Ontario court awards employee 10 months’ reasonable notice at common law
Exclusive to Canadian HR Reporter from Rudner Law.
If you’re familiar with the management of residential and commercial buildings in Ontario, you know that it’s frequently outsourced. Often, the service providers change, yet the staff remain the same.
If an employee of the former provider is not retained by the new one, who is responsible for their statutory and common law entitlements on termination?
The employment standards legislation is clear that the new provider is responsible for the statutory entitlements.
A recent court decision significantly broadened the potential liability of new providers by finding the new provider liable for the employee’s common law entitlements as well.
The case involved an employee with three-and-a-half years of service with the former provider who was not retained by the new one. The court ruled that the new provider was liable and awarded the employee 10 months of reasonable notice at common law.
Facts of case
In Kondaj v. Crossbridge Condominium Services Ltd. et al, 2025 ONSC 3905, the plaintiff, Gazmend Kondaj, had been employed by the former provider, Crossbridge Condominium Services, for nearly three-and-a-half years as a licensed condominium manager for the SoHo Hotel and Residences. When Crossbridge’s property management agreement with SoHo ended, Duka Property Management took over the contract.
Duka informed Kondaj that they would not employ him and terminated his employment without cause, providing him with three weeks' pay in lieu of notice under the ESA.
Kondaj sued both Crossbridge and Duka alleging wrongful dismissal. Although he had a written employment agreement with Crossbridge containing termination clauses, both Crossbridge and Duka conceded that these provisions were unenforceable. Consequently, the motion for summary judgment proceeded on the premise that the condo manager had an implied common law right to reasonable notice of termination.
The court was tasked with determining (a) which defendant, Crossbridge or Duka, was liable for any damages to Kondaj, and (b) the appropriate period of reasonable notice.
Analysis of employment standards
Section 75 of the Employment Standards Act, 2000 (ESA) specifies that if a new building services provider replaces an old one and does not retain the former provider’s staff, the new provider is considered the employer for the purposes of complying with the ESA's termination and severance pay provisions.
To determine if this responsibility extended to common law termination entitlements, the court considered the legislative intent behind the ESA, and Section 75 specifically, which aims to protect employees, stabilize employment, and encourage new building services providers to retain existing staff. Citing the Ontario Court of Appeal's decision in Elsegood v Cambridge Spring Service (2001) Ltd., 2011 ONCA 831, where a deemed ESA termination due to a temporary layoff was also recognized as a common law termination, the court concluded that when the ESA “imposes an obligation to provide termination or severance pay, that obligation includes common law notice”.
Accordingly, Duka, the new provider, was held responsible for Kondaj’s common law reasonable notice entitlements.
In assessing the appropriate notice period, the court considered the standard Bardal factors, including the manager’s age at termination (42), length of service (three years and five months), and his role as a licensed condominium manager earning $86,100 annually. The court heavily emphasized his mitigation efforts (he had applied for 170 positions) and the condominium market's impact on his difficulty finding new employment (it took him 11 months to secure new employment).
The court concluded that Kondaj had fulfilled his duty to mitigate damages but was hesitant to award damages for his entire period of unemployment. He was awarded 10 months of reasonable notice at common law.
Key takeaways on building service providers
This decision confirms that in Ontario, a new building services provider replacing an existing one is liable not only for the statutory termination and severance pay owed to unretained employees of the former provider, but also for their potentially much larger common law entitlements.
Importantly, the plaintiff in this case did not have a binding contract limiting their common law entitlement to reasonable notice. Employers in general, and building service providers in particular, would be well advised to ensure they have enforceable employment agreements in place, limiting employees’ entitlements upon termination. Otherwise, they could be exposed to substantial liability.
This decision also considered the impact of an economic downturn on the manager’s ability to mitigate damages. Although the economic conditions assessed were specific to the Greater Toronto Area condominium market, the decision reaffirmed that an employee’s common law notice entitlement is based on a holistic assessment and courts will consider the availability of similar employment.
Nadia Zaman is a senior associate lawyer at Rudner Law in Toronto. She can be reached at (416) 864-8500 or [email protected].
