failure to seek damages from a former employer can be found to be a failure to mitigate. Furthermore, neither of those cases involved the employee signing an agreement releasing their former employer from any claim arising from the cessation of employment.

[176] I find that Ms. Manthadi’s failure to advance a claim seeking to set aside the Release Agreement and then seek damages from 637 is not a failure to mitigate.

[177] A dismissed employee must make reasonable efforts to secure alternate, comparable employment to mitigate or minimize their damages: Red Deer College v. Michaels, 1975 15 (SCC), [1976] 2 S.C.R. 324, at p. 331. An employer bears the burden of proving that the employee failed to mitigate his or her damages: Michaels, at p. 332.

[178] Efforts to mitigate involves reasonable conduct, not perfect conduct: Adjemian v. Brook Crompton North America (2009), 2008 27469 (ON SC), 67 C.C.E.L. (3d) 118 (Ont. S.C.J.) aff’d 2008 ONCA 882 (Ont. C.A.), para. 21

[179] ASCO did not lead any evidence to prove that Ms. Manthadi failed to mitigate her damages. The undisputed evidence is that her health prevented her from looking for work until February 2019. I also accept her evidence that she applied to other manufacturing companies to work as a blaze welder. While she arguably could have expanded the scope of her search, in the totality of the circumstances, I consider her search to find employment to be reasonable.

[180] In my view, given the totality of the evidence including her efforts to secure employment and her health, I find that Ms. Manthadi took reasonable efforts to mitigate her losses.

Issue Six: What damages are Ms. Manthadi entitled to from ASCO for her wrongful termination?

[181] Given my finding that ASCO purchased 637 as a going concern and that it failed to prove that Ms. Manthadi was hired as a fixed term employee, the Court of Appeal in Manthadi held that ASCO bears the burden of displacing the presumption that Ms. Manthadi’s prior service with 637 should be recognized in the assessment of reasonable notice: para. 80.

[182] The Court of Appeal also found that in a situation where there is a successor employer, reasonable notice is not determined by stitching together the employee’s terms of service with the vendor and purchaser of the business and considering it as one continuous period of employment: para. 59. Rather, notice is to be determined by applying the Bardal factors, using a contextual approach and weighing the experience a long-time employee brings to the purchaser: para. 62. Using this flexible approach, the court can deal with the unique circumstances of each case and consider all or some of an employee’s service with the vendor to arrive at a fair result: para. 67

[183] The Bardal factors include the character of the employment, the length of service of the employee, the age of the employee and the availability of similar employment having regard to the experience, training, and qualifications of the employee. I must also consider the experience a long-time employee brings to the purchaser.

[184] While the Bardal factors are to be considered, they are only guidelines. There is no scientific or mathematical formula to apply in determining the appropriate notice: Iriotakis v. Peninsula Employment Services Limited, 2021 ONSC 998, at para. 14. It is more an art than a science.

[185] This case is distinguishable from Sorel and Addision where the successor employer received the benefit of a skilled worker whose skills were used in its operations. Mr. Singh’s uncontested evidence was that ASCO did not use blaze welding it its operations. He did not even know anything of Ms. Manthadi’s experience or training when she began to work for ASCO. This is an important factor in considering the appropriate length of notice.

[186] While Ms. Manthadi’s years of service with 637 are a factor to consider, I must also consider that she only worked 5 weeks for ASCO and her skills as a blaze welder were not used in its operations, other than for just over one week completing existing 637 orders.

[187] In relying on 20 months being reasonable notice, counsel for Ms. Manthadi relied on the following cases, which I am taking directly from counsel’s written submissions:

Position Years Served Age Salary Notice

Visaggio Joynt-Dent Inc23 Dental Hygienist 33 57 $59,000 24 months

Briggs v Treco Machines and Tool24 Production Worker 39 62 $40,154.00 24 months

Williams Estate v Vogel of Canada Ltd25 Upholsterer (Part Time) 32 60 $28,008.86 23 months

Stolze v Delcan Corp26 Technical Services 32 56 $67,000 24 months

Sweeting v Mok²⁷ Nurse 22 52 $60,000 24 months

McKay v Eaton Yale Ltd²⁸ Engineering technologist 22 45 $38,000 24 months

23 2018 ONSC 1911, BOA, Tab 25. 24 2009 67656 [Ont SCJ], BOA, Tab 5. 25 2016 ONSC 342, BOA, Tab 26. 26 (1998), 84 ACWS (3d) 281 [Ont. Ct. (Gen. Div.)] (WL), BOA, Tab 10. 27 2015 ONSC 4154, BOA, Tab , aff’d 2017 ONCA 203, BOA, Tab 22. 28 1996 8234 [Ont Ct Jus (Gen Div)], BOA, Tab 17.

[188] While these cases deal with plaintiffs of similar age and with similar years of service, I must also consider the experience, or in this case, the lack thereof, that Ms. Manthadi, a long serving employee, brought to ASCO, the new owner. As noted by the Court of Appeal in Manthadi, a “purchaser of an ongoing business who takes on the vendor’s employees avoids the burden, cost, and time of having to recruit a new employment force that is unfamiliar with the work, the working environment, and one another”: para 58.

[189] In this matter, ASCO had the benefit of Ms. Manthadi’s welding skills for just over one week. Thereafter, while she worked as a general labourer, ASCO had some benefit of Ms. Manthadi’s knowledge of the purchased assets to assist in the move, rather than hiring employees from an outside agency. This is, however, markedly different than Ms. Manthadi working in Brampton as a blaze welder on any sort of ongoing basis. I consider the benefit of her skills to ASCO be of a more modest nature.

[190] This is not a case where it is appropriate for the length of notice to be as long as it would have been if 637 had not been sold. Given the unique circumstances of this case, I find that the appropriate notice period is 12 months. I have considered Ms. Manthadi’s age, the nature of her employment, the failure of ASCO to communicate its intentions to her when she was hired by ASCO, her years of service with 637 and the modest benefit her skills provided to ASCO in reaching this conclusion.

[191] Based on Ms. Manthadi’s 2016 earnings of $39,834.44, she is therefore entitled to $39,834.44.

[192] Neither party made submissions about the $5,900 that Ms. Manthadi was paid by 637. I agree with the summary motions judge that it should not be deducted from the 12-month notice period. Ms. Manthadi was terminated by ASCO on December 13, 2017. The 12-month notice is to compensate Ms. Manthadi for the notice that ASCO ought to have given her that day. Accordingly, any amount paid to Ms. Manthadi by 637 is not to be considered in determining ASCO’s obligation to her.

Costs

[193] If the parties cannot reach an agreement on costs, the party seeking costs is to file their bill of costs and written submissions, which must be no more that five pages, double spaced, 12 pt. font, together with any written offers to settle by June 30, 2023. The responding party may file their bill of costs and written submission of no more than five pages, double spaced, 12 pt. font, together with any written offers to settle, by July 14, 2023. There shall be no reply.

L. Shaw J.

Released: June 9, 2023

COURT FILE NO.: CV-18-3222-00

DATE: 2023 06 09

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

SANDRA MANTHADI

Plaintiff

and -

ASCO MANUFACTURING

Defendant

REASONS FOR DECISION

L. Shaw J.

Released: June 9, 2023

Manthadi v. ASCO Manufacturing, 2023 ONSC 3499

Case Summary

Overview

Issues

Position of the Parties

Preliminary Comments Regarding Inadmissible Evidence

a) The Affidavits

b) The Viva Voce Evidence

Review of the Admissible Evidence

a) Ms. Manthadi’s Employment with 637

b) The Settlement and Release Agreement

c) The Purchase of 637

d) The Offer of Employment to Ms. Manthadi

e) Working for ASCO

Analysis

Issue One: Does the Release Agreement bar Ms. Manthadi from advancing a claim against ASCO?

Issue Two: Did ASCO hire Ms. Manthadi on fixed term employment contract or was her employment with ASCO an indefinite contract?

Issue Three: Can Ms. Manthadi’s prior years of service with 637 be considered in determining reasonable notice following her termination from ASCO?

Issue Four: Did ASCO purchase 637 as a going concern?

Issue Five: Can mitigation be argued if it was not pled and if so, was there a failure to mitigate?

Issue Six: What damages are Ms. Manthadi entitled to from ASCO for her wrongful termination?

Judge

Counsel

Parties

Areas of Law

Fact Patterns

Financial Outcomes

Issues

Statutory Provisions 3

Legal Tests 3

Legislation 2