1605511 Alberta Ltd. v Director of Employment Standards, 2024 ABESAB 7 (Johnson, Vice Chair), is an Alberta employment standards decision where the labour relations board concluded that several different corporate entities were a “single employer” of an employee, so that he could recover money against the one that could actually pay.
This decision is important because the “single employer” mechanism at Section 80(1) of the Employment Standards Code does not get used very often and this case provides some direction on how and when it applies.
Facts
The following were the facts summarized by the ALRB:
- The complainant Ozzie Robertson was employed by 1605511 Alberta Ltd. as a scale house attendant
- 1605511 was a construction waste recycling business. Near the end of Mr. Robertson’s employment, 1605511 relocated to 6710 – 90 Ave SE, and became a tenant of 2409421 Alberta Ltd., the owner of that building
- 2409421 had been incorporated that same year as a holding company for the purchase of the 6710 property
- 578267 Alberta Ltd. was a roofing company carrying on business under the name of Hail Busters Roofing. In 2023, 578267 ceased its roofing business and commenced a business as a roof shingle recycling company
- Gary Wilson was and is a director of all three companies, and his residence is the registered office for each
- In 2018, 1605511 had registered the trade name of North Calgary Recycling
- In 2022, 2409421 registered the trade name of North Calgary Recycling
- The complainant Mr. Robertson’s employment was terminated. He brought an employment standards complaint for termination pay
- An employment standards officer issued an order of officer directing the three companies, as single employer to Mr. Robertson, to pay Mr. Roberton termination pay
- The three numbered companies appealed that decision, and the question on appeal was whether they were truly a “single employer” of Mr. Robertson
Analysis / Conclusion
In the ALRB analysis, they first reproduced Section 80(1) of the ESC:
80(1) If, in the opinion of an officer, a business, undertaking or other activity is carried on or has been carried on by or through 2 or more employers or other persons, or a combination of them, the officer may make a single employer declaration, declaring that the employers or persons named, or combination of them, are a single employer for the purposes of this Act.
The ALRB cited Cedar (Stampede Cleaning Services) v Director of Employment Standards, 2019 CanLii 25237 (AB ESA) for the law respecting when Section 80 can be used, which identified the following five conditions:
- There must be more than one business entity involved
- Each separate entity must be or have been actively involved in business whether currently or at some time in the past
- The activities or businesses of the various entities must be carried on under common control or direction. Ownership need not be limited to ownership in the strict legal sense: financial control is a factor, as are shareholdings and ownership of assets, but it might be enough to show that the business operations of the various entities are run in practice by the same person or group of people. There need not be perfect overlap, but there needs to be a common thread of control or ownership running throughout
- The activities or businesses carried on by the various business entities must be associated or related in their functions or operations
- The individual whose rights or benefits are in dispute must have been an employee of the entities involved
The ALRB used Section 80 to find that the entities were all a single employer of the employee, reasoning as follows:
[23] In addressing the five factors described in the Green Glass and Associates decision cited by the Appeal Body in Cedar Stampede, the Appeal Body notes the following considerations:
All three entities described themselves as being part of the business at one time or the other;
There was common control by Wilson being the director of each of the companies and, based on the evidence the Appeal Body heard, Wilson was clearly the directing mind;
1605511 was the operating company;
2409421 supplied the business location for 1605511 for part of the time; and
Robertson was employed by 1605511.
My Take
Generally speaking the ESC has this mechanism of “single employer” to prevent employees from being left in the lurch for ESC amounts when the entity in a corporate conglomerate that actually pays them runs out of money. Whether the corporation simply falls on hard times or runs out of money on purpose to avoid paying debts does not appear to be a consideration.
However, complaints under the ESC are generally for statutory minimum amounts, so while the “single employer” remedy can be useful in that forum, it will not help employees suing for severance in civil court.
Employees that sue in civil court for wrongful dismissal can seek a similar remedy called “common employer” at common law, which is usually done for similar purposes but is harder to establish than a “single employer” declaration under the ESC is.
Bow River Law provides these regular legal blog articles for the purposes of legal news, education and research for the public and the legal profession. These articles should be considered general information and not legal advice. If you have a legal problem, you should speak to a lawyer directly.
Bow River Law is a team of knowledgeable, skilled and experienced lawyers handling employment law, human rights (discrimination) and labour law matters. Bow River Law is based in Calgary but we are Alberta’s Workforce Lawyers.
