Executive Summary: Key Legal and Evidentiary Issues

• Determined which of two building service providers is liable for common law notice under Ontario’s Employment Standards Act, 2000.

• Analyzed whether section 75 of the ESA implies successor employer liability for common law notice in addition to statutory entitlements.

• Considered the enforceability of the employment agreement’s termination clause in light of statutory non-compliance.

• Assessed the impact of economic conditions (a downturn in the Toronto condo market) on the appropriate notice period.

• Evaluated the plaintiff’s mitigation efforts, including scope, location, and level of roles applied for.

• Set a 10-month notice period based on Bardal factors, rejecting the defendants’ position of a much shorter entitlement.

Facts and procedural background

Gazmend Kondaj was employed as a building manager by Crossbridge Condominium Services Ltd., managing the SoHo Hotel and Residences in Toronto. In November 2023, Crossbridge lost its service contract with the SoHo property. Duka Property Management Inc. was awarded the new contract, taking over operations as of December 1, 2023.

Before the transition, Duka met with Kondaj and discussed possible employment, during which Kondaj expressed interest in more senior roles with higher compensation. However, Duka ultimately decided not to retain him and did not offer continuation in his existing role on prior terms. Crossbridge did not reassign Kondaj to another property. As a result, his employment ended on November 30, 2023.

Both Crossbridge and Duka denied liability for providing common law notice. Crossbridge claimed Duka, as the successor service provider, was responsible. Duka claimed it was only liable for statutory termination pay under section 75 of the ESA and that Crossbridge remained liable for any further common law obligations.

Issues before the court

The central issues were: (1) which of the two companies was liable to provide common law notice, and (2) what the appropriate notice period should be. The court was also asked to consider whether the plaintiff failed to mitigate his damages and whether economic conditions should influence the notice period.

Determination of the responsible employer

Justice Koehnen held that Duka, as the incoming service provider under section 75 of the ESA, was liable for common law notice. While section 75(2) refers only to statutory termination and severance obligations, the court interpreted the ESA in light of its overall purpose — to protect vulnerable employees and promote continuity in the building services sector. Relying on established jurisprudence, the judge found that statutory obligations under the ESA must be read as minimum standards that do not displace common law entitlements unless expressly stated otherwise.

The court rejected Duka’s argument that common law liability remained with Crossbridge. It reasoned that assigning such liability to the outgoing provider would undermine employment stability and allow successor employers to avoid meaningful termination obligations by offering no employment or lower-tier terms to existing staff.

Assessment of notice period

Applying the Bardal factors, the court considered Kondaj’s age (42), his length of service (3 years and 5 months), the nature of his role (licensed condominium manager with supervisory and financial responsibilities), and the state of the job market. The court noted that the Toronto condominium market was in recession, significantly impacting job availability. Kondaj had applied for approximately 170 positions over 11 months, showing diligence and flexibility. His efforts included applying to both senior and junior roles across the Greater Toronto Area.

The court found no failure to mitigate. Criticism by the defendants that Kondaj applied for roles above his qualification level or failed to register with temp agencies was dismissed. The court also noted the absence of any job postings the defendants believed Kondaj should have applied to and the lack of reference letters provided to him.

Considering all these factors, the court set the common law notice period at ten months, which aligned with comparable case law. It also awarded an additional 10% of the notice damages for loss of benefits, reflecting coverage for the plaintiff, his wife, and his child during the notice period.

Conclusion

The Ontario Superior Court ruled in favor of the plaintiff. Duka was ordered to pay ten months' worth of common law notice damages plus 10% for lost benefits, less the statutory termination pay already provided. The court held that under the statutory framework of the ESA and established principles of common law, the incoming service provider is responsible for full termination obligations, including common law notice, when it chooses not to retain existing employees.