Legal Blog

Wrongful Dismissal

Krishnamoorthy v. Olympus Canada Inc. 2017 Ont CA

Employee worked for Company A from 2005. In 2005, Company B purchased some of the assets of Company A and made offers of employment to most of the employees of Company A, including the plaintiff. Before starting employment with Company B, the plaintiff executed an employment agreement containing termination provisions. Company B terminated the plaintiff’s employment in 2015 and was prepared to pay the plaintiff in accordance with the employment agreement termination provisions. The plaintiff declined to accept those funds and sued, claiming common law wrongful dismissal damages. The plaintiff relied upon Section 9(1) of the Employment Standards Act, which states that when a purchaser purchases a business and takes over the employment of an employee of that business, the employee is deemed not to have been terminated “for the purposes of this Act.” The plaintiff therefore argued that since, under the Act, the plaintiff remained an employee of Company B, the employment agreement was entered into without consideration and was invalid. The motions judge bought the argument, but the Court of Appeal did not. The Court of Appeal noted that the employment was deemed to be continued only for the purposes of the remedies contained in the Act, not for all purposes, and certainly not to say that there was no consideration for an offer of employment that did not have to be made.

Written by Jonathan Speigel Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.